Case Information

*1 Hon. Be8uford B. Jester

&wernor of Texas Opinion No. V-204

Austin, Texas lte : Power of the Automatic Tax Board, to set an ad valorem for tax rate 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 the Available School Fund, ex- cept that portion needed 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 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,

“I shall’,be grateful for your opin- ion on the matter.”

The Constitution of Texas, Section 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 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 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; *3 Hon. Beauford Ii. Jester, 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 School Fund and be included as one of the "other, sources’ (item 3 above) to be considered by the Automatic Tax Board In fixing for school purposes, This is in accord with the Interpretation of Article VII of the Texas Constitution made over a long period *4 Hon. Beauford Ii. Jester, 4, V-204

of years by the Legislature and the Courts, In defin- ing what shell constitute the Aveil,able School Fscd, v. C. s., the Legisls,ture Article 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 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 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 *5 Han; Beauford H. Jester,

the last phrase of that portion of Sect Ion 3, AP- title VII, quoted above, 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 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 Such appropriations for school purposes. could not be credited to the Available School Fund until after tax rate has been set and , If any, has ‘been determined, the est lmated def felt it remains for us to determine Therefore, 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

State School Fund such a sum which when taken tonether with the’ total of all other and c statutory true to the Ava

Hon. Beauford H. Jester, 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 vision of this Act by taking into account his estimate of such other constitutional and statutory amounts to accrue to the School Fund as made at the begin- Available 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- This bill contemplates proprlation above discussed.

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 *7 Hon. Beauford H. Jester, 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 if any, necessary to pay such make up the balance, 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

school purposea 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 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 *8 Hon. Beauford Ii. Jester,

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 such date being subse- each fiscal year, quent to calculation and levy of the ad valorem tax by the Automatic Tax Board.

Hon. &auford H. Jester,

Sincerely yours, /s/ Price Daniel Price Daniel Attorney General PD:sh:mrj PD:sh:mrj

The foregoing The foregoing opinion was considered opinion was considered and approved and approved in Confere in Confere composed of As- ce ce composed of As- Fagan Dickson, sistant Attorney Genera' Fagan Dickson, sistant Attorney Genera' 9 9

Chester Qlllson, Chester Qlllson, Joe Gr+enhlll, Joe Gr+enhlll, J. C. Davis, J. C. Davis, Jr., Jr., and Ocie Speer. 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.