                                ATTORNEY            GENERAL OF TEXAS
                                             GREG        ABBOTT




                                              February 23,2006



The Honorable Steven B. Payson                       Opinion No. GA-0405
Dawson County Attorney
Post Office Box 1268                                 Re: Whether article VII, section 6b of the Texas
Lamesa, Texas 7933 1                                 Constitution   permits a commissioners      court to
                                                     distribute county permanent school fund reductions
                                                     to a school district based on students attending
                                                     school in the district who have transferred from
                                                     another school district in the county (RQ-0386-GA)


Dear Mr. Payson:

         You ask whether article VII, section 6b of the Texas Constitution permits a commissioners
court to distribute county permanent school fund reductions to a school district based on students
attending school in the district who have transferred from another school district in the county.’

I.      Legal and Factual Background

        Under section 6 of article VII of the Texas Constitution,        a commissioners     court is the trustee
of the school land granted to the county:

                          All lands heretofore, or hereafter granted to the several
                 counties of this State for educational purposes, are of right the
                 property of said counties respectively, to which they were granted,
                 and title thereto is vested in said counties, and no adverse possession
                 or limitation shall ever be available against the title of any county.
                 Each county may sell or dispose of its lands in whole or in part, in
                 manner to be provided by the Commissioners Court of the county.
                 Said lands, and the proceeds thereoA when sold, shall be held by said
                 counties alone as a trustfor the benefit ofpublic schools therein; said
                 proceeds to be invested in bonds of the United States, the State of
                 Texas, or counties in said State, or in such other securities, and under



          ‘See Letter and Brief from Honorable Steven B. Payson, Dawson County Attorney, to Offke of the Attorney
General, Opinion Committee, at 1 (Aug. 22, 2005) (on file with the Opinion Committee, also available at http://www
.oag.state.tx.us) [hereinafter Request Letter and Brief respectively].
The Honorable Steven B. Payson - Page 2                        (GA-0405)




                   such restrictions as may be prescribed by law; and the counties shall
                   be responsible for all investments; the interest thereon, and other
                   revenue, except the principal shall be available fund.

TEX. CONST.art. VII, 5 6 (emphasis     added); see also TEX. LOC. GOV’T CODEANN. 5 263.003(a)
(Vernon 1999) (“The commissioners court of a county shall provide for the protection, preservation,
and disposition of lands granted to the county for educational purposes.“), (b) (“The commissioners
court may dispose of land granted to the county for educational purposes only as provided by law.“).

         In 1995, the legislature extensively revised Titles 1 and 2 of the Education Code.2 In doing
so, the legislature repealed provisions governing county school lands, sections 17.8 1 through 17.84
of the Education Code, but provided that a county operating under repealed chapter 17 “may
continue to operate under the applicable chapter as that chapter existed on [May 1,l 995.]“3 Chapter
17 is currently included in the Education Code as an appendix to Title 2. See TEX. EDUC. CODE
ANN. tit. 2, $5 17.01-.99-App. (Vernon 1996). Under the constitution and these statutes, county
school lands together with investments purchased with the proceeds of land sales constitute the
“county permanent school fund.“4 Interest and revenue on county permanent school fund
investments, which article VII, section 6 refers to as “available fund,” see TEX. CONST. art. VII,
0 6, are commonly referred to as the “county available school fund.“’



         2See Act of May 27, 1995,74th Leg., R.S., ch. 260, $ 1, sec. 11.301, 1995 Tex. Gen. Laws 2207,2234.

         3See id. $9 1 (enacting Education Code section 11.301(a) regarding continued application of certain repealed
chapters), 58(a)(l) (repealed chapters), 1995 Tex. Gen. Laws 2207, 2234, 2498.

         4See TEX. CONST.art. VII, 5 6b (authorizing the commissioners court to reduce the “county permanent school
fund”); TEX.EDUC.CODEANN.tit. 2, 5 17.8 1-App. (Vernon 1996) (“It shall be the duty of the commissioners court to
provide for the protection, preservation, and disposition of all lands heretofore granted, or which may hereafter be
granted, to the county for educational purposes and which constitute the permanent county school fund.“) (emphasis
added). See also infra note 5.

         ‘As this office has explained, in addition to county school lands,

                   [t]he permanent school fund belonging to a county would be the funds or the bonds
                   authorized to be purchased by the county with such funds, which resulted from the
                   sale or lease of the land granted to the various counties for public school purposes.
                   The available school fund belonging to the county would be the income derived
                   from the investment of the county permanent school fund.

Tex. Att’y Gen. Op. No. M-480 (1969) at 2; see also TEX. EDUC.CODEANN. tit. 2, &$ 17.82(b)-App. (Vernon 1996)
(“The proceeds of any such sale [of county school land] shall be invested in bonds of the United States; the State of
Texas; counties of the state; independent or common school districts; road precinct, drainage, irrigation, navigation, and
levee districts in the state; or incorporated cities or towns; or in interest-bearing bank time deposits with the bank having
been designated the depository for that county under the terms and conditions of the depository contract. These bonds
and deposits shall be held by the county in trust for the benefit of its public free schools, and only interest thereon may
be used and expended annually.“), 17.83 (“Besides other available school fimds provided by law, rental and lease
proceeds from lands previously granted by the state to any county for educational purposes shall be appropriated by the
                                                                                                                (continued...)
The Honorable Steven B. Payson - Page 3                   (GA-0405)




        Article VII, section 6b, approved by the voters in 1972,6 effectively amends section 6 to
authorize a commissioners court to distribute all or some of the county permanent school fund corpus
to the school districts of the county for paying bonded indebtedness or making permanent
improvements:

                          Notwithstanding     the provisions of Section 6, Article VII,
                 Constitution of the State of Texas, any county, acting through the
                 commissioners court, may reduce the county permanent school fund
                 of that county and may distribute the amount of the reduction to the
                 independent and common school districts of the county on a per
                 scholastic basis to be used solely for the purpose of reducing bonded
                 indebtedness     of those districts       or for making      permanent
                 improvements.      The commissioners court shall, however, retain a
                 sufficient amount of the corpus of the county permanent school fund
                 to pay ad valorem taxes on school lands or royalty interests owned at
                 the time of the distribution. Nothing in this Section affects financial
                 aid to any school district by the state.

Id. $6b (emphasis added). There are no judicial opinions construing section 6b, but this office has
concluded that all the school districts with territory in a county are entitled to partake in a section 6b
distribution, including school districts that also include territory in other counties. See Tex. Att’y
Gen. Op. No. H-47 (1973) at 3. When more than one school district has territory in the county,
section 6b requires the commissioners court to distribute a county permanent school fund reduction
between the school districts by allocating each district “a pro rata part for each ‘scholastic’ residing
in the part of the district within [the] county.” Id.

          Your letter asks about the proper method to distribute a reduction of the county permanent
school fund under article VII, section 6b. You explain that there are five independent school districts
(ISDs) located in Dawson County. See Brief, supra note 1, at 1. Only Lamesa ISD is located wholly
within the county. See id. Two other school districts, Klondike and Sands ISDs, are located in
both Dawson and Martin Counties. See id. Dawson ISD is located in Dawson, Terry and Gaines
Counties. See id. The campuses of the Dawson, Klondike, and Sands ISDs are located in Dawson
County. See id. O’Donnell ISD is located in Dawson and Lynn Counties “with the school campuses
in Lynn County.” Id. You and the county auditor have correctly concluded that all these school
districts, because they have territory in the county, are entitled to partake in the distribution and that
the location of their campuses is not a relevant factor. See id. at 1,3; see also Tex. Att’y Gen. Op.
No. H-47 (1973) at 3, Tex. Att’y Gen. LO-98-006, at 2 (“Attorney General Opinion H-47 stands for



        ‘(...continued)
commissioners court of the county in the same manner legally prescribed for the appropriation of interest on bonds
purchased with the proceeds from sale of such lands.“).

         6See Act of May 26, 197 1, Tex. H.R.J. Res. 57, 62d Leg., R.S., 197 1 Tex. Gen. Laws 4 138 (adopted Nov. 7,
1972).
The Honorable Steven B. Payson      - Page 4        (GA-0405)




the proposition that under article VII, section 6b, a school district with at least some territory in a
county is entitled to a portion of the corpus of the county permanent school fund.“). However, there
is some question regarding how the funds should be distributed among the five school districts.

        You provide the following facts:

                         There are students who reside in Lamesa Independent School
                District who attend school in the other 4 school districts. There are
               also students who are being home schooled. There are also students
               who are over the age of 18 who are still in school in each district who
               would be counted in the Average Daily Attendance under the state
               education code. There are also illegal aliens attending our schools.
               The Superintendent of the Lamesa Independent School District is of
               the opinion that the Dawson Commissioner’s Court must count and
               distribute the permanent school fund on the basis of the School
               District of the child’s residence rather than the school of his
               attendance. The superintendents of the other school districts are of
               the opinion that if they are educating the child, they should get to
               count the child as one of their scholastics in determining the
               proration.

Brief, supra note 1, at 1,

II.    Analvsis

        Your question is whether students who reside in Lamesa ISD but who attend school in one
of the other four school districts should be treated as scholastics of Lamesa ISD or of the districts
where they attend school. See id.

         Article VII, section 6b of the Texas Constitution requires a commissioners          court to
“distribute the amount of the reduction to the independent and common school districts of the county
on a per scholastic basis.” TEX. CONST.art. VII, 6 6b. In 1973, shortly after section 6b’s adoption,
this office addressed the meaning of the phrase “on a per scholastic basis” in Attorney General
Opinion H-47 and determined that it “means ‘on the basis of the number of persons residing in the
school district eligible by age for free education.“’ Tex. Att’y Gen. Op. No. H-47 (1973) at 2. The
opinion considered and expressly rejected the suggestion that distribution between school districts
could be based on the number of students who attend school in the district. See id. (concluding that
the phrase “on a per scholastic basis” “has no relation to average daily attendance”). Opinion H-47
based its analysis primarily upon a 1931 Texas Supreme Court case. That case, Love v. City of
Dallas, while focusing primarily upon the distribution of the available school fund and its relation
to transfer students, made clear the Court’s view that the property and funds of the public schools
are impressed with a trust in favor of the county or district in which the student resides:

               In view of the history of the subject and the statutory and
               constitutional provisions referred to above, it is plain, we think, that
The Honorable Steven B. Payson - Page 5                 (GA-0405)




                 the property and funds of the public schools are held in trust by the
                 city, district, county, or other statutory agency, to be used for the
                 benefit of the school children of the community or district in which
                 the properties exist, or to which the school funds have been allocated.
                 We think these properties and funds are so plainly and clearly
                 impressed with a trust in favor of the local public schools of the city
                 or district that they are within the protective claims of both the state
                 and federal Constitutions, and that the Legislature is without power
                 to devote them to any other purpose or to the use of slny other
                 beneficiary or beneficiaries.

Love v. City ofDallas,     40 S.W.2d 20,26 (Tex. 1931).

          As a result, distribution of the county permanent school fund follows the property rather than
the student. From a practical point of view, this construction makes sense, because a student who
transfers to another district retains a right to return at any time to the district in which he resides.
Since 1973, no court or attorney general opinion has questioned Opinion H-47. Moreover, that
opinion was issued only seven months after the November, 1972 adoption of article VII, section 6b,
and thus is entitled to the benefit of the contemporaneous construction rule. See Am. Indem. Co. v.
City ofAustin, 246 S.W. 1019,1023 (Tex. 1922) ( “contemporaneous exposition of a constitutional
provision is of substantial value in constitutional interpretation”); Tex. Att’y Gen. Op. No, GA-0054
(2003), at 3 (“The construction placed upon statutes and constitutional amendments soon after their
enactment or adoption is entitled to substantial weight.“). Thus, it is our opinion that a section 6b
distribution must be based on students residing in a district as opposed to attending school in the
district.

        Accordingly, in answer to your question, for purposes of article VII, section 6b, transfer
students are to be counted as scholastics of the school district in which they reside. A commissioners
court may not distribute county permanent school fund reductions to a school district based on
students attending school in the district who have transferred from another school district.7

         We note that you cite Attorney General Opinion JM-355 for the proposition that a
commissioners court has the discretion “to set the criteria for deciding who to count” as scholastics,
see Brief, supra note 1, at 3, and conclude that the Dawson County Commissioners            Court may
therefore distribute funds among the school districts on the basis of average daily attendance, see id.
at 4. In Attorney General Opinion JM-355, this office noted that the legislature had repealed statutes
that provided for a scholastic census “whereby the number of students of scholastic age residing in
a particular school district could be determined.” Tex. Att’y Gen. Op. No. JM-355 (1985) at 4.
Given the absence of an official state census, this office determined that a commissioners court has
the discretion “to formulate a method to determine the scholastic population within a school district.”
Id. at 5. However, in exercising that discretion, the commissioners court cannot use criteria that are



         7Thus, for example, the 40 students who reside in Lamesa ISD but transfer to O’Donnell ISD must be counted
as scholastics of Lamesa ISD. See Brief, supra note 1, at 4.
The Honorable Steven B. Payson - Page 6                     (GA-0405)




not authorized by section 6b. The commissioners court may select a method to determine the
number of “persons residing in the school district eligible by age for free education,“* but it may not
select a method that counts as a scholastic a person who resides in another school district. See Tex.
Att’y Gen. Op. Nos. H-391 (1974) at 2 (proportional distribution “according to actual pupil
enrollment would not be the correct standard”); H-47 (1973) at 2.

          You also ask whether article VII, section 6b requires a commissioners court to count certain
other persons as scholastics. See Brief, supra note 1, at 1,3. In particular, you ask about “students
who are being home schooled,” “students who are over the age of 18 who are still in school,” and
“illegal aliens attending our schools.” Id. at 1. Section 25.001 ofthe Education Code governs which
persons residing in a school district are eligible to attend its schools. A school district must admit
for a school year a person residing in the district who is at least five years of age and under 2 1 years
of age as of September 1st of the school year. See TEX. EDUC. CODE ANN. 5 25.001(a)-(b) (Vernon
Supp. 2005). Thus, children residing in a school district who are home schooled or students residing
in a district who are over the age of 18 but not yet 2 1 must be counted as scholastics. In addition,
we gather that there is some dispute between ISDs regarding whether undocumented persons must
be counted as scholastics. See Brief, supra note 1, at 1, 3-4.9 Undocumented persons residing in a
school district may not be denied admission on the basis of their immigration status. See Plyler v.
Doe, 457 U.S. 202 (1982); 8 U.S.C. 5 1643(a)(2) (“Nothing in this chapter [restricting entitlement
to welfare and public benefits based on immigration status] may be construed as addressing alien
eligibility for a basic public education as determined by the Supreme Court of the United States
under PZyZer v. Doe (457 U.S. 202) (1982).“) (P ersonal Responsibility and Work Opportunity
Reconciliation Act of 1996).” Accordingly, school-age undocumented persons residing in a school
district must be counted as scholastics.




         ‘Tex. Att’y Gen. Op. No. H-47 (1973) at 2.

       ‘See also Brief from Cheryl T. Mehl, Schwartz & Eichelbaum, PC., to Nancy S. Fuller, Chair, Opinion
Committee, Attorney General of Texas, at 3 (Oct. 7,200s) (on file with Opinion Committee).

         “&e also www.tea.state.tx.us/taa/legalOSO2O5.html(Letter from David A. Anderson, General Counsel, Texas
Education Agency, to School District Administrator (Aug. 2, 2005) (advising that “under the United States Supreme
Court decision in Plyler v. Doe . . a student’s immigration status is not a permissible basis for denying admission to a
public school”)).
The Honorable Steven B. Payson - Page 7            (GA-0405)




                                        SUMMARY

                        Article VII, section 6b of the Texas Constitution authorizes a
               commissioners court to reduce the county permanent school fund and
               to “distribute the amount of the reduction to the independent and
               common school districts of the county on a per scholastic basis.”
               TEX. CONST.art. VII, § 6b. For purposes of article VII, section 6b,
               transfer students are to be counted as scholastics of the school district
               in which they reside. A commissioners court may select a method to
               determine the number of resident scholastics in each school district
               in the county, but it may not select a method that counts as a
               scholastic a person who resides in another school district.




BARRY R. MCBEE
First Assistant Attorney General

ELLEN L. WITT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Mary R. Crouter
Assistant Attorney General, Opinion Committee
