Untitled Texas Attorney General Opinion

Honorable W. 0. Reed, chairman Appropriations Committee House of Representatives Austin, Texas Dear 3ir: Opinion No. O-3450 Re: Payment of taxes by the State to school distrlcts in Cherokee County, Texas; on Texas State Railroad lands. Your letter of April 24, 1941, submits the following question for the opinionof this department: "At the request of the members of the Ap- propriations Committee, please inform me whether or not the Legislature Is obligated to pay taxes to the school districts in Cherokee County, where the old Texas State Railroad is located, by authority of Article 2784-B, Revised Civil Statutes." Article 2784b, Vernon's Revised Civil Statutes of Tex- as, reads as follows: "Sec. 1. That from,and after the passage of this Act, all land in Cherokee County, Texas, owned by the State of Texas and Prison Commis- sion of Texas, except the land heretofore set aside for the Rusk State Hospital, but includ- ing the land heretofore set aside to the Agri- cultural & Mechanical i;ollegefor re-forestation purposes, shall be subject to taxation for school purposes where any such land is embraced within the metes and bounds of any independent or com- mon school district. "Sec. 2. Where any such land is embraced within the metes and bounds of any independ,ent or common school district, the Trustees of the Independent School District, of the Commlssion- em ' Court for a Common School District, are hereby authorized to levy and cause to be as- sessed and collected taxes for school purposes Honorable W. 0. Reed, Chairman, page 2 g-3450 for the amount and in the manner prescribed by the General Laws for the levy of school taxes. “Sec. 3. The taxes herein provided for shall be assessed and collected in the manner now orescribed br General Laws for the assess- ment-and collection of school taxes." Article 1, Section 3, of the Texas Constltutlon, pro- vides: "All free men, . . . have equal rights, and no man, or set of men, Is entitled to exclusive ._ separate public emoluments, or privileges, . . .ll Article III, Section 51, provides: "The Legislature shall have no power to make any grant or authorize the making of any grant of public money to any indlvldual, asso- cFatlon of Individuals, myicipal 02;:other cor- porations whatsoever, . . Except grant of aid in cases of public calamity. .~, Article III, Section 56, proh,ibFtsthe passing of loc'al or special laws: "Regulating the affairs of . . . . school districtsj". . . . ,, . . . Prescribing the powers and duties of officers in . . . school districts." "Regulating the management of public schools, the building and repairing of school ho$ses, and the raising of money for such purposes. "Exempting property from taxation." Article VIII, Section 2, authorizes the exemption of public property used f;r public purposes from taxation, but only 'by general laws. There is nothing ln our Constitution prohibiting the Legislature from conferring the power to tax State property- upon school districts. This power, however, in our opinion, cannot be conferred upon some school districts and withheld from others, without violating the above constitutional pro- visions -- at least, in the absence of a statute classifying school districts for the purpose of conferring such authority, . . Honorable W. 0. Reed, Chairman, page 3 O-3450 on the basis of characteristics which, considering the object and purpose of the law, affords a reasonable basis for ex- tending the right to those possessing the characteristics ati' denglng it to those who do not. Article 2784b confers the power to assess and collect taxes on State owned lands from the State only upon school districts situated in Cherokee County; Texas. No classiflca- tion of school districts Is attempted, only designation ac- cording to geographical location of the districts andlands involved. It is obvious that mere geographical location bears no reasonable relation to the objects and purposes of the law, so as to authorize this power and privilege to be conferred upon Cherokee County School Districts and withheld from other school districts in other counties wherein State owned lands may be located. Miller v. El Paso County, by the Texas Su- preme Court, not yet officially reported. Subjecting State lands to taxation by certain school districts necessarily involves the idea that State funds shall be appropriated to the payment of such taxes. Our Constitu- tion does not contemplate that the inhabitants of particular school districts (in the absence of public calamity) shall receive the benefit of the application of State funds to the purposes of the districts, when Inhabitants of other school districts, similarly situated, are denied the benefits thus accorded. The constitutional guaranty of equal rights to all is violated as effectively by extending privileges to local go-vernmentalunits in one area of the State which are denied to similar local governmental units similarly situated, in other sections, as by conferring special privileges and bene- fits upon the inhabitants directly. Our constitutional pro- visions are designed to prevent unreasonable discrimination between units of local self government, An appropriation of State moneys to certain school districts, when no similar ap- propriation is made to school districts similarly situated, operates to confer a special benefit upon and unduly favor the citizens and taxpayers of those districts, to the preju- dice of the citizens and taxpayers of the school districts not thus favored by the State. Hill v. Snodgrass, (Tenn.) 68 S. W. (26) 943. We therefore advise that, in OUP opinion, Article 2784b is unconstitutional. Next we turn to the question whether taxes may be due by the State upon the State Railroad land,sto the school dis- tricts involved, under the provlslons of general laws applica- ble alike to all school districts in the State. , . Honorable W. 0. Reed, Chairman, page 4 O-3450 Article 7150, Revised Civil Statutes, provides In Sections 17 and 18 thereof as follows: "17. State prLson property; school bona taxes.-- Provided that any~terrltory that has been acquired or may hereafter be acquired, by the State of Texas, as a part of any state Pri- son Farm nor property, shall not hereafter be ex- empt from the payment of its pro rata.part of any bond tax of a public school district of which the said territory was a part at the time bonds of the said-district which are now outstanding were issued, or whkh Is a part of said district at the time of the Issuance of bonds which may hereafter be voted; and the pro rata part of said tax that shall be paid by said territory shall be the proportionate part that the assessed valuation of such territory for county purposes is of the total assessed valuation of the school district for the year in which taxes are assessed. Provided, also, that the said bond tax shall be paid by the governing board of management of the State Prison System out of any funds appropriated therefor by the Legislature. It is hereby spe- cifically provided that the said bona tax shall be paid for each year that has elapsed since any such territory of a school district was acquir- ed by the State for and as a part of said prison system if any bonds were then outstanding; Acts 1927, 60th Leg,, 1st C. S., p. 224, ch:81, 1 1; Acts 1930, 41st Leg., 5th C. S., p. 191, ch. 49, x 1. "18. State prison property; school mainten- ance tax. -- Provided that any territory that has been acquired or may hereafter be acquited, by the State of Texas, as a part of any State Prison Farm or property, shall not hereafter be exempt from the payment of its pro rats part of any maintenance tax of a public school district of which the said territory WRY a part at the time said maintenance tax of the said district which are now outstanding was voted, or which is a part of said district at the time any maln- tenance tax may hereafter be voted by said dis- trict; and the pro rata part of said tax that shall be paid by said territory shall be the proportionate part that the assessed valuation of such territory for county purposes is of the total assessed valuation of the school district Honorable W. 0. Reed, Chairman, page 5 O-3450 for the year in which such taxes are assessed. Provided, also, that the said malntenance'tax shall be pald by the governing Board of Manage- ment of the State Prison System out of any funds appropriated thereby by the Legislature. It is hereby speciffcally provided that the safd main- tenance tax shall be paid for each year that has elapsed since any such territory of a school district was acquired by the State for and as a part of said-prison system. Acts 1930, 41st Leg., 5th C.S., p. 190, ch. 47, 1 1." The property of the State here subjected to taxation is "State Prison Farms or property". The property Involved, the lands of the State Railroad, is.no longer "State PrLson property". Senate Bill 267, Ch. 26, Acts Regular Sesslon, 37th Legislature, took this property from the jurfsdiction of the Board of Prison Commissioners and placed it in the hands of a Board of Managers appointed by the Lieutenant Governor to be sold or leased. This property is now under twenty-year lease to the T. & N. 0. Railroad Company. You are therefore advised that, in our opinion, the Legislature 1s not obligated for the payment of taxes upon this property under the provisions of Article 7150, Sections 17 and 18. Attention is directed to the factthat under the pro- visions of Article 7173, Revised Civil Statutes, 1925, this property, belonging to the State and being leased for more than three years, is taxable to the lessee to the extent of the value of the leasehold interest. Daugherty v. Thompson, 71 Tex. 192; State v. Taylor, 72 Tex. 297. Yours very truly ATTORNEY GENERAL OF TEXAS RWF:LM:wc By s/R. W. Fairchild R. W. Falrchild APPROVED MAY 16, 1941 Assistant s/Grover Sellers FIRST ASSISTANT ATTORNEY GENERAL Approved Opinion Committee By s/REK Chairman