Untitled Texas Attorney General Opinion

- . The Attorney General of Texas September 18, 1979 MARK WHITE Attorney General Honorable Gibson D. (Gib) Lewis Opinion No. Mw-58 Chairman, Committee on ’ Intergovernmental Affairs * Re: Effect of a proposed charter House of Representatives amendment which would inhibit the Capitol Station 2910 taxing authority of the City of Fort Austin, Texas 78769 Worth. Dear Representative Lewis: You have requested our opinion regarding the effect of a proposed amendment to the Charter of the City of Fort Worth. The proposed amendment, which may be submitted to the voters at the general election to be held on November 6,1979, provides: 723Main. S”iw 610 “Ousbnl. TX 77002 The ad valorem’tax rate of the City of Fort Worth 7WZ8-0701 shall be divided into two separate and distinct tax rates; those being described and named Bond Rate and General Fund Rate. Further, that the Bond Rate shall be set for the Fiscal Year of 1979-1980at that rate which shall provide for the retirement of legal bond payments as prescribed for that 5scal year, and no more, and that subsequent year% rates be set accordingly. Further, that the General Fund be set for the fiscal year 1979-60 at the rate which shall produce $26 Million Dollars revenue, with no provision for delinquency or uncollectables, and that in subsequent years, shall be set at that rate which will produce a growth rate in Ad Valorem taxes not to exceed 5% of the previous year’s revenue from Ad Velorem Taxes. At present, the city charter requires that the tax rate be set by the City Council prior to October 1 of each year. You state that the adoption of the amendment would require that the 1979-80 rate be set at an amount substantially lower than that which will be set by the Council prior to October L YOU ask therefore whether the amendment may lawfully be applied to the 1979-60 tax rate. P- 183 Honorable Gibson D. (Gib) Lewis - Page Two (Mw-581 The question presented here is ln many ,respects similar to that considered in Attorney General Opinion MWjl (19?91. In that opinion, we held that legislation implementing a constitutionally derived tax exemption could not be awlled to tax liabilities which had become “5xed by levy end assessment” as of the Statute’s effe&Ve date. We relied in part on article Ill, section 55 of the Texas Constitution: The Legislature shall have no power to release a extinguish, or to authorize the releasing or extinguishi, in whole or in part, the indebtediieas, RabilIty op &ligation of any corporation ce individual, to this State or to any county or defined subdivision thereof, or other municipal corporation therein, except delinquent taxes which have been &e for a period of at least ten years. Under the circumstances you have described, adoption of the charter amendment would extinguish, in part, the liability of individuals to a political subdivision of the state. Since 8 home rule city may exercise only those powers which the legislature itself could have exercised, it follows that a city may not act to “authorize the releasing or extinguiihing,” in part, of the liability of individuals to the City of Fort Worth. Under the terms prescribed in Attorney General Opinion MW-4 (l979), a “taxpayer’s liability hisfixed when these two requlirements are met, the assessment has been made and there has been a legal levy.” See Cracker v. Santo Consolidated LS.D., llfl S.W.Zd750 (Tex. Civ. App. - l&&land 1938,rit dismQ3L vLe@ refers to the City Council’s act in imposing the tax and fixing the rate, Clegg v. State, 42 Tex. 605, 610-ll (1875), while %ssessmenta describes “the administrative process of applying the tax rate to an individual’s property end thereby determining the amount he owes.” Attorney General Opinion MW-4 (l9791. According to the present requirements of the Fort Worth City Charter, the tax rate must be levied prior to October L Since assessments will also have been made prior to the date of tlte charter amendment election, the amendment may not constitutionally affect the 1979-80 tax rate. Such a construction would not render the amendment totally ineffective, however, since it also includes a valid provision limitii the annual growth,rate in ad valorem taxes to “5% of the previous year’s revenue from Ad Valorem Taxes.” SUMMARY Since the tax rate is levied and assessments are made prior to the election of November 6, 1979, a proposed amendment to the Charter of the City of Fort Worth adopted that date will be ineffective to affect the 1979-80 tax rate. The amendment would, however, limit future taxes to a rate which would produce a growth of not more than 5ve percent of the previous year’s revenue from ad valorem taxaticn. MTRK WHITE Attorney General of Texas P. 184 Honorable Gibson D. (Gib) Lewis - Page Three (.NW-58) JOHNW. FAINTER, JR. First Assistant Attorney General TED L. HARTLEY Executive Assistant Attorney General Prepared by Rick Gilpin Assistant Attorney General APPROVED: OPINION COMMITTEE C. Robert Heath, Chairman David B. Brooks Susan Garrison Rick Gilpin Myra McDaniel William G Reid Bruce Youngblood P. 185