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Hon, H. A. Triesch Opinion No. V-1161
Couaty Attomiey
Coma1 CoUnty Re: Exemption from ad valorem
New Braunfils, Texas taxes of Coma1 Plant, vailous
properties used in connection
therewith, and Kuehler Power
Station Site, all owned by City
Da&r Sir! of San Antonio,
We quote the following excerpt from your letter of Feb-
rurey 1, 1951:
“On October 24, 1942, the City of San Antonio
a@$uired all of the electric power plants and facilities
t&ratefora operated by the San Antonio Public Service
COmpany, except the local distz~ibution systems located
within the corporate limits of other mcorporated towns
and eLtfas. Among the propica-ties so acquired was the
cllltctric generating plant in the City of N,ew Braunfels.
commorly known as the Comai Plant, various tracts of
land, electric transmission lines., transformers, ease-
ments, and other proP+rty used in connection therewith,
all of which is situated in Coma1 County, Texas. A
forty-seven acre tract abutting on the Guadalupe Rive1
k@#wn as the Kuchler Power Station Site was included
in the property that was acquired in the sale,
“At the time of the acquisition of these properties
by the City of San Antonio it l?ased all of the properties
in Coma1 County with the ,exception of three transmis-
don lines to the Guadalupe-Blanco River Authority which
l&ase is non-assignable except with the consent of the
cityp butt the lease does provide that it might be assigned
to the Lower Colorado River Authority. This lease has
been assigned by the G. B. R. A. to the L. C. R. A. and
the L.. C. R. A. is now operating theee properties.
“The history qf tk+ tramsactions by which these
properties were acqbired by the city 01 San Antonio is
f&y act brth ln the opinion of Guadalupe-Blanco River
Authority vs, City of San Antonio, 200 S.W. (2nd) 989.
.
Hon. H. A. Triesch, Page 2 (V-1161)
“All cf the properties with the exception of the
three transmission lines are now operated by the L. C,
R. A. under the lease agreement and all of the proper-
ties so operated by the L. C. R. A. with the exception
of the Kuehler Power Station Site constitute an integral
part of the system,
“Among the many provisions of the lease agree-
ment, we find the following:
“ARTICLE V, Section 1: ‘The Authority agrees
to supply and the City agrees to take and pay for all of
the power and energy requirements of the City up to a
maximum requirement of 66,000 kilowatts over and
above that supplied by its Station “B”, and such addi-
tional power and energy as the City may require and
the Authority may have available.’
“ARTICLE V, Section 21: ‘If for any cause what-
c.oever, the Authority shall, at any time, be unable to
supply the power and energy requirements of all of its
customers, including the City, the City is to be entitled
to receive, to the extent of its requirements, as speci-
fied in this Article V, the entire output of the Coma1
Plant not in excess of 66,000 kilowatts, and failure of
the Authority to make ava:ilable to the City such output
shall constitute a default within the meaning of Section
1 of Article VI hereof,’
“ARTICLE VI, Section 1; ‘Section 1. The city
shall have the right to re-enter and take possession of
any of the property dascribed in “Exhibit A” attached
to this Agreement and occupied and used by the Authox -
Ity (which has not then been purchased by and conveyed
to the Authority), upon the happening of any of the fol-
lowing events: * * *
l”(b) If during the term of this contract the Au-
thority, except for causes ret out in Section 3 of AM-
cle VIII of thin contract, fails or refurer to deliver to
the City electric power’ and enex gy an provided in Arti-
cle V hereof.’
“The legality of the lease sgreemont between thr
Clty of San Antonio and the 0. B. R. A. bar beon sdju-
dicated and was upheld as a valid leare in Guadalupe-
Blanc0 River Authority vs. City of San Antonio, 200 S.W.
(2nd) 989. The right of ownership to the plant has also
been adjudicated in the case of City of New Braunfelr
Hon. H. A. Triesch, Page 3 (V-1161)
vs. City of San Antonio, 212 S. W. (2nd) 817, ref. n.r.e.
“The assessor and collector of taxes has been
listing and assessfag this property on his roll ever since
the acquisition of the plant by the City of San Antonio
and has been instructed by the Comptroller to continue
listisg and assessiag the same even though the City of
San Antorio refuses to list it because of their claim of
exemption.
“I am submitting the following three questions
with the request that you be kind enough to give us your
opinion thereon.
“(1) Are the electrical generating plant, the lands
on which the same is situated, easements, transmission
lines, transformers and other facilities used in connec-
tion with the operation of said plant subject to taxation?
‘(2) Is the forty-seven acrs tract (Kuehltr Power
Station Site) aubjsct to taxation?
‘(3) If any part of the property is exempt from
taxation, should the prop&ties so exempt be listed and
rendered by the alsessor in accordance with the provi-
sions of Azticle 7192 and Article 7193, R. C. S.? *
The various properties covered by your first question
are public properties held for public purposes and are clearly ex-
empt from taxation. Tax. Const. Art. XI, Sec. 9; City of New Braun-
fele v. City of San Antonio, 212 S.W.Zd 817, 825 (Tex. Civ. App. 1948,
error x-e . nz.8. ‘: A. h b.. Consolidated Independent School Dist. v.
p 184 S.W.Zd 914 (1945); Lower Colorado
u or ty v. Chemkai Bank & Trust Co., 144 Tex. 3L6, 1YO
. . 40 (1945) s
In your letter requesting our opinion, you state the fol-
IowIng facts relating, to the Kuehler Power Station Site:
u
. . . it should be observed that the 47-acre,tract
is not presently used in the operation of, the plant. None
of the facilities of the plant are situated thereon. The
same in fact, constitutes a small park that is being main-
tained and used by the employees of the L. C. R*.A. which
Authority has charge of the property under the lease.
Various local organizations are accorded the right to
use it upon request and with permission of the Authority.
The property was originally acquired by the San Antonio
Public Service Company for a powers station site but the
Hon. H. A. Triesch, Page 4 (V-1161)
same was abandoned after purchasing the present
Coma1 Plant site. While in the hands of the Public
Service Company the same was used for Boy Scout
purposes which use has been discontinued since the
acquisition of the property by the City of San Antonio.”
The fact that the Kuehler Power ‘State site is not
presently used in connection with the operation of the Coma1 Plant
does not make the property subject to taxation. At the time the
City of San Antonio acquired the properties of the San Antonio Pub-
lic Se’rvice Company, the City issued and sold revenue bonds in the
sum of approximately $34,000,000.00 and used the funds to purchase
the outstanding stock of the Public Service Company. The Trustees
in Dissolution of the S.A.P.S. Company conveyed all of the assets
of the Company to the City. These facts just summarized are given
in Guadalupe-Blanc0 River Authority v. City of San Antonio, 145
Tex. 611, 200 S.W.Ld 989 (1941). The property which was purchased
with money from a special fund, thi $34,000,000.00 bond issue, in
excess of the portion required for actual operation of the electric
power system is a-part of the special fund amd iS therefore held by:the
Cityibf Sarxtin&enio fos a.l%&&c;prrrpos&and is exempt from taxation.
State v. City of Houston, 140 S.W.2d 277 (Tex. Civ. App. 1940; error
ref.).
ThC answer to your third question is,;as stated in your
brief, that the Assessor and Collector of Taxes is without authority
to list and assess the ejLempt properties for taxation. Article 7145,
V.C.S.
SUMMARY
The Coma1 electric generating plant, various
tfacts of land, electric transmission lines, trans-
formers, easements, and other property used in con-
nection therewith, owned by the City of San Antonio
and opeeated by the Lower Colorado River Authority
as assignee under a lease agreement with the City is
public property held for public purposes and is exempt
from taxation. Tex. Const. Art. XI, Sec. 9; City of New
Braunfels v. City of San Antonio, 212 S.W.2d 817, 8d.5
~TCX, Clv., App. 1948, error ref. n.r.e.); A. & M. Con-
solidated Ind. School District v. City of Bryan, 143 Tex.
348 184 S W 2d 914 (1945) Lower Colorado River Au-
thoiity i. ?h;mical Bank & Trust G 0.2 4 Tex. 326,
190 S . W . Ld 48 (1945). Th e Kuehler Power Station site
was acquiieb by the City of San Antonio for public pur-
poses~and is still held by the city as a part of the fund
created.by the sale of revenue bonds. Such site is there-
fore exempt from taxation even though it is not presently
. .
Hon. H. A. Triesch, Page 5 (V-1161)
used in connection with the operation of the Coma1
plant. State Y. City of Houston, 140 S.W.2d 277 (Tex,
Civ. App. 1940 , error Pe s D l%s Assessor and Col-
lector of Taxes has no authority to lisb and assess
exempt properties for taxation. Art. 7145, V.C.S.
Your8 very truly,
PRICE DANIEL
Attorney General
APPROVED:
-Mrs. MariettaMcGreg6r Creel
,W. V. Geppert Assistant
Taxation Divisiom
Jesse P. Luton, Jr.
Reviewing Assistant
Char&es D. Mathews
First Assistant
MMC/mwb