    Honorable Geo. H. Sheppard
    Comptroller of.PublIc Accounts
    Austin, Texas
.
    Dear Sir:               Opinion NO. 0-2506
                            Re: Whether propertg'belonglngto ati
                                 Independent school district which
                                 is not used for 'schoolmrposes Is
                                 exempt from taxation.
                                                                    .
               We adcnowleage receipt of your 1etter'df~Julg1; 1940,
    wherein ga request the oplnlon of this Department as t6 whether
    property which IS 'ownedby the,Wolfe City Inaependent3chool
    District and 1s~rented cut for business and .resIdentIalpurposes
    Is subject 'totaxation.
                Your request is as follows:
               "About'the year 1923 W. J. Turner died, leaving
        a ,wrlttenwill, In which he Willed to the Wolfe City
        IndependentSchool District a brick business building
        and several residences in the forinof rent property.
        The title to this property passed to the school In
        due course. The rents and revenues received from
        such property since that time have'been used fojr
        schpol purposes only, except such as was necessary
        for PepaIrs t3 the buildings, etc. The school has
        not rendered this property far taxes and has not
        paid any taxes thereon. Demand has been tide by the
        city, State and county for the school to pay taxes.
        Is such demand authorized?
               A;tIcle  8, Section 1 of the Constitution of Texas, pro-
    vides that    . . . All property in this State, whether owned by
    natural persons or corporations, other khan rmnlcipal, shall be
    taxed in proportion to its value, . . . In 'otherwords, the
    Constitution has said that all property owned by persons or cor-
    porations, except that belonging to municipal corporations, shall
    be subject to taxation.
               The Constitution proviaea'forthe establishmentand
    maintenance of a system of free WblIc schools. When Article
    7, Section 1 of the ConstItution.wasadopted; It'recognizedthat
    the education of the messes was a,governmental function for
Hon. Geo. H. Sheppard, page 2        0-2506


therein was used the following phrase: "A general diffusion of
knowledge being essential to the preservation of the liberties
and rights of the people, . . .' Within nine years after the
adoption of the Constitution,the Supreme Court, in the case of
Casslano vs. Ursullne Academy, 64 Tex. 573, recognized that
education was a governmental function.
           Pursuant to the provlslon of the Constltutlonabove
quoted, the Leglslature'madeprovision for the establishment
of free public schools and provided, among other things; for
independent school distrkts. These districts were established
to carry out a portion of that function of the government. The
district is not an ordinary corporatlofiorganized for purposes
of gain to Its members, but 1s a public agency, using the motiej
ralssd-'bytaxation to educate the ch+ltien-withinthe district.
It Is'~apolitical subdIvIsIon of the State, to which has b&en
delegated'thepower of carrying on the function of-education.
;;;Bs Estate vs.,School Trustees of Wlllacy County, 33 S.W. (26)
      .
           While the school district Is strictly a political sub-
divlslon,~it Is design&ted a nainiclpalcorporation,because It
Is an organization of a certain geographical district under
atithorltyof law and invested with a governmentalfunction.
Hatcher vs'.State, 81 S.W. (26) 499; Bexar-Medlna-Atascosa
Counties Water ImprovementDistrict vs. State, 21 S.W. (26) 747;
Short vs. Gouger, 130 S.W. (26) 267.
           The power to tax Is an attribute of sovereigntyand-.
the extent to which this power may be exercised for governmanta
purposes finds its only limitation in the Constltulon. Stratton
vs. Commissioners'Court, 137 S.W. 1170 (Writ refused). TaXatIon
is Inherent in sovereignty and without which a constltutlorsl
government cannot exist. It Is vested In the Legislature by the
general grant of legislative power whether speclflcallyenumerated
In the Constitution,among the powers to be exercisedby It, or
not. The constitutionalprovisions In reference to It, therefore,
are more usually Intended or understood as llm&tatlons or restric-
tions upon Its exercise than as a direct grant ?f the power to
the Legislature. 40 Tex. Jur. p. 21.
           Therefore, under Article 8, Section 1 *ofthe Constltu-
tion, the taxing power of the Legislature Is limited to the
property of 'all persons and corporations, except mniclpal cor-
porations.
           But the framers of the Constitutiongranted to the
Legislature the authority to exempt certain property from taxa-~~'
$Ion by the adopti‘onof Article 8, Sbction 2, which provIdes.that
 . . . the Legislature may, by general laws,.exempt from taxation
Hon. Geo. H. Sheljpard,page 3                 0-2506

 .

public property   used   for   public purposes.    . . . .I’
           It is then apparent, in so far as this opinion is
concerned, that the Legislature, for the purpose of taxation,
is limited to all property owned by persons or corporations,
except that property which Is owned by municipal corporations
and used for a public purpose. In other words, we believe that
It was~the purpose of the framers of the Constitutionto ex'empt
political subdivisionswhich were carrying out a governmental
function from ,taxatIon,but that when such political subdlvl-
.slonsentered into proprietary enterprises that the property so
uqed wwld be subject to taxation.
                                                              ,.
           Pursuant thereto the Legislature passed Article 7150,
Vernon's Annotated Civil Statutes, whlch~'provIdesthat the fol-
lowing property shall be exempt from taxation, to-wit:
            "1. Fubllc school houses . . . .
            “4 . All property, whether real or personal, belong-
                 ing exclusively to this State, or any political
                 subalvlslonthereof . . ."
           The property concerned hereIn is not property on which
Is located a public school house and, therefore, is not exempt
under Section 1 of Article 7150.
           The Legislature,when it passed,Artlcle7150, apparent-
ly overstepped'thebounds of Its power when It df;dnot limit the
exemption to property "used for uubllc DurDoses, for Justice
F'underburk,ln the case of City of Abllene vs. State, 113 S.W.
(2a)b31 (Writ of Error Dismissed) said:           _~
            "It Is apparent that the exemption declared In
     said Article 7150 Is more comprehensivethan the power
                           possessed. The purpose of the
     which the Leglslittiire
     Legislature Is broad enough to exempt public property
     regardless of Its use. This the Legislature wa&!ex-
     pressly denied the power to do. But it does not fol-
     low, we think, that the statute is for that reason
     wholly inoperative. We see no reason why It may not
     be operative, as an exercise of all of the power the
     Legislature has, to declare the exemption. The de-
     clared exemption includes public property used for
     public purposes, and to that extent, we think, the
     statute.is valid and operative.
           It IS elementary that the property concerned herein
and owned by the Wolfe City Independent School District is pb-
llc property. The property is not being "used for Dubllc Dur--'
poses,I'but on the contrary, Is being u&by    private IndIvidUals
 Hon. Geo. II.Sheppard, page 4          O-2506



 for residential and business purposes.
             The property does not come within the purview of the
  cases of Sherman vs. Wllllams, 19 S.W. 606, or State vs. City
. of Houston, 140 S.W. (2d) 277.  In those cases the property was
  held to be a part of a special fund which fund was established
  to carry out a governmental fuhctlon.
            It ls;therefore, our opinion that,the property Is
 not exempt from taxation.
    .,
            Trusting that the foregoing fully answers your Inquiry,
 we are
                                 Yours very truly
                            ATTORNEY   GENERALOF TEXAS


                                 By s/Richard Ii.Cocke
                                      Richard R. Cocke
                                      Asalstant
 FiHC:N:wc

 APPROVEBJUL 22, 1940
 s/Grover Sellers
 FIRST ASSISTANT
 ATTORNEYGENERAL
 Approved Opinion Committee By sbfB Chairman
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