Honorable Henry Wade Opinion No. C-533
District Attorney
County Records Building Re: Whether Dallas County Junior
Dallas, Texas College District May Tax the
Intangible Property and
Rolling Stock of Railroads
or TransportationCompanies
and Other Questions Relat-
Dear Mr. Wade: ing to Such District.
You have requested that we reconsider Opinion No. C-458
of this office dated June 21, 1965, pertaining to the taxation
by the Dallas County Junior College District of intangible
assets and rolling stock of railroads or transportationcom-
panies.
Said Opinion C-458 Is hereby withdrawn and the follow-
ing is substitutedtherefor.
You ask the opinion of the Attorney General In answer
to the following five (5) questions relating to the levy
and assessment of ad valorem taxes by Dallas County Junior
College District:
1. Can a valid contract for the assessment
and collection of taxes be entered Into
by the Board of Trustees of Dallas County
Junior College District and the County
of Dallas for the Tax Assessor and
Collector of Dallas County to assess and
collect the taxes for the Junior College
District?
2. In the event that the answer to Question
No. 1 is In the affirmative, what fees and
commissions can the Tax Assessor and
Collector of Dallas County legally charge
the Dallas County Junior College District
for the assessment and collection of the
above referred to taxes?
3. Can taxes be levied and collected for the
year 1965?
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Honorable Henry Wade - Page 2 Opinion No. C-533
4. May the District tax lntatiglble
properties
within Its boundaries?
5. Can the District assess and levy a tax on
the rolling stock of a railroad or trans-
portation company?
The relevant facts are as follows: The Dallas County
Junior College District (hereinafterreferred to as District)
was created on May 25, 1965, pursuant to the provisions of
Article 2815h of Vernon*s Civil Statutes. The boundaries
of the District are cotermlnouswith the boundaries of
Dallas County. eat the election, the voters elected a Board
of Trustees of the District and granted them the authority
to assess and 'levya tax for the support and maintenance of
the District and to Issue bonds to'be paid,for by a tax which
was also authorized.
We answer your questions In the order in which,you ask
them.
1.
Your first question asks If the District may contract with
the Tax Assessor and Collector of Dallas Coun,tyto assess and
collect ita ad valorem taxes. Our answer Is that It may enter
into &&ah a contract pursuant to the provisions of Sec. 7b(c)
of sald Article 2815~ This Article in Its relevant portlolis
reads as followsr
"When a majority of the Board of
Education of such Junior College District
prefer to have the taxes of their district
assessed and coll&ated by the County Assessor
and Collector,or by the City Assessor and
Collector of an Incorporatedcity or town
In the limits of which the Junior College
District or a part,thereofIs located, or
collected only by the County or City Tax
Collector, same may be a@,ses?edand collected,
or collected only, as the case may be, by said
county or city officers, as may be determined
by the Board of Education of said Junior
College District, and turned over to the
Treasurer of the Junior College District fo:
which such taxes have been collected. . . .
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Honorable Henry Wade - Page 3 Opinion No. C-533
2.
Your second question asks what fees and commlsslonsmay
be paid In the event we'answer your first question In the
affirmative. Our answer Is that the following provision of
said Article 2815h, Sec. 7b(c) sets forth these fees and
commissionsIn the following language:
When the County Assessor and
Collecior are required to assess and collect
the taxes on Junior College.Dlstrlctsthey
shall respectivelyreceive one (1%) per
cent for assessing and one (1%) per cent
for collecting same; . . .'
3.
Your third question asks whether the District can levy
and collect taxes for the year 1965. Our answer Is that it
can.
Under the following authorities,the levy and assessment
of taxes by the Mstrict~ is governed by the same laws govern-
ing t.axatlonby independentschool districts.
a) Section 7 of said Article 2815h provides, in part:
I, The issuance of the bonds for
Junlor'C&.iegepurposes.,,and the provision
of the sinking fund for the retirement
thereof, and the payment of ln,terest
and the levying of t,axesfor the support
and maintenance of the Junlor College,
shall In so far as same is applicable,
be In accordance with the general election
laws ax&the laws governing the Issuance
of bonds Andythe levying of taxes finthe
Independent School Dlstrlc~t,. . .
b) Section 7a of said Article 2815h (Acts,1937, 45th
Leg.9 p. 248, oh. 130,.sea. 3~).
further provides, In part:
?!he Assessor and Collector of such .
Junlo~rCollege Dlstrlct shall assess the
taxes and collect the same in the manner
now provided by law for,the collection
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Honorable Henry Wade - Page 4
of ad valorem taxes.by County:~Assessors
and Collectorsand where.there:is not
,herein contained any.speciflcprovision,
or direction as to how anything connected
with the assessmentand collect,ion of
taxes shall be done, then the provision;
of the General Law shall prevail.'. . .
.,
cl The case of Shepherd v. San Jacinto Junior College
District, 363 S.W.2d.742 (Tex.Sup.1963), holds that Section 3
of Article VII of our State,Constitutionpertaining to taxation
for benefit of schools and school districts is-applicableto
Junior College Districts.
Although the college district was not created until %y
25: 1965. the district has the authority to levy and collect
taxes for ~theyear 1965 on ~allproperty within such newly
created district which was owned by the taxpayers on January 1st.
Blewitt v. Megargel County Line Ind. Sch. Dist., 285 S.W. 271
‘(Comm.App.1926);
.Afferbach,12 S.W.
....185
S.Wi, 367 (Tex..
The Court in Blewitt v. Megargel,'supra,stated:
: : ,f
. . . when an independentschool
district is created after the 1st of
,:January of a ~givenyear, all property ::
within such newly created district,
which wasowned by t.he,taxpayer on Jan-
uary 1st of that year, 'IS subjectto'
any tax authorized by.law, whether
such taxes have been authorized there-
tofore or may be authorized duringthe
year, and can,be levled~by the body : ..
given the power to levy $t any time
during the year;' . . . (Underscoring
added.)
4. and 5~.
In your fourth questionyou ask if the District may tax
intangibleproperties.within its boundaries;,,.(You do not
mention intangible assets of railroads or other companies).
We presume that In your fourth ,questionyoumeant to ask
whether the District might use the Intangible values deter-
mined by the State Tax Board for rallroads and other companies
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Honorable Henry Wade - Page 5 Opinion No. C-533
enumerated In Articles 7105 and 7105a of V.C.S. We will
answer this question acting upontis presumption. The other
companies mentioned are ferry companies. bridge companies,
turn plke companies, toll companies,oil pipe'llne companies,
all common carrier pipe line companies of ,everycharacter
whatsoever engaged in the transportationof oil, motor bus
companies, common motor carriers operating under certificates
of convenience and necessity Issued by the Railroad Commission,
and contract motor carriers operating under contract motor
carrier permit,sissued by the Railroad Commission. We answer
this question in the ne~gatlve.
In answer to the fifth que~stlon,the District may not
tax the rolling stock of railroads. As to the taxation of
rolling stock of other tr.ansportationcompanies, we express
no opinion as It is necessary to know the facts in each parti-
cular case, ~8inc.e
the taxation of .said~propertyfalls within
the same general.category of taxing per,sonalproperty of any
owner except railroads and other companies above mentioned.
There is no parti,cularprovision In the statutes providing
for the .sltusand valuation of rolling stock of other transpor-
tation companies and that 1s to be determined by t.hegeneral
law with reference to the sltus of personal property for taxa-
tion. For that reason 'wedecline to pass upon that matter
without 'knowing'the,speclficfacts pertaining to each company.
Article VIII, Sec..8 of the Texas Constitutionprovides
as follows.:
"Railroad Property; How Assessed..- All
prope~rtyof railroad companies shall be assessed,
and the taxes collected in the several counties
in which ,saldproperty Is situated, including
so much of the roadbed and fixtures as shall
Abe In each county. The rolling .stockmay be
assess~edin gross In the county where the prln-
cipal office of the company 1s located,, land
the county tax paid upon It ahal, be apportioned
by the Comptroller:,in proportion to the dis-
,tanaesuch road may run .throughany such County,
among the .severalcounties through which the
road.passes, as part of their tax asse,ts.
Article ma, v.c.s., provides for the sworn rendition of
property made,by railroads to the county assessor and provides
for rendition of all personal property of a railroad except
the rolling stock.
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Honorable Henry Wade - Page 6 Opinion No. C-533
Article 7169 provides that ~thevalue determined by the
County in whlch:.theprincipal office .ofthe road is located
shall be certified to the.State Comptrollerand by him certi-
fied and apportioned to each county-in proportion~tothe
mileage of the railroad in each county.
Articles $205 - 7113, inclusive,V.C.S., provide for the
determinationof the value of the intangibleassetsof rail-
roads and other companies by the State Tax Board and for
apportionmentof the values between the counties according
to the mileage of the road in each county. The intangible
values of motor bus companies, common carrier motor carriers,
and contrac,tmotor carriers are'likewiseapportioned in the
counties in proportion to the distance the lines traversed
by said carriers in each respective county.
The original Act (now Article 7105, V.C.S.) provided for
the taxation of.the intangible assets of railroads only, but
said Act has been amended, as shown by said Article, to include
ferry companies, bridge companies, turn pike or toll companies,
oil pipe line companies, oil common carrier pipe line~.companies
of every character, motor buacompanies, and common carrier
motor carriers:ogeratingundercertificates ,issuedby the Rail-
road Commission.,We are interested.onlyin the question as to
whether the district.may tax the intangible assets of,a rail-
road and other transportationcompanies above mentioned.
Opinions of the Attorney General's office ranging as far
back as 1909 and court decisions hold that the rolling stock
and intangible assets of a railroad are notesubject to taxa-
tion ~by~
school districts.andother subdivisionsof the county.
In Attorney General's DepartmentalOpinion No. 2794, Rook
63,,page 20, dated December 20, 1929; (page 286 Biennial Report
lg28-1g3o;: itwas held thatthe intangibleproperty and rolling
stock of .&ilroads are not subject to taxation by a school
districteven though the district comprises an entire county.
In Opinion dated ,January24, 1938 (Let,terBook 379, pages
779-783) it was held that the Nueces County Navigation District
No. One, which district had the same ~boundariesas the county,
could not tax the intangible assets of railroads and pipe line
companies for the reason that such tax would not be a State
and County tax.
In Opinion No. b-7469 dated October 29, 1946, it was held
that a junior college district which has boundaries coextensive
with the county cannot tax the intangibleassets or rolling
stock ofta railroad.
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Honorable Henry Wade - Page 7 Opinion No. C- 533
Opinion No. S-184 dated December 30, 1955, held that the
rolling stock and intangible assets of a railroad are not sub-
ject to taxation by the Dexar County Hospital District which
is coextensivewith the boundaries of the county.
We approve the holdings in said four opinions.
In State v. H. & T. C. Ry. Co., 209 S.W. 820 (C.C.A. 1919)
it was held that the intangibleproperty and rolling stock of a
railroad were not subject to taxation by a navigation district
in Harris County, even though the boundaries of the district and
the county were the same, and it further said that the district
had no power of taxation except as is expressly conferred upon
it by the law of its creation. The Court also said:
"!Pheintangible assets and rolling
stock of appellee is not property 'within
said district,' within the meaning of the
Constitution and statutes, and, the power
of the district to tax same not being
expressly granted by the act of its crea-
tion, the tax proposed to be levied is
unlawful."
In order forthe rolling stock and intangible assets of
a railroad to be taxed, it is necessary that the tax be a
county tax. In Dell County v. Hines, 219 S.W. 556 (C.C.A. 1920,
error ref.), the Court di ti I h d the H & T. C. Ry. Co.
case above mentioned. Th: f"a%ss% that case are that Be11
county, under the constitutionalprovision, Article III, Section
52 and Act of 1907 (Article778a, et seq., V.C.S.), voted bonds
for the constructionof roads and since the tax thereby became
a county tax, the Court held that the intangible assets and
rolling stock of railroads are subject to taxation. In this
case, Bell County.alonehad voted bonds under the same act as
the two counties in the case of
S.W.2d 81 (Tex.Com.App.1933),
case said:
'We do not think that the case of State
v. Railway Co., 209 S.W. 820, is an authority
as to the issue involved in this case. That
was a suit to collect taxes for the use and
benefit of the Harris county Ship channel
navigation district, on the intangible,assets
and rolling stock of the railway company
which had been apportioned to Harris county.
The boundaries of the navigation district
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Honorable Renry Wade - Page 8 Opinion No. C$33
were the same as the boundariesof Harris
county, but it was not Harris county. On
the contrary, it was a body corporate,a
separate legal entity, capable of suing
and being sued as such. In that case the
court held that, while the Legislature
might have authorized the district to levy
a tax on the intangibleassets and rolling
stock of the railway company, it had not
done so, for the reason that it had,autho-
rized the tax to be levied upon property
'within said district'; and, while recog-
nizing the power,of the Legislature to fix
the situs for taxation of all personal pro-
perty, as it had not fixed the situs of
rolling stock and intangible values for
taxation for district purposes in any dis-
trict, the navigation company had no power
to tax such property. Reference is here
made to the case above referred to, and
'theauthorities there cited, for a full
discussion of the question of taxing in-
tangible assets and rolling stock.
"For the reason that we have concluded as
a matter of law that the road bonds issued by
Bell county were county bonds, issued for a
county purpose; that the tax levied by the
commissioners1court is a county tax, and
that the intangible assets and rolling stock
of appellee apportioned to Ball county for
state and county taxation are the property
of such county for the purpose of taxation,
the judgment of the trial court is here
reversed and judgment is here rendered for
appellant."
In State v. T. & P. Ry. Co., supra, the Court said:
The standard by,which such appor-
tionment'ik to be made by the board is pres-
cribed in the act. .l&econclusionreasonably
follows that, by these apportionmentprovisions
of the statutes, the Legislature intended that
such apportionment,when made as prescribed,
would fix the situs of each portion in accord-
ance with the allocationmade by the board. It
is quite true, as contended by counsel, that 3?i
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Honorable Henry Wade - Page 9 Opinion No. C-533
the intangible tax law, it is provided in
effect (article 7105) that intar
pay the bonds, there provided for, shall
be levied 'against the property in each
of the counties, respectively.' Thls
language, in the connection used, plainly
comprehends all property situated, either
actually or by operation,,oflaw, in any
of the counties as such. (Emphasisadded.)
The opinion concluded as follows:
"As regards the value of the rolling
stock which under the provisions of
artiole 8, j$8, of the Constitution,
and of article 7169 of the statutes, was
apportioned by the state comptroller to
El Paso county, the situs for taxation
purposes became fixed in that county.
The reasons upon which this conclusion
is based are substantiallythe same as
those upon which our conclusion res-
pecting intangible assets is based. In
both instances, the situs became fixed
in the county at large, but not, of.
course,,,inany particular portion of the
county.
We believe that the Court in the T. & P. case correctly
held that the railroad was liable for the tax on its intangible
assets and rolling stock and further believe that it could also
have held that the tax was a county tax as held in the Bell
County case above mentioned. We believe that this is pmly
the reason the Supreme Court .onlyaQQroVed the judgment, and
not the opinion, of the Commission of Appeals. The Supreme
Court refused writ of error in the Bell County case.
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Honorable Henry Wade - Page 10 Opinion No. C-533
The Constitution,Article III, Sec. 52, reads in part
as follows:
f,
. . . under legislativeprovision
any county, any political subdivision
of a county, any number of adjoining
counties or any political subdivision
of the State or any defined district now
or hereafter to be described and defined
within the State of Texas, . . . uQon,a
vote of a two-thirdsmajority of the
resident property taxpayers voting thereon
who are qualifiedelectors of such district
or territory to be affected thereby, in
addition to all other debts, may issue
bonds or otherwise lend its credit in any
amount not to exceed one fourth of the
assessed valuationof the real property
of such district or territory,except that
the total bonded indebtednessof any city
or town shall never exceed the limits im-
QOSed by other provisions of this Consti-
tution, and levy and collect such taxes
to Qay the interest thereon and provide a
sinking fund for the redemption thereof, as
the Legislaturemay authorize, and in such
manner as it may authorize the tame, for
the following purposes, to wit:
The Constitutiondoes not say that the two counties con-
stitute a district, but says that each county may vote bonds
and levy a tax for the same. This clearly shows, as held in
the Eel1 Count that if the county issues the bonds, the
tax Hor paymen CtEiof is a county tax.
The original enabling act under the above provision of
the Constitutionwas contained in the act of 1207, page 249,
and only authorized the bonds to begissued by a county or
a political subdivisionof a county. A later act of 1909,
page 271, amended the 1907 act so as to add "district,,,now
or hereafter to be described and defined, of a county. The
original act of 1907 with the changes made in 1909 were
carried forward as Article 627, R.C.S., 1911.
It was not until 1927 that a separate act which is now
Article 778a - 7781, V.C.S., authorizesbonds to be issued
for roads by "any number of adjoining counties" and provides
that the counties are authorized to issue bonds for suCh,,Qur-
poses and "to levy and collect annually ad valorem taxes to
pay for the same. It IS, therefore,relevant to notice that
both the Constitutionand the Act of 1927 provide that the
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Honorable Henry Wade - Page 11 Opinion No. C-533
counties are authorized to levy the taxes to pay for the bonds.
We submit, therefore, that under the reading of the Constitution
and the first section of the Act, it is clearly provided that
the tax for the payment of the bonds is a county tax.
It is true that other sections of the 1927 act provide
for what is denominateda "road district ComQoSed of two or
more adjoining counties' (Articles778b, et seq.). However,
even though the area of the adjoining counties are mentioned
in the act as 'districts" , yet it is clear that it is intended
that the tax levied to ay the bonds is a county tax as shown
by Section 9 (Art. 7781 P which reads as follows:
"The amount of the bond tax to be levied
annually shall be determined by the commis-
sioners' courts of the respective counties
before the period at.which the annual levy
of taxes is made in the counties composing
said district, an-the of the tax
levied against the property in each of the
counties, respectively,shall be levied
by the commissioners'court of sumnty
at the same time and in the same manner
that other taxes in such counties are levied,
and the levy and collection thereof shall be
governed by the same laws that govern the
levy and collection of county taxes. . . ."
(Emphasis added.)
We submit that it is clear that the tax provided for
under the 1927 Act for adjoining counties, even though called
a district, is a county tax and that the Court properly held
that the railroad was liable for the same as the district
was Composed of El Paso and Hudspeth counties and could have
given that reason for its holding. It was the 1927 Act that
gave the two counties authority to levy the tax.
This, then, brings us to the question as to whether the
Act authorizing the creation of the Dallas County Junior
College District which has the same boundaries as Dallas County
authorizes the district to tax the intangible assets and roll-
ing stock of railroads. This requires an examination of the
Junior College District Act. The statute authorizing the crea-
tion of Junior College Districts is found in Article 2815h,
V.C.S.
Section 17 of the Act authorizes the formation of County
Junior College Districts in counties which would include Dallas
County. .
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Honorable Henry Wade - Page 12 Opinion No. C-533
Article 2815h-3b, Section 1 provides that the governing
boards of all public Junior Colleges have power to issue bonds
for the District and further provides that the total amount of
tax levied shall never exceed One Dollar ($1.00) valuation of
property "In the Junior College District".
Section 2a under the same Article provides for an annual
ad valorem tax not to exceed One Dollar ($1.00) rate of taxable
property "within the District" for the maintenanceof schools
and further provides that the amount of maintenance and bond
tax "of the district" shall never exceed the rate of One Dollar
($1.00).
Section 22 of Article 281531 provides that all taxes levied
for County Junior College Districts "shall be assessed and
collected in the manner provided in Section 7b and 7c.' (A foot-
note to this Article, page 637, V.C.S., states that this Section
probably should read 'Section7a and 7b'!. This is true for
two reasons, to wit: There is no "Section 7~“. There are
two Sections "7a" at page 627 but the first applies only to
districts operating prior to October 1, 1936. Therefore,
we will look to the other Section 7a and also to 7b.)
Section 7a provides for assessing and collectionof
taxes by the Assessor and Collector 'of the District", and
for the Board of Education to appoint a Board of Equalization
to equalize the value of all property subject to taxation "in
said District".
Section 7b (c) provides that where a district has the
County Assessor to assess the taxes that it may be assessed
at a 'gr%atervalue than that assessed for county and State
and in such cases the Assessor shall assess the
i3isF9 or said district on separate blanks furn+shed by said
district and prepare the rolls for said district . (&Qhasis
.m This shows that the tax is not for a county tax, or
it would not and could not have separate values and separate
rolls.
We see, then, that under the authority of the above
H. & T. C. Ry. Co. case, the intangible assets and rolling
stock of a railroad are not Droverts within the junior college
district even though the boundaries-ofthe district are the -
same as the county boundaries, for the reason that in each
of the Articles above mentioned, it is not provided for the
taxation of property "in the county" as was done in the Act
of 1927 and county wide bonds. For this reason, the decision
in the T. & P. Ry. case has no applicationwhatever to junior
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Honorable Henry Wade - Page 13 Opinion No. C-533
college districts, even though the boundaries of the county
and the district are the same. The statutes do not "in
effect", as stated in the T. & P. Ry. case, authorize the levy
of taxes against all property "in the county", for the reason
that the ttatutes provide only for the levy of taxes "in the
district. As stated by the blT.& P. Ry. case, the situs of
the rolling stock and intangi e assets of a rallroad are liable
only for state and county taxes unless there is some other act
in addition to the original act authorizing the taxing of such
property for other than State and County taxes.-
SUMMARY
---s--s
Answering questions pertaining to Dallas County
Junior College District, created pursuant to Article
2815h, V.C.S. on May 25, 1965:
1. It may contract with the Tax Assessor and
Collector of Dallas County to assess and
collect its ad valorem taxes.
2. The fees and commissionsof such Tax Assessor-
Collector for his services are 14%for assess-
ing and l$ for collecting.
3. The District may levy and collect taxes for the
year 1965.
4. Said District does not have authority to tax
the intangible assets of railroads and other
companies mentloned in Articles 7105 and 7105a,
V.C.S.
5. Said District does not have authority to tax
the rolling stock of railroads.
6. No opinion is expressed as to the taxation of
rolling stock of other transportationcompanies.
7. Attorney General's Opinion No. C-458 (June 21, 1965)
is hereby withdrawn and this opinion is substituted
in lieu thereof.
Yours very truly,
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Honorable Henry Wade - Page 14 Opinion No. C- 533
HGC/fb
APPROVED:
OPINION cOmT!t!EE
W. 0. Shultz, Chairman
Kerns B. Taylor
Paul Phy
John Banks
J. C. Davis
APPPOVED FORTHE ATTORNEY GENERAL
BY: T. B. Wright
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