GEFt4LDC.lUHN Au- ai.TEXAS
.a-- ommmnA&
HonorableGeo. H. Sheppard
Comptrollerof PublicAocounts
Austin,Texas
Dear Sirr OpinionNo. O-2037
Hei Liabilitybf!propertyowed by the
LOrreiColoradoRiver Authorityto State
and countyad wlorem taxes.
Lkder date of l&arch4, 1940, you suhnitfor the opinionof this
Departmentthe followingquestion:
'The Lower ColoradoBihr Authoritypurchasedfromthe Texas Power and
Light Canpanyoe+ain real estateand power linesin ColoradoCounty on
which ad wloremtaxes had been previouslyleviedand colleoted. Is
this propertynow subjectto ad valorsmtaxes under the new ownership?"
.Ho questionis presentedhere as to the Vesting of title in the
L&r ~tiloradoRiver Authorityto certainreal estateand power lines in
ColoradoCounty by virtue of its purchaseof ssme from the Texas Power &
Light Company, or~of taxationthereofwh%le onned by grantor,but the only
questionbeforethis Departmentis whether suoh real eatatebe-es ex-
empt from State and countyad valoremtaxationin the hands of Authority,
under oontrollingoonstitutional and statutoryprovisions.
Artiole8, Section2, Constitutionof Texas, providesthat "the
Legislatwe may, by generallaws, extrnpt
fromtaxation publicproperty
used for ~ubliopurposes." Article 7150, Vernon'sAnnotatedCivil Statutes,
provides-'eertain
exrrmptions
from taxation,anong them "all property,
*ether real or'personal,belongingexclusivelyto this State,or any
politicalsubdivisionthereon,. . ." (Section4).
re now turn to pertinentconstitutionaland statutoryprovisions
to ascertainif the Lover ColoradoRiverAuthorityis "a politicalsubdi-
Vision" of the State,within the tax exemptionaffordedby Artiale 7150,
Vernon!sAnnotatedCivil Statutes,so as to constitutethe real estate in
question"publicpropertyused for purlib purposes,"within the intend-
ment of Article~8,Seation2, Constitutionof Texas.
The Lower ColoradoRiverAuthorityis a body politicand corporate
oreatedunder Article 16, Section59a, Constitutionof Texas,and the
EnablingAct of the Legislaturepursuantthereto,appearingas Olapter7,
Acts of the 4th Called Session,43rd Legislatirs(Vennon'sAnnotatedCivil
Statutes,Article8194 note). This smondment,known as the "Conservation
Amendment"providesfor the creationof conservationand reclamationdis-
tricts as-follows,:
HonorableGee. H. Sheppard,Page 2 (O-2037)
%ec. 59a. The conservationand developmentof all of the naturalresources
of this State, includingthe oontrol,storing,preservationand distr.ibution
of %ts storm and flood waters,the waters of its riversand strelrms,for ir-
rigation,power and all other useful purposes,the reclamationand irrigation
of its arid,s&-arid and other lands needing irrigation, ,thereclamation
and,drainageof its over-flowedlands and other lands nee&ng drainage,the
conservationand develousentof its forests.water and hvdro-eleotrio Dower.
the navigationof its &land and aoastalwaters, and the-preservation -&I -
oonservation of all such naturalresourcesof the State are earn and all here
dealaredpubliorights and duties;andthelegislature shall pass all such law
as may be appropriatetbreto.
e(b) There may be orsatedwithin the State of Texas,or the Statemaybe divld-
ed Into such nuisberof conservationand realamationdistrictsas may be deter-
mined to be essentialto the accomplishent of the purposesof this amendmentto
the constitution, which distfiots&all be governmentaiagenciesand bodiespol-
itic and corporatewith eooh powersof governmentand with the author%* to
exercisesuch rights,privilegesand functionsoonoerningthe subjectmatter of
this amendmentas may be oonferredby law." (Underscoring ours)
The abovebat, creatingthe Loner ColoradoRiverAuthority,declares,
in Seotion1 thereof,the nature and purposesof the Authorityto be as follows8
*sea. 1. There ia hereW oreatedwithin the State of Texas.In additionto the
distri& lnto~whiohthe-statehas heretoforebeen divided,.aconservation and
reclamationdistriotto be known a8 Qmer ColoradoRiver ~Authority*(herein-
after calledthe District)and consistingof that part of the State of Texas
whiah is iaoludedwithin the boundariesof the countiesof Blanoo,Burn&, Llano,
Travis,Bastrop,F'aytte,Colorado,Sharton, San SabP; and Matagorda. Such Dis-
triot shall be snd is herebydeolaredto be a goverrnnental
agencyand bom-
tic and corporate,with the powersof governmentand with the authorityto
exercisethe rights,privilegesand funationshereinafterspecified.and the
creationof such districtis here@ determinedto be essentialto the accomplish-
nt of the purposesof oeotion59 of Article16 of the Constitutionof the State
5 Tyas, . . .(Undersooring ours)
and with mferenoe to real estatemquired, owned snd held bythe Authority,
subdivisions(e), (f), and (g) of Seotion2 of the A& provide,respectively,
as followsI._
te) to'aoquireby purchase,lease, gift,norin aw othermanner (otherwise
than by oondemnation) and to maintain,use and operateanymd all property
of any kind, real, personalor mixed, or any interest therein,wlthinor
withoutthe boundariesof the Distriat,neoessaryor convenientto the en-
erolseof the powers, rights,privilegesand functionsconferredupon it by
this Aot;
"(f) to acquireby condemnationany and all propertyof any kind, real, per-
sonal or mixed, or sny interesttherein,within or withoutthe boundariesof
Hon. Geo. H. Sheppard,page 3 (o-2037)
the District(otherthan such props4 or any interestthereinwithout the
boundariesof the Distflotas may at the time.be~owned by any body Politic)
necessa4 or wme~ent.t~ the exerciseof the powers,rights, privileges
snd funotionsconferredupon it by this.Act,in the manner providedby
General~~with~~spe~t'.to oondemnationor, at the option of the District,
in the manner provided by the statutesrelativeto oondesuWion.byDistricts
organi,edm&r GeneralLaw pursuantto SeCtiOn 59 Of k'Glde 16 Of the
Constitutionof the State of Texas;
"(g) Subjectto the provisionsof this Aot from time to time sell or other-
trlsedisposeof any propertyof sny hind, real, personalor mixed, or aw
interestthereb, ,vhichshallnot be necessaryto the carryingon of the
businessof the District;~*
Ii%think the languageof the late Judge PIy.forthe San Antonio
Court of CivilAppeals,in the case of Bexar-Medina-Atascosa CountiesDater
ImprovementDistrictNo. 1 vs. State, 21 S.W. (2d) 747, is oonclusiveof the
instantquestions. The Court said:
"The ohly issue in this cause is: Has Medina countythe power and authority
to assessand collecttaxes, state and county,on the.dams,reservoirs,can-
als, ditches,and other propertyneoessaryfor the conservationanddistribu-
tion of waters In the District?
"It is providedby article8, g 2, of the Constitutionof Texas,that the
Legislaturemay by generallaws exempt frantaxationpublicpropertyused for
publiapurposes,and in pursuanceof that authorityenactedRev. St. 1925,
Art. 7150, in se&ion 4, of which it is provided: 'allproperty,whether
real or personal,, belongingexolusivelyto this State, or any politicalsub
divisionthereof,*shall be exempt Pram taxation. The very statutoryre-
quirementsfor the creationand formationof water improvementdistricts
would seem to stamp them as politicialsubdivisiorsof the state. All the
machineryused to form them is throughagenciesof the state,the cou&y
.i*ge,the ccennissioners' oourt, the electioninstrumentalities,the dis-
trict courtto establish.the validityof the issuanceof bonds,the powers
Of taxation,restricting the use of suchtaxationto dischargethe princi-
pal and interestof the bonds, the electionof directors,all these are
governmental powers providedfor in detail by law. The districtis not an
ordinarycorporationorganizedfor purposesof gain to its members,but is
a publiaagency,using the money ntisedby taxationto advanoethe interests
of the landownerswithin its jurisdiction. It is a golitioalcorporationor
divisionof the statewhich has principallyfor its object the administration
of the government,or towhich the powersof government,or a part of such
powers,havebeen delegated."
The analogybsheen the Lower ColoradoRiver Authority,= a con-
servationand reclamationdistrict., snd the wter improvementdistrictin-
volved in the above case, in regardto this tat exemptionquestion,is
established~by~ourSupremeCourt in the ease of Lower ColoradoRiver Auth-
orityvs. NcGraw, 83 S.W. (Zd) 629, wherein the court statedthat said
HonorableGeo. H. Sheppard,Page 4 (o-2037)
Authoritg"was createda conservationand reolamationdistrict,and as a
governmental agenoy and body polltioand corporate,under and by virtue of
Chapter7, Acts 4th Called.Session, 43rd Legislature,(Veraon'sAnnotated
Civil Statutes,Article8184 note)." Again, in the ease ofLower Colorado
RiverAuthority,et al vs. Gulf Cost Water Cornpam,107 S.W. (2d) 1101,
the GalvestonCourt of CivilAppals, aptly descrivedsaid Authorityas
the 'alterego ofths State Itself,"and, with referenceto the improvi-
denoe of an Injunctionsuit againstIt, state:
'The appellantbeing such WI amu of the stete,in the exerciseof a gov-
ernmentalfunotion,and so in possessionof the water impoundedbehind
that dam. mith at least the color of title thereto under the oited oon-
stl~tio&l and statutoryprovisions,It was the boundenduty of the
' appelleeto have at first appliedto the trial oourt for a hearingon the
facts,after noticeto this public authority,before seekingthe issuanae
of a temporaryinjunotionso mandatoryin oharaoter,ratherthan that of
appellantto move for a dissolutionthereofbeforeappealing; . . ."
In the light of the foregoingconstitutional and statutorypro-
visions and the opinionsof our courts construingsame, the conclusionis
inesapable that the Lorsr ColoradoRiver Authority is a "politloalsubdi-
vdslonsof the State of Texas withinthe quoted tax exemptionstatute,and
propertybelongingexolusi~ly to it is "publiepropertyused for publio
purposes"and consequentlyexempt frae State and 00&y ad valorastaxation.
Yours very truly
ATTORREYGRER&LOFTRX&S
Ry /s/ Pat M. Reff, Jr.
Pat UI.Reff, Jr.
Assist&
iiPP%~MAR 28,184O AFFRovED
Is/ GEBALD C. MtU?H Opinionhmnitt ee
ATTCRI'iSYGPRPRALOF TSXAS ByBKB
Chairman