OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Ronorabla Lee Bra&y
BElnklng ComlsdoIler
Austin, %exa6
Deer 1Er. Bradyr
t of your letter no-
at on four ~ertfonm.
8 aa followr:
ion aad Rso&mn-
govermmn6al ageaoy,
io aad wrpom6r, under
Lsglelature , Seoond
sd bon48 pursuant to the
dlstriot, and both &ate and
avesting la these bonds, and
rmoeesary to Uetmrilne whab
ve been plaoad by law on them
IlvClutentr.”
amum that you have refermoe to the .!G,OOO,-
8 authorized by the Board 01 Direotore of the
Bra~oa District a,nO which are recured by an6 piyabla out of
the State taxes grantad to the diatrlot by the law oreating
Sam.
our opinion ie requested on the tollodng four
pueetiona t
1. “1s eeld dlstriot a munialpal oorpora-
tlon or a dietrlot created for rohool or any
other state or looel purpose, wlthln the 0x089-
tion to Article 5% of the Penal Code of Texas,
aa anended?”
i3. *Does this distrlot have the aoverslgn
power of taxetion, or power ot taxation derived
fron: the aovarelgn, lnoludlng the incidental
pow4r to oompsl payment?*
3. *Is the State of T4xar liable on these
bondln”
“Are bonds iesuetl by aaid dietriot with-
la 2; lofinlimit pmvldad u5d4r Seation 6136,
c. 3. R. 3.9'
X4 ahall answer the queetiom in the order abovo
ret OUL.
hlative to your first quertlon, Arti 864 of the
Penal Code of Texa11, aa ammded, Yoraoa*a Aanotawd civl.1
Statutes, reads, in part, a4 iollcnr8t
“No lnoorporated bank or trurrt oonqmay,
obertered under the law6 of thi6 State, #hall
loan itrr lilonrp dlnotly or lnbirmotlg or permit
any individual, private corporation, company or
rim, to beooum, at aqp th4, indebted or liable
to it in a 4uni exoeedlng twentpriv4 per 04nt
(8561 of its oauital stook aotual4 paid in anb
We think there oan be no queatloa but that the obri-
gor on a muni~lpsl bond lsl a debtor in the mmao oontemplat~
by the above quoted artiole, and that, thenSore, in the ab-
nenoe of the 9rovlao undtwaroored tn the above quotti Aot, the
Honorable Lee Brady, page 63
~aatrlotlon theraof muld apply to tns purohaae ct muniol-
pl bonds a8 an inveatmnt by any beak 80 chartered. It
844~~ olear that tha above underaoorsd proviso removaa the
reatrlctlon and would pennlt of unllmlted iaveatmat la
munioipal bonda; provided, ot wuree, that the lamlag poll-
tic41 imbdtvldon oo?z.oa within the meaning oi the phrase
%unlcip41 oorporatlon, oounty or any dlatriot orsat for
lohool or any other State or looal publio purpoaaW. The
Brazoa River Conssrvation and Reolemation Dlstriot was
created by an Aot of tbe Ssaond Called S4aalon, Forty-first
Laglalatun,, oompiled as Chapter 19 - Seotlon I! thbnof ma&-
lag, la part, as r0llwar
*The Braeoa River Conaervatlon and R4olaaa-
tlon Diatrlot is or4atad as a go~orameatal asnoy, i
a muafafpelity, body politio and oorporate, vati&
with 411 the authority a4 auoh under ths Conatitu-
tloa aad lawa ot th4 State; it shall have knd be
reoognised to exeroiae all ot ths pow4ra ot mob
govpsrmental agency and body polltlo and oorporata,
as are 4xpr48aly autborlr4d by the provlaio~a~of
#a Conetitutloa, Sleotion 89 of Art1014 16 i
and shall have and be reaognlzad to exerolaa all
the rlghta end pcmrs ot an indapendant gOvS-t-
al ag4nog, mnlolpallty, body polltlo and 4orporat4,
to formulatbl any an4 all p&na,b*e4~d 4884ntla1 to
the operatlon ot the dietriot .
R'S thfnk that Seation 1 at this Aot, h4ralnaft4r
wotad, will auftlclently attest to th4 fsot th a ltald d.l8-
trlot is organized for a State 9urpoae. Sootion 1, r-da,
in part, 46 follows:
*It, being dsolsrsd by aoostltutional pro-
vision tha policy of the Stats of T4x4a to pro-
vid4 for thee conservation and dwslopent of all
the natural resourOeS ot th4 state * * * Olld th4
prsaarvntlon and eonaervatlon of all auoh aatu~ral
r6Bouro4a, are 4a4h and all hareby d4olared polioy
rights and duti48 whloh map be etfoot4d thrOUgh
42’;
the oreation within the State or the dlvlelon of
the State into such number of conservation and
reclamation di&rlots n1) may be determined to be
esrentlal to the acoonpllshment of the purpoaem
of the policy expressed ln the Conetltutlon of the
Stats * * * and funotlons aa may he conferred by
laW, there is hereby created the Braxoa River Con-
8ervation end Reclamtlon Distri ot .-
In the ease of Brazes River Conservation and Rechma-
tlon Dlatrlat va. LEcCraw, 91 5. W. (Ed) 66, the Supreme Go&
in an axhmmtlv6 opinion upheld the ralfdity or the Act areat-
lng the dietriot, a6 Well a8 tAie bonds lsnued pursuant theMto,
E;hAiyds are eeoured by a pledge of State taxea donated by
Ifi rererrlng to the origin and purpose 0r thla typo
dlatrlot: the Supren\a Court raid that it wa8 bacrfoly a publio
enterprim, orated by the Legihila~ for the gener81 govern-
mental purpose of erfeotuating the objeot 0r the oonserv~tioa
emondment to the Con& 1 tut ion.
Vfe, therefore, oonolude, in answer to your flrrt qua+
tion that the Rrasos River Diatrfot is, a *dlstrtot oroated for
* * 4 State pub110 purpo80N within the exoeptlon to brtiole 554
or the Penal Code ai T&as, aa a&ended.
Answering your eeoond queatlon, we a&Ire that la our
opinion the power of taxation haa been oonferred upon the Brnzo8
Rlter Coneermtion end Reolamtlon Dlrtriot, end that auah parr
include8 the lnoideatal power to oczcpel payment oi 8uah tax*@.
However, as will be notad rrom a reading of the Act OreatlBg thr
diatriot the power to levy tam8 cannot be ererolaed until 4uah
propoeition shall hare been submitted to the qudliiled propsttr
taxpayln6 roterr or the dlatrlot and approved by a nu1ori.W of
mob elector@ voting thereon. Seotlon 10 or the Act Oreating
the dintriot, reads PB r0ilow6:
*‘phe Brason River Conaermtdon and Reolamatlon “:2 :z: ‘.1:~:
Diatriot shall not be authorize4 to ia8ue bond@, Mr
incur any rorm or contlnulng obligation or indebted-
ness ror purposes 0f efreotlng Iirwoveatente conwe-
hended In the plan 0r organlzatlon and adalnlrtratiofi
or the dlstrlct, nor Inour any Indebtedness in the
c
gaaorable Lea Brady, pago #!5
r0mi or u oontlnulng charge upon lands or pro-
pertiea within the diatrlot unless suoh progoal-
tion shall hate been sublufttsd to the qualtiisd
property taxpaying votora of the district and
approved by a majority ot such eleotora voting
thecean.n
Seotion 4 of Chapter 19 of the A&s or the Regular
Srsion, Forty-fourth Leilislature, omoadlng Seotioa 9 or
Chapter 13 of the Ssoond Called Eleaslon of the Forty-first
&sgislature, reads, in part, aa tallows:
This district shall have the power to pro-
vide and maintain improvements for the oomrson
benerlt of aaid district aa a whole, subjeot
only in appropriata oaaea to the oonstltutlonal
and otatutory provision8 sonosrnlsg a vote bl
the qualified electors cf ths dlatrlotn.
a% think thst rr0m a awading or the roregolng it must be aon-
oludodthatthe teglslature has oonterred upon the diatrbt
ths power cb taxation, subjeot, or oour5e, to the approval
thereor by a maJorlty or the quallried eleoltors voting at aa
sleotlcn oallsd for that purpose, and that suoh power or tar-
ation Includes t&e Incidental power to compel the paymmt of
bares levied.
In rsply to your third question, we advise that It
should be amwered lo the riegatire. In ths Bras08 River Con-
servatfon and Reolamatlon 3istrlot oaso, supra, ths qumsbioa
was raised that the Agt oreating the dlstrlot ooastltuted as
attempt to authortie the Board or ths district to ortmte a
drbt lc behalt or the State, or land the oredlt or t&s Stats
in 7iol~tfon 0r the inhibitory provisicms 0r 30ctlons 49 and
50 or Artiola 3 cf the Constitution. The Suprem+ Court stated
tersoly -
YTo debt on the prt cS tho Stats la to be
oreated, nor fs the State oredlt loaned for thst
purpose. Theo6 queatlons am roreoloaed in the
oplalon or this oourt in the eve or ~24%~al Arsn-
sas ?a88 ml. XelMng, R4V S. ati 818eH
1
.Y
Eonomblr Lee Brady, pege #a
With reierenoe to the fourth qucmtlon, above quoted,
we conoluda that to answer sane would place ue :n the pomi-
tion of advising as to the law governlrg ~etional Banking
~reociations, wiiich Is beyond our proper sphere. Therefore,
we do not answer the question.
Vary truly YOUrS
9,6A~.~W
Clarence E. Crow8
Amsistant
CBC.4 APPROVEDDEC 18, 1940
&-WS--
ATTORNEY GENERAL OF TJi:'Untitled Texas Attorney General Opinion
Combined Opinion