Honorable Tom A. Craven
County Auditor
McLennan County
Waco, Texas
Dear Sir:                  Opinion No, O-3173
                           Re: Time and manner of levying
                                a tax to pay the interest
                                and create a sinking fund
                                to retire warrant5 at
                                maturity.
         Your written request dated February 14, '1941,for
anopinion has been received and considered by this depart-
ment. We quote from your letter:
         "May I refer to your opinion of January 30th
     in regard to authority of the Commissioners1 Court
     to purchase road machinery for one precinct, paying
     a part of such purchase price out of 1941 revenues,
     and issuing interest bearing warrant for payment
     of balance of purchase price out of the Road and
     Bridge Fund revenues for 1942.
         "Your answer to this matter was in the affirma'
     tive for reasons stated in your opinion #O-1703
     (Conference Opinion #3098), provided, however, (you
     state) that at the tFme the contract of purchase is
     made a tax is levied to pay the debt, and interest
     thereon, as provided in Section 7 Article 11 of the
     State Constitution. This proviso leaves the method
     of levying the tax for the payment of the debt and
     interest somewhat uncertain.
         "County Engineer Manton Hannah has worked out
     a procedure which he thinks will be In line with
     the contingency. Will you not, therefore, take the
     matter under advisement and render a supplemtnal
     opinion: (1) As to when and how a tax may be levied,
     at a time other than the regular time in August, and,
     (2) whether the procedure worked out by the County
     Engineer is legal insofar as the purphase of road
     equipent is concerned."
                                                                    .
                                                                        -7

 Hon. Tom A. Craven, page 2
                                      -”




           Considering your first question we call your attention
 to ArticrleII, Section 7 of the Constitution of the State of
 Texas which provides:
           w * * * But no debt for any purpose shall
       ever be Incurred in any manner by any city or
       county unless provision is made at the time of
       creating the same, for levying and collecting
       a sufficient tax to pay the Interest thereon
       and provide at least two per cent as a sinking
       fund; l :.it
                  * 1 1
                    .
            It will be noted that the Constitution provides that
  to create a debt for any purpose the bornmissioners'~courtmust
  'at the tl.meof creating the same" provide for the "levying
  and collecting (of) a sufficient tax to pay the interest there-
  on and provide at least two per cent as a sinking fund * * *.
 Our courts have held several times that at the time a debt Is
 +reated a tax must be simultaneously provided for in compliance
,,~wlththe provisions of the Constitution referred to. Lasater
  vs. Lopes, (S. Ct. 217 S. W. 373; Colonial Trust Co. vs. Hill
  County, (Corn.App. 294 S. W. 516; Holman vs. Broadway Improve-
 ment Co., (Corn.App.) 300 S. W. 15; Austin Bros. v. Montague
  County, 10 S. W. 26 718; Colonial Trust Co. vs. Hill County,
 ;g5S. W. 2d 144; Wade vs. Travis County (C. 0~.Tex.) 72 Fed.
     .
           We believe the purchase of a drag line to be partl-
 ally paid for out of taxes to be collected in future years
 creates a "debt" and comes within the provisions of Article 11,




           Article 2368-a of Vernon's 01~11 Statutes is'applica-
 ble to the proposition under consideration. It is known and
 designated by the short title as the "Bond and Warrant Law of
 1931." It provides for the issuance of warrants by counties
 for certain named urposes Including the purpose under consid-
 eration. Section 8 of said statute, in part, provides as
 follows:
           Y3ec. 8. It is hereby made the duty of all
       Commissionerst Courts and of all governing bodies,
       as the case may be, to levy, and have assessed
       and collected, taxes sufficient to pay the inter-
       est as it accrues and the principal as It matures
       on all bonds ana time warrants Yasu%a %t'%u%a%-
       ante with the provisions of this Act. * it**I'
Eon. Tom A. Craven, page 3


         We desire to aall your attention to Article 2354,
Vernon's Civil Statutes, which we believe is applicable to
the levying of the tax.in quest&on and which should be ob-
served in levying the tax. Said article provides as follows:
         "HO county tax shall be levied except at a
     regular term of the court, and when all members
     of said court are present.”
         In view of the constitutional and statutoryprovl-
sions referred to and the holdings of the cases cited, we are
of the opinion that the commissioners1 court of McLennan County
can and should contemporaneously with the date of the execu-
tion of the contract for the drag line, provide for the levy-
ing of a tax sufficient to pay the Interest, create a sinking
fund to retire the warrants, issued in payment thereof, at
maturity, and to pay attorneys' fees if any are provided for
In the warrants. We do not believe that the constitutional
provision and statutes referred to require that at the time
of the creation of the debt that the rate per cent of'the tax-
able values of the county should be ascertaIned, and we quote
as authority for this statement from the case of Mitchell
Co ty vs. City Hational Bank (S. Ct.) 43 S.W. 880, where the
coir
   rt In discussing the provisions of Article 11, Section 7
of the Constitution said:
          'It was not the purpose of the convention in
     adopting the foregolng article to require that a
     city or county'should, at the time of creating
     a debt, ascertain the rate per cent.required to
     be levied upon the taxable values ,of the county
     in order to raise a sufficient sum to pay the
     interest and provide a sinking fund upon that
     debt, and to actually levy that rate of tax at.
     the time. Bassett v. City of El Paso, 88 Tex.
     175, 30 s. w. 8%.    In the case cited, the city
     of El Paso had at the time that it determined to
     issue its bonds, by an ordinance, provided for
     the collection annually of a given sum for the
     purpose of paying the Interest which might accrue
     upon the said bonds, and also a given sum to be
     raised annually as a sinking fund. This court
     said: 'The language and purpose of these provl-
     sions (of the constitution) seem to be satisfied
     by an order providing for the annual collection
     by taxation of sufficient Sum to pay the interest
     thereon,and create a sinking fund, etc., though
     It does not fix the rate of per cent. of taxation
Hon. Tom A. Craven, page 4


    for each year by which such sum Is to be col-
    lec~ted,but leaves the fixing of such rate for
    each successive year to the commissioners' court
    or city council. * * * As stated above, we have
    not deemed it necessary to determine whether the
    order of August 11, 1893, actually levied a tax,
    as we are of the opinion that It fully complied
    with the law by making provision for the collec-
    tion of the interest and sinking fund by taxation.'
    what the constitution requi,resis that provision
    shall be made at the time, or shall have been pre-
    viously made, by which the rate of tax to be levied
    is so definitely fixed -- as was done in the case
    last cited -- that It becomes merely a rn~~i;t~~3.al
    act to determine the rate to be levied.
        We believe that the rate per cent of the taxable,prop-
erty'of the county, which the commissioners' court believes
is necessary and required to meet the payment of the debt In
the manner heretofore indicated, could properly be ascertained
at a regular or special meeting of the commissioners 1 court
as provided in Article 7045 of Vernon's Civil Statutes, at
;h$E,:me   the court ascertains and sets the regular county
         .
        With regard to your second question, we advise you
that there are no specific forms required by statute to be
used In the issuance of time warrants. You are respectfully
referred to Article 2368-a of Vernon's Civil Statutes, for
the general procedure to be followed in the issuance.of time
warrants. You are further advised that It Is customary for
the person accepting the warrant to have the warrant and the
procedure used in issuing the same examined by an attorney.
Therefore; you would probably not have to pass on the legality
of forms like those submitted In your request. A form of
time warrant and forms to be used In the issuance thereof
that were approved by this department might not be acceptable
to the person to whom the warrant was issued or his assignee.
        From,what has been said you can see why this department
feels that it is Impractical and improper for it to approve the
forms enclosed with your request and which you have asked this
office to approve.
        We are returning herewith the forms you enclosed in
your letter.
                                  Yours very truly,
APPROVED: Mar. 11, 1941      ATMRREY      GENERAL OF TEXAS   Approved:
/a/ herald 0. Mann                                           Opinion
Attorney General of Texas    By   /a/   Harold McCracken     Committee
RM:RS:rt                                      Assistant
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