Untitled Texas Attorney General Opinion

Mr. H. D. Dodgen Opinion No. O-2864 Chief Clerk Re : Liability of Game, Fish & Oyster Game, Fish & Oyster Commlssion to Water Improvement District Commission for "flat rate water service charge," Austin, Texas for customary charge for water used, and for sinking fund taxes. Dear Sir: This will acknowledge receipt of your letter of Octo- ber 26 1940, wherein you request the opinion of this department as to 8ertain matters therein set out. We quote your letter as follows: "The State of Texas owns 40.57 acres of land lying within the boundaries of the Bexar-Medina-Atascosa Counties Water Improvement District No. 1. There has been built on this land a fish hatchery which is now in operation. The hatchery is being supplied with water from an irrigation canal operated by the above water improvement district. "We respectfully request your opinion on the following questions: "1. Should the Game, Fish and Oyster Commission be required to pay the flat rate water service charge custom- arily assessed against owners of land lying within this district? "2. Is the Game, Fish and Oyster Commission required to pay the customary charges for water used, such charge being in addition to the flat rate charge? "3 . Is the Game, Fish and Oyster Commission required to pay sinking fund taxes assessed by the Water Improvement District? "4. Does the Bexar-Medina-Atascosa Counties Water Improvement District No. 1 have authority to furnish water without charge to the State Fish Hatchery located within that district? 29 Mr. H. D. Dodges, Pago 2 ‘3. fs the CIaw, Fish and Oyster Commis- sion roqulrod to pay sinking fund taxes assessed by the Water Inprovewnt Di8triOtT '4. Does the Bexar-&dine-Ataesosa Countlos Water ImprovemaatDlstriOt Ilo.1 hare authority to furnish water without sharge to the Stats Fish Iiatohery looated withln that dfmtrlot? Tour attention is oaUed to t.b lxlstenoe of sn agreewnt the orlglnal copy OS whloh is belieredto be In tb file of the'AttorneyGen- eral's Offloe, relative to the supply of water to be furnished the State Fish Batolmry located within the boundaries of the Bexar-Medina-Atasoosa Countiss Water Iaprorewnt Dirtriot lo. l.* We shall dlsouss the agrsement referred to In mother portion of this opinion. Under our 86atutes when a water oontrul and improve- ment dietriot is organlead, it is rspuired to set up two funds. Ona of those, prorlded for in Article 9115, R. C. 3.. 1925, 18 the wlntcrest alld sinking fund,” and the other , denozninated~ authorized b;l Article 7714, 8. C. S., 1925, is the %aintenanoe and operating rund." Artiolm 9712, B. c. S., 1925, empowere the direotors to levy a tax upon all propsrty within tha distriot suffiolent to pay the lntsrest on its bonds and to provide a slnklng fund to pay off the bonds at maturity. The dlreotors of tlm Dls- trlct under Artlols 1113 are required to plaoe in tha first fund above menttoqed money reallsod iron taxes.' Moneys ior ths wlntenanoe and operating fund are derived rrom two typss or oharges ror water servioe. The direotors OS the Distrlst wider the provisions of Artiole 7152, R..U. ,S.,1925, are require4 to estimate the operating and Oaintenanoeexpense at tb beginning of eaoh year, A’ portion ot the neoessarg fund is then to be raised by assess- aents against all lrrlgablr lsnds within the dirrtriot; pro rata per aore, and the remainder is to k paid by porsonc taking water. We assume that what loa refer ta as tlm “flat rate water oharge* is the pro rata assesswnt levied against -Oh Mr. H. D. Dodgen, page 3 (O-2864) the State government in the absence of provisions of theconsti- tution or statutes specifically granti ng them relief thereform. The exemption from taxation may not be construed to relieve them of such other burdens. See 40 Tex.Jur. 109 and authorities cited. We doubt that It could be seriously contended that the customary charge for water used, even remotely approaches any of the accepted definitions of a **tax." This charge is nothing more than a fee for a service to be paid only by those making use of such service. There might have been some doubt as to whether the as- sessments or "flat rate water charge" Is a lltax,"had not our Appellate Courts already foreclosed the question. This assess- ment is levied against all irrigable lands within the District without regard to whether the owners of such lands avail them- selves of the water service or not. However, the statute authorizing this charge scrupu- lously refrains from designating this charge as a 14taxwand, as stated, our Courts, in the few instances when the,question was before them, have pointed out that this assessment is not a tax." In Brady vs. Hidalgo County Water Control and Improve- ment District (Civ.App., San Antonio, 1932) 36 S.W.(2d) 298; affirmed by the Commission of Appeals in 91 S.W. (2d) 1058, the court used the following language: "The district cannot levy taxes except to provide interest upon its bonds and sinking fund for the retire- ment of its bonds. Its operating expenses, after construc- tion expenses, must come from water rentals and service charpes." In Western Metal Manufacturing Company of Texas vs. Cameron County Water Improvement District (Civ.App. Fort Worth, 1927) 105 S.W.(2d) 700, error dismissed, the'court makes the following observation: "The prayer in plaintiff's petition asking for a man- damus to require the assessment and collection of fees, against land in the district for the purpose of raising funds to pay the current maintenance and operating expense of the district was fully justified, if recovery should be had by it. We have shown that by the provisions of arti- cle 7752, it is the duty of the directors to estimate the current expense for the year and to collect it from the land owners in the district in the manner and proportions therein set out. .*** It will be noted, however, that the . - ,-- Mr. H. D. Dodgen, page 4 (O-2664) prayer in the petition asks for the writ of mandamus to require the collection of .‘taxes’as well as assessments against the property in the district to raise revenues for the purpose of paying plaintiff’s debt. If the writ is granted it should not require the collection of ‘taxes’ .for the purpose mentioned, since taxes can only be cr lected to cay interest and to create a sinking fund to re- tire the bonds when due.” The following language from.Texas Jurisprudence also adheres to this distinction: “While taxation is the source of the funds used for the payment of interest on the district’s bonded indebted- ness and the accumulation of a sinking fund, expenses of maintaining and operating the water system cannot be met in this way. Such expenses mustbe paid, in the case of water improvement districts at least, from a fund known as the ‘maintenance and operating fund, I which is created by levy- ing pro rata assessments against all irrigable lands within the districtand by making charges for all waters delivered ,‘- to water users.” 44 Tex.Jur. 295. .(, /j, Another opinion by the Commission of Appeals declared: “The only provision in the chapter expressly authoriz- ing a tax for any purpose is to be found in Article 5107- 69 (now Art. 7712)” Creager et al v. Hidalgo County Water Improvement Dist. No. 4. 283 S.W. 157. It becomes apparent, therefore, that the answers to your first and second questions are that the Commission is re- quired to pay both the “flat rate water service charge” assessed against all irrigable land in the district and the customary charge for water used-unless the District has by the contract mentioned above relieved the Commission of the burden of these charges. The agreement to which you have directed our attention recites that the Commission agreed to locate a fish hatchery within the boundaries of the Bexar-Medina-Atascosa Counties Water Improvement District No. 1 and that the directors of the District agreed to furnish the land and water necessary for so long as the property was used for a hatchery. By a resolution of the Board of Directors of the District,,which was incorpor- ated into the agreement, the District agreed to furnish water to the Commission “without charge.” :-~ Two possible constructions of the language “without charge” occur to us--that neither the “flat rate” nor the . -_ hr. H. D. Dodgen, page 5 (o-2864) "customary service charge" would be paid or that the Commission would be relieved only of payment of the "customary service charge." The District has apparently adopted the latter con- struction, while the Commission has adopted the former. We have no way of knowing which construction those who made the agreement intended or whether the meaning of this phrase was even discussed. However, at all events, it appears to be undisputed that the parties intended to relieve the Com- mission at least of the burden of paying the customary service charges based upon the amount cf,water used. In the absence of more ,evidencewe feel constrained'to.ado~pt.thatconstruction. Under such a construction, the answer to your first question is Iryes",while the answer to your second question is and you are so advised. The obvious answer to your third rlnolV, question, under the pertinent authorities cited above is "no." Your fourth question concerns the authority of the directors of the D1stric.tto donate water service to theCommis- sion. We find nothing in the statutes which msy be construed as authorizing the directors to dispose of water service other- wise than by.sale. Sound public policy would mi.litateagainst a presumption of such authority. See Jones v. Wi.lliams,121 Tex. 94, 45 S.W. (2d) 130 79 A.L.R. 983; Llano County v. Knowles, et al, (Civ.App.$ 29 S.W. 549; and Dreeben vs. White- hurst (Comm.App., 1934.)68 S.W. (2d) 1025. We have?reached tbc:conclusion however tha,tyour ob- ject in asking the fourth o,?l?st~ion was to determine whether the District may furnish weter t,othe Commission witbout charge under the agreement to which you directed our attention ,inyour letter, and we will answer i ::under that assumption. Tht1t agreement, as pointed out above, recites as a consideration the promise on the part of the Commission to locate a fish hatchery within the boundaries of the District. 'WCknow of no reason why this would not be valid consideration upon which the Dis- trict would be authorized to furnish the water service. The bi~ndingeffect 01 i~r,i:< coni,rac t might be upheld on still another basis. It war.bold in a recent case that even though a contract enter4 into ky7 dir~c.tcr::of a Water Improve- ment District is prohibited by the Cons,titutlonand laws of the ,State, yet if it was deliberately entered into by the proper District officials, thereunto lawfully auti,cl;~iz?d and the other party was induced thereby to perform service:;exacted of it in rel~ianceupon the contraci:and the District accepted such serv- ices and benefits derivable therefrom, the District was bound by the terms of the contract. Nagle, Witt, Rollins Engineering Co. vs. La Salle Water Improvement District NC. 1 (Civ,App., ur. Ii. D. Dodgen, Page 8 latter aonstruotion, while the Commission has adopted the f ora4r. tie have no way of knowing which eonstruotlon those who trade the agreemnt intended or whether the msn- ing of this phrase was even discussed. However, at all 4vent 8 ) it appears to be undieputed that the parties intend- ed to relieve the Comiission at least of the burden of pipp lng the customary service charges based upon the amount of water used. In the absence of more evidenoe we tee1 eon- strained to adopt that oonstruotlon. Under such a construction, the answer to your rirat question is eyes?, while the answer to your seoond Ques- tion is “non, and you are so advised. The obvious answer to your third question, under the pertinent authorities oited above is “no. n Your fourth question eonoerns the authority of the direotoro of the Distriot to donate water service to the Corn- mission. be find nothing in the statutes which may be oon- strued as authorizing the dlreotors to dispose of water serv- ice otherwise thsn by sale. Sound publlo polioy would mill- tats against a presumption of suoh authority. See Jones t. Williams, 131 Ter. 94, 45 S. W. (9d) 130, 79 A. L. R. 983; Llano County v. Rnowles, et al, (Civ. App.) S9 9. W. 349; gi&Dreeben vs. Whitehurst (Comm. App., 1934) 68 5. W. (Rd) . We have reaahed the oonoluslon however that your object In asking the fourth question was to determine wheth- er the Distriot may furnish water to the Commission without aharge under the agreement to which you dlreoted our atten- tion in your letter, ahd we will anewer it under that araruql)- tlon. That agreement, aa pointed out above, recites as a consideration the promlse on tho part of the Conm.lsalon to locate a fish hatohery within the boumlaries of tlm Distrlot. We know of no reason why this would not be valid oonaldera- tion upon whioh the Dlstriot would be authorized to furnish the water eervioe. The bindlhg effeot of this oontraot might be Up- held on still another basis. It was held in a reoent aaoo that even though a contract entered Into by dimotors of a Water Improvement District is prohibited by the Constitution and laws of the State, yet if it was deliberately entered . Mr. H. D. Dodgon, Pa&8 7 into by the proper Distriot oiiloials, themunto lawfully authorized end the othar psrty was lnducpd thereby to par- fo r msenlo ss lxaotsd of it In relianoe upon tb oontraot and the Dirtriot aooeptod such ssnioss and benstlts ds- Arable thereiron,the District was bound by the terms ot the oontraot. Waglo, Witt, Bolllns EngInesrIng Co. vs. La Salle Water Impror~msnt Dlstriot No. 1 (Clr. App., San Antonio, 1931) 44 8. W. (Ed) 1033, error dismissed. Sss also Oltl 0i Tyasr f. Jester, 97 l's% 344, 78 8. W. 103S; Sludsr w. Gitr of San Antonio (Corn.App.) 3 8. W. (Zd) S4lj cab Eudspsth County Consenatlon & Reolanmtlon Dist. T. Spars (Clr. Am., El Paso, 1931) 39 8. W. (2d) 94. You are advissd, therefore, that under th8 agree- ment referred to, the Dlstriot is authorizedto furnish water to tbr State Fish Eatohsry looated within that Dis- trlot wwithout oharga.* Trusting that we hate sufrloientlyanswered your LnptirJ, ws are Yours wry trn&y - - Peter Manisoaloo Assistant APiRCfVEDNOV27, 1940 i s ATTORNEY GENERAL OF TEXAS