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Untitled Texas Attorney General Opinion

Court: Texas Attorney General Reports
Date filed: 1988-07-02
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                        May 13, 1988



Honorable D.C. Jim Dozier          Opinion No. JR-902
Montgomery County Attorney
Courthouse                         Re: What constitutes     an
Conroe, Texas   77301              "improvement district" for
                                   purposes of article   1667,
                                   V.T.C.S.   (RQ-1253)

Dear Mr. Dozier:

     You have asked questions     concerning article 1667,
V.T.C.S.  This statute, enacted in 1915 and most recently
amended in 1941, provides in relevant part:

        In all counties which have or may have a
        County Auditor and containing a population of
        [llO,OOO] or more . . . and in which counties
        there exists or in which there may be created
        any improvement,    navigation, drainage,   or
        road or irrigation district, or any other
        character of district having for its purpose
        the expenditure of public funds for improve-
        ment purposes,   or for improvements   of any
        kind whether   derived  from the issuance. of
        bonds or through any character     of special
        assessment, the County Auditor shall exercise
        such control over the finances of said dis-
        trict as hereinafter provided.   [See V.T.C.S.
        art. 1668 et sea.]

You expressed concern about the effect of this statute on
certain districts in Montgomery County, which has a popula-
tion exceeding 110,000. Your letter states:

        We find no clear authority defining        the
        'improvement districts'   to which    article
        1667, V.T.C.S., on its face applies.    Accor-
        dingly, we ask the following questions:

           1. What constitutes an 'improvement    dis-
        trict' as contemplated by the statute?




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Honorable D.C. Jim Dozier - Page 2 (JR-982)




           2. Is an emergency communication district
        created pursuant to article 1432e, V.T.C.S.,
        an improvement   district   subject to   the
        financial control of the county auditor?

           3. Is a county hospital district an im-
        provement district subject to the financial
        control of the county auditor?

           4. Is a rural fire prevention     district
        created   pursuant   to   article    2351a-6,
        V.T.C.S., an improvement district subject to
        the financial control of the county auditor?

           5. Is the county entitled to reimburse-
        ment from improvement   districts under the
        financial control of the county auditor  for
        the salaries of such additional    assistant
        auditors as may be required to perform the
        duties imposed by article 1667?

In answer to your first question, we have found no precise
definition of "improvement district"   in Texas statutory  or
case law.    However,  definitions   of "improvement"   found
elsewhere may be useful.

     Black's Law   Dictionary     (5th    ed.   1979)   defines   an
improvement as:

        A valuable addition made to property (usually
        real estate) or an amelioration in its condi-
        tion, amounting to more than mere repairs  or
        replacement, costing labor or capital,    and
        intended to enhance   its value, beauty    or
        utility or to adapt it for new or further
        purposes. . . . An expenditure to extend the
        useful life of an asset or to improve     its
        performance over that of the original asset.

This definition essentially addresses the subject matter  of
real estate,   land or property. An improvement    generally
involves a "permanent   addition" or "betterment"   of real
property  that enhances    its capital value and involves
expenditure of labor and money and is designed      to make
property more useful or valuable.  Richview Nursina Home v.
Minnesota Dewartment of Public Welfare, 354 N.W.2d 445, 458
(Minn. App. 1984). An improvement must be permanent and it




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        Honorable D.C. Jim Dozier - Page 3 (-902)




        must enhance the value of the premises for general purposes.
    -   Overcase v. Akra, 197 Mont. 76, 642 P.2d 1058, 1062 (1982).

             An improvement involves a change in the condition    of
        property or real estate from a lesser developed stage to a
        more developed stage. Improvement means the state of being
        improved, especially enhanced in value of excellence.   Mvra
        Foundation v. Harvey  100 N.W.2d 435, 439, (N.D. 1959).   In
        order for an improv;ment to be made there must previously
        have been something to be improved.     An improvement  con-
        sists in the amelioration or betterins of certain wremises.
        Provident Mutual  Life Insurance Co; of Philadeiwhia      v.
        Douaherty, 125 N.J. Eq. 442, 6 A.2d     184, 187   (N-J. ch.
        1939).

             A definition of an improvement district that takes into
        consideration the legal meaning of "improvementl' as it has
        been traditionally  interpreted by the courts will neces-
        sarily imply a type of special district that is concerned
        with the permanent    enhancement  or betterment   of   real
        property to make it more useful or valuable.  An improvement
        district is thus concerned with the enhancement or better-
P
        ment of real property from a lesser developed    stage to a
        more developed stage. This definition describes the intent
        and purpose  of the various types of special districts
        that are mentioned  in article 1667, V.T.C.S.    Navigation,
        drainage, road and irrigation districts   are all basically
        established in order to enhance the value of land by
        increasing its usefulness.

             The Texas Constitution   includes two provisions   that
        pertain to the betterment or enhancement of land through the
        establishment of special districts.    These provisions  are
        found in article III, section 52, and article XVI, section
        59. Article III, section 52 generally empowers     counties,
        cities, towns or other political      corporations  or sub-
        divisions to issue bonds, levy and collect taxes for the
        following purposes:

                   (1) The improvement of rivers, creeks and
                streams to prevent overflows, and to permit
                of navigation thereof, or irrigation thereof
                or in aid of such purposes.
    P               (2) The construction  and maintenance  of
                pools, lakes, reservoirs, dams, canals and
                waterways for the purposes    of irrigation,
                drainage or navigation, or in aid'thereof.




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Honorable D.C. Jim Dozier - Page 4   (m-902)




           (3) The construction,    maintenance  and
        operation of macadamized,  graveled or paved
        roads and turnpikes, or in aid thereof.

Tex. Const. art. III, 552(b). This constitutional provision
relates to the general improvement  of lands. Bonds may be
raised by a local government or by a special district.

     Article XVI, section  59, of the Texas Constitution
specifically   deals with  the establishment   of   special
districts for conservation  and reclamation  purposes.   It
provides that:

           (a) The conservation   and development   of
        all of the natural  resources of this State,
        including the control, storing, preservation
        and distribution   of its storm and flood
        waters, the waters of its rivers and streams,
        for irrigation,  power and all other useful
        purposes, the reclamation   and irrigation  of
        its arid, semi-arid and other lands needing
        irrigation, the reclamation   and drainage  of
        its overflowed lands, and other lands needing
        drainage, the conservation and development of
        its forests, water and hydro-electric   power,
        the navigation  of its inland and coastal
        waters, and the preservation and conservation
        of all such natural resources    of the State
        are each and all hereby declared public
        rights and duties: and the Legislature   shall
        pass all such laws as may be appropriate
        thereto.

            (b) There may be created within the State
        of Texas, or the State may be divided    into,
        such number of conservation and reclamation
        districts as may be determined.to be essen-
        tial to the accomplishment of the purposes of
        this amendment  to the constitution,     which
        districts shall be governmental agencies   and
        bodies politic and corporate with such powers
        of government   and with the authority      to
        exercise such rights, privileges   and func-
        tions concerning the subject matter of this
        amendment as may be conferred by law.

     Improvement  districts that   are established   under
article III, section 59, and article XVI, section 59, are




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    Honorable D.C. Jim Dozier - Page 5    (m-902)




    classified as "natural resource special districts" by the
    United States Census Bureau. The Census Bureau has esta-
    blished twelve   functional    classifications for   special
    districts.  These classifications are based on two criteria.

               (1) The name of the entitv involved which
            in many    instances, such as for     housing
            authorities and hospital districts provide a
            specific guide. . . .

                (2) the function or functions reported as
            being performed   bv individual units. . . .
            (Emphasis added.)

    United States Census Bureau of the Census, Census of Govern-
    ments:  1977, Vol. I, No. 1, Governmental Organization (U.S.
    Government Printing Office, Washington D.C., 1977), at 5.
    Using this criteria, the United States Census Bureau has
    established a classification that includes twelve types of
    special district.  They are as follows:

            (1)   Natural Resources
P                 Soil Conservation
                  Drainage
                  Irrigation, Water Conservation
                  Flood Control
                  Other Natural Resources

            (2)   Fire Prevention

            (3)   Urban Water Supply

            (4)   Housing and Urban Renewal

            (5)   Cemeteries

            (6)   Sewerage

            (7)   School Building Authorities

            (8)   Parks and Recreation

            (9)   Highways

            (10) Hospitals

            (11) Libraries




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Honorable D.C. Jim Dozier - Page 6 (-902)




        (12) Other Single-Function   and Multi-Function
             Districts
                                                                    ?
Since improvement districts are fundamentally concerned with
the amelioration or change in the character of land, they
generally  fall within the "natural resources"       type of
special district.  Improvement districts serve very distinct
functions that are exclusively related to improvements     in
land. In our opinion, an "improvement     district" for pur-
poses of article 1667, V.T.C.S.,     pertains to a district
which  is primarily   concerned with the enhancement       or
betterment of the land or other natural resources.   Improve-
ment districts  are distinguishable from fire prevention,
hospital and emergency communications districts.

     Fire prevention  districts  are created under   the
provisions of article  III, section 48-d.   This article
provides:

           The Legislature  shall have the power to
        provide for the establishment and creation of
        rural fire prevention     districts  and   to
        authorize a tax on the ad valorem    property
                                                                        -.
        situated in said districts. . . .

These districts are created to combat fires in rural areas
through the purchase of modern fire-fighting equipment and
the hiring of necessary personnel.

     Hospital districts are created under the provisions   of
article XI, section 9, of the Texas Constitution.        This
article states:

           Sec. 9. The Legislature   may by law pro-
        vide for the creation, establishment,    main-
        tenance  and operation    of hospital     dis-
        tricts . . . providing that any district    so
        created shall assume full responsibility   for
        providing medical and hospital care for its
        needy inhabitants. . . .

Providing medical  facilities and    services is   the    primary
purpose of a hospital district.

     Emergency communication districts are created under the        ?
provisions of the Emergency Telephone   Number Act, article
1432~ of the Business Corporation Code. This act provides:




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     Honorable D.C. Jim Dozier - Page 7 (JM-902)




                Sec. 2. It is the purpose of this Act to
             establish the number 9-l-l as the primary
             emergency telephone number of use by certain
             local governments    in this state and    to
             encourage units of local government      and
             combinations of those units of local govern-
             ment to develop and improve emergency   com-
             munication procedures  and facilities  in a
             manner that will make possible the quick
             response to any person calling the telephone
             number 9-l-l seeking police, fire, medical,
             rescue, and other emergency services.

                . . . .

                Sec. 5. An emergency communication    dis-
             trict may be created as provided by this Act.

          There is nothing in the character     or function of a
     hospital,   fire  prevention   or   emergency    communication
     district that relates to the enhancement    or betterment    of
     land. Their purpose is primarily      to provide   a distinct
     service to a select population rather than to make permanent
     changes to real property or land. Although it can be argued
     that these districts result in general improvements for the
     community  at large, the courts have not traditionally
     defined "improvement"   in this manner.     A definition     of
     "improvement district"   that takes into consideration    both
     the legal definition of "improvement" and the United States
     Census Bureau classification of special districts    generally
     excludes a hospital, fire prevention and emergency    communi-
     cation district from its meaning.

          The auditing provisions    of article   1672, V.T.C.S.,
     apply to improvement districts   and other similar districts
     that make improvements to land such as navigation,    irriga-
     tion, drainage and road districts.     They do not apply to
     hospital,  fire prevention     and emergency    communication
     districts.

          Finally, you ask whether a county is entitled to reim-
     bursement by districts for salaries of assistants who aid in
     the auditing  functions performed by the county auditor
F-   pursuant to article 1672. As you point out, former article
     1673, V.T.C.S. (now repealed), authorized county auditors in
     counties with a population in excess of 330,000 to apply for
     assistants to help carry -out the duties imposed by article
     1667 et sea.     No current statute expressly     authorizes




                                   p. 4451
Honorable D.C. Jim Dozier - Page 8   (-502)




assistants for these specific purposes.    However,   section
84.021 of the Local Government Code provides in part:           ?

           (a) From time to time the county auditor
        may certify to the district judges a list
        stating the number of assistants        to    be
        ZErinted,   the name, duties, qualifications,
             experience   of each appointee, and the
        salary to be paid each appointee.     The dis-
        trict judges, after careful consideration     of
        the application   for the appointment of the
        assistants and after inquiry concerning      the
        appointees'   qualifications,   the   positions
        sought to be filled, and the reasonableness
        of the requested salaries,     shall prepare   a
        list of the appointees       that the    judges
        approve and the salary to be paid each.      The
        judges shall certify this list to the commis-
        sioners court, which shall order the salaries
        to be paid on the performance of services and
        shall appropriate an adequate amount of money
        for this purpose.
                                                                    h
Article 1672, V.T.C.S., provides that county auditors shall
receive for their services    in auditing the affairs    of
special districts within article 1667

        such compensation as the commissioners   court
        may prescribe,  which shall be paid by the
        county out of the general fund and reoaid to
        the county by such districts       by warrants
        drawn upon the proper funds of such district.
        In such counties which have or may have as
        many as five such districts, the compensation
        allowed the county auditor for his services
        on behalf of such districts shall be not less
        than the sum of twelve hundred dollars per
        annum, to be prorated among the districts    in
        such proportion   as the commissioners   court
        may determine.   (Emphasis added.)

     Your letter states that article   1672 "does not on its
face authorize the payment of such assistants from funds to
be reimbursed by the improvement districts."     We believe,
however, that such authority   is at least implicitly    con-
ferred by section 84.021 of the Local Government Code in
combination with article 1672, V.T.C.S.   The former statute
permits the hiring of needed assistants, and the latter




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     Honorable D.C. Jim Dozier - Page 9      @M-902)




     authorizes   compensation by   special districts   for  the
r    "services@* of county auditors  in auditing the affairs   of
     such districts.   In our opinion, the services contemplated
     by article 1672 necessarily  include the services of needed
     assistants hired under the authority of section 84.021.

                             SUMMARY

                The provisions of article 1667, V.T.C.S.,
             do not
             districtay~os;~t~~   d~~~=~~~Yorc~m~~=h~a~~~~
             prevent&   district. These districts are not
             "improvement districts" within the meaning of
             article 1667, V.T.C.S.

                Section 84.021 of the Local Government Code
             and article 1672, V.T.C.S., entitle a county
             to reimbursement  from special districts   for
             the salaries of such additional      assistant
             auditors as may be required to perform     the
             duties imposed by article 1667.




                                       J NzJ7t
                                           Very truly yo


                                       -        &
                                           JIM     MATTOX
                                           Attorney General of Texas

     MARY KELLER
     First Assistant Attorney General

     LOU MCCREARY
     Executive Assistant Attorney General

     JUDGE ZOLLIE STEAKLEY
     Special Assistant Attorney General

     RICK GILPIN
     Chairman, Opinion Committee

     Prepared by Karen C. Gladney
     Assistant Attorney General
,-




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