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                               ATTORNEY GENERAL OF TEXAS
                                          GREG        ABBOTT


                                               August 4, 2014



Ms. Ann Marie Lee, CPA                                   Opinion No. GA-l 073
Henderson County Auditor
125 North Prairieville Street, Room 202                  Re: Whether a home-rule municipal charter
Athens, Texas 75751                                      provlSlon may require voter approval to
                                                         impose an ad valorem tax (RQ-1183-GA)

Dear Ms. Lee:

        You ask whether a home-rule municipal charter provision may require voter approval to
impose an ad valorem tax. 1 You inform us that Gun Barrel City (the "City") adopted a home-
rule charter that authorizes the City to impose lawful municipal taxes but provides that "[n]o
ad valorem or additional sales tax or assessments may be imposed ... without the approval of
the electorate." Request Letter at 1 (emphasis omitted) (further explaining that the City adopted
the charter under article XI, section 5 of the Texas Constitution, the municipal home-rule
provision); GUN BARREL, TEX., CHARTER art. VII, § 7.19(1) (1996). You inquire as to the
validity of this charter provision. Request Letter at 1-2.

        Article XI, section 5(a) ofthe Texas Constitution authorizes home-rule municipalities to
"levy, assess and collect such taxes as may be authorized by law or by their charters." TEX.
CoNST. art. XI, § 5(a). The Legislature has authorized home-rule municipalities to "levy special
or general property taxes for lawful purposes." TEX. TAX CODE ANN.§ 302.001(c) (West 2008).
You state that the charter grants the City "the power to levy, assess and collect taxes of every
character and type for any municipal purpose not prohibited by the Constitution and laws of the
State of Texas." Request Letter at 1; GUN BARREL, TEX., CHARTER art. VII, § 7 .19(1) ( 1996).
From your statement of the facts, we will assume that the City possesses the predicate authority
necessary to impose an ad valorem tax. The charter provision about which you ask limits that
authority by requiring voter approval before it may be exercised. Request Letter at 1. You are
concerned that this provision may conflict with or be preempted by chapter 26 of the Tax Code,
specifically section 26.05. Id. at 3.

       A municipality that has adopted a home-rule charter possesses the full power of self-
governance, subject to legislative limitation. TEX. CONST. art. XI, § 5; S. Crushed Concrete,

        1
         See Letter from Ms. Ann Marie Lee, CPA, Henderson County Auditor, to Honorable Greg Abbott,
Attorney General ofTexas at 1 (Feb. 4, 2014), https://www.oag.state.tx.us/opin/index_rq.shtml ("Request Letter").
Ms. Ann Marie Lee, C.P.A. - Page 2                   (GA-1073)



LLC v. City of Houston, 398 S.W.3d 676, 678 (Tex. 2013). A city charter provision may not
conflict with state law, nor may it regulate a subject matter that a state statute preempts. In re
Sanchez, 81 S.W.3d 794, 796 (Tex. 2002). To preempt subject matter normally within a home-
rule municipality's authority, however, the Legislature must do so with "unmistakable clarity."
Id. (quoting Dallas Merch. 's & Concessionaire's Ass 'n v. City of Dallas, 852 S.W.2d 489, 491
(Tex. 1993)). Moreover, courts will not hold that a municipal charter conflicts with or is
preempted by a state law "if they can reach a reasonable construction leaving both in effect." In
re Sanchez, 81 S.W.3d at 796.

           Section 26.05 of the Tax Code provides procedures for the governing body of a tax unit
to adopt a tax rate and does not mention voter approval as part of the process. See TEX. TAX
CODE ANN. § 26.05 (West Supp. 2013). The City's charter requires voter approval before any
tax may be imposed. Interpreting the charter as substituting an election for any of the procedures
in chapter 26 would necessarily conflict with the chapter. See generally Tex. Att'y Gen. Op. No.
GA-1031 (20 13) at 3 (determining that a charter provision is unenforceable to the extent it is
inconsistent with the governing body's statutory authority). However, the charter can be read as
requiring voter approval in addition to, not in replacement of, any state statutory requirements, so
that the charter does not conflict with chapter 26. See City of Richardson v. Responsible Dog
Owners ofTex., 794 S.W.2d 17, 19 (Tex. 1990) (holding that "the mere fact that the legislature
has enacted a law addressing a subject does not mean that the subject matter is completely
preempted"). 2 The City Council could adopt a tax rate under chapter 26 of the Tax Code subject
to voter approval as required by the charter, giving full effect to both the Tax Code and the
charter. Because this interpretation leaves both the charter provision and chapter 26 in full
effect, it is the interpretation most likely to be adopted by a court. See In re Sanchez, 81 S.W.3d
at 796 (harmonizing home-rule city charter with the Election Code).

         More broadly, section 1.02 of the Tax Code states that title 1 of the code, which includes
chapter 26, supersedes municipal charter provisions and ordinances "relating to property
taxation." TEX. TAX CoDE ANN. § 1.02 (West 2008). Section 1.02 further explains, however,
that "[n]othing in [title 1] invalidates or restricts the right of voters to utilize municipal-level
initiative and referendum to set a ... limitation on [a] tax increase for that municipality." Id.
Section 1.02 suggests a general legislative intent to limit the preclusive effect of state Tax Code
requirements on municipal tax increase elections. Moreover, while chapter 26 prescribes
procedures for adopting the taxing unit's ad valorem tax rate, the chapter as a whole does not
reveal a legislative intent to preclude municipalities from requiring voter approval as an



        2
          You state that the City's charter and chapter 26 of the Tax Code might be construed as requiring two
elections, one to impose a tax rate and another for a rollback election. Request Letter at 5-6. We express no
opinion about the issue because the City ouncil should dec ide iJ1 the first in stance how the municipal charter
provision may be construed and implemented consisten tly wit h chapter 26 and other slate law. See Tex. Att' y Gen.
Op. No. GA-0449 (2006 at 1 (explaining that this office refi·ains from construing city charter or ordinances "[i]n
deference to munici pal offi cials authority to interpret their [own] charters and ordinances").
Ms. Ann Marie Lee, C.P.A. - Page 3         (GA-1073)



additional requirement before the tax may be implemented. See id. §§ 26.01-.16 (West 2008 &
Supp. 2013).

       A court would likely construe a city charter provision requiring voter approval of
municipal ad valorem taxes in a manner that gives full effect to both the charter provision and
chapter 26 of the Tax Code. Accordingly, a court would likely conclude that chapter 26 of the
Tax Code does not conflict with or preempt such a city charter provision.
Ms. Ann Marie Lee, C.P.A. - Page 4          (GA-1073)



                                     SUMMARY

                      A court would likely conclude that chapter 26 of the Tax
              Code does not conflict with or preempt a city charter provision that
              requires voter approval before municipal ad valorem taxes may be
              imposed.

                                            Very truly yours,




                                            Attorney General of Texas


DANIEL T. HODGE
First Assistant Attorney General

JAMES D. BLACKLOCK
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

William A. Hill
Assistant Attorney General, Opinion Committee
