Municipal Corner

A municipality may not use maintenance and operations property tax for debt service, nor may it obligate itself to transfer funds to a local government corporation indefinitely. Tex. Att’y Gen. Op. No. KP-0444 (2023).

The Chairman of the Texas Senate Committee on Local Government requested a Texas Attorney General Opinion regarding (1) whether a tax increase election authorizes a municipality to “earmark” use of its maintenance and operations property tax revenue for debt service and (2) whether an increase in a municipality’s maintenance and operations property tax may be transferred to a local government corporation. The Attorney General determined that revenue from a maintenance and operations tax may not be used for debt service and that a municipality may not agree to transfer revenue to a local government corporation indefinitely.

In 2020, the City of Austin (the “City”) sought to increase its maintenance and operations tax rate to raise funds for a city-wide rapid transit system, known as “Project Connect.” Before the required tax-rate increase election in November of that year, the Austin City Council adopted a Resolution to create a contract with the voters. The contract “earmarked” proceeds from increased tax revenue for investment in Project Connect. The Attorney General determined that the Tax Code prohibits the use of maintenance and operations tax for debt service. Therefore, the City may not use revenue from its maintenance and operations tax to invest in Project Connect.

Additionally, the Attorney General determined a court would likely conclude that an agreement binding a municipality to indefinitely transfer revenue to a local government corporation, as was the City’s intent to fund Project Connect, is prohibited by article XVI, section 5 of the Texas Constitution. While a municipality is authorized to contract with a local government corporation, the Texas Constitution generally limits contractual terms. Here, it likely prohibits the City from obligating itself to transfer revenue for more than one year.

A member of a municipality’s governing body may dually serve as a volunteer for an organization that protects the health, safety, or welfare of the municipality only if an authorizing resolution is adopted. Tex. Att’y Gen. Op. No. KP-0442 (2023).

The 112th Judicial District Attorney requested an opinion from the Texas Attorney General regarding whether a member of the Iraan Volunteer Fire and Rescue Department may simultaneously serve on the Iraan City Council. The City of Iraan sought guidance after both the volunteer fire chief and lieutenant were elected to the City Council. To determine whether such dual service was permitted, the Attorney General analyzed Texas Local Government Code section 21.003.

The Attorney General provided that section 21.003 allows a member of a municipality’s governing body to dually serve as a volunteer for an organization that protects the health, safety, or welfare of that municipality only if the governing body adopts a resolution allowing its members to perform such a service. Based on the plain language of section 21.003, the Attorney General determined that – absent a resolution adopted by the Iraan City Council – the dual service of a person as a member of the volunteer fire department and the City Council is prohibited.

A municipality may provide trash collection services outside of its municipal boundary but within its ETJ. Tex. Att’y Gen. Op. No. KP-0438 (2023).

The Starr County Attorney requested a Texas Attorney General opinion regarding whether the City of Escobares (the “City”) has authority to provide trash collection services outside of its municipal boundary but within its extraterritorial jurisdiction (“ETJ”). The Attorney General concluded the City likely can provide solid waste disposal service within its ETJ.

The opinion focuses on (1) a public agency’s broad contracting authority and (2) the definition of “jurisdiction” in relation to a geographic area. Health and Safety Code section 363.113 provides that counties and municipalities should assure solid waste management services are provided to all persons within its jurisdiction, either by a public agency or a private person. Additionally, Chapter 363 authorizes a public agency, such as a municipality, to enter into contracts to furnish or receive solid waste management services. Further, the common definition of jurisdiction in relation to a geographic boundary likely includes a municipality’s ETJ. Therefore, a municipality has the authority to ensure the provision of solid waste disposal services in its jurisdiction, independently or via contract.

Madison Huerta is an Associate in the Firm’s Governmental Relations, Water, and Districts Practice Groups. If you would like additional information or have questions related to these or other matters, please contact Madison at 512.322.5825 or mhuerta@lglawfirm.com.