Can a Texas school district pay city impact fees or build off-site roads for a new school?

TX AG Opinion GA-0496: Can a school district pay impact fees and build off-site infrastructure?

Plain-English summary

A Texas House committee chair asked how Education Code section 11.168 affects an independent school district's ability to build or pay for infrastructure serving new schools. The question grew out of a real situation: in October 2005, voters in the Ellis Independent School District approved a bond package to build a new junior high school and an 11th- and 12th-grade center, with the understanding that part of the bond money would pay for water, sewer, and roadway upgrades on land the district does not own or lease but that is needed to serve the new schools. The district worried that spending bond money this way might violate section 11.168.

Section 11.168, added in 2005, says a school board "may not enter into an agreement authorizing the use of school district employees, property, or resources for the provision of materials or labor for the design, construction, or renovation of improvements to real property not owned or leased by the district." It had not been construed by a court or the AG's office before. The chair asked two questions. First, does section 11.168 bar a district from paying impact fees a municipality imposes to fund water, sewer, and roadway work (under chapter 395 of the Local Government Code) when the work is off district land, typically along city or state highway rights-of-way. Second, can a district lease right-of-way to make those improvements, which would later be dedicated back to the public, and then end the lease.

The opinion answered no to both. On the impact fees, it focused on the word "agreement," which triggers the section 11.168 prohibition. Reading "agreement" by its common meaning (consent or harmony between parties), the opinion then looked at how impact fees work. Chapter 395 describes an impact fee as a charge "imposed" by a political subdivision, and "impose" means a unilateral act of placing a charge on someone, not a meeting of the minds. Because an impact fee is imposed unilaterally rather than paid as the result of an agreement, section 11.168's bar on agreements does not reach it, so the statute does not stop a district from paying municipal impact fees for its new school development. On the second question, the opinion explained that section 11.168 limits how a district uses its own resources for materials or labor; it says nothing against a district's authority to acquire or lease land and improve it. Indeed, the statute expressly contemplates leasing, since it speaks of "real property not owned or leased" by the district. So section 11.168 does not prohibit a district from leasing right-of-way to make needed water, sewer, and roadway improvements.

Currency note

This opinion was issued in 2006. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Education Code section 11.168 and the Local Government Code impact-fee provisions cited here may have been amended since 2006, and later opinions or court decisions may bear on how the statute is read. Anyone weighing the use of school bond funds for off-site infrastructure today should check the current statutes and any later authority rather than relying on this 2006 opinion.

Who this opinion affected (as of 2006)

Independent school districts: The opinion told districts that section 11.168 did not stop them from paying municipal impact fees for off-site water, sewer, and roadway work serving new schools, or from leasing right-of-way to make those improvements.

The Ellis ISD specifically: The opinion meant that, under the law as read in 2006, using bond money to pay impact fees and to lease and improve off-site rights-of-way for the new junior high and grade center would not run afoul of section 11.168.

Municipalities assessing impact fees on school development: The opinion confirmed that an impact fee is a unilaterally imposed charge, not an "agreement," so a district's payment of it did not trigger the section 11.168 bar.

Common questions

Does section 11.168 stop a school district from paying city impact fees?
No. The opinion concluded that an impact fee is imposed unilaterally and is not paid as the result of an "agreement," so section 11.168, which prohibits certain agreements, does not bar a district from paying impact fees for its new school development.

Why does the word "agreement" matter so much?
Section 11.168's prohibition is triggered by an "agreement" authorizing the use of district resources. The opinion read "agreement" by its common meaning (consent or harmony between parties) and concluded that a unilaterally imposed impact fee is not an agreement, so the statute's bar does not apply.

Can a district lease right-of-way to build the water, sewer, and roads?
Yes. The opinion concluded section 11.168 does not bar a district from leasing right-of-way to make needed improvements. The statute limits how a district uses its resources, not its authority to acquire or lease land and improve it, and the statute's text expressly contemplates leased property.

Does the statute limit a district's power to acquire and improve land?
No. The opinion explained that section 11.168 is about a district entering agreements to use its resources for work on property it does not own or lease; it is not relevant to a district's authority to acquire land and improve it, even when the improvements stay with the land after a lease ends.

Background and statutory framework

Education Code section 11.168, added by the Legislature in 2005, prohibits a school board from entering an agreement authorizing the use of district employees, property, or resources to provide materials or labor for the design, construction, or renovation of improvements to real property the district does not own or lease. Chapter 395 of the Local Government Code lets municipalities and other political subdivisions impose impact fees on new development to fund capital improvements necessitated by that development (Tex. Educ. Code Ann. § 11.168 (Vernon 2006); Tex. Loc. Gov't Code Ann. §§ 395.001(4), 395.001-.082, 395.011(a), 395.012(a) (Vernon 2005); Act of May 27, 2005, 79th Leg., R.S., ch. 979, § 1, 2005 Tex. Gen. Laws 3286, 3286).

Construing the statute by its plain language and the common meaning of its terms, the opinion concluded that the section 11.168 bar depends on an "agreement," while chapter 395 describes an impact fee as a charge "imposed," a unilateral act, so paying an impact fee is not the product of an agreement and is not barred. On the second question, the opinion concluded section 11.168 limits a district's use of its resources for materials or labor and does not restrict its authority to lease land and improve it, an authority recognized elsewhere, and the statute itself refers to "real property not owned or leased" (Tex. Gov't Code Ann. §§ 311.011, 311.021, .023 (Vernon 2005); Albertson's, Inc. v. Sinclair, 984 S.W.2d 958, 960 (Tex. 1999); In re Canales, 52 S.W.3d 698, 702 (Tex. 2001); Circle Double "C" Enters., Inc. v. Disco Elec., Inc., 782 S.W.2d 299, 301 (Tex. App.-Beaumont 1989, no writ); McCorkel v. Dist. Trs. of Robinson Springs Sch. Dist. No. 76, 121 S.W.2d 1048, 1052 (Tex. Civ. App.-Eastland 1938, no writ); City of Houston v. Richard, 21 S.W.3d 586, 589 (Tex. App.-Houston [1st Dist.] 2000, no pet.); Tex. Att'y Gen. Op. No. GA-0321 (2005)).

Citations

Statutes and session law:

• Tex. Educ. Code Ann. § 11.168 (Vernon 2006)
• Tex. Loc. Gov't Code Ann. §§ 395.001(4), 395.001-.082, 395.011(a), 395.012(a) (Vernon 2005)
• Tex. Gov't Code Ann. §§ 311.011, 311.021, .023 (Vernon 2005)
• Act of May 27, 2005, 79th Leg., R.S., ch. 979, § 1, 2005 Tex. Gen. Laws 3286, 3286

Cases:

• Albertson's, Inc. v. Sinclair, 984 S.W.2d 958, 960 (Tex. 1999)
• In re Canales, 52 S.W.3d 698, 702 (Tex. 2001)
• Circle Double "C" Enters., Inc. v. Disco Elec., Inc., 782 S.W.2d 299, 301 (Tex. App.-Beaumont 1989, no writ)
• McCorkel v. Dist. Trs. of Robinson Springs Sch. Dist. No. 76, 121 S.W.2d 1048, 1052 (Tex. Civ. App.-Eastland 1938, no writ)
• City of Houston v. Richard, 21 S.W.3d 586, 589 (Tex. App.-Houston [1st Dist.] 2000, no pet.)

Attorney General opinion referenced:

• Tex. Att'y Gen. Op. No. GA-0321 (2005)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0496
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2006/ga0496.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain - the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

December 22, 2006

The Honorable Jim Pitts
Chair, Committee on Appropriations
Texas House of Representatives
Post Office Box 2910
Austin, Texas 78768-2910

Opinion No. GA-0496

Re: Education Code section 11.168 and its effect on an independent school district's authority to build or pay for infrastructure for new schools within the district (RQ-0503-GA)

Dear Representative Pitts:

You ask about Education Code section 11.168[1] and its effect on an independent school district's authority to build or pay for infrastructure for new schools within the district.[2]

You inform us that in October 2005 voters in the Ellis Independent School District (the "District") approved a bond package authorizing the District to construct a new junior high school and 11th- and 12th-grade center. Request Letter, supra note 2, at 1. You also inform us that the voters approved the proposition with the understanding that a portion of the bond money would be used for infrastructure improvements to land not owned or leased by the District that will provide sufficient water, sewer, and roadway upgrades to serve the new school development. See id. The District is apparently concerned, however, that using bond money for this purpose will violate Education Code section 11.168.

Section 11.168 of the Education Code provides that

[t]he board of trustees of a school district may not enter into an agreement authorizing the use of school district employees, property, or resources for the provision of materials or labor for the design, construction, or renovation of improvements to real property not owned or leased by the district.

TEX. EDUC. CODE ANN. § 11.168 (Vernon 2006). This provision was adopted during the Seventy-ninth Legislature's regular session;[3] it has not been construed by a court or this office.

Given the language in section 11.168, you first ask whether section 11.168 prohibits a school district from paying impact fees imposed by a municipality to help fund water, sewer, and roadways necessary to serve new school development, when those improvements will not be made on land owned or leased by the district. See Request Letter, supra note 2, at 1. Chapter 395 of the Local Government Code authorizes political subdivisions, including municipalities, to impose impact fees against new development "in order to generate revenue for funding or recouping the costs of capital improvements or facility expansions necessitated by and attributable to the new development." TEX. LOC. GOV'T CODE ANN. § 395.001(4) (Vernon 2005); see generally id. §§ 395.001-.082. And the infrastructure improvements for which an impact fee may be assessed against a school district for new school development, we are told, do not usually occur on district property but rather "along city . . . or state highway rights-of-way."[4] Thus, you ask us to construe Education Code section 11.168 relative to Local Government Code chapter 395.

In construing a statute, we must give effect to the legislature's intent. See TEX. GOV'T CODE ANN. §§ 311.021, .023 (Vernon 2005); Albertson's, Inc. v. Sinclair, 984 S.W.2d 958, 960 (Tex. 1999). To do so, we must first attempt to construe statutes according to their plain language, reading the language according to the rules of grammar and common usage unless it has acquired a technical meaning. See TEX. GOV'T CODE ANN. § 311.011 (Vernon 2005); In re Canales, 52 S.W.3d 698, 702 (Tex. 2001).

On its face, and as relevant here, section 11.168 prohibits a school district from entering into an agreement authorizing the use of school district resources and employees to improve real property not owned or leased by the district. TEX. EDUC. CODE ANN. § 11.168 (Vernon 2006). Thus, for the prohibition to apply to a school district's use of its resources, there must be, minimally, an agreement controlling that use. There is no indication in section 11.168 that "agreement" has acquired a technical meaning. Therefore, we look to its common meaning. The term "agreement" has various meanings, however, and depending on its context, Texas courts use the term narrowly to refer to formal contracts or more broadly as evidence of consent between parties. See, e.g., Circle Double "C" Enters., Inc. v. Disco Elec., Inc., 782 S.W.2d 299, 301 (Tex. App.-Beaumont 1989, no writ) (defining agreement as "the bargain of the parties in fact as found in their language or by implication from other circumstances"); McCorkel v. Dist. Trs. of Robinson Springs Sch. Dist. No. 76, 121 S.W.2d 1048, 1052 (Tex. Civ. App.-Eastland 1938, no writ) (finding "agreement" to be a synonym for consent but may not necessarily be a contract). But in its broadest sense it means "harmony or accordance in opinion or feeling." THE NEW OXFORD AMERICAN DICTIONARY 32 (2001). Therefore, for section 11.168 to prohibit an independent school district from paying an impact fee, again, minimally, an impact fee has to evidence harmony or accordance in opinion or feeling.

Turning to Local Government Code chapter 395, which authorizes impact fees, we note that an impact fee is "a charge or assessment imposed by a political subdivision." TEX. LOC. GOV'T CODE ANN. § 395.001(4) (Vernon 2005) (emphasis added). Indeed, the provisions detailing how a political subdivision may assess an impact fee use the term "impose." See, e.g., id. §§ 395.011(a) ("Unless otherwise specifically authorized by state law or this chapter, a . . . political subdivision may not enact or impose an impact fee."), 395.012(a) ("An impact fee may be imposed . . . ."). Again, we find nothing that indicates "impose" has acquired a technical meaning, so we look to its common meaning. In this respect, a Texas court has reviewed the common-usage definition of "impose" and relied upon, among others, the Oxford English Dictionary's definition, which defines the term to mean "to lay on, as something to be borne, endured, or submitted to; to inflict (something) on or upon; to levy or enforce authoritatively or arbitrarily." City of Houston v. Richard, 21 S.W.3d 586, 589 (Tex. App.-Houston [1st Dist.] 2000, no pet.) (quoting VII OXFORD ENGLISH DICTIONARY 731 n.4 (2d ed. 1989)). Ultimately, the court found that "[i]n all of the definitions, 'impose' is associated with the act of placing a penalty or charge upon a person." Id. In short, to impose something, in this case, an impact fee, is a unilateral action that does not involve harmony or accordance in feeling or opinion. An impact fee, consequently, is not paid as a result of an agreement. Thus, in answer to your first question, Education Code section 11.168 does not prohibit an independent school district from paying impact fees imposed by a municipal corporation on the district for the district's new school development.

You also ask whether an independent school district "can lease right-of-way for needed water, sewer and roadway improvements which later, after construction, would be dedicated back to the public for maintenance purposes and public use and the lease be terminated." Request Letter, supra note 2, at 1. Because you ask this question in the context of Education Code section 11.168, we understand you to be asking whether section 11.168 prohibits an independent school district from leasing rights-of-way on which the district will make infrastructure improvements that will serve the district's new school development.

By its plain language, section 11.168 places limits on an independent school district's use of its resources for the provision of materials or labor under certain circumstances. See TEX. EDUC. CODE ANN. § 11.168 (Vernon 2006). This provision is not relevant to an independent school district's authority to acquire land and improve it.[5] Moreover, the provision expressly contemplates a district's leasing land. See id. ("to real property not owned or leased") (emphasis added). In answer to your second question, then, section 11.168 does not prohibit a school district from leasing right-of-way in order to make needed water, sewer, and roadway improvements on such property.

SUMMARY

Education Code section 11.168 does not prohibit an independent school district from paying impact fees imposed by a municipal corporation on the district for the district's new school development.

Education Code section 11.168 does not prohibit an independent school district from leasing land and improving it.

Very truly yours,

GREG ABBOTT
Attorney General of Texas

KENT C. SULLIVAN
First Assistant Attorney General

ELLEN L. WITT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Daniel C. Bradford
Assistant Attorney General, Opinion Committee

Footnotes

[1] There are two sections 11.168 in the Education Code. In your request, you quote from section 11.168 that was added by House Bill 1826 during the Seventy-ninth Legislature's regular session. See Act of May 27, 2005, 79th Leg., R.S., ch. 979, § 1, 2005 Tex. Gen. Laws 3286, 3286. Thus, in this opinion, our reference to Education Code section 11.168 is to this one.

[2] Letter from Honorable Jim Pitts, Chair, House Committee on Appropriations, to Honorable Greg Abbott, Attorney General of Texas (June 21, 2006) (on file with the Opinion Committee, also available at http://www.oag.state.tx.us) [hereinafter Request Letter].

[3] Act of May 27, 2005, 79th Leg., R.S., ch. 979, § 1, 2005 Tex. Gen. Laws 3286, 3286.

[4] See Brief from Lydia L. Perry, Law Offices of Robert E. Luna, P.C., to Honorable Greg Abbott, Attorney General of Texas, at 2 (Aug. 4, 2006) (on file with the Opinion Committee).

[5] An independent school district has authority to lease land and make improvements to it, even where the improvements will remain with the land upon the lease's termination. See Tex. Att'y Gen. Op. No. GA-0321 (2005).