THE ATITORNEY GENERAL
OFTEXAS
Honorable Fred T. Porter
County Attorney
Kaufman county
Kaufman, Texas
Dear Sir: Opinion dumber O-883
Re: Maxlmum~tax~~rateunder charter
of Gity of --,__
%kr@;~authority to
plGdge net profits of municipal
light plant, together with ad
valorem taxes to servicesgeneral
obligation bonds of ~the city;
authority under ~the city charter to
levy a tax other than thatprovided.
for in bections 17, 18, 21, and 22i,~
for the payment of streetimprove-
ment bonds.
We have your letters of May 25th and June 13th, in '
which you request our opinion on the following questions:
1. Under the present city charter of Terre11 is the
maximum tax rate that can be levied by the city for all pur-
poses $2.25 or $2.65 on the $100 valuation?
2. Can the City of Terre11 add the net profit of the
municipal light plant to the maximum amount possible to derive
from taxation in determining the amount of general obligation
bonds the city may legally issue?
3. Can street improvement bonds be paid and serviced
by a tax levy other than that provided for in Sections 17, 18,
21 and 22 of Article 29 of the charter?
In reply to your first question, we must first state
that in view of the inhibitions of Article 11,'Section 5 of the
Honorable Pred. T. Porter page #2 O-883
Constitution, and Article 1165 of the Revise Civil Statftes.
t?jelegal.tax limit can not be in excess of 82.50 on the $100
valuation, notwithstanding any provisions of Terrell's charter.
It appears from the charter provlslons outlined In your letter
that the electors intended that the total tax rate for any and
all purposes for any one year ehould never exaeed 62.25 on the
$100 valuation, except that an addltional tax aould be levied
for the building of sidewalks. & the language of the provi-
slcns, it 1s evident that a maxlmb tax levy of 25# on the "
$lOtivaluation could be levied for the'buildlng of sidekalks.
We arrive at this figure by subtracting the total amount'author-
lzed,to be levied ($2.25), exalusive of sidewalk building tax,
from the $2.50 maximum allowed by law to be levied.
Ry another provision of the charter, as set forth in
your letter, the City Commission is charged with the duty of
annually,levylng and collecting a tax ofU35$'on-the~$100 valua-
t'ion,~
theretofore authorized by'the electors, forthe support
and malntenanoe of the public free schools. It 'furtherprovides
that *hen authorized by a majority vote of the qualified ~taxpay-
faiable property in+the city for any one.year; exclus~iveof the
t a x 1evSed for the building of sidewalks'; ~&id inclusive .of"'all
tam levied for bond is8ues.e This, we think, clearly limits
the maximum tax that may be levied for any and all purposes
exolusive of that which may be levied for the building of side-
walks.
$e do not think that the case of the City of Fort Worth
v. Curetcm,'222 S. W., 531, is in point with the contention men-
tioned In your letter. Terre11 has assumed full control'of its'.'
schools, the boundaries'~beingcoextensive with those of the~clty,
and that the City Commission has the authority to levy and collect
taxes for the support and maintenance of the schools. We,there-
fobe, 'think thatunder the wording of the charter, any tax levied
for school purposes would operate to reduce the amount that may
be levied for all other purposes, exclusive of the tax authorized
to be levied for the building of sidewalks. In our opinion, the
Honorable Fred T. Porter,'page #3 O-888
total now avalla le'for other 'purposes,exclusive of sidewalks
Is $1.50 on the B100
" valuation, for the reason that the charted
sets $2.25 as .the'limit for all purpoees,~exalusIve~of'sIde~
walks, and that 76$ has been authoriaed'ior sahool'purposes;
leaving a ,balanaeof $1.50 avallable~for'other purposes, subject
to restrlotions elsewhere in the charter. ..,__
Your seoond question can be answered in the language of
Judge Crltz, speaking for the Supreme Court In the case of the
City of Houston vs. McGraw, 113 S. W. (2nd) 1512 -- "As already
shown. the maxlmum and valorem taxing lI.mltof the.6lty is $2.00/
All bonded Indebtedness must be serviced out of ad valbrem taxed';
and waxes must be l=dTo th t extent;The oharter of
%&mvz notsx aaidemy _ &Ioular
_ Dart
_ ~~~ of
_ the'ad'valor~eti
~~~~.~~~~~~
~~~
taxes authorized to be levied for bond purposes alone, and neither
does it set aside any particular part thereof for other purposes.
,Itmust follow that the law requires that a sufficient part of
the ad valorem taxes must first be,allocated to servicing out-
&&ding bbnas'or other Indebtednessee. Any balance may be .levled
and used for general operating expenses. Of course, when a city
-slm~e&?l~ iJh~pwzlsb~~rnd#.a arIukf3awa$&fiIlWlt
~~~18lsu~p~~~eo~i~~~ttje’~aamfi~~~8tPP
Shde&itednBeseYa,t&her~para&9ppm~ms~ecbe~ a~lZf$z+Z eAM@jW on
‘krhs ad;;h%zw& Barb ae3mmiA ae?el!@SQ@@$$S
,I lunWbh&let@,gq~2
Wfatithorized to be lievied for indebtedness or other purposes
only."
We~interpret the holding In thI$ case to mean that In
deters&.ng the maxlmym amount of general obligation bonds that
may be Issued by a city, sources of revenue other than that ob-
talned by reason of the levy of ad valorem taxes must be oonsider-
ed only &hen the cIty*s~debit. creating power has-been reached and
ap arently absorbed al-lof the ad valorem taxes, leaving an -In-
suKfiaient amount with nblah to pay operatin expenses of the city.
You are, therefore, advised that in our opinfon, sources of reve-
nue other than that obtained through the levy'of ad'valorem taxes
can not be considered In determining the amount of general obllga-
tlon bonds that,may be issued by,the city..
In answer 0 your third question, we advise that in our
opinion the City of 3 errell may anthorlze the Issuance of bonds
for street Improvements and levy a tax in payment thereof from
Honorable Fred. T. Porter, page #4 O-883
any other souroe not otherwise restricted. Sections 17 to
22 of %iIol6 29 of the aharter provide certain taxes and
c&taIn tax limitations for the pbrmanent
an& upkeep-of the streets and bridges of the said
Terrell; Article 22 belongan amendment which clearly authorlzgs
the City ConnuIssIonto use the funds provided In Seotlcm 19 for
the payment of prtiofpal and interest of bonds of th& city voted
and issued for street Improvement purposes. We interpret this
amendment to authorize the City Commission to appropriate suoh
money a8 may be needed to pay the prinoipal and Interest on
bonds Issued for street Improvement purposes, and oan not oon-
-strue from the language of aaid amendment that any restrlotlon
::'.yas
.+i&t@ed,to be imposed
~, upon the Com$SsiOn. _
.,.
" Jo,
.' We think, however, that the total amount whlah may be
I. '1
lwS&Yfo'? street iti!btildge@wpos,@@ is l~mit&d"by'the~l*.uage
.af:Ssdtlon'18'l,_whloh,,in
~..__, part,,provid6s -- Fl?hist6he amouA
,16X&d fd+'street and brld 8 pur@o%ii,-, as hi&Iri,i&t"fbrthj to-.
g&$her wlth'the amount lev ed for
reseed in ang one
,. year fih8~SUp, ?f ~~.~~~lt~~~~~~~~;s~~~:~On"ser
..' &usting that ihe above aiswers your questions, i8 are
Veq truly yours
ATTORNEY GENERAL OF v
Olarenoe E; -Ctid%i(j
Assistant
C=+S/Pcup _ ,.,
AppRovED JDL 21, 1939
V. F. Moore
FIRST ASSISTANT ATTORNEY GENERAL
Approved OpInIotiCommittee
dy T.D.R., Chairman