                               ATTORNEY GENERAL OF TEXAS
                                            GREG        ABBOTT




                                                 May 3 1,2006



The Honorable Kip Averitt                                 Opinion No. GA-0434
Chair, Committee on Natural Resources
Texas State Senate                                        Re: Authority of the El Paso Water Utilities
Post Office Box 12068                                     Public Service Board to set an impact fee for
Austin, Texas 787 1 l-2068                                new development in the City of El Paso and its
                                                          extraterritorial jurisdiction (RQ-04 17-GA)


Dear Senator Averitt:

        Your predecessor as Chair of the Senate Committee on Natural Resources inquired whether
the El Paso Water Utilities Public Service Board (the “Public Service Board”) may establish an
impact fee for water and wastewater infrastructure needed for new development in the City of El
Paso and its extraterritorial jurisdiction.’



         The El Paso City Council created the Public Service Board in 1952 by adopting an ordinance
under former article 1115, Revised Civil Statutes, now codified as Government Code section
1502.070.2 See EL PASO,TEX.ORDINANCE         No. 752, tj 8 ( 1952);3 see also Act of May 1,1995,74th
Leg., R.S., ch. 69, §§ l(5), 4, 1995 Tex. Gen. Laws 448,449 (defining Public Service Board and
designating the City of El Paso, through its Public Service Board, as the regional water and
wastewater planner).

        Government Code section 1502.070 provides that “[mlanagement and control of a utility
system may be vested in . . . a board of trustees named in the proceedings adopted by the
municipality and consisting of not more than five members, one of whom must be the mayor of
the municipality.” TEX.GOV’TCODEANN. $ 1502.070(a)(2) (V ernon 2000). It further states that


           *Letter from Honorable Ken Armbrister, Chair, Comrnittee on Natural Resources, Texas State Senate, to
Honorable Greg Abbott, Attorney General of Texas (Nov. 152005) (on file with the Opinion Committee, also available
at http://www.oag.state.tx.us) [hereinafter Request Letter].

         2See Act effective 90 days after adjournment, 32d Leg., R.S., ch. 112,§ 4, 1911 Tex. Gen. Laws 230; repealed
and recodzjied by Act of May 10, 1999, 76th Leg., R.S., ch. 227, $5 1, 28(c), 1999 Tex. Gen. Laws 3899, 3910;
renumberedfrom    Government Code § 1502.071 and amended by Act of May 20,1999,76th Leg., R.S., ch. 1064, § 22,
1999 Tex. Gen. Laws 3899,391O.

         30n file with the Opinion Committee.
The Honorab le Kip Averitt   - Page 2          (GA-0434)




                       (c) The proceedings of the municipality may specify the
               terms of office of the board of trustees, their powers and duties, the
               manner of exercising those powers and duties, the election of
               successor trustees, and any matter relating to the organization and
               duties of the board. On any matter not covered by the proceedings,
               the board of trustees is governed by the laws and rules governing the
               municipality’s governing body, to the extent applicable.

Id. 8 1502.070(c); see generally EL PASO,TEX.ORDINANCE
                                                     No. 752 (1952) (setting out various
powers of the Public Service Board).

         Thus, pursuant to the 1952 ordinance and Government Code section 1502.070, the Public
Service Board manages and controls the El Paso water and wastewater system. Since 1952, “the
principal action by the City Council on behalf of the water utility was to approve the issuance of
water and sewer financial bonds . . . . The Public Service Board approves its annual budget, sets
rates and has complete autonomy over [the] water and sewer system servicing El Paso and El Paso
County.” Request Letter, supra note 1, at 1.

         No provision in chapter 1502 authorizes the Public Service Board to establish impact fees
or even refers to such fees; we therefore turn to Local Government Code chapter 395, which
authorizes certain political subdivisions to establish impact fees. Section 395 .OO1 defines “impact
fee” as “a charge or assessment imposed by a political subdivision against new development in
order to generate revenue for funding or recouping the costs of capital improvements or facility
expansions necessitated by and attributable to the new development. ” TEX.Lot. GOV’TCODEANN.
5 395.001(4) (V ernon Supp. 2005). A “capital improvement” that may be funded by impact fees
includes certain “water supply, treatment, and distribution facilities; [and] wastewater collection
and treatment facilities” that “are owned and operated by or on behalf of a political subdivision.”
Id. tj 395.001(l).

        A “political subdivision” within chapter 395 “means a municipality, a district or authority
created under Article III, Section 52, or Article XVI, Section 59, of the Texas Constitution, or,
for the purposes set forth by Section 395.079, certain counties described in that section.” Id.
kj 395.001(7); see also id. 9 395.079(a) (impact fee for storm water, drainage, and flood control in
a county with a population of 3.3 million or more or that borders a county with such population and
certain districts and authorities created under Texas Constitution article XVI, section 59). A political
subdivision within this definition may impose and collect impact fees in its service area that is within
its corporate boundaries or extraterritorial jurisdiction and that will be served by the capital           .
improvements or facility expansions. See id. § 395.001(9). To adopt an impact fee, a political
subdivision must comply with the detailed procedures set out in subchapter C of chapter 395,
which are designed to keep the public well informed of the political subdivision’s action. See id.
5 395.04 1 (Vernon 1999). “Unless otherwise specifically authorized by state law or by this chapter,
a governmental entity or political subdivision may not enact or impose an impact fee.” Id.
9 395.01 l(a).
The Honorable Kip Averitt     - Page 3          (GA-0434)




         The Public Service Board is not “a municipality, a district or authority created under Article
III, Section 52, or Article XVI, Section 59, of the Texas Constitution,” or an entity within section
395.079 and accordingly is not a “political subdivision” within chapter 395. See id. 5 395.001(7)
(Vernon Supp. 2005). Chapter 395 confers the power to set impact fees on the City of El Paso,
which must act by and through its governing body. See id. ch. 395 (Vernon 1999 & Supp. 2005);
see also City of Coppell v. General Homes Corp., 763 S.W.2d 448,456 (Tex. App.-Dallas              1988,
writ denied); Cook v. City ofAddison, 656 S.W.2d 650, 657 (Tex. App.-Dallas             1983, writ ref d
n.r.e.) (a political subdivision of the state may act only by and through its governing body). A public
service board, within its limited field of operation, is an agent of the city that established it under
Government Code section 1502.070 or its predecessor. See Zacharie v. City of San Antonio, 952
S.W.2d 56,59 (Tex. App.- San Antonio 1997, no writ); Mireles v. Deer Run Properties, Inc., 616
S.W.2d 342,343 (Tex. Civ. App.- San Antonio 1981, no writ); San Antonio Indep. Sch. Dist. v.
Water Works Bd. of Trustees, 120 S.W.2d 861,865 (Tex. Civ. App.Beaumont                1938, writ ref d);
Tex. Att’y Gen. Op. Nos. DM-444 (1997) at n.7, JM-4 (1983) at 2. The powers of the Public Service
Board are limited to those conferred upon it by Ordinance No. 752 and Government Code chapter
 1502.

        Moreover, the City Council may not delegate to the Public Service Board its authority to
impose impact fees. Section 395.011 provides that “[ulnless otherwise specifically authorized by
state law or this chapter, a governmental entity or political subdivision may not enact or impose an
impact fee.” TEX.LOC.GOV’TCODEANN. § 395.011 (Vernon 1999). This language indicates that
only a governmental entity expressly authorized by statute may establish an impact fee. Furthermore,
absent express authority a political subdivision may not delegate a statutorily-authorized power. See
Newsom v. Adams, 45 1 S.W.2d 948,953 (Tex. Civ. App. -Beaumont            1970, no writ); Moody v. Tex.
 Water Comm’n, 373 S.W.2d 793, 797 (Tex. Civ. App. -Austin              1964, writ ref’d n.r.e.) (absent
express legislative authority, a public office may delegate only ministerial tasks); see generally
Lipsey v. Tex. Dep )t of Health, 727 S.W.2d 61, 64 (Tex. App.-Austin             1987, writ ref d n.r.e.)
(considering implied statutory authority of an administrative agency to subdelegate a statutorily-
authorized function). Accordingly, a political subdivision may not delegate its authority to establish
an impact fee to another governmental entity.

        The Public Service Board does not have authority to set impact fees. If, however, the El Paso
City Council approves the imposition of impact fees for water and wastewater infrastructure in the
city and its extraterritorial jurisdiction, it may delegate ministerial authority to the Public Service
Board to collect those fees and spend them for authorized purposes pursuant to Local Government
Code chapter 395, Ordinance No. 752, and the city ordinance approving the impact fees. See San
Antonio Indep. Sch. Dist. v. City of San Antonio, 550 S.W.2d 262 (Tex. 1976) (city was authorized
to delegate to city public service board ministerial duty of computing excess fuel charges according
to a formula set by the city council).
The Honorable Kip Averitt    - Page 4           (GA-0434)




                                         SUMMARY

                        The El Paso Water Utilities Public Service Board is not
               authorized to establish an impact fee for water and wastewater
               infrastructure for new development in the City of El Paso and its
               extraterritorial jurisdiction.    Local Government Code chapter 395
               vests in the City of El Paso the sole authority to adopt such impact
               fees. If the El Paso City Council approves the imposition of impact
               fees for water and wastewater infrastructure in the city and its
               extraterritorial jurisdiction, it may delegate ministerial authority to the
               El Paso Water Utilities Public Service Board to collect those fees.




BARRY R. MCBEE
First Assistant Attorney General

ELLEN L. WITT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Susan L. Garrison
Assistant Attorney General, Opinion Committee
