Honorable W. 0. Reed, chairman
Appropriations Committee
House of Representatives
Austin, Texas
Dear 3ir:               Opinion No. O-3450
                        Re: Payment of taxes by the State to
                             school distrlcts in Cherokee
                             County, Texas; on Texas State
                             Railroad lands.
        Your letter of April 24, 1941, submits the following
question for the opinionof this department:
       "At the request of the members of the Ap-
   propriations Committee, please inform me whether
   or not the Legislature Is obligated to pay taxes
   to the school districts in Cherokee County,
   where the old Texas State Railroad is located,
   by authority of Article 2784-B, Revised Civil
   Statutes."
       Article 2784b, Vernon's Revised Civil Statutes of Tex-
as, reads as follows:
       "Sec. 1. That from,and after the passage
   of this Act, all land in Cherokee County, Texas,
   owned by the State of Texas and Prison Commis-
   sion of Texas, except the land heretofore set
   aside for the Rusk State Hospital, but includ-
   ing the land heretofore set aside to the Agri-
   cultural & Mechanical i;ollegefor re-forestation
   purposes, shall be subject to taxation for school
   purposes where any such land is embraced within
   the metes and bounds of any independent or com-
   mon school district.
       "Sec. 2. Where any such land is embraced
   within the metes and bounds of any independ,ent
   or common school district, the Trustees of the
   Independent School District, of the Commlssion-
   em ' Court for a Common School District, are
   hereby authorized to levy and cause to be as-
   sessed and collected taxes for school purposes
Honorable   W.   0. Reed, Chairman, page 2     g-3450


    for the amount and in the manner prescribed by
    the General Laws for the levy of school taxes.
        “Sec. 3. The taxes herein provided for
    shall be assessed and collected in the manner
    now orescribed br General Laws for the assess-
    ment-and collection of school taxes."
         Article 1, Section 3, of the Texas Constltutlon, pro-
vides:
        "All free men, . . . have equal rights, and
    no man, or set of men, Is entitled to exclusive ._
    separate public emoluments, or privileges, . . .ll
         Article III, Section 51, provides:
        "The Legislature shall have no power to
    make any grant or authorize the making of any
    grant of public money to any indlvldual, asso-
    cFatlon of Individuals, myicipal 02;:other cor-
    porations whatsoever, . .   Except grant of
    aid in cases of public calamity.            .~,
        Article III, Section 56, proh,ibFtsthe passing of loc'al
or special laws:
        "Regulating the affairs of . . . . school
    districtsj". . . .
        ,,
         . . . Prescribing the powers and duties of
    officers in . . . school districts."
        "Regulating the management of public schools,
    the building and repairing of school ho$ses, and
    the raising of money for such purposes.
         "Exempting property from taxation."
        Article VIII, Section 2, authorizes the exemption of
public property used f;r public purposes from taxation, but
only 'by general laws.
        There is nothing ln our Constitution prohibiting the
Legislature from conferring the power to tax State property-
upon school districts. This power, however, in our opinion,
cannot be conferred upon some school districts and withheld
from others, without violating the above constitutional pro-
visions -- at least, in the absence of a statute classifying
school districts for the purpose of conferring such authority,
.   .




    Honorable W. 0. Reed, Chairman, page 3              O-3450



    on the basis of characteristics which, considering the object
    and purpose of the law, affords a reasonable basis for ex-
    tending the right to those possessing the characteristics ati'
    denglng it to those who do not.
            Article 2784b confers the power to assess and collect
    taxes on State owned lands from the State only upon school
    districts situated in Cherokee County; Texas. No classiflca-
    tion of school districts Is attempted, only designation ac-
    cording to geographical location of the districts andlands
    involved. It is obvious that mere geographical location bears
    no reasonable relation to the objects and purposes of the law,
    so as to authorize this power and privilege to be conferred
    upon Cherokee County School Districts and withheld from other
    school districts in other counties wherein State owned lands
    may be located. Miller v. El Paso County, by the Texas Su-
    preme Court, not yet officially reported.
            Subjecting State lands to taxation by certain school
    districts necessarily involves the idea that State funds shall
    be appropriated to the payment of such taxes. Our Constitu-
    tion does not contemplate that the inhabitants of particular
    school districts (in the absence of public calamity) shall
    receive the benefit of the application of State funds to the
    purposes of the districts, when Inhabitants of other school
    districts, similarly situated, are denied the benefits thus
    accorded. The constitutional guaranty of equal rights to all
    is violated as effectively by extending privileges to local
    go-vernmentalunits in one area of the State which are denied
    to similar local governmental units similarly situated, in
    other sections, as by conferring special privileges and bene-
    fits upon the inhabitants directly. Our constitutional pro-
    visions are designed to prevent unreasonable discrimination
    between units of local self government, An appropriation of
    State moneys to certain school districts, when no similar ap-
    propriation is made to school districts similarly situated,
    operates to confer a special benefit upon and unduly favor
    the citizens and taxpayers of those districts, to the preju-
    dice of the citizens and taxpayers of the school districts
    not thus favored by the State. Hill v. Snodgrass, (Tenn.)
    68 S. W. (26) 943.

                 We therefore advise that, in OUP opinion, Article
    2784b   is    unconstitutional.
            Next we turn to the question whether taxes may be due
    by the State upon the State Railroad land,sto the school dis-
    tricts involved, under the provlslons of general laws applica-
    ble alike to all school districts in the State.
                                                            ,   .




Honorable W. 0. Reed, Chairman, page 4        O-3450


        Article 7150, Revised Civil Statutes, provides In
Sections 17 and 18 thereof as follows:
         "17. State prLson property; school bona
    taxes.-- Provided that any~terrltory that has
    been acquired or may hereafter be acquired, by
    the State of Texas, as a part of any state Pri-
    son Farm nor property, shall not hereafter be ex-
    empt from the payment of its pro rata.part of any
    bond tax of a public school district of which
    the said territory was a part at the time bonds
    of the said-district which are now outstanding
    were issued, or whkh Is a part of said district
    at the time of the Issuance of bonds which may
    hereafter be voted; and the pro rata part of
    said tax that shall be paid by said territory
    shall be the proportionate part that the assessed
    valuation of such territory for county purposes
    is of the total assessed valuation of the school
    district for the year in which taxes are assessed.
    Provided, also, that the said bond tax shall be
    paid by the governing board of management of the
    State Prison System out of any funds appropriated
    therefor by the Legislature. It is hereby spe-
    cifically provided that the said bona tax shall
    be paid for each year that has elapsed since any
    such territory of a school district was acquir-
    ed by the State for and as a part of said prison
    system if any bonds were then outstanding; Acts
    1927, 60th Leg,, 1st C. S., p. 224, ch:81, 1 1;
    Acts 1930, 41st Leg., 5th C. S., p. 191, ch. 49,
    x 1.
        "18. State prison property; school mainten-
    ance tax. -- Provided that any territory that
    has been acquired or may hereafter be acquited,
    by the State of Texas, as a part of any State
    Prison Farm or property, shall not hereafter be
    exempt from the payment of its pro rats part of
    any maintenance tax of a public school district
    of which the said territory WRY a part at the
    time said maintenance tax of the said district
    which are now outstanding was voted, or which
    is a part of said district at the time any maln-
    tenance tax may hereafter be voted by said dis-
    trict; and the pro rata part of said tax that
    shall be paid by said territory shall be the
    proportionate part that the assessed valuation
    of such territory for county purposes is of the
    total assessed valuation of the school district
Honorable W. 0. Reed, Chairman, page 5          O-3450


    for the year in which such taxes are assessed.
    Provided, also, that the said malntenance'tax
    shall be pald by the governing Board of Manage-
    ment of the State Prison System out of any funds
    appropriated thereby by the Legislature. It is
    hereby speciffcally provided that the safd main-
    tenance tax shall be paid for each year that
    has elapsed since any such territory of a school
    district was acquired by the State for and as
    a part of said-prison system. Acts 1930, 41st
    Leg., 5th C.S., p. 190, ch. 47, 1 1."
        The property of the State here subjected to taxation
is "State Prison Farms or property". The property Involved,
the lands of the State Railroad, is.no longer "State PrLson
property". Senate Bill 267, Ch. 26, Acts Regular Sesslon, 37th
Legislature, took this property from the jurfsdiction of the
Board of Prison Commissioners and placed it in the hands of a
Board of Managers appointed by the Lieutenant Governor to be
sold or leased. This property is now under twenty-year lease
to the T. & N. 0. Railroad Company.
        You are therefore advised that, in our opinion, the
Legislature 1s not obligated for the payment of taxes upon
this property under the provisions of Article 7150, Sections
17 and 18.
        Attention is directed to the factthat under the pro-
visions of Article 7173, Revised Civil Statutes, 1925, this
property, belonging to the State and being leased for more
than three years, is taxable to the lessee to the extent of
the value of the leasehold interest. Daugherty v. Thompson,
71 Tex. 192; State v. Taylor, 72 Tex. 297.
                                   Yours very   truly
                                ATTORNEY GENERAL OF TEXAS

RWF:LM:wc                          By s/R. W. Fairchild
                                        R. W. Falrchild
APPROVED MAY 16, 1941                         Assistant
s/Grover Sellers
FIRST ASSISTANT
ATTORNEY GENERAL
Approved Opinion Committee By s/REK Chairman
