Untitled Texas Attorney General Opinion ( 1942 )

State Board of Eduoation
Au&In, Texasl
Attention: Caynor Kendall,InvestmentCouneel
Dear Sir: opinionlo. O-4490
Re: Constructionof the 7s debt
ratio limitationprovidedby
Article 2671, R.c.s., for
eligibilityof bonds which may
be purchasedfor the Permanent
Free SchoolFund as appliedto
the total indebtcdneseof cities
for municipaland school purposes.
We have your letterof March 6th requestingour opinionon the
above question,which reads:
"By Article 2669, Revised Civil Statutesof 1925, as amended
by Chapter278, A&s of the RegularSession of thb Fdrty-fititLsgis-
lirkure, the State Board of Educationis au$horizedand empoweredto
Investthe PermanentFree School Fund of the State in bonds of 'inde-
pendentor ocmrmon sahool dietriots,+i* and the bonds of incorporated
cities and towns -,' It is provided,however,by Article 2671 as
slaended that 'no bonds, obligations,or pledges- shall be 80
purohasadwhen the indebtednessof the county,city, precinctor
dietriotissuingfame, inclusiveof those offered,shall exceed aev~1
(746) per cent of the assessedvaluationof the real estate +hersln.'
The State Board of Educationis desirousof obtain- a oonatrnotlon
of the quoted limitationin connectionwith the followingquesttill:
1.
“Wherea oity has extendedits boundariesfor schoolpurposes
only, is the lndebtedneasfor waterworksand other municipal
purposesoutstandingagainst the city which is includedwithin,
the boundarieeof the schooldistrictto be includedand combined
with the debt againstthe school districtin detenuininfl
whether
the bonds of the school districtthus establishedare eligiblefor
purohaeeunder the limitationabove quoted. In other words, Is
the city as a municipalitya separateissuingagency from the
-, .
State Board of Education,page 2 (o-4490)
school dletrictcreatedby the extensionof the boundaries
of the city for echool purposesonly?
"(a) Does any dlatlnotlonobtain in this oonneotlon
betweencities of 5,000 populationand less.,operatingunder
generallaws, and home-n& citieswhich have assumedoontrol
of their schools?
2.
"Wherea city has assumedcontrolof its schools,and
the boundariesof the district80 createdand ,those of the
city are cotenninousie the Indebtednessfor school bui-ldings
to be includedand combinedwith the debt exietingagainst
the city for municipalpurposesin determiningwhetherbonds sre
eligiblefor purchaseunder the limitationabove quoted. In
other words, le the city a separateissuingagency from the
independentschool districtof which It has aesumedcontrol?
"(a) Does any distinctionobtain in this connection
betweencities of 5,000 populationand less, operatingunder
generallaws, and home-rulecitieswhich have assumedcontrol
of their schools?"
The severalquestionssubmittedby you resolvethemaelveeto 8
constructionof the underlinedportionof Article 2671, R. C. S., 1925,
ae amended,quotedbelow, as applied to a city or town which-has(under
the au+&orityof Article 11, Section 10 of the Texas Constitution)acquired
the status of "a separateand iudcpendentschool dfetrict"in additionto
its ordinarymunicipalcharacter. Such a municipalitycontrolled"eepar-
ate and independentschooldistrict"may be eithercoterminouswith tie
municipalboundariesof such city (Article2768,R. C. S., 1925; Temple
IndependentSchool Districtv. Procter,97 S.W.(2d)1047,writ of error
refused)or it may extend over an area greaterthan that of the munici-
pality proper (Article2803,R. C. S., 1325; Boesch v. Byrom, 83 S.W.
18; Snyder v. Baird IndependentSchool Dktrict, 102 Tex. 4, 111 S.W. 723).
Article 2671, as last emendedby Acts 1939, 46th Legislature,
page 276, reads:
"The Comptrollerof State Board shall carefullyexamine
the bonds, obligations,or pledges80 offeredand investigate
the facts tendingto show the validitythereof;and such Board
may declineto purchase~eme unless satisfiedthat-theyare a
safe and proper investmentfor such fund. No bonds. obligations,
or pledgesshall be 80 purchasedthat bear lees than two and
one-half(2%) per cent interest. No bonds, obligationfr, or
pledgesexcept those of the United Statee, the State of Texas, and
the Universityof Texas, shall be 80 purchasedwhen the indebted-
ness of the oounty,city? precinctor districtiseuingsame,
. .
State Board of Education,page 3 (O-4490)
lncluelveof those so offered,shall exceed seven (7%) per
cent of the aeseesedvalue of the real estate therrln. If
defaultbe madeIn the paymentof Intsreetdue upon ruoh bondr,
obllg8tlone,or pledges,the State Board of Eduo8tionmay at -
any time prior to the psymentof euoh overdueInteresteleot
to treat the prlnclpalae due, and the s8me mhall thereupon,
at the option of said Board, become due and payable;and
paymentof both such principaland Interestehall In all 0888s
be enforcedIn the manner providedby law, and the right to
enforaesuch collectionshall never be barred by 8ny law or
limitationwhatever."
The wordingof the above provisionhas bwn changed to some
extent since its originalenactmentIn 1905 in the couree of three
amendmentsend two codifloations(1909,1911, 1925, 1929, and 1939),
but except for changesto make eligiblethe bonds of additionalgovern-
mental agencies,the apparentpurposeof the underlined portionof
Article2671 8s quotedabove is no differentfrom what It was 86 orlgi-
nally enacted In Section4 of S.B. 218, Chapter 124, page 263, Acts 1905,
RegularSession,29th Legislature,reading:
". . . and no countybonds or bonds of any incorporated
city or Independentschooldistrictshall bs purchgsedas an
investmentfor the permanentpublic free school fund when the
Indebtedness of such county, incorporatedaity or Independent
school distriot,Inclusiveof the bonds so offered,shall exceed
seven per cent of the aeeessedvalue of the 'realestate in such
county or incorporated city or independentschooldistrict,. . ."
It is to be noted that the eligibllltyof bonds for purchaseby
the permanentpublic free school fund (as defined In the originalenaot-
ment In 1905 and In all subsequentamendmentstheretoIncludingArticle
2671, R.C.S., 1925, as now constituted)does not requirethat the real
estatewithin the politicalsubdivisionconstitutingthe ieeuIngagency
shall not be encmbered beyond 7% of its assessedvalue for 811 public
debts; but It requiresonly that the debt ratio of the part&i& politIca
subdivisionwhose bonds are consideredfor purchasebe not In exaeeeof
7% of the assessedvalue of the real estatewithin that partlaularaub-
division. For example,the real estatewIthIn particular
Independentschooldistrictmay be encumbered:w,thebond issuers UI UN
county,a road districtand a drainagedistrIct“embraoing or overlapping
this same real estate,constitutinga tot81 Indebtednessfar In excess of
7% of its assessedvalue, and yet the bonds of the Independentschool
districtwould still be eligibleso long as the schooldistrictIndebted-
ness (consideredindependently of the Indebtednessof other overlapping
politicalsubdivisions) did not exceed 7% of the assessedvaluationof
the school district. Our pr6blem,therefore,is to determinewhether the
Independentschool districtcreatedwhen a city assumesoontrolof the
schoolswithin its limits (under the authorityof Article 11, Section 10
of the Constitution)is in fact an Independentsohooldistrict and a
. .
State Board of Education,page 4 (o-4490)
separatepoliticalentity as dlatIngulehedfrom the munlcip8litywhich
has assumedoontrolthereof. If such a sohool districtconstitutes
8 "dietriot"as dietingulehedfrom 8 "oity,"aa thoeewords are found
In Article2671, then the Indebtedneeeof the city for munioipalpur-
poses‘ienot to be lumpedwith the Indebtedness of the olty In Its
aapacity8s 8n Independenteohool districtIn applyingthe’7$ debt ratio
requirement. It may be helpful to 8soert8Inthe legisl8tlveIntentwith
respectto the 7% debt ratio limitationby referringto the snac+xuent
wherein this requIreskent
first 8ppeaiWd. This ~8s S.B. 218, Chapter 124,
p8ge 263, Acts 1905,Regular Session,29th Legislature,which act was a
ccmprehensivestatuteprovidingfor a ocmpletesystemof publicfree
schools In Texas. Let us examinesaid Act to see whether the J..egislature
regardedthe schoolsystem of 8 city which had assumedcontrolof its
schools8s an Integralpart of the municipalityor whether it treatedthe
school so controlled8s 8 separateand Independentschool district.
In other parts of this Act the legislaturemade detailedprovi-
sion for the creationand operationof rchoolsunder the controlof aities
and towns,and these provisions,tend to indicatethst the Legislature
regardedsuch munlclp8laohooldistriats8s separateand distinctentitles,
8p.Wt fran the municipalfunotIo%MOf the citiesunder WhOSo OOn~Ol they
were placed.
For example,Section U6 of the Act providedthat in cities 8nd
townswhich had 8ssumOdcontrolof the schoolswithin their limits,"such
exclusivecontroland management. . . shall be In a board of trustees,"
and the title to all school propertyshall be vested in such board, and
". . . such board of trusteesshallconstitutea body COrpOr8te.. .)I
Section lj7 providedthat the pro rat8 part of the *Vailable
school fund and all taxes levied for school purposesshall be paid "direct.4
to the Treasurerof the board of trustees. . . and the mayor end council
or board of aldermanof such city or town shall have no power or control
of such funds."
in this respect is Section 144 of the
Of specialsifplificanoe
Act which re8dsr
"Schoolsthus organizedand providedfor by Incorporated
cities and towns shall be subJectto the generallaws, so far as
the 8Bme are 8ppliCablej but each city or town having controlof
schoolswithin its limitsshall constitutea separateschool dis-
trict and may providefor the organizationof schoolsand the
appropriationof its school funds in such m8nner 88 may be best
suited to its populationand condition." (Emphasisours) (Said
section144 is the legislatuveancestorof Article 2768,R.C.S.,
1925).
. .
State Board of Education,page 5 (0-4&l)
Seotion 148 providedfor the extensionof the oorporatelimits
of such oity or towns "for school purposes0134,’ and stated that "the
added territoryshall not affeot the olty debts or busInessi relationsIn
any manner whatsoever, exoeptfor sohoolpurposeeas providedabove,"
It seems to us, that the provislonaabovereferredto In the
1905 enactmentwhich containedfor the first time.the 7$ debt limitation
upon bonds whioh are to be purchasedby the permanentpublio free sohool
fund, ol.ear4 Indicatesthat the Lsgislatursregardedthe school system
of a city or town which had assumedcontrolof its schoolsas 8n Indepen-
dent schooldistrictand 8 separateand distinotgovernment81entity fran
the municipalcorporationproper; 80 that In app4Ing the 7% debt ratio
provisionto such a city due regardmust be given to Its dual character
to the end that the 7% provisionsshould be appliedseparate4 to each
of,the governmentalentitiesand not to the city and the school district
taken together.
While the preolse~question
with referenceto the oonstruotionof
the 7% debt limitationh8s never been before the appellatecourts of Texas,
our courtshave consistent4 reoognizedthe dusl entitleaof cities and
school districtswhich have been 8uthOriZOdunder Article 11, Section 10
of our Constitution,and in every Instanaethe court haa given effect to
the separateentitiesInvolved.
Thus In Love v. City of Dallas, 120 Tex.,351,40 S.W. (2d) 20,
Chief JusticeCuretondeclared,at page 356:
"The City of Dallas is a munIoIpa1corporation,chartered
under the laws of the state,has assumedcontrolof its public
schools,and 88 suoh Is to be regardedas an Independentschool
district."
In dealingwith schoolswhich are under the controland manage-
ment of cities the courtshave oonsl6tsnt4 held thst the rate of tax
which msy be leviedfor schoolpurposcuIn such cities is limitedby
tit&lo 7, Section 3 of the Constitutionof Texas which relatesto schools
and is not controlledby Article 8, Section 9 of the Constitution,which
limitsthe tax rate of counties,cities 8nd towns. In other words, in
this respect,the courtshave treatedschoolsunder the managementand
controlof cities8s school districtsrather th8n as 8 part Of the Cities
under whose controlthe schoolsare operated.
The first of these cases is Houstonv. Ccmzales.&dependent
SchoolDistrIct,decidedby the Commissionof Appeals in 1921, 229 S.W.
467. The City of Coneales,while exercisingcontrolof its schoolshad
issuedbonds for the erectionof schoolbuildingswhich requireda tax
levy of 179. Thereafter,the Legislature,by specialAct, divestedthe
City of Gonzalesof controlof its schoolsand createdthe Conzales
IndependentSchool Districtcomprisingthe city and approximate4 24,000
aores in additionthereto. The trusteesof the new districtthen
. .
State Board of Education,page 6 (o-We)
attemptedto levy a 404 tax On the propertyof the entire district. The
CourVhdld that the new tax wae valid only to the extent of 334 because
at that time,Article7, Section 3 of our ConetltutlonlimitedWee for
echool~purpoeee to 50$ 60 that the s&o01 dletrlot'oould levy only 33#
in additionto the 174 previously leviedby the City of Gonzaleewhile
in 00ntro10f ite eohool8. The oourt held that the 174 tar originally
leviedby the oity for eahool purpoeeewae a eohool tax authorizedand
limitedby Artiole 7, Seotlon 3 of the conetltution,ma not a oity tax
limitedby Article 8, Section 9 (which limltecounties,oltles and towns
to 25d "for the erreotionof public buildings,eewere,w&terworkeand
other improvements").Spencer,J., speakingfor the court at page 468,
said:
"The beneficialtitle to the propertyof the Gonzales
Sohool districtae originallyformedwae in the people thereof-
the mayor merely holding tie came ln trust for the sole uee of the
" echoole - and the Legislaturecould,withoutany wtee disturbInS
much title,ohange the tnieteee,as was done by the epeoiala&,."
And at page 469s
"The bonded indebtednessbeing for schoolpurposes,the
174 tax levy neceeearyto pay the interestthereonand provide
a sinkingAma, to retire same at maturity,is a ltiitation
upon the taxingpower of the district,but not a ,limltation
upon the 01t.y Of ChI?d.ee for buildingp~rpO688.”
The leadingcase annquncingtie doctrineof'the dual nature of
a city which has assumedcontrolof its schools Is City of Rockdalev.
Cureton,decidedby the !@exaaSupremeCourt in 1921, 111Tex. 1.36, 229
S.W. 852. We quote from the court'8statementof the facts in this~oaae:
'Prior to 1918, the city of Rockdale,incorporatedunder
the generallaws,had assumed the controlof its public schools.
The effectof this actionwas to oonetltuteit, for school
purpoeee,an independentecho01 district. Article 2871.
"It had never extendedita city boundariesfor echo01
purposes."
This was an action to 0-1 the AttorneyGeneralby mandamus
to approvea $75,000bond issuewhich he had refusedto approvefor the
reason that the tar necessaryto pay the same would exceed the city's
256 tax l+mit for improvements,imposedby Article 8, Section 9 of Us
ConEtitutlon. The oourt granted tie mandamusfor the reaeon that the
tax of euch a ci$y for,echoolpurposes is not limitedby Article 8, Sec-
tion 9, but by Article 7, Section 3 of the Oonetitutlon.We qiz0t.e
from
the opinionof Chief JuatiaePhIllipsi
State Board of Education,page 7 (O-4490)
"The Conetitution(Section10 of Article 11) haa
empoweredthe~Leglelature to oonetltuteanytowior olty
an independentschooldletrlot. The Leglelatqra,threfom,
had the power to cay ae it hae done in Artlole 2871, that a olty
or town takingover controlof lte pub110 sohoolae&allocmntl-
tute auoh a dietrlat. There may thue be oonferredupon a olty
a dual character,and with such oharaoter,dual powera. There
could have been no purpoae in authoriziug the oreatlon of
t- and cities ae independenteohooldlat,rlote - a reoog-
nized separateclass of municipaloorporatlon~ with individual
powers,unless in that oapacitythey were to have the power6
of such districts.
"The city of Rockdalehad lawfullyacquiredthis dual
aharaoter. It had powers strictlya8 a munlclpality,to be
,exercisedfor strictlymunicipalpurposee;and it had ita
powereas 8 duly constitutedindependenteohooldistrict.
The two are not to be confueed."
In W. L & T. R. R. Co. of Texas v. City of Whitesboro,(196)
287 S.W. 904, the Texas Ccamnieeion
of Appeals -In decleredthat the
tax rate for citieswhich have seamed controlof their schools le
ooutrolledby Artiole 7, Section 3 of the Constltutiopboth'beforeand
after such city may have extendedits llmitefor echo01 purposesonly.
Bishop,J., at page 906, saldr
"The municipalcorporationand the independentschool
districtare distinct,thou& they are both under the control
of the same officers."
It may appear that City of Athene v. Moody, (1926) 115 Tex.
247, 280 S.W. 514, by the Commieelonof Appeals, is In oonfliotwlth
the doctrineannouncedby the preoedingcaaee whioh recognizethe dual
nature of citieswhich have aaeumedcontrolof their echoola. A care-
fulanaly~ie of thle ease, however, indicatesthat it does not disavow
.thedual nature of citieshaving controlof their eohoole,but merely
reoognizeethe $1.50 limitationon the tax rata of oitleehaving a
populationof leea than 5,000 for both school and municipalpurposes,
pursuantto the express languageof the statutethere under cozglderatlon
(Section3 of Chapter 9, Acts 1921, 37tb Legislature,which ls'now
codifiedas Article 1027,R.C.S., 1925).
Again we find the courts deckring that those eligibleto vote
on an Increasein taxes for ischoolpurposesln oltleawhich have aeeumed
controlof their schools is to be gOVem3d by Article7, Section 3 of the
Constitutionrelatingto eohooldietriotsrather than to the provielone
relatingta cities.
State Board of Education,page 8 (O-4490)
1~ Cltg of Fort Worth v. Zane-Oett.1(1925),278 S.W. 183,
the Texae Ccmmleelonof Appeala;heldthat an elebtlonto inarease
the tax rate for eohool purpoeeein Port Worth (whlohhas aeeumed
oontrolof lta eohoole)muet be by the "qualifiedpropsrtytax paying
voterr"as providedby Artlole 7, Seotlon 3 of the Cor<utlon, instead
of by the "qualifiedvotera” se provided by Fort Worth% home-rule
,ohartar.Said Nichols,J., at page 184;
"The souroe of the legislativepower to create,or
define an independenttlchool distrlotis to be found in
Section 3, Article 7 of the Constitution.Such a district
is a municipalcorporation,sui generls. City of Rockdale
v. Cureton,AttorneyGeneral, 111 Tex. 136, 229 S.W. 852.
The territoryof a city and the territoryof a districtmay be
exactlycoincident,and for the distinctivepurpomea,separate
governmentimay be providedto operateseparately,but harmoni-
oualy,within the common orbit. Simmonsv. Lightfoot,Attorney
General,105 Tex. 212, 215, 146 S.W. 871; Munson v. Iooney,
AttorneyGeneral,107 Tex. 263, 268, 172 S.W. 1102, 177 S.W.
1193. Or, In virtue of the tews of Section 10, Article 11,
of the Conatitutlon,and for the convenientadmlnistratlve
pUZ=POSEE, ‘the k.&dhtWe Dlz3y OOWtitUte 8Uy City Or tOWl
a separateand independentschool district.' Such a combination
of the two munioipalcorporations,each sui generis,does not
take fram either its distinctivefeatures."
In Ttiacoarv. City of Galveston,(GalvestonCourt of Civil
Appeals, 1930,writ of error refused)28 S.W. (26) 887, the court held
that an additionalschool tax in the City of Galvestonwas valid when
based upon a vote of “a majorityof the qualifiedtax paying voters of
the dietriatvotingat an election"as providedby Article 7, Section 3
of the Oonat.ltution,even though this electiondid not satisfythe
requirementof Article 11, Section 10 of the Constitution,that "two-
thirdsof the tax payers of such city or town shall vote for such tax,"
therebyfurther indicatlng,that city-controlled schoolsare treatedfor
electionpurposesa8 "schooldlstriota"rather than as "cities." We
quote frau the opinionof Pleasants,C. J., at page 891:
"The City of Galvestonis one of the school district8
of the State, createdas such in the mannerprovidedby our
Constitutionand legislativeacts, and in itb capacityas e
schooldietrictit cannot be denied the rights and prlvilegetl
given by the Oovtitution to all other school districtain the
state. It cannotbe held that because it is an Incorporated
cl&y having a~speclalmunlolpalcharterthat Its constitutional
power* as a free school districtof the State are in any way
lessenedor restricted. We think thla questionIs settledby
the opinionof our SupremeCourt in the ease of Rookdalev.
Cureton,111Tex. 1.36,229 S.W. 852."
-.. .
We wish to olte only a few additionaloWes whloh further
indicatethat olty-oontrolled eohooldara to be mated am independent,
sohool aisthte rather thau tam lnntegral
partu of'*e oitier.
,InOity of FortWoi%b v. Cureton, (1920)ll0 Tar. 590, 222
S.W. 531, the SuprezneCFt con&rued the ohfarter of the olty of Port
Worth which limitedthe tax rate for all purpoaeeto $1.75 "inclus$ve
of the school tax that may bc,leviedby the board of truateeeof public
schoolsas providedby thls.Aot"60 ae to authorir,e an iacreassin the
combinedtax rate when the tax rate for e&o01 purpoeeeonly was increased
by charteramendment. The oourtalluded to the dualcharaoterof a city
which has controlof its sohooleand declaredthat the chartershouldnot
be construedso aa to reduce the authorizedtaxrate for ~emeralmunlolpal
purposesin the event of an increaseln the rate for sohoolpurposesonly.
In City of Belton k. &la Trust& Sav& Benk, 273 S.W.
914, (aff:lzmedby the Texas Comnleslonof Appeab, 283,S.W.164) the
Auatln CaUrt of ClvllAppea3n held that a ohsrterprovisionauthorizing
a $1.50 tsl rate without atatiag I@ purpose,had referenoeto taxation
for Seneralmunleipalpurposesunder the home-rulemndment, and had no
relationwhateverto the c~lty'ataxlnSpower wuIan independentaohool
aiatriot.,
The Austin Court of Clvll~ADpeale,in Temple IndependentSchool
Districtv. Prooter, (1936) 97 S.9..(2d) l&y, (writof error rofueed),
held that the validityof a contrffi~i;
between the Supertitendentor s~@Mle
In Templeand the school board (whichwa8 appointedby the citv ooinoil;
,Templehaving assumedcontrolof its schools)was to be gpvernednot by
the city charterbut by the statutesrelatingto school affalre. In this
case Judge Bau& declared,at page 1053:
"It is now sett@d, however,that, where suoh city does
amume cantrolof its schools,such controls0 far aa the eohools
are comerned, does not becomemerged into and becomea part of the
municipalgovernmentaa such. &ridwhere the city o~lealoncre or
city councilretainaoontrolof lte pub110 schvle it aota ln a
dual capacity- me as a governlnf3 bo&y of the olty ln It8 etatum
as a munlclpality,and the other ae the controllingor governing
board of Its schools. The two capacitiesare not tobbe confused.
City of Rockdalev. Cureton, ill Tex. 1.36,~9,229 S.W. 852~ City
of Fort Worth v. Zane-Cett.1,(Tex.Casmn.App.),278S.W. 183. Inso-
far a8 it acts in Its strictlymunicipalgovernmentaloapacity,
Its poweraare referableto Art1ol.ell.of the Constitutionand
title 28 of the R. S. (Article961, et seq., ps amended (Vernon'e
Annotatd civil Statutes,Artiole 961, et seq.)).meross, in the
managementand controlof its eohools,ite powera are referable
to Article 7'of the Constitutionand Title 49 of the R. 5. (Article
2584, et seq., as amna~a (Vernon'sAnnotatedCivil Statutee,Artiols
2584, et seq.))."
. . -
stats Board of Eduoatiw, page 10 (o-4490)
The eeparataand dlstlnotoharacterof a oity school district
landthe oltf under whose control it ie,operatedie most for0eful.Q
illuetrated,byi&e oaee of Olty of El Paeo v. Carrollby the El Paeo
Court of Civil Appeals, (1937) 108 S.W. (26) 251, (writof error refueed)
wherein itwaa held that the City of El Paeo va6 not authorizedto take
$54,000out of t;hegeneralma for muniolpel purposeaend loan this
money to the eahool dletriotwhloh wae under the controlof the oity, for
the reaeon thatthe sohooldietrlct80 conrtitutedand the city were two
senarategovernmentaLentities and their respectiveflnanoeeshouldbe kept
ai8th0t snd eeparato.
Baaed upon a statutoryconstructionof Article 2671 by looking
to other sectionsof,the Act of 1905 whereby the 7s debt ratio lincitation
wae fleet enacted,and based upon the unbrokenline of authorityof the
Texas court8holding that the munioipalfunctioneof a city muat at all
time6 be kept separateand apart frcanthe schooldistrictof which it has
aeemnedcontrol,it ie our opinion'thatin construingArticle 2671we
ehould give effect to this eepezatecharacterof the two governmentalenti-
tiee. We believe,therefore,, that if the debt ratio of a city, independent
of the indebtedness which may hove been createdfor school purposes,is
belaw 7$, then the bcrrdsof such city we eligiblefor pWh%3e by the
permanentfree school fund; and likewise,that $f the indebtednessof a
city for school purpose0only, is lees than 7% of the aeeeeaedvaluation
of the real propertytherein,independentof the debt6 of the city for
muniolpalpurposes,then ln auoh event, the bonds of the oity leauedfor
who01 purposesonly are eligiblefor investmentin the permanentfree
~oh00i ma, We believeno dietinctionexists insofarae the construction
of this statuteie OOMerUed between citieshaving a populatiOngreateror
less than 5,000. Nor do we believe that any dietinotlonis to be drawn In
this respectbetween those citieswhioh have extendedtheir bormdarleefor
schoolpurpoeeeonly, end thoee oitleewhose boundariesfor aohoolend
municipalpurposesare cotermlnous. In all such caeee it is our opinion
that the oity'aea munlolpalltyis a,eepazutelesuingwy &m the
s&ooldlstrict under the omtrol of such olty and the bonded indebtedneee
of each ehaaldbe looked to Independently of the oclpblnedbonded indebted-
neee of the two governmentalunite ln applyingthe 7% debt ratio limita-
tim of ~&i&e 2671.
APPROBEDAPR. 28, 1942 Yours very truly
/s/ GroverSellem A?XXdiEYGENERALOFTEXAS
FIRBTASSlSTAliT' By /e/Walter R. Koch
ATTORNEY- Walter R. Koch
Aeeistant
WRKrdb4e
APP~vBDoPlHIONcoMrITEE BY /e/ B.W.B. CEAIRMAN
.