Case Information
*1 GEFt4LDC.lUHN Au- ai. TEXAS
.a-- ommmnA&
Honorable Geo. H. Sheppard
Comptroller of Public Aocounts
Austin, Texas Opinion No. O-2037
Dear Sirr Hei Liability bf! property owed by the LOrrei Colorado River Authority to State and county ad wlorem taxes.
Lkder date of l&arch 4, 1940, you suhnit for the opinion of this Department the following question:
'The Lower Colorado Bihr Authority purchased fromthe Texas Power and Light Canpany oe+ain real estate and power linesin Colorado County on which ad wloremtaxes had been previously levied and colleoted. Is this property now subject to ad valorsm taxes under the new ownership?" .Ho question is presented here as to the Vesting of title in the L&r ~tilorado River Authority to certain real estate and power lines in Colorado County by virtue of its purchase of ssme from the Texas Power & Light Company, or~of taxationthereof wh%le onned by grantor, but the only question before this Department is whether suoh real eatate be-es ex- empt from State and county ad valorem taxation in the hands of Authority, under oontrolling oonstitutional and statutory provisions.
Artiole 8, Section 2, Constitution of Texas, provides that "the Legislatwe may, by general laws, extrnpt fromtaxation public property used for ~ublio purposes." Article 7150, Vernon's Annotated Civil Statutes, provides-'eertain exrrmptions from taxation, anong them "all property, *ether real or'personal, belonging exclusively to this State, or any political subdivision thereon, . . ." (Section 4).
re now turn to pertinent constitutional and statutory provisions to ascertain if the Lover Colorado River Authority is "a political subdi- Vision" of the State, within the tax exemption afforded by Artiale 7150, Vernon!s Annotated Civil Statutes, so as to constitute the real estate in question "public property used for purlib purposes," within the intend- ment of Article~8, Seation 2, Constitution of Texas.
The Lower Colorado River Authority is a body politic and corporate oreated under Article 16, Section 59a, Constitution of Texas, and the Enabling Act of the Legislature pursuant thereto, appearing as Olapter 7, Acts of the 4th Called Session, 43rd Legislatirs (Vennon's Annotated Civil Statutes, Article 8194 note). This smondment, known as the "Conservation Amendment" provides for the creation of conservation and reclamation dis- tricts as-follows,:
Honorable Gee. H. Sheppard, Page 2 (O-2037)
%ec. 59a. The conservation and development of all of the natural resources of this State, including the oontrol, storing, preservation and distr.ibution of %ts storm and flood waters, the waters of its rivers and strelrms, for ir- rigation, power and all other useful purposes, the reclamation and irrigation of its arid, s&-arid and other lands needing irrigation, ,the reclamation and,drainage of its over-flowed lands and other lands nee&ng drainage, the conservation and develousent of its forests. water and hvdro-eleotrio Dower. the navigation of its &land and aoastal waters, and the-preservation -&I - oonservation of all such natural resources of the State are earn and all here dealared publio rights and duties;and thelegislature shall pass all such law as may be appropriate tbreto.
e(b) There may be orsated within the State of Texas, or the State maybe divld- ed Into such nuisber of conservation and realamation districts as may be deter- mined to be essential to the accomplishent of the purposes of this amendment to the constitution, which distfiots &all be governmentai agencies and bodies pol- itic and corporate with eooh powers of government and with the author%* to exercise such rights, privileges and functions oonoerning the subject matter of this amendment as may be oonferred by law." (Underscoring ours)
The above bat, creating the Loner Colorado River Authority, declares, in Seotion 1 thereof, the nature and purposes of the Authority to be as follows8 *sea. 1. There ia hereW oreated within the State of Texas. In addition to the distri& lnto~whioh the-state has heretofore been divided,.a conservation and reclamation distriot to be known a8 Qmer Colorado River ~Authority* (herein- after called the District) and consisting of that part of the State of Texas whiah is iaoluded within the boundaries of the counties of Blanoo, Burn&, Llano, Travis, Bastrop, F'aytte, Colorado, Sharton, San SabP; and Matagorda. Such Dis- triot shall be snd is hereby deolared to be a goverrnnental agency and bom- tic and corporate, with the powers of government and with the authority to exercise the rights, privileges and funations hereinafter specified. and the creation of such district is here@ determined to be essential to the accomplish-
nt of the purposes of oeotion 59 of Article 16 of the Constitution of the State 5 Tyas, . . .(Undersooring ours)
and with mferenoe to real estate mquired, owned snd held bythe Authority, subdivisions (e), (f), and (g) of Seotion 2 of the A& provide, respectively, as followsI. _
te) to'aoquire by purchase, lease, gift, nor in aw other manner (otherwise than by oondemnation) and to maintain, use and operate anymd all property of any kind, real, personal or mixed, or any interest therein,wlthin or without the boundaries of the Distriat, neoessary or convenient to the en- erolse of the powers, rights, privileges and functions conferred upon it by this Aot;
"(f) to acquire by condemnation any and all property of any kind, real, per- sonal or mixed, or sny interest therein, within or without the boundaries of *3 Hon. Geo. H. Sheppard, page 3 (o-2037)
the District (other than such props4 or any interest therein without the boundaries of the Distflot as may at the time.be~ owned by any body Politic) necessa4 or wme~ent.t~ the exercise of the powers, rights, privileges snd funotions conferred upon it by this.Act, in the manner provided by General ~~with~~spe~t'.to oondemnation or, at the option of the District, in the manner provided by the statutes relative to oondesuWion.by Districts organi,ed m&r General Law pursuant to SeCtiOn 59 Of k'Glde 16 Of the Constitution of the State of Texas;
"(g) Subject to the provisions of this Aot from time to time sell or other- trlse dispose of any property of sny hind, real, personal or mixed, or aw interest thereb, ,vhich shall not be necessary to the carrying on of the business of the District;~*
Ii% think the language of the late Judge PIy.for the San Antonio Court of Civil Appeals, in the case of Bexar-Medina-Atascosa Counties Dater Improvement District No. 1 vs. State, 21 S.W. (2d) 747, is oonclusive of the instant questions. The Court said:
"The ohly issue in this cause is: Has Medina county the power and authority to assess and collect taxes, state and county, on the.dams, reservoirs, can- als, ditches, and other property neoessary for the conservationand distribu- tion of waters In the District?
"It is provided by article 8, g 2, of the Constitution of Texas, that the Legislature may by general laws exempt frantaxation public property used for publia purposes, and in pursuance of that authority enacted Rev. St. 1925, Art. 7150, in se&ion 4, of which it is provided: 'all property, whether real or personal,, belonging exolusively to this State, or any political sub division thereof,* shall be exempt Pram taxation. The very statutory re- quirements for the creation and formation of water improvement districts would seem to stamp them as politicial subdivisiors of the state. All the machinery used to form them is through agencies of the state, the cou&y .i*ge, the ccennissioners' oourt, the election instrumentalities, the dis- trict court to establish.the validity of the issuance of bonds, the powers Of taxation, restricting the use of suchtaxation to discharge the princi- pal and interest of the bonds, the election of directors, all these are governmental powers provided for in detail by law. The district is not an ordinary corporation organized for purposes of gain to its members, but is a publia agency, using the money ntised by taxation to advanoe the interests of the landowners within its jurisdiction. It is a golitioal corporation or division of the state which has principally for its object the administration of the government, or towhich the powers of government, or a part of such powers, have been delegated."
The analogy bsheen the Lower Colorado River Authority,= a con- servation and reclamation district., snd the wter improvement district in- volved in the above case, in regard to this tat exemption question, is established~by~our Supreme Court in the ease of Lower Colorado River Auth- ority vs. NcGraw, 83 S.W. (Zd) 629, wherein the court stated that said *4 Honorable Geo. H. Sheppard, Page 4 (o-2037)
Authoritg "was created a conservation and reolamation district, and as a governmental agenoy and body polltio and corporate, under and by virtue of Chapter 7, Acts 4th Called.Session, 43rd Legislature, (Veraon's Annotated Civil Statutes, Article 8184 note)." Again, in the ease ofLower Colorado River Authority, et al vs. Gulf Cost Water Cornpam, 107 S.W. (2d) 1101, the Galveston Court of Civil Appals, aptly descrived said Authority as and, with reference to the improvi- the 'alter ego ofths State Itself," denoe of an Injunction suit against It, state:
'The appellant being such WI amu of the stete, in the exercise of a gov- ernmental funotion, and so in possession of the water impounded behind that dam. mith at least the color of title thereto under the oited oon- stl~tio&l and statutory provisions, It was the bounden duty of the ' appellee to have at first applied to the trial oourt for a hearing on the
facts, after notice to this public authority, before seeking the issuanae of a temporary injunotion so mandatory in oharaoter, rather than that of appellant to move for a dissolution thereof before appealing; . . ."
In the light of the foregoing constitutional and statutory pro- visions and the opinions of our courts construing same, the conclusion is inesapable that the Lorsr Colorado River Authority is a "politloal subdi- vdslons of the State of Texas within the quoted tax exemption statute, and property belonging exolusi~ly to it is "publie property used for publio purposes" and consequently exempt frae State and 00&y ad valoras taxation.
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 Opinion hmnitt ee ByBKB ATTCRI'iSYGPRPRAL OF TSXAS
Chairman