Hon. Be8uford B. Jester
&wernor  of Texas
Austin, Texas                  Opinion       No. V-204

                               lte :     Power of the Automatic
                                         Tax Board, to set an ad
                                         valorem tax rate for
                                         the Available    School
                                         Fund except   for text
                                         books where suff iclent
                                         money is available      in
Dear Governor      Jester:               the clearance    fund.

             Your request    for       opinion   dated   May 2,   1947.,
reads    in part es follows:

               “Several  authorities  have expressed
        to me their graqe doubt as to whether,       un-
        der the provisions     of House Bill   301, re-
        cently   enacted by the Legislature3     the Au-
        toutic    Tax board can set any ad valorem
        tax rate for the Available      School Fund, ex-
        cept that portion     needed for free textbooks.

              “This question    is raised in relation
        to the foll&ing     language of the bill:
               ”t           the’re is hereby approprla-
        ted, sll&itidj      transferred   and credited
        to the Available     School Fund such a sum
        which when taken together       with the total
        of all other statutory       and constitutional
        amounts to accrue      to the Available     School
        Fund 11111 equal to such a total        as may be
        needed to pay a Fifky-five       dollar    ($55)
        per .capita    . a . .

               “The suggest ion tide to me is that if
         there should be sufficient   money avollable
         in the clearance   fund to pay the $55, the
        .Automatic  Tax Board could not levy the ad
         valopem tax of 35 cents for schools     D s 0 e
                                                                                                  .   .




Eon.    Reauford          Ii, Jester,          Page 2,         V-204



                  “I shall’,be  grateful                   for     your      opin-
        ion      on the matter.”

                   The Constitution                 of    Texas,       Section        3,    Ar-

ticle     VII,      provides         in part         as follows:

              %ne-fourth     of the revenue derived
        from the State occupation         taxes and poll
        tax of one dollar      a 0 0 shall be set a-
        part annually    for the benefit        of the pub-
        lic free schools;     and In addition        thereto,
        there shall be l.evled and collected            an an-
        nual ad valorem State tax of such an amount
        not to exceed thirty-five         cents on the one
        hundred ($100.00)      dollars    valuation,     es
        with the available      school    fund arising
        from all other sources,        vi11 be sufficient
        to maintain end support the public             schools
        of this State for a period          of not less than
        six months in each year, and it shall be
        the duty of the State Board of Education               to
        set aside a sufficient        amount out of the
        said tax to provide       free text books for
        the use of children      attending      the public
        free schools    of this State;       provided,     how-




                   Retterating          the     sources          of    funds     for       the

support       of       the public       free        schools,          the    Con& it ution

provides         for     the   foll.owlng:

                   1.     One-fourth           of    the    occupation           taxes,

                   2.     The poll       tax.

                   3.     Other      sources         available          to the

                          school      fund.          These       “other       sources’

                          (Article       2823,           lt. C. 5,)         Include

                          interest       on bonds           and other          funds;
Hon. Beauford         Ii. Jester,              Page 3,         V-204



                      interest           on proceeds              from the

                      sale       of    land;       moneys from leases;

                      and all          direct         appropriations                to

                      the Available                School        Fund,        except

                      such       final       appropriation               (5 below)

                      as may be necessary                       to make UP the

                      deficit          In the         total      sum required

                      to maintain              end support              the    publtc

                      schools,

                 4.   Ad valorem             tax not           to exceed        35

                      cents       on the hundred                 dollar        valua-

                      tion.

                 5.   Appropriations                  from the          general          rev-

                      enue       to make up the                 "deficit",            if

                      the      four      above        listed      sources           are

                      Insufficient.

                 Under the Constitution,                        the     general          reve'nue

may be used for            the    support          of    the publFc            free        schools

in two ways.          First,          direct       appropriations               may be made

from     the general        revenue          to    the Available               School           Fund

and be included            as one of           the      "other,        sources’          (item      3

above)        to be considered            by the Automatic                    Tax Board           In

fixing        the ad valorem           tax     rate      for     school        purposes,

This     is    in accord      with       the      Interpretation               of     Article

VII    of     the Texas     Constitution                made over         a long           period
Hon.      Beauford        Ii. Jester,           Page 4, V-204



of     years     by the         Legislature           and the          Courts,            In defin-

ing what shell               constitute          the Aveil,able               School         Fscd,

Article         2823,     v. C. s., the Legisls,ture                          said        thatt      ir

should         include        “other        Available        School          Funds prcrlded

by Iaw,”           The history              of educational              legislation               1.n

Texas      shows       that      the    provisions           o.f Artlck             XI,         -,ke

edncat:lonel           Artic1.r        of    t.he Con.st itotioc,,             ?mve never

bets      regardcld       as lin~ltetic~:~s             ‘bg~ impll.cat.lon            on tnc

gEC?l.ei'al     power     af tk         Legl.s~.st:ure        t3 appropriate                    mou

e.;: fern       the    general         Lund ar:d        fPOlli   0tk5P        sources           ti.r,-

act     to the Avalleble                School        Fund or to             ctkr         schcoi

p!lrpuse 3.           On many cccaslocs                 the Texe:s Legislature

has made direct                 apprcprietions              from       the generai              rev-

sue       to    the Available               School      Fund,      end on several                    oc-

casions         larger       percentages             then    oc.e fcurth             of    the       oc-

cupation         taxes       have been assl.gned                 to the        Schcol           Fund.

These      Acts,       and this         Ieglslatlve           interpretation.                   of

the     Constltut        ion,     have       been     approved          by our        courts         0

See,      Mumme vs.          Marra,;        120 Tex.        Reports          383,         When

such direct            appropriations                are    made to tfie Available

School         Fund before            the ad valorem             tax     Is    set,        it     1s

clear      that       they      are    to be considered                 In arriving               at

the     rate     of    ad veiorem            tax needed          for     school           purposes.

                   The second           manner in which                 appropriations

may be made from                 the    general         revenue         is    outlined            In
Han; Beauford            H. Jester,                Page 5, V-204



the     last     phrase        of        that     portion         of    Sect Ion 3,       AP-

title     VII,        quoted         above,        for     the     purpose       of making

up the deficit,                if        any,     after      totaling          the estimated

revenue         from all        of        other       sources          named above,         ln-

cludlng         the ad velorem                  tax      (Items        1,    2, 3,   and 4

above)     S     When It            is    clear       that    such appropriations

are     made by the Legislature                           only     for       the purpose        of

raising         the    total         available            funds        to    the amount re-

quired         to meet the               necessary         per     capita       apportlon-

ment,     obviously            they        should         not be considered               by

the Automatic             Tax Board               In f lxing           the    ad velorem

tax rate         for    school            purposes.           Such appropriations

could     not     be credited               to     the Available               School     Fund

until     after        the     ad valorem                tax rate           has been     set    and

the est lmated            def felt          , If      any,    has ‘been determined,

                  Therefore,               it     remains         for       us to determine

what typs         of    appropriation                    was contemplated               and ec-

tuallg         mede by the               50th Legislature                   In House     Bill

301.      The bill           provides,             in pert,            as followsz

                “‘(4-e)    After  the above allocations
         and payments have been made from such Clear-
         ance Fund, beginning       with the fiscal      year
         September 1, 1947, end annually          thereafter,
         there is hereby appropriated,         allocated,
         transferred,      and credited    to the Available
         State School Fund such a sum which when
         taken tonether       with the’ total  of all other
         statutory      and c
         true to the Ava
Hon.     Beauford       H. Jester,            Page 6,      V-204



         to such a total       as may be needed to D y
         a Fifty-rive      Dolla              capita   ip-
         ;r:;zynt         for eagh’ f%‘e%y     scholastic
                    tate-approved    school census for




        vision    of this Act by taking into account
        his estimate     of such other constitutional
        and statutory     amounts to accrue to the
        Available    School Fund as made at the begin-
        ning of each fiscal        year.      Thereafter     the
        Comptroller     shall   allocate,      transfer,     and
        credit    monthly in equal monthly installments
        from the Clearance        Fund to the Available
        State School Fund such amount as so deter-
        mined . The Comptroller           Is hereby author-
        ized to modify from time to time during
        the fiscal    year his estimates          of the rev-
        enue to accrue to the State Available                School
        Fund in any one year, and shall              la the
        light    of the revised      estimate     or estimates
        increase,    diminish,     or suspend any remain-
        ing monthly payment or paymsnts from the
        Clearance    Fund to the Available           School Fund,
        provided    by the close      of each fiscal       year
        there shall have been paid from the Clear-
        ance Fund to the Available            School Fund
        such an amount as may be neaded to enable
        the Available     State School Fund to pay
        said Fifty-five       Dollar    ($55)   pel;, capita
        apportionment     annually      in full e

                   Clearly,        we believe        that     the     Legislature        in-

tended      by this         Act    to provide        the     second     type    of     ap-

proprlation          above        discussed.         This     bill     contemplates

the     transfer       of     no money to the Available                  School        Fund

until      after      “the     total     of    all   other     statutory        and con-

stitutional          amounts”          have been      considered,          determined,

and credited           to the School            Fund.        go part     of    such al-

location       should         be considered          by the      Tax Board        in
Hon.      Beauford           H. Jester,                  Page 7,          V-204



setting          the    ad valorem                  tax rate           for     school         purposes,

The Board             should        set      the         rate     of      such an amount as

with      all     other        sources              of    school          revenue,          will        meet

the     $55 .OO per            capita           set       by the          Legislrt         ure,     and,

without          considering              any portion                  of     the     funds        that

may ba allocated                    thereafter                  under House Bill                   301 to

make up the             balance,               if    any,        necessary            to pay such

per     capita         apportionment                  0

                      That this           was the               intent        of     the, Legislature

in House Bill                301,       i3      shown by the                  fact       that      the     Com-

troller          Is    not     authorized                 to transfer                any of        the mon-

ey from the             Clearance               Fund until                September           1,    the

beginning             date     of    each           fiscal        year 0           Prior      to    that

time,      within         five       days after                  July       15th      of each           year,

the Tax Board                is     required              by Article               7043,      V0 C. 3, 9

to meet and calculate                           the ad valorem                     tax     rate     for

school          purposea          for     the next               fiscal        year.          Only after

that      has been done and not before                                      September             1st     of

the     aan       year       may the Comptroller                             transfer         money from

the     Clearance            Fund,        if        needed        to pay the               full     $55”00

per     capita         apport ionmeat s

                      Therefore,             the Automatic                    Tax Board must

mset      In accordance                 with         Article           7043,         V, C, 3,,            aad

levy      an ad valorem                 tax         of    such      an amount,              not     to ex-

ceed      35# on the $lOO,OO valuation,                                       as with           the available
Hon. Beauford                Ii. Jester,      Page 8,          V-204



school         fulla    arising       from all         other     sources            (not     in-

cluding         the allocation              in Ii. B. 301)            will        be suffl-

clent     to pay the             $55.00      per     capita      for        maintenance

and support             of    the   public      schools.            Thereafter,              if

the     total      of       the ad valorem           tax and all             of     these     oth-

er     aourcea         is    Insufficient          to pay the           $55.00        per     cap-

ita,     and only            in such event,            the     Comptroller            Is auth-

orized         by 11. B. 301 to             transfer         such      aurns      as may be

necessary          to make up the             full      per     capita         of    $55.00

set     by the         Isglslature.           In no event              is    the     Comptrol-

ler     authorized            to determine           the     amount to be trans-

ferred         or to make any portion                   of     such     transfer            from

the     Clearance            Fund until       the beginning                 date     (Septem-

ber     1st)      of each        fiscal      year.

                                            SUMMAHY

                The allocations     authorized      in House
         Bill 301, 50th Legislature,          from the Clear-
         ance Fund to the Available         School Fund are
         limited   to such amounts as may be necessary
         to pay the $55.00 per capita           apportionment
         after   the Automatic     Tax Board has levied
         an ad valorem tax for school           purposes   not
         to exceed 359? on the $100.00 valuation.
         The Automatic     Tax Board must levy the ad
         valorem tax without       regard to any suma
         that may become available         later    from the
         Clearance   Fund.      The State Comptroller       is
         not authorized      to transfer    any money from
         the Clearance     Fund until September 1st of
         each fiscal     year, such date being subse-
         quent to calculation       and levy of the ad
         valorem tax by the Automatic           Tax Board.
Hon. &auford     H. Jester,         Page 9, V-204



                                        Sincerely     yours,

                                        /s/   Price   Daniel

                                        Price Daniel
                                        Attorney General

PD:sh:mrj


             The foregoing   opinion   was considered
      and approved in Confere ce composed of As-
      sistant   Attorney   Genera' 9 Fagan Dickson,
      Chester Qlllson,     Joe Gr+enhlll,   J. C. Davis,
      Jr.,   and Ocie Speer.

                                        /a/   Fagan Dickson

                                     Fagan Dickson
                           First Assistant  Attorney  General
                               Chairman of the Conference


Approved:     May 19,      1947
Attorney    General   of    Texas


This Opinion aonsidered    and
approved  in limited  conference.