                    November 25, 1969


Honorable J. W. Edgar                   Opinion No. M-519
Commissioner
Texas Education Agency                  Re:   Local    fund credit to be
Austin, Texas                                 assigned a school district
                                              containing a federal-wned
                                              military    reservation fol-
                                              lowing annexation of
                                              another district pursuant
                                              to Sections 16.76 and
                                              19.262 of the Texas
                                              Education Code.
Dear Dr. Edgar:

     You have requested an official opinion regarding the above
stated matter. We quote from your letter as follows:

           "Pursuant to Article 280313 (now in Chapter 19,
     Section 19.262, Texas Education Code) a prerequisite
     petition has been presented to the El Paso County
     Judge (under Article 26883. acting in the capacity
     of a county school board) requesting that an election
     be called to annex Canutillo Independent School Dis-
     trict  to the adjoining El Paso Independent School
     District.

          "In line with Section 19.262 of the Code, the
     County Judge has asked the Board of Trustees of
     El Paso Independent School District for its consent
     or approval to the proposed annexation required by
     subsection (c) prior to the calling of an election,
     and the El Paso district is in the process of
     gathering and studying information prior to making
     its decision.
          11....




                         -2476-
Honorable J. W. Edgar, page 2 (M-519)


          "The Canutillo district proposed to be annexed
     to El Paso district has 964 square miles of territory,
     none of which is federal-owned military lands. Cur-
     rently, El Paso district's local fund assignment credit
     for military lands approximates 49 per cent. If
     Canutillo district is combined with the El Paso District,
     the resulting El Paso Independent School District, so
     enlarged would have by virtue thereof 3044 square
     miles of territory and the combined district would have
     a reduced military land credit on its local fund
     assignment approximating 34%.

         "Thus, we are informed that should the Canutillo
    district be annexed, the El Paso district so enlarged
    would realize $334,244 less from Foundation School
    Funds occasioned by the percentage change in the military
    land credit, than it is currently realizing in its
    present status, .. .

          "The Board of Trustees of the El Paso Independent
     School District acting through its superintendent has
     requested this Agency to submit for an opinion from
     the Office of Attorney General the following question:

                "Must the local fund assignment credit for
          federal-owned military reservations be proportion-
          ately computed on the basis of total territory
          in a district enlarged by annexation, under
          Chapter 19, Section 19.262, Texas Education Code,
          or can the language in Subsection (k) be construed
          to authorize computation of such credit otherwise."

     Section 16.76 of the Texas Education Code sets out the
formula to be used in determining the local funds to be charged
to the various school districts.  House Bill 959, Acts of the
61st Legislature, Regular Session, 1969, pages 2698 et seq..
amended Section 16.76, and the pertinent provisions of H.B. 959
are quoted as follows:

           "Provided, however, that in any district contain-
     iraq State University-owned land. State-owned prison land,




                        -2477-
,    .




Honorable J. W. Edgar,'page 3     (M-519)


     Federal-owned forestry land, Federal-owned reservoirs,
     Federal-owned recreation areas, Federal-owned military
     reservations or Federal-owned Indian reservations, the
     amount assiqned to such school district shall be reduced
     in the proportion that the area included in the above-
     named classification bears to the total area of the
     district.   Provided further, that no local fund assignment
     shall be charged to the Boys Ranch Independent School
     District in Oldham County; Texas, the Bexar County School
     for Boys Independent School District in Bexar County,
     Texas, and the Bexar County School for Girls Independent
     School District in Bexar County, Texas." (Emphasis added.)

     1t~'seems clear from the above,underlined language that in
any school district containing a federal-owned military reserva-
tion, such as El Paso presently has, the amount of local funds
thatthe,district   is assigned to raise towa,rd financing its own
school is reduced by a percentage that the military reservation
bears to the whole district. A discussion of the apparent
purpose for such legislation can be found in Central Education
Aqency v. Independent School District of El Paso, 152 Tex. 56,
254,,S.W.2d 357, (1953), and you are referred to the discussion
in that case.

     This brings us to the question at hand, and that is, what
effect does the annexation of another district have on the local
fund assignment of a receiving district which has a federal-owned
military reservation or some other land, as set out in House
Bill 959, as part of the receiving district.

     Answer to this question lies in an analysis of Certain
provisions of Section 19.262 of the Texas Education Code, a
codification of Article 2803b, Vernon's Civil Statutes, which
authorizes and controls annexation of one school district by
another in larger counties.

     Subsections (i), (j) and (k) of Section 19,262 of Chapter 19
of the~Texas Education Code control the effect of an annexation
of existing school districts in larger counties.  Subsections (i),
(j) and (k) are quoted as follows:




                         -2478-
                                                     .    .




Honorable J. W. Edgar, page 4    (M-519)



          "(i) Title to all property, real and personal, of
     the annexed district shall vest in the receiving district.
     The receiving district shall have complete authority over
     and management of the public schools in the territory
     annexed.

          "(j) The receiving district shall assume all out-
     standing indebtedness of the annexed district, bonded or
     otherwise. Any tax in effect in the receiving independent
     school district shall continue and become effective and
     apply to the entire independent district as constituted
     after annexation is completed.

          "(k) The independent receiving district shall
     continue as the same district and operate in all
     respects as it was prior to the annexation except that
     the annexed territory shall become liable for all in-
     debtedness, subject to all taxes, and be a part~thereof
     for all purposes as though oriqinally included in the
     independent district." (Emphasis added.)

     The above quoted sections construed as a whole would give
the receiving district (El Paso) title to all the property and
authority over all the personnel of the district to be annexed
(Canutillo). and El Paso district would assume all debts of
Canutillo district and property owners in Canutillo district
would be immediately subject to the indebtedness, if any, and
tax rate, etc. effective in El Paso District.  Furthermore, the
two districts would be treated as one district as if they had
originally been set up as one district.

     Therefore, the effect of one district (El Paso) annexing
another (Canutillo) is the same as if the districts were
originally set up as one district.  It is, therefore, our opinion
that the Commissioner of Education must look to the whole district,
including the annexed territory, and determine what proportion
of the whole district is composed of military or other charge
free land, in determining what the local fund assignment must be.




                        -2479-
.    .




Honorable J. W. Edgar, page 5 (m-519)


This construction follows your long departmental interpreta-
tion and practice, which we do not believe the Legislature
intended to change in adopting the Texas Education Code.

                             SUMMARY

               The local fund assignment credit for
          federal-owned military reservations must be
          proportionately computed on the basis of
          total territory in a district, including
          territory resulting from the annexation of
          another school district.




Prepared by James C. McCoy
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Kerns Taylor, Chairman
George Kelton, Vice-Chairman
Malcolm Quick
Ed Esquivel
Scott Garrison
Jack Goodman

MRADE F. GRIFFIN
Staff Legal Assistant

NOLA WHITE
First Assistant




                         -2480-
