Untitled Texas Attorney General Opinion

Honorable Geo. H. Sheppard
Comptroller of.PublIc Accounts
Austin, Texas
.
Dear Sir: Opinion NO. 0-2506
Re: Whether propertg'belonglngto ati
Independent school district which
is not used for 'schoolmrposes Is
exempt from taxation.
.
We adcnowleage receipt of your 1etter'df~Julg1; 1940,
wherein ga request the oplnlon of this Department as t6 whether
property which IS 'ownedby the,Wolfe City Inaependent3chool
District and 1s~rented cut for business and .resIdentIalpurposes
Is subject 'totaxation.
Your request is as follows:
"About'the year 1923 W. J. Turner died, leaving
a ,wrlttenwill, In which he Willed to the Wolfe City
IndependentSchool District a brick business building
and several residences in the forinof rent property.
The title to this property passed to the school In
due course. The rents and revenues received from
such property since that time have'been used fojr
schpol purposes only, except such as was necessary
for PepaIrs t3 the buildings, etc. The school has
not rendered this property far taxes and has not
paid any taxes thereon. Demand has been tide by the
city, State and county for the school to pay taxes.
Is such demand authorized?
A;tIcle 8, Section 1 of the Constitution of Texas, pro-
vides that . . . All property in this State, whether owned by
natural persons or corporations, other khan rmnlcipal, shall be
taxed in proportion to its value, . . . In 'otherwords, the
Constitution has said that all property owned by persons or cor-
porations, except that belonging to municipal corporations, shall
be subject to taxation.
The Constitution proviaea'forthe establishmentand
maintenance of a system of free WblIc schools. When Article
7, Section 1 of the ConstItution.wasadopted; It'recognizedthat
the education of the messes was a,governmental function for
Hon. Geo. H. Sheppard, page 2 0-2506

therein was used the following phrase: "A general diffusion of
knowledge being essential to the preservation of the liberties
and rights of the people, . . .' Within nine years after the
adoption of the Constitution,the Supreme Court, in the case of
Casslano vs. Ursullne Academy, 64 Tex. 573, recognized that
education was a governmental function.
Pursuant to the provlslon of the Constltutlonabove
quoted, the Leglslature'madeprovision for the establishment
of free public schools and provided, among other things; for
independent school distrkts. These districts were established
to carry out a portion of that function of the government. The
district is not an ordinary corporatlofiorganized for purposes
of gain to Its members, but 1s a public agency, using the motiej
ralssd-'bytaxation to educate the ch+ltien-withinthe district.
It Is'~apolitical subdIvIsIon of the State, to which has b&en
delegated'thepower of carrying on the function of-education.
;;;Bs Estate vs.,School Trustees of Wlllacy County, 33 S.W. (26)
.
While the school district Is strictly a political sub-
divlslon,~it Is design&ted a nainiclpalcorporation,because It
Is an organization of a certain geographical district under
atithorltyof law and invested with a governmentalfunction.
Hatcher vs'.State, 81 S.W. (26) 499; Bexar-Medlna-Atascosa
Counties Water ImprovementDistrict vs. State, 21 S.W. (26) 747;
Short vs. Gouger, 130 S.W. (26) 267.
The power to tax Is an attribute of sovereigntyand-.
the extent to which this power may be exercised for governmanta
purposes finds its only limitation in the Constltulon. Stratton
vs. Commissioners'Court, 137 S.W. 1170 (Writ refused). TaXatIon
is Inherent in sovereignty and without which a constltutlorsl
government cannot exist. It Is vested In the Legislature by the
general grant of legislative power whether speclflcallyenumerated
In the Constitution,among the powers to be exercisedby It, or
not. The constitutionalprovisions In reference to It, therefore,
are more usually Intended or understood as llm&tatlons or restric-
tions upon Its exercise than as a direct grant ?f the power to
the Legislature. 40 Tex. Jur. p. 21.
Therefore, under Article 8, Section 1 *ofthe Constltu-
tion, the taxing power of the Legislature Is limited to the
property of 'all persons and corporations, except mniclpal cor-
porations.
But the framers of the Constitutiongranted to the
Legislature the authority to exempt certain property from taxa-~~'
$Ion by the adopti‘onof Article 8, Sbction 2, which provIdes.that
. . . the Legislature may, by general laws,.exempt from taxation
Hon. Geo. H. Sheljpard,page 3 0-2506

.

public property used for public purposes. . . . .I’
It is then apparent, in so far as this opinion is
concerned, that the Legislature, for the purpose of taxation,
is limited to all property owned by persons or corporations,
except that property which Is owned by municipal corporations
and used for a public purpose. In other words, we believe that
It was~the purpose of the framers of the Constitutionto ex'empt
political subdivisionswhich were carrying out a governmental
function from ,taxatIon,but that when such political subdlvl-
.slonsentered into proprietary enterprises that the property so
uqed wwld be subject to taxation.
,.
Pursuant thereto the Legislature passed Article 7150,
Vernon's Annotated Civil Statutes, whlch~'provIdesthat the fol-
lowing property shall be exempt from taxation, to-wit:
"1. Fubllc school houses . . . .
“4 . All property, whether real or personal, belong-
ing exclusively to this State, or any political
subalvlslonthereof . . ."
The property concerned hereIn is not property on which
Is located a public school house and, therefore, is not exempt
under Section 1 of Article 7150.
The Legislature,when it passed,Artlcle7150, apparent-
ly overstepped'thebounds of Its power when It df;dnot limit the
exemption to property "used for uubllc DurDoses, for Justice
F'underburk,ln the case of City of Abllene vs. State, 113 S.W.
(2a)b31 (Writ of Error Dismissed) said: _~
"It Is apparent that the exemption declared In
said Article 7150 Is more comprehensivethan the power
possessed. The purpose of the
which the Leglslittiire
Legislature Is broad enough to exempt public property
regardless of Its use. This the Legislature wa&!ex-
pressly denied the power to do. But it does not fol-
low, we think, that the statute is for that reason
wholly inoperative. We see no reason why It may not
be operative, as an exercise of all of the power the
Legislature has, to declare the exemption. The de-
clared exemption includes public property used for
public purposes, and to that extent, we think, the
statute.is valid and operative.
It IS elementary that the property concerned herein
and owned by the Wolfe City Independent School District is pb-
llc property. The property is not being "used for Dubllc Dur--'
poses,I'but on the contrary, Is being u&by private IndIvidUals
 Hon. Geo. II.Sheppard, page 4 O-2506

for residential and business purposes.
The property does not come within the purview of the
cases of Sherman vs. Wllllams, 19 S.W. 606, or State vs. City
. of Houston, 140 S.W. (2d) 277. In those cases the property was
held to be a part of a special fund which fund was established
to carry out a governmental fuhctlon.
It ls;therefore, our opinion that,the property Is
not exempt from taxation.
.,
Trusting that the foregoing fully answers your Inquiry,
we are
Yours very truly
ATTORNEY GENERALOF TEXAS

By s/Richard Ii.Cocke
Richard R. Cocke
Asalstant
FiHC:N:wc

APPROVEBJUL 22, 1940
s/Grover Sellers
FIRST ASSISTANT
ATTORNEYGENERAL
Approved Opinion Committee By sbfB Chairman
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