Hon. Be8uford B. Jester
&wernor of Texas
Austin, Texas Opinion No. V-204
lte : Power of the Automatic
Tax Board, to set an ad
valorem tax rate for
the Available School
Fund except for text
books where suff iclent
money is available in
Dear Governor Jester: the clearance fund.
Your request for opinion dated May 2, 1947.,
reads in part es follows:
“Several authorities have expressed
to me their graqe doubt as to whether, un-
der the provisions of House Bill 301, re-
cently enacted by the Legislature3 the Au-
toutic Tax board can set any ad valorem
tax rate for the Available School Fund, ex-
cept that portion needed for free textbooks.
“This question is raised in relation
to the foll&ing language of the bill:
”t the’re is hereby approprla-
ted, sll&itidj transferred and credited
to the Available School Fund such a sum
which when taken together with the total
of all other statutory and constitutional
amounts to accrue to the Available School
Fund 11111 equal to such a total as may be
needed to pay a Fifky-five dollar ($55)
per .capita . a . .
“The suggest ion tide to me is that if
there should be sufficient money avollable
in the clearance fund to pay the $55, the
.Automatic Tax Board could not levy the ad
valopem tax of 35 cents for schools D s 0 e
. .
Eon. Reauford Ii, Jester, Page 2, V-204
“I shall’,be grateful for your opin-
ion on the matter.”
The Constitution of Texas, Section 3, Ar-
ticle VII, provides in part as follows:
%ne-fourth of the revenue derived
from the State occupation taxes and poll
tax of one dollar a 0 0 shall be set a-
part annually for the benefit of the pub-
lic free schools; and In addition thereto,
there shall be l.evled and collected an an-
nual ad valorem State tax of such an amount
not to exceed thirty-five cents on the one
hundred ($100.00) dollars valuation, es
with the available school fund arising
from all other sources, vi11 be sufficient
to maintain end support the public schools
of this State for a period of not less than
six months in each year, and it shall be
the duty of the State Board of Education to
set aside a sufficient amount out of the
said tax to provide free text books for
the use of children attending the public
free schools of this State; provided, how-
Retterating the sources of funds for the
support of the public free schools, the Con& it ution
provides for the foll.owlng:
1. One-fourth of the occupation taxes,
2. The poll tax.
3. Other sources available to the
school fund. These “other sources’
(Article 2823, lt. C. 5,) Include
interest on bonds and other funds;
Hon. Beauford Ii. Jester, Page 3, V-204
interest on proceeds from the
sale of land; moneys from leases;
and all direct appropriations to
the Available School Fund, except
such final appropriation (5 below)
as may be necessary to make UP the
deficit In the total sum required
to maintain end support the publtc
schools,
4. Ad valorem tax not to exceed 35
cents on the hundred dollar valua-
tion.
5. Appropriations from the general rev-
enue to make up the "deficit", if
the four above listed sources are
Insufficient.
Under the Constitution, the general reve'nue
may be used for the support of the publFc free schools
in two ways. First, direct appropriations may be made
from the general revenue to the Available School Fund
and be included as one of the "other, sources’ (item 3
above) to be considered by the Automatic Tax Board In
fixing the ad valorem tax rate for school purposes,
This is in accord with the Interpretation of Article
VII of the Texas Constitution made over a long period
Hon. Beauford Ii. Jester, Page 4, V-204
of years by the Legislature and the Courts, In defin-
ing what shell constitute the Aveil,able School Fscd,
Article 2823, v. C. s., the Legisls,ture said thatt ir
should include “other Available School Funds prcrlded
by Iaw,” The history of educational legislation 1.n
Texas shows that the provisions o.f Artlck XI, -,ke
edncat:lonel Artic1.r of t.he Con.st itotioc,, ?mve never
bets regardcld as lin~ltetic~:~s ‘bg~ impll.cat.lon on tnc
gEC?l.ei'al power af tk Legl.s~.st:ure t3 appropriate mou
e.;: fern the general Lund ar:d fPOlli 0tk5P sources ti.r,-
act to the Avalleble School Fund or to ctkr schcoi
p!lrpuse 3. On many cccaslocs the Texe:s Legislature
has made direct apprcprietions from the generai rev-
sue to the Available School Fund, end on several oc-
casions larger percentages then oc.e fcurth of the oc-
cupation taxes have been assl.gned to the Schcol Fund.
These Acts, and this Ieglslatlve interpretation. of
the Constltut ion, have been approved by our courts 0
See, Mumme vs. Marra,; 120 Tex. Reports 383, When
such direct appropriations are made to tfie Available
School Fund before the ad valorem tax Is set, it 1s
clear that they are to be considered In arriving at
the rate of ad veiorem tax needed for school purposes.
The second manner in which appropriations
may be made from the general revenue is outlined In
Han; Beauford H. Jester, Page 5, V-204
the last phrase of that portion of Sect Ion 3, AP-
title VII, quoted above, for the purpose of making
up the deficit, if any, after totaling the estimated
revenue from all of other sources named above, ln-
cludlng the ad velorem tax (Items 1, 2, 3, and 4
above) S When It is clear that such appropriations
are made by the Legislature only for the purpose of
raising the total available funds to the amount re-
quired to meet the necessary per capita apportlon-
ment, obviously they should not be considered by
the Automatic Tax Board In f lxing the ad velorem
tax rate for school purposes. Such appropriations
could not be credited to the Available School Fund
until after the ad valorem tax rate has been set and
the est lmated def felt , If any, has ‘been determined,
Therefore, it remains for us to determine
what typs of appropriation was contemplated and ec-
tuallg mede by the 50th Legislature In House Bill
301. The bill provides, in pert, as followsz
“‘(4-e) After the above allocations
and payments have been made from such Clear-
ance Fund, beginning with the fiscal year
September 1, 1947, end annually thereafter,
there is hereby appropriated, allocated,
transferred, and credited to the Available
State School Fund such a sum which when
taken tonether with the’ total of all other
statutory and c
true to the Ava
Hon. Beauford H. Jester, Page 6, V-204
to such a total as may be needed to D y
a Fifty-rive Dolla capita ip-
;r:;zynt for eagh’ f%‘e%y scholastic
tate-approved school census for
vision of this Act by taking into account
his estimate of such other constitutional
and statutory amounts to accrue to the
Available School Fund as made at the begin-
ning of each fiscal year. Thereafter the
Comptroller shall allocate, transfer, and
credit monthly in equal monthly installments
from the Clearance Fund to the Available
State School Fund such amount as so deter-
mined . The Comptroller Is hereby author-
ized to modify from time to time during
the fiscal year his estimates of the rev-
enue to accrue to the State Available School
Fund in any one year, and shall la the
light of the revised estimate or estimates
increase, diminish, or suspend any remain-
ing monthly payment or paymsnts from the
Clearance Fund to the Available School Fund,
provided by the close of each fiscal year
there shall have been paid from the Clear-
ance Fund to the Available School Fund
such an amount as may be neaded to enable
the Available State School Fund to pay
said Fifty-five Dollar ($55) pel;, capita
apportionment annually in full e
Clearly, we believe that the Legislature in-
tended by this Act to provide the second type of ap-
proprlation above discussed. This bill contemplates
the transfer of no money to the Available School Fund
until after “the total of all other statutory and con-
stitutional amounts” have been considered, determined,
and credited to the School Fund. go part of such al-
location should be considered by the Tax Board in
Hon. Beauford H. Jester, Page 7, V-204
setting the ad valorem tax rate for school purposes,
The Board should set the rate of such an amount as
with all other sources of school revenue, will meet
the $55 .OO per capita set by the Legislrt ure, and,
without considering any portion of the funds that
may ba allocated thereafter under House Bill 301 to
make up the balance, if any, necessary to pay such
per capita apportionment 0
That this was the intent of the, Legislature
in House Bill 301, i3 shown by the fact that the Com-
troller Is not authorized to transfer any of the mon-
ey from the Clearance Fund until September 1, the
beginning date of each fiscal year 0 Prior to that
time, within five days after July 15th of each year,
the Tax Board is required by Article 7043, V0 C. 3, 9
to meet and calculate the ad valorem tax rate for
school purposea for the next fiscal year. Only after
that has been done and not before September 1st of
the aan year may the Comptroller transfer money from
the Clearance Fund, if needed to pay the full $55”00
per capita apport ionmeat s
Therefore, the Automatic Tax Board must
mset In accordance with Article 7043, V, C, 3,, aad
levy an ad valorem tax of such an amount, not to ex-
ceed 35# on the $lOO,OO valuation, as with the available
Hon. Beauford Ii. Jester, Page 8, V-204
school fulla arising from all other sources (not in-
cluding the allocation in Ii. B. 301) will be suffl-
clent to pay the $55.00 per capita for maintenance
and support of the public schools. Thereafter, if
the total of the ad valorem tax and all of these oth-
er aourcea is Insufficient to pay the $55.00 per cap-
ita, and only in such event, the Comptroller Is auth-
orized by 11. B. 301 to transfer such aurns as may be
necessary to make up the full per capita of $55.00
set by the Isglslature. In no event is the Comptrol-
ler authorized to determine the amount to be trans-
ferred or to make any portion of such transfer from
the Clearance Fund until the beginning date (Septem-
ber 1st) of each fiscal year.
SUMMAHY
The allocations authorized in House
Bill 301, 50th Legislature, from the Clear-
ance Fund to the Available School Fund are
limited to such amounts as may be necessary
to pay the $55.00 per capita apportionment
after the Automatic Tax Board has levied
an ad valorem tax for school purposes not
to exceed 359? on the $100.00 valuation.
The Automatic Tax Board must levy the ad
valorem tax without regard to any suma
that may become available later from the
Clearance Fund. The State Comptroller is
not authorized to transfer any money from
the Clearance Fund until September 1st of
each fiscal year, such date being subse-
quent to calculation and levy of the ad
valorem tax by the Automatic Tax Board.
Hon. &auford H. Jester, Page 9, V-204
Sincerely yours,
/s/ Price Daniel
Price Daniel
Attorney General
PD:sh:mrj
The foregoing opinion was considered
and approved in Confere ce composed of As-
sistant Attorney Genera' 9 Fagan Dickson,
Chester Qlllson, Joe Gr+enhlll, J. C. Davis,
Jr., and Ocie Speer.
/a/ Fagan Dickson
Fagan Dickson
First Assistant Attorney General
Chairman of the Conference
Approved: May 19, 1947
Attorney General of Texas
This Opinion aonsidered and
approved in limited conference.