The Attorrwy General of Texas
July 17, 1986
JIM MATTOX
Attorney General
Supreme Court Building Mr. Llas B. "Bubba" Siteen Opinion No. JM-523
P. 0. BOX 12546
Austin, TX. 7671% 2546
Executive Director
512,4752501 State Purchasing and General Re: Whether the city of Austin
Telex 9101674-1367 Services Commiss:.on may assess a capital recovery
Telecopier 512/475-0268 P. 0. Box 13047, Cal'itolStation fee on state construction pro-
Austin, Texas 787:.1. jects
714 Jackson, Suite 700
Dallas. TX. 752024506 Dear Mr. Steen:
214/74&3344
You ask whethlnr a home rule city may legally assess capital
recovery fees against state construction projects. The city requires
4624 AlbeRa Ave., Suite 164
El Paso. TX. 799052793
that the owner of any new construction must pay a capital recovery fee
9151533-3464 at the time a water t:apis purchased. The amount of the fee is deter-
mined by the size and type of water meter required for the project.
The fees are intentledto include both the actual costs of providing
pl Texas. Suite 700 new service to a specific site and the estimated proportional cost of
ston, TX. 77002~3111
I ,Y223-5866
building and maintaining the general water infrastructure to meet the
collective demands o:Eall new development. You assert that the city
may not assess these fees against state construction projects.
604 Broadway, Suite 312
Lubbock. TX. 79401.3479 The question ,p:cesentedis one raised but left unanswered in
80617476236
Maverick County Watlz:Control and Improvement District No. 1 v. State,
456 S.W.2d 204 (Tel:.Civ. App. - San Antonio 1970. writ ref'd) and
4309 N. Tenth, Suite S Attorney General Opinion l&-551 (1982). A central question in
McAllen, TX. 76601-1665 Maverick involved the nature of the charges -- whether they constl-
512,662-4547
tuted a tax or a special assessment. Special assessments differ from
general taxes insof,sras special assessments are levied only on land,
200 Main Plaza, Suite 400 the amount based on the benefits conferred to the land; a special
San Antonio, TX. 762052797 assessment is uniqw as to time and locality. See generally 456 S.W.2d
5121225-4191 204, note 4 (cases cited therein); Londerholm V. City of Topeka, 443
P.2d 240 (Kan. 196,s). The Maverick court held that state statutes
An Equal Opportunity/
clearly exempt stat,e property from taxation by a water control and
Affirmative Action Employer improvement district so long as the state holds full legal title to
the property. 456 S.W.2d at 206 (relying on article 7150, V.T.C.S.,
now replaced by Tex. Prop. Code 111.11); see also Tex. Const. art. XI,
59; City of Beaumo:z:v. Fertitta, 415 S.W.2d 902 (Tex. 1967). The
court acknowledged 1:hatthe legal ramifications of special assessments
differ from those of a tax, noting Wichita County Water Improvement
District No. 2 v. l:ity of Wichita Falls, 323 S.W.2d 298 (Tex. Civ.
APP
__ . - Fort Worth r359. writ ref'd n.r.e.) in which the court held
that a city was 1:table for special assessments levied by a water
p. 2403
Mr. Lias B. "Bubba" Steen - Page 2 (JM-523)
district. The court in Wichita County reasoned that a special assess-
ment is not a tax withinthe meaning of constitutional and statutory
provisions exempting public property from taxation. 323 S.W.2d at
300. The Maverick court found it unnecessary to determine whether a
special assessment is a tax for those purposes because it adopted the
common law rule that a polil:icalsubdivision of the state cannot levy
a special assessment against state property without express legisla-
tive authority. 456 S.W.;:d at 206-07. Attorney General Opinion
MW-551 applied this reasoning to a home rule city and decided that a
home rule city may not legally levy a drainage fee against state-owned
property.
On the other hand, home rule cities have full authority to do
anything the legislature could authorize them to do. Lower Colorado
River Authority v. City of San Marcos, 523 S.W.2d 641, 643 (Tex.
1975). Accordingly, as a &neral rule, it is necessary to look to
legislative limitations on the power of home rule cities rather than
to specific grants of pow=::.. Id. The Maverick court dealt with a
water control and improvement district, a political subdivision which
holds only the powers granted to it expressly or by necessary implica-
tion by the constitution or statutes of this state. A home rule
city’s powers, however, are limited to the area of Its jurisdictfon.
The issue at hand has state-wide implications. Attorney General
Opinion MW-551 applied the 'zaverickcase to a home rule city but did
not address the different le:velsof power held by home rule cities and
special districts. The sources cited by the Maverick court, however,
suggest that its holding was intended to be broad. See 456 S.W.2d at
207. note 6 (cases cited therein). Levying special assessments
against the state requires authorization from the state legislature.
See & Accordingly, we conclude that the Maverick rule applies to
n political subdivisions, including home rule cities.
Nevertheless, the impact of Maverick is limited. The court
stated:
Even if it be ,assumed that a county or munici-
pality is subject to special assessments levied by
another political subdivision of the State, it does
not necessarily follow that a subordinate political
subdivision can impose an involuntary monetary
obligation on the sovereign. It is generally held
that, in the absence of clear legislative authorisa-
don. a political :subdivisionof the State has no
power to levy a special assessment against State
property. [Footnote omitted]. We adopt this view
at least in a case where, as here, the sovereign is
neither making no; contemplating any use of the
allegedly benefittid land and has neither received
p. 2404
Mr. Lias B. "Bubba" Steen - 'Page3 (JM-523)
nor requested the services rendered by the assessing
agency. (Emphasis added).
456 S.W.2d at 207. Similarly, Attorney General Opinion MW-551
emphasized that it did not purport to address a situation where the
state acted in a manner that indicated a willingness to pay a fee. In
the question presented, the :stateis requesting water service from the
city.
Maverick stands for the proposition that the city cannot impose
an involuntary monetary &ligation on the state without express
legislative authorization. Accordingly, the city cannot treat state
property in the same manner as private property with regard to special
assessments for local improvements. It does not follow, however, that
the city cannot charge the state for the actual cost of extending
service which the state expressly requests. As indicated previously,
the fees in question are intended to include both the actual costs of
providing new water service to a specific site and the estimated
proportional cost of build:_ng the general infrastructure. To the
extent that the city can dc:terminethe actual costs, both general and
specific, attributable to faxtendingservice to the state, we do not
believe that Maverick prevarnts the city from requiring the state to
pay those costs as a cond::tionof extending service. The city may
not, however, assess the s1:atefor its pro-rata share of the cost of
local improvements which provide benefits that are too general to
specifically apportion to each user.
Further, we emphasize that any "exemption" for state property
from special assessments by political subdivisions is limited to
property used exclusively for public purposes. It is well-settled in
Texas that the constitutLona1 and statutory exemption of state
property from taxes applies only when the nrouerty is used exclusivelv
for public purposes,. See Satterlee V. -Gulf Coast Waste Disposal
Authority, 576 S.W.2d 77nTex. 1978); State V. Houston Lighting and
Power Co., 609 S.W.2d 263 (Tex. Civ. App. - Corpus Christi 1980. writ
ref'd7r.e.); Attorney C,eneral Opinion MW-430 (1982); -- see also
Central Appraisal District of Erath County V. Pecan Valley Facilities,
Inc., 704 S.W.2d 86 (Tex. App. - Eastland 1985. no writ). We belfeve
that the courts of this state would apply similar restrictions to the
common law "exemption" from special assessments announced in the
Maverick case. This conclusion finds support in the sources relied
upon in Maverick. For example, one such source states the general
rule as follows:
Apart from constitutional or statutory authori-
zation public property . . . used for public
purposes is not liable to special assessment for
local improvement:;..
. . . (Emphasis added).
p. 2405
Mr. Lias B. "Bubba" Steen - Page 4 (JM-523)
14 McQuillin, Municipal Corporations (3d. ed., rev. 1970) §38.73
(cited in Maverick County, 456 S.W.2d at 207, note 6).
SUMMARY
Without express constitutional or legislative
authorization, a 'home rule city may not levy
special assessmen:s; against state property which
is used solely fo,cpublic purposes. This general
rule, however, i.oes not prevent a city from
c requiring the state to pay the actual costs
attributable to extending service to the state
when the state recuests
JIM MATTOX
Attorney General of Texas
JACK HIGHTOWER
First Assistant Attorney General
MARY KELLER
Executive Assistant Attorney General
RICK GILPIN
Chairman. Opinion Committee
Prepared by Jennifer Riggs
Assistant Attorney General
p. 2406