R-248
~IEATTORNEY GENERAL
Q,F TEXAS
PRICE DANIEL
ATTORNEYGENERAL
Mar. 31, 1947
Hon. Ben J. Dean Opinion No. V-ll8
District Attorney Re: Issuance of imPas by %.Q-
Stephens County pheas Cow&y payable mt
Breckenridge, Zi’&xas of Permanent Improvement
Taxes.
Dear Sir:
We have received your letter of March 15, 1947, relative
to a certain contemplated hospital bond issue in the amount of
$120,000. You state in your letter that “On August 25, 1945, by a
proper vote of the citizens of Stephens County, the Constitutional
Fund provided for under Section 9 of Article 8 af tbs Coastitutlon
*as re-allocated as follows:
Jury Fund 5 cents on the $100 valuation
, Road and Bridge
Fund, 8 cents on the $100 valuation
General Fund 38 cents on the $100 valuation
Permanent Im-
.1 provtmtnt Fund 3 cents on the $100 valuation
You fuither state that the Commissiontrs’ Court of Ste-
pbhns County “has not entered its order issuing the Hospital Bonds,
but contemplate’s doing so and they txpect to pay the inttrett on
such bonds until 1951 out of 3 cent6 now allocated to permanent im-
provement, and beginning with 1951 to starts retiring the bonds. It is
contemplated that at tht time the order is entered they will provide
for a tax sufficient to pay the interwst aad sinking fund on such Hes-
pita1 Bonds. *
You mention in your letter that there are certain cow!+
house and jail refunding bonds now outstanding and that these are
the only bonds which are paysblt out of the permanent knpsrvearti
tax.
Izi connection with these facts you ask the follc*ring Q~S-
tions:
‘1. Would this meth~od of paying the bonds meet w%h
the requirements of law and the election order?
“2. Since the order will provide for the levying and
colkactling of a sufficient tax ta pay the intereM and
Hon. Ben J. Dean - Page 2 Opinion No. V-118
sinking fund on these bonds, could any re-allocation
election held hereafter under the provision of Section
9, Article 8 of the Constitution prevent the court from
levying and collecting sufficient taxes to pay the Hos-
pital Bonds? In other words, since the order would
be entered with the thought that in 1951 the Ptrmantnt
Improvement Fund would automatically revert to 25
cents on the $100.00 valuation, could any re-allocation
election between now and said time in any way impair
the order of the court so that the money could not be
collected for these bonds?
“3. If said order of the Commissioners’ Court of
Stephens County, made in pursuance of this election,
provides for the levying and collecting of taxes to
pay the interest and sinking fund, would this author-
ize the Commissioners’ Court to collect such taxes
for such purposes, regardless of the fact that the re-
allocation order now of record author&es only 3 cents
on the $100.00 valuation to be collected for parma-
nent improvements.
‘“4. Would the Commissioners” Court be authoriead
to pay the interest on the Hospital Bonds as it accrued
up until 1951 from the General Fund?
“‘5. Assuming that the provisions of the law with re-
spect to the voting and issuance of such Hospital Bonds
have been carried out, and the bonds were issued in
the manner herein proposed, would the same meetwith
the approval of the Attorney General? R
Section 9 of Articlt VIII of the Constitution of Texas, aa
amtnded in November. 1944, authorizes the re-allocation of the Con-
stitutional taxer upon a majority of the qualified property taxpaying
voters of a county voting at an election for that purpose,
It is also provided that *such re-allocations and changes
shall remain in force and effect for a period of six (6) years from
the date of the electionat which the same shall be approvtd, unle,ss
the same again shall have been changed by a majority vote of the
qualified property taxpaying voters of such county, voting on the
proposition, after submission by the Commissioners Court at a gen-
era1 or special election for that purpose.“”
It follows that for a period of six years from the date of
the election the various constitutional tax limits are those specified
in the election ‘“unless the same again shall have been changed by a
majority vote of the qualified property taxpaying voters of such coun-
ty.w In Stephens County the Permanent Improvement tax was re-
allo,cated to an am,ount not to exceed 3$ on the $100.00 valuation.
Hon. Ben J. Dean, Page 3 ; Opinion No. V-118
We have been advised by the Comptroller of Public Ac-
counts that the assessed valuation of Stephens County, bss,& upon
the latest approved rolls, is $,10,529,220. A 3$ tax appZMI +e &is
valuation would realize, even komputed at 100~ collect&n, only
$3,15!3.76. The Constitution of Texas, in Seation 6 of Art’irle XI,
provides that no debt for any purpose shall have be,en incurred in
any marmer by any city or county “unless provision is made at t&e
time of creating the same for levying and collecting a eufficient
tu to pay the interest thereon and provide at leant 2% a# a &&king
fund.”
You do not state wha; rate of interest it i8 proposed that
the bonds are to bear, but it is aosumed that such interest ,rate will
be at Ieast 1%. A 1% intereut charged against $120,000 would amount
to $~200. Add to this $1200 2% for the canatitwtien~l sinking fund
($2400) and the total amount is $3600. It is obvious, therefore, that
the county does not have sufficient taxing power to meet the canstitu-
tional requirement. This conclusion is rare&d, even without consid-
ering the bonded indcbtedneris of the county already outstandingagainst
its Permanent Improvement Fund. We might add, however, that in
Opinion No. O-6863 the proposition is clearly set forth that a county
cannot by a re-allocation of taxe$ infringe upon an existing contract.
A copy of Opinion No. O-6863 is enclosed herewith for your conside-
ration.
In view of the foregoky, yru are advised that Stephen6
County is without sufficient taxing power to warrant the i,ssuance of
the contemplated bonds. As we have reached the conclusion that the
be&s may not be issued, the answeriag of your specific questions is
rendered unnecessary. You are advised, however, that in connection
with Queetioa No. 4,’ with respect to the payment of the interebt on the
bonds with moneys from the General Fund, the Cernmieaioners’&art
laar no power to transfer moneyr from the General Fund to the Per-
manent Improvement Fund, or to expend for permanent improvement
purposes tax moneys which were raised for general purpores. 11 Rx.
Jur. 609; Carroll v. Williunr, 109 Tex. 155, 202 9. W, 504.
SUMMARY
I
As Stephens County has m-allocated its taxes under
the authority of Section 9, Article VIII, Constitution of
Texas, whereby the permanent improvement tax was
reduced to an amount not to exceed 3$ on the $100.00
valuati.on, said county does not have sufficient taxing
power to warrant the issuance of contemplated Hospital
Bonds in the amount of $120,000. It followa that or&ah
Hon. Ben Jo Dean, Page 4 Opinion No. V-118
bonds may not be legally issued.
Yours very truly
ATTORNEY GENERAL OF TEXAS
I
George Vi. Sparks ’
Assistant
GWS-a: sl
Enclosure APPROVED APR 1, 1947’
ZL 22
ATTORNEYGENERALOFTEXAS
.
:
. ..~ *.
..
. ..