The opinion
- .
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