.       ,




Hon, H. A. Triesch                     Opinion      No. V-1161
Couaty Attomiey
Coma1 CoUnty                           Re:   Exemption from ad valorem
New Braunfils,   Texas                       taxes of Coma1 Plant, vailous
                                             properties   used in connection
                                             therewith, and Kuehler Power
                                             Station Site, all owned by City
Da&r Sir!                                    of San Antonio,

              We quote the following      excerpt     from   your letter   of Feb-
rurey   1, 1951:

               “On October    24, 1942, the City of San Antonio
        a@$uired all of the electric power plants and facilities
        t&ratefora  operated by the San Antonio Public Service
        COmpany, except the local distz~ibution systems located
        within the corporate     limits of other mcorporated       towns
        and eLtfas. Among the propica-ties so acquired was the
        cllltctric generating plant in the City of N,ew Braunfels.
        commorly     known as the Comai Plant, various tracts of
        land, electric   transmission   lines., transformers,     ease-
        ments, and other proP+rty used in connection          therewith,
        all of which is situated in Coma1 County, Texas.          A
        forty-seven    acre tract abutting on the Guadalupe Rive1
        k@#wn as the Kuchler Power Station Site was included
        in the property    that was acquired in the sale,

               “At the time of the acquisition    of these properties
        by the City of San Antonio   it l?ased all of the properties
        in Coma1 County with the ,exception of three transmis-
        don lines to the Guadalupe-Blanco       River Authority which
        l&ase is non-assignable   except with the consent of the
        cityp butt the lease does provide that it might be assigned
        to the Lower Colorado River Authority.         This lease has
        been assigned by the G. B. R. A. to the L. C. R. A. and
        the L.. C. R. A. is now operating    theee properties.

               “The history qf tk+ tramsactions  by which these
        properties   were acqbired by the city 01 San Antonio is
        f&y   act brth ln the opinion of Guadalupe-Blanco    River
        Authority vs, City of San Antonio, 200 S.W. (2nd) 989.
                                                                       .




Hon. H. A. Triesch,   Page   2 (V-1161)



             “All cf the properties  with the exception of the
      three transmission    lines are now operated by the L. C,
      R. A. under the lease agreement     and all of the proper-
      ties so operated by the L. C. R. A. with the exception
      of the Kuehler Power Station Site constitute an integral
      part of the system,

            “Among the many provisions        of the lease   agree-
      ment, we find the following:

             “ARTICLE    V, Section 1: ‘The Authority agrees
      to supply and the City agrees to take and pay for all of
      the power and energy requirements      of the City up to a
      maximum requirement      of 66,000 kilowatts over and
      above that supplied by its Station “B”, and such addi-
      tional power and energy as the City may require and
      the Authority may have available.’

             “ARTICLE       V, Section 21: ‘If for any cause what-
      c.oever,  the Authority shall, at any time, be unable to
      supply the power and energy requirements         of all of its
      customers,     including the City, the City is to be entitled
      to receive,   to the extent of its requirements,    as speci-
      fied in this Article V, the entire output of the Coma1
      Plant not in excess of 66,000 kilowatts,     and failure of
      the Authority to make ava:ilable to the City such output
      shall constitute a default within the meaning of Section
      1 of Article VI hereof,’

             “ARTICLE    VI, Section 1; ‘Section 1. The city
      shall have the right to re-enter   and take possession   of
      any of the property dascribed    in “Exhibit A” attached
      to this Agreement   and occupied and used by the Authox -
      Ity (which has not then been purchased by and conveyed
      to the Authority), upon the happening of any of the fol-
      lowing events: * * *

              l”(b) If during the term of this contract the Au-
      thority, except for causes ret out in Section 3 of AM-
      cle VIII of thin contract,  fails or refurer to deliver to
      the City electric   power’ and enex gy an provided in Arti-
      cle V hereof.’

             “The legality of the lease sgreemont    between thr
      Clty of San Antonio and the 0. B. R. A. bar beon sdju-
      dicated and was upheld as a valid leare in Guadalupe-
      Blanc0 River Authority vs. City of San Antonio, 200 S.W.
      (2nd) 989. The right of ownership to the plant has also
      been adjudicated    in the case of City of New Braunfelr
Hon. H. A. Triesch,     Page   3 (V-1161)




      vs.   City of San Antonio,   212 S. W. (2nd) 817, ref.           n.r.e.

              “The assessor   and collector   of taxes has been
      listing and assessfag   this property on his roll ever since
      the acquisition  of the plant by the City of San Antonio
      and has been instructed by the Comptroller       to continue
      listisg and assessiag    the same even though the City of
      San Antorio refuses    to list it because of their claim of
      exemption.

             “I am submitting the following three questions
      with the request that you be kind enough to give us your
      opinion thereon.

             “(1) Are the electrical   generating plant, the lands
      on which the same is situated, easements,      transmission
      lines, transformers    and other facilities used in connec-
      tion with the operation of said plant subject to taxation?

             ‘(2)  Is the forty-seven  acrs         tract   (Kuehltr    Power
      Station Site) aubjsct to taxation?

             ‘(3) If any part of the property   is exempt from
      taxation, should the prop&ties     so exempt be listed and
      rendered by the alsessor    in accordance    with the provi-
      sions of Azticle  7192 and Article   7193, R. C. S.? *

              The various properties    covered by your first question
are  public properties   held for public purposes   and are clearly ex-
empt from taxation.     Tax. Const. Art. XI, Sec. 9; City of New Braun-
fele v. City of San Antonio, 212 S.W.Zd 817, 825 (Tex. Civ. App. 1948,
error x-e . nz.8. ‘: A. h b.. Consolidated   Independent School Dist. v.
p                                184 S.W.Zd 914 (1945); Lower Colorado
         u or ty v. Chemkai      Bank & Trust Co., 144 Tex. 3L6, 1YO
  . .    40 (1945) s

               In your letter requesting     our opinion,      you state        the fol-
IowIng facts    relating, to the Kuehler    Power     Station Site:

               u
               . . . it should be observed    that the 47-acre,tract
      is not presently    used in the operation of, the plant. None
      of the facilities   of the plant are situated thereon.     The
      same in fact, constitutes a small park that is being main-
      tained and used by the employees        of the L. C. R*.A. which
      Authority has charge of the property        under the lease.
      Various   local organizations    are accorded    the right to
      use it upon request and with permission        of the Authority.
      The property was originally acquired by the San Antonio
      Public Service Company for a powers station site but the
Hon. H. A. Triesch,   Page 4 (V-1161)



      same was abandoned after purchasing     the present
      Coma1 Plant site. While in the hands of the Public
      Service Company the same was used for Boy Scout
      purposes which use has been discontinued    since the
      acquisition of the property by the City of San Antonio.”

               The fact that the Kuehler Power ‘State site is not
presently used in connection with the operation of the Coma1 Plant
does not make the property subject to taxation.        At the time the
City of San Antonio acquired the properties       of the San Antonio Pub-
lic Se’rvice Company, the City issued and sold revenue bonds in the
sum of approximately      $34,000,000.00   and used the funds to purchase
the outstanding stock of the Public Service Company.          The Trustees
in Dissolution   of the S.A.P.S. Company conveyed all of the assets
of the Company to the City. These facts just summarized           are given
in Guadalupe-Blanc0     River Authority v. City of San Antonio, 145
Tex. 611, 200 S.W.Ld 989 (1941).       The property which was purchased
with money from a special fund, thi $34,000,000.00         bond issue, in
excess of the portion required for actual operation of the electric
power system is a-part of the special fund amd iS therefore held by:the
Cityibf Sarxtin&enio fos a.l%&&c;prrrpos&and is exempt from taxation.
State v. City of Houston, 140 S.W.2d 277 (Tex. Civ. App. 1940; error
ref.).

             ThC answer to your third question is,;as stated in your
brief, that the Assessor  and Collector   of Taxes is without authority
to list and assess the ejLempt properties    for taxation. Article 7145,
V.C.S.

                             SUMMARY

              The Coma1 electric      generating plant, various
      tfacts of land, electric     transmission     lines, trans-
      formers,     easements,    and other property used in con-
      nection therewith, owned by the City of San Antonio
      and opeeated by the Lower Colorado            River Authority
      as assignee     under a lease agreement with the City is
      public property held for public purposes and is exempt
      from taxation.      Tex. Const. Art. XI, Sec. 9; City of New
      Braunfels v. City of San Antonio, 212 S.W.2d 817, 8d.5
      ~TCX, Clv., App. 1948, error ref. n.r.e.); A. & M. Con-
      solidated Ind. School District v. City of Bryan, 143 Tex.
348 184 S W 2d 914 (1945) Lower Colorado River Au-
      thoiity i. ?h;mical       Bank & Trust    G 0.2    4 Tex. 326,
      190 S . W . Ld 48 (1945).   Th e Kuehler Power Station site
      was acquiieb      by the City of San Antonio for public pur-
      poses~and is still held by the city as a part of the fund
      created.by     the sale of revenue bonds. Such site is there-
      fore exempt from taxation even though it is not presently
   .     .




Hon. H. A. Triesch,   Page 5 (V-1161)



       used in connection with the operation of the       Coma1
       plant. State Y. City of Houston, 140 S.W.2d 277 (Tex,
       Civ. App. 1940 , error Pe s D l%s Assessor        and Col-
       lector of Taxes has no authority to lisb and      assess
       exempt properties    for taxation. Art. 7145,     V.C.S.

                                   Your8 very   truly,

                                   PRICE DANIEL
                                  Attorney General


APPROVED:
                                    -Mrs.   MariettaMcGreg6r         Creel
,W. V. Geppert                                     Assistant
Taxation Divisiom

Jesse P. Luton, Jr.
Reviewing Assistant

Char&es D. Mathews
First Assistant


MMC/mwb