-   .




                                                                    R-672

               "I‘~EATTORNEYGENERAC
                        OF-TEXAS



                                  August 5, 194’7


    Hon. L. A. Woods
    State Superintendent of Public            Instruotlon
    Department of Eduoation
    Aimtin, Texas
        Attention:   IIon. T.   M. Trlmble,
                     First   Assistant          Opinion Ho. V-328
                                                Rei   Interpzretation of
                                                      tax levy provi-
                                                      sions   of Aots
                                                      ;E!8C45”;h   pia-

                                                      Art.   1: E&i,
                                                      1st paragraph,
                                                      conoe.rnl.ng t&as
                                                      eliglbllfty    of
                                                      school districts
                                                      to State aid.
    9~       air;

               We acknowledge your letter     dated July 17, 1947,
    wherein you request an opition of thi8 office       oonserMn$
    the interpretation   at Acts 1947, 50th Legislature,      Ii. B.
    Ro. 295, &tiole    I, Section 2, relative    to equalization
    aid for   ublic scrhools.   The epeclfic   questdons subritted
    in said Ketter ar4 quoted as follows:

                   "1.   Doer a school dletrict comply
             with Artlcle~ I, Section 2 of H.B. lo. 2'95,
             whioh haa not lowered the valuation on its
             taxable property and has a 504 tax ior lo-
             cal osintenance   purposes?
                    “2 . Can a school district  be eligible
             for equalization   aid, which district   haa not
             lovcsred the valuation on its taxable proper-
             ty but has reduced Fts local maintenance t&x
             in order to ee~vice a bond l&me, as long a4
             the local maintenance tax Is not lovared be-
             lov the 50+? nlnlmum?
                    “3.   Does then following   quotation froln
             Artiole    I, Section 2 of.&     B. Ro. 295,which
                                                                    .   -




Hon. L. A. Woods - Page 2          (v-328)


     Foods as follows    - sfncome for the current
     year from local maintenance taxes is equal
     to or in excess of the highest 0 . .I moan
     that a rchool disWi4t      which has lowemd its
     valuation muat increase     Its maintenanoe tu
     in order to secure a local     maintenance ln-
     00x49 equal to 03 in excema of the highest
     per enrum   incorn  which the school district
     has oolleated    in either of the tvo gears i.m-
     mediately pr4aeding8”
            Sootion   2 of" Article   I, H, B. 295,     provlden,
In paste
              “300. 2,. T&x Levy.. No school dis-
       *Lot dull      b4 ollgCfblo     to reoeiva any type
   . of aid .authardmd uzador the p~ovsfslons of
       tU8    Act W4rr      it shall be pmvidlng for
       t&u aumual mpaolet of its sohools by voting,
       lovylngmd      collecting     fop the amrent school
      you? a local maintonanae school tax of not
       less thin Sift       cents (50#) on the One Huu-
       dred Dollars ( 3 100) of propersty valuation in
       the entire dlstvict,        The ppopepty valuation
       shall not be less than said property is val-
       ued for State and County pmposes.              !Pheln-
       cope from such a malatenmce           tax in excess
       of the required fifty       eentr (5OCj xaintananoe
       tax muat firet     bs used to ‘   ~etim indobtod-
       nesa, if any, in the Local and Rqualieatlon
       (Rural ALd) Sohool Punds. ASteP the indebt-
       rUnem in these Funds, if any, has been re-
       t&red, the Income from thl.s maintenance tax
    .” in excess of the required fifty          cents (50+!)
      ‘palntenance tar may be used at th4 diacre-
       tlon of the local school authorities            of the
      distriot SW any lawful school purpose ex-
       cept increasing     OP supplestenting any teachers
       or aaninir*ativs       saladea.      Any OP all main-
       tanmoe    tsix above Sifty      c4nts (504) may not
      be inaludld in the aalaulation           OS need for
      aid. . . . lfo school di#t@ist          ahall be oligl-
      ble to mmeive any type of aid auth4riaed
       under the provisions       of this Act unless it ia,
       cumently asseaming        taxes on the higheat valu-
      ation it has used within the p~4vlous ‘two (2)
      years for levying lte looal school,taxes              ex-
       c4pO i&on Zt canbe shown to the State Depart-
      ment of Bluaation and Loglrlatfve            Aooountant


       /,   ”
mm.   L.   A, woods - page    3 (v-328)

      that a lower     velubtion
                              IS siue to actual
      1088   of pl>Operty OF whose Income for the
      ourrent year from loaal maintenance taxes
      is eqUa1 to or in exoesa of the highest
      Per amnm ImOme ~FOSQ   such source In the
      two-gesr period immedietelg preceding.
            n . . . I,

              The iirst   rbqtiremnt    of a school district
derirlng     to qualify for State aid under the tax levy
)rovi.atrioIAs of II. B. 295, is that it provide for the
annul rupport of ita schools by a local maintenance
tax of not less than 504 on the $X00.00 property valu-
ation of the entire district,        which property valuation
shall not be leas then said property is valued for
Jtrte and county purpoees.         Section 2, above quoted,
apeclfiosllg      provides that after retirement of any in-
dobtedneae any income from a local meintenence tax
which is In excess of the 504requirement of’ the Act
ray be used at the discretion        of the school district
authorities     for any lawful school purpose except ln-
creasing or aupplementlng teachers or admInIstrative
salaries,     end may not be included in the celcujetlon
of need for aid.
              The term “local maintenance school tax” es
used in Section 2 of this Act, means, and was intended
to mean, that local sohool tax voted or levied end
collected     for local maintenance or local operating pur-
poses as distinguished          from any local tex voted or
levied and collected         for the myaent of school bond
obligations.       The  prlmwy      purpose   behind H. B. 295
sooms clearly      to be for the aiding of those school die-
tricts    needing financial        assistance     in the support anA
operation     of their school program when and after a dis-
trict needing such aid has first             attempted to finance
its own school program or operation by voting or levJr-
ing end collecting        a local maintenance tax of et least
the 50# P8qUiPed       under h. B. 295.          The Act, we believe,
oontemplatas the use of any local school tax in eXOQO(I
of the rinimum required 5O+! Local maintenance tax fer
$inenoing the building          or repair of the district’s
s&001     buildings    or facilities.        Thus, If a SOhOOl dis-
trict hiaa voted end levied           8 speclflo    local maintenance
tax of 504or more on its $100.00 valuations                to be used
in the support or operation of Its local school Program,
for purposes other than bond payments, the district                 is
eligible     for aid, other requirements of the Act having
been met.
                                                                  .   .




Eon. L. A. Uoods - Page 4         (V-328)


           Whepe 6 distpiot      haa by an election  euthorisod
the levy and.oolleotlon     of I a~a%imum   local t3chool tar
for
-    local school
    ._^     -     - purposes,
                       _.        a portion of whloh my be
LeVlea rOP IOwl nrelntenance oa OpeZwtional purposes ad
a portion of whioh~tax may be levied for school bond pw-
posea, then if the portlon leoiad in~th.61 omrent year
fOF 10061 maintenance or operational        puPposes is not less
thrn the 50# local maintenance ka.x mqulred under the
AOt, the dlstpI&     is eligible    Pop State aid, other re-
qU.bOnnts of Section 2 knd of &be Ao,t having been met.

             By wry of lllurtretion,       suppose o school dis-
tPiot h&a ruthorisod      a maximum sahool tax of 50          Later
it de,velops that the district       needs 6 new sohoo f *building
OP othor faoilltlea      neaessltsting    the issuance of school
bonds.    The dfstrlct    vote8 the bonda and provides that
the service    and Petltiement thereof shall be paid by a
lovy ngbinst    the maxImum50 school tux prevlourl~          lu-
thorlsod.     Suppose fux%he& i,*he 16.4~~neoa.ssaaJ to sactioe
raid bonl irrue is 104,        The misximtm 10081 sohool tax
bolng 504, the proper Levging mtho:~ltiss           would have to
levy fop bond puzcposes a lQ# bond T&.X, and consequently
a 10~81 rsintenanoe      OP opemtlo.ml      tax to the mtent of
4Q4 only oould be levied,         Under om lnterpretstlon      or
Section 2 of &ticle       1[ of saiCi Act, this eehool district
would mot be eligible      for State aid, and rot&l net be
eligible   thmeundm wiLeas and until It Us voted to im-
creeae its maximum school tar to 6O# to take 0-0 of its
bond leity of lO#+ whenever, thepefope,           by poa8amof
bonded indebtedness      of 6 sahool distriot,      the bend tax
levy of the distpiot      occasions    a sedractioa or levy of Ifs
local +ntenenoe        tax to a tax rate or levy or leas than
the 506 miakllur 10061 mintenenoe         tax Pcquf~ement of
Sootion 2, &tlele       I of said Act, the district      Is inell-
giblo f0~ State aid.
             In sddition    to the dnfmum 506 loo&l muinto-
zmnco tax requirement of said Seation 2 above di8cusred,
thoro is 6 further or eecond tax levy requironent         or
qualifioiktion    which a school dlstpict     must mot la order
to establish     its eligibility   for. State aid.   The sohool
clirb*iaO Ittat be currently ssrossiy        taxou on the high-
oat vrluatlom it har ured within tho previous tvo fears
fov lovylng 1t.r local school tuces, exoopt vhen it can be
shown that II lover valuation is due to aatual loss OS
property.      Asmmlng fop the moment that a eohool dlstrlOt
soeking State aid under this Aat hna been In exlrteme           es
a lawfully     oreeted and functioning    school district  for
the two Jeers previous to the year SOP vtieh it is Wkillg
.   .




        ml.   L. A. ifoads - page 5   {v-328)



     lppli6ation    for a id,   (although,   indeed, the act does
    Pot p.Peolutie or prohibiti any newly oreated coaon,
    illdependont,     conaolldated,    or pupal high sohoel dis-
     trict rP0l applying and showing el5~ibtiity            for state
    aid), and asaWe #tit the highest ~a$ljilon              which it
    has aaed for sob001 tax purposes in t&a&two re#s                in
    question waa $300,000,00,         then to be w$Qible       under
    this dot, it plrt be rrreaaing; its curmnt school
    taxea on that highest valuatlou,          $300,000,00,     or a
    U&m? valuation occasioned by inmease of property
    la   the district.      Certainly there is nothing in the
    Ast, par may an iatention         be aonatrued therefrom,       to
    pPohibit the valsiug of the tax valuations             of the
    IllatPict   if the true prrkst values of the taxable
    ppopwbty thePeln waPPant8 suoh a P&ise rJ the proper
    vrluation     authorities.      Again, under the kxosption
    clause above noted, if the arrsuued district's             valu-
    atioa for the current yeaP is showh to be less than
    $3OC,OOC.O0, it still        would'be eligible    for State aid,
    other conditions       of the hot having    been met, if it
    can show that the lower valuation is due to actual
    loss of taxable property in the district,
                 There is yet ahotheP exception to this set-
     ond PsquiPement (that a school district        seeking aid
     must show that it is cumently assessing         taxes on the
     highest valuat$on it has used witbin the previous two
     years for levying Its local school taxes)*         UudeP this
     exception,    if the aahool district     can show that it8
     income for the cuzmmt year from local maintenance
     taxes ia equal to or is in excess of the highest per
     annum income from such source in the two yeaP period
     imediately      preceding the gear fop which it makes ap-
    .pllcation   for State~aid,    other provisions   of the Act
     haviag been *et, it is eligible       for aid,   be iZlt8rpPet
     the provisions      of bhis exception to allow a sehool
     district,   othel*oise eligible    for State aid undoer the
     Act, to asses8 aud levy its local school taxes for the
     cig2w4at year oa 8 lowor valuation than the highest
     vrluation   that it ha8 used within the previous two
     years prior to the yesr it rakes applioatlon         for Stat8
     aid, *ovided      it cau show that its iaco~s fror 10-l
    8aintenance taxes for       the current gerr is 4qti~te     OP
     ia exaess of the highest per aPnI.uulocal BaintenaUze
     tu income in the two-year period immediately preceding
     the gear for which it makes its application.
                  By way of illustration,        where a~school dia-
    tPiot:s     highest valuation during        the two years Prior to
Hon. L. AL. Moods - Pago 6         (V-328)



the yeaP it mad8 application      for StAta, aid undim P.B.
2% Pa8 ~3~,~0.00,        and its highest lnuonba fBom looal
xaintrmSne8 taxer toted, 18vied and oolleoted          duFihg
ally ON9 Of thOfl8.,dWOJWP8 VI8 41,500.00, bbn the
distriot   desiri        e8tabli&   lb8 el;i(gibilit~,w&il8P
B. B. 295, mar tl#E lovered its property valuation for
school tax pwpoms in the bumant year for VpLca it
scseks aid, for example, to $250,000.00,        pmwided it
votes OF levies a loaal maintenance tax rate for the
OuPPent pm      auSflalent   to show that the local m&&n-
tenance taxes colleatible      for the oument year will
produce an Incore from that ~01~08 equal oc in exoeaa
of $l,~UO.OO, and p~ovlded the cuPrent year prceperty
Valuation of the 8'3hOOLdi8Orlct       shall not be le8e thah
said gl?opePby 18 valued for State and aounty pwposer.
            In ae6artUneo with thb ahove Qi8~u8rioa ma-
OQ        Ml. latwgmtatiem or sea*i@n 2, Arptiele f, of
bt8 ""s1 47, 50eh &Mgi8iabUPe, 9, R. 295, it is ma! ol)1n-
iSSk tlut tt# t&Pa8 8peOitio qU#8biMt6 UUb&ttOd    8hOUfd
be aneve~ed each 5.13the affiPx8tlve~


          UtiOP hot8 1947, 50th LI .e, A. s., R.B.
     295, Art. I, Sec. 2, the Pim b QRP~~PO#IB

           1. WhePe a school distPiat vhlch has
     not Xovered the valuation on its taxable
     property fop the curzwnt gear in which it
     IUke8 ibs application   foP Stats aid, is
     cumently as88~seing taxes on the highest
     valuation it has used within the tvo yeape
     previoue to the year fop whioh it seeks aid
     under this Bill,   an4 has a 50 tax fer lo-
     or1    autintenancr   OP opassstioaa f 9W&308-,
     raid    sehool di8tPict    is eligible   for Stabs
     aid,    other provisions    of the Act havinC: been
     net.

           2. A school distPiot    vhlah ha8 sot
     1ovePed bhe valuationonsito Paxablemop-
     8pty, Is oumently    assersing tax06 on the
     highest valuation lb ha8 used Vib&in bhe
     tvo year8 preoedlug the yeaP for which it
     seeks State aid tmds~ this Bill,     may reduce
     its looal maintenance tax ix oPdeP to 8eF-
     'I%08 l bO!Nt 188Ue, a8 loll&$ 88 bhf3 %OCd
     maintsaanae~taJ. for the owrea,at year :a tb3b
EOn. L. A, WOOdl - pa60 7             (V-326)




                 3.  T8 br sliglbxofor Strte al6 WI&P
            this Bill, a schooldlatriotwhich b&s
            voluntti,iljloweredthe v&lurtlonof it8
            tucsble    pmgmty    for the biawent year, rust
            ircroase    its looal safntenanos tax rate 8uf-
            riolentl~to show thrt looal ua.?atenanos
            taxes oollsetible  for the rear fer whiob it
            is seeking State aid will produce an imere
            equal to OT in exoeas of the highest per
            e,nmua local maintenanoe tax income in the
            two year period immediately preceding the
            year for which it makes its application,   all
            other p~ovialons of the Act having been met.
                                      Very tmly   your8
                                  ATTORREN6EmAL     OF TEXAS



                                      Chester E. Ollison
cwrjtiaj8                             Assistant
