Can a Texas municipal utility district use property tax money to buy land just to build a public park?

Texas AG Opinion JM-1173: Could a Municipal Utility District Tax-Fund a Public Park?

Plain-English summary

The chairman of the Senate Health and Human Services Committee asked whether a municipal utility district operating under chapter 54 of the Texas Water Code could contract to buy real property to be used as a public park within the district, paying for it from ad valorem taxes that district voters had approved. The request arose from the Spencer Road Public Utility District in Harris County, which wanted to acquire about six acres to develop a park with playgrounds, volleyball and basketball courts, picnic tables and grills, and a jogging trail.

The Attorney General concluded the district could not do this. Municipal utility districts derive their authority entirely from article XVI, section 59 of the Texas Constitution, the Conservation Amendment, and the legislature cannot grant a district powers beyond what that amendment (or another constitutional provision) contemplates. A 1980 Austin Court of Civil Appeals decision had already held that a different water district's proposed park and recreational facilities, including swimming pools, tennis courts, and a clubhouse, did not further a Conservation Amendment purpose and so could not be built using the district's tax-funded powers under a similarly worded Water Code provision. A 1981 Attorney General opinion had read that case as allowing recreational facilities only as a secondary use tied to an actual conservation project (there, a reservoir built for water supply), not as an independent, freestanding purpose. Although a 1985 amendment to chapter 54 added a new subchapter declaring parks and recreation a stated district purpose and asserting the legislature's power to authorize it without regard to any specific constitutional provision, the opinion concluded the legislature cannot overturn the Supreme Court's construction of a constitutional provision by ordinary statute, so the new subchapter had to be read consistently with the Conservation Amendment's limits as the Supreme Court had already defined them, rather than as authorizing tax-funded land purchases for parks as a standalone purpose.

Currency note

This opinion was issued in 1990. 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 mentioned here.

Who this opinion affected (as of 1990)

Municipal utility districts and their boards: The opinion meant a district could not use tax revenue to buy land for the independent purpose of developing a public park, even where district voters had approved the taxes, unless the park use could be tied to an actual Conservation Amendment purpose already being carried out on the property, such as recreational use of an existing reservoir built for water supply.

Spencer Road Public Utility District specifically: The opinion directly answered the district's plan to acquire roughly six acres in Harris County for a park with playgrounds, sports courts, and a jogging trail, concluding it could not fund that land purchase from tax revenue as an independent park project.

Legislators and drafters of district legislation: The opinion signaled that the 1985 subchapter I "parks and recreation" provisions of chapter 54 would be read consistently with the Supreme Court's existing construction of article XVI, section 59, not as a freestanding grant of park-purchasing power, unless the Conservation Amendment itself were further amended, as it had been after Deason to allow fire-fighting facilities.

Common questions

Why can't the legislature just pass a law letting utility districts build parks?
Because a municipal utility district's authority is limited by the Texas Constitution's Conservation Amendment (article XVI, section 59), and the opinion found the legislature cannot override the Texas Supreme Court's construction of what that amendment allows by ordinary statute. Only a constitutional amendment, of the kind voters approved after the Deason case to allow fire-fighting facilities, can expand that limit.

Did the 1985 Water Code amendment declaring parks a district "purpose" change the answer?
The opinion concluded it did not, at least not for tax-funded, freestanding park purchases; the new subchapter's declarations had to be read in a way consistent with the Conservation Amendment's existing judicial construction rather than as expanding the district's constitutional authority.

Could a district ever use tax money connected to a park or recreational facility?
The opinion pointed to a 1981 AG opinion approving recreational improvements, boat ramps, landscaping, and similar features tied directly to a reservoir a district had built for water supply, since those were treated as incidental to an actual conservation purpose, unlike buying land for a park as an independent goal.

Background and statutory framework

Municipal utility districts are created under and subject to article XVI, section 59 of the Texas Constitution (the Conservation Amendment), Water Code § 54.011, and can exercise no authority not clearly granted by the legislature within the amendment's scope, citing Quincy Lee Co. v. Lodal and Bain Engineers, Inc. The legislature can grant a district only such powers as come within the Conservation Amendment or other applicable constitutional provisions, citing Deason v. Orange County Water Control & Improvement Dist. No. 1.

In 1980, the Austin Court of Civil Appeals in Harris County Water Control & Improvement Dist. No. 110 v. Texas Water Rights Commission held that a district's proposed community center, three swimming pools, four tennis courts, and a clubhouse did not further a purpose under Water Code § 54.012, notwithstanding language in § 54.201(b)(7) then authorizing districts to acquire facilities to "provide parks and recreational facilities" for district inhabitants. A 1981 Attorney General opinion (MW-313), addressing park and recreational improvements the Upper Guadalupe River Authority planned around a reservoir built for municipal water supply, read the Harris County case as not barring recreational facilities altogether, but as limiting them to improvements that further a Conservation Amendment purpose already being carried out, there, the reservoir project itself.

In 1985, chapter 54 was amended to add subchapter I, changing § 54.201(b)(7) to make it "subject to subchapter I," amending § 54.501 to delete bonding authority for parks and recreational facilities, and adding §§ 54.771 and 54.773, which declared it state policy to encourage districts to provide parks and recreational facilities, made recreational-facility development a stated district purpose, and asserted (in § 54.771(a)(3)-(5) and (b)) that the legislature's general power to enact laws was adequate to support the subchapter without reference to any specific constitutional authorization. The opinion held that the legislature cannot overturn, by declaration or enactment, a construction of the constitution already pronounced by the Supreme Court, citing Milam County v. Bateman and Langever v. Miller, and that prior to subchapter I, the Supreme Court had already defined the Conservation Amendment's limits on delegating tax and bonding power to municipal utility districts in Deason (rejecting fire-fighting equipment as outside the amendment) and Parker v. San Jacinto County Water Control & Improvement Dist. No. 1 (upholding a sewage disposal system as within the amendment, because it served the constitutional purpose of returning water to the hydrological cycle). Because the Deason holding was later overridden only by a constitutional amendment adopted by the voters (allowing fire-fighting facilities), not by ordinary statute, and because the Spencer Road district's proposed six-acre park purchase, with playgrounds, sports courts, picnic tables, and a jogging trail, was not tied to any existing conservation project on the land, the opinion concluded the district could not use tax revenue to buy the land for the independent purpose of a public park, and that subchapter I had to be read consistently with the constitutional limits the Supreme Court had already recognized.

Citations

Statutes and constitutional provisions:

• Tex. Const. art. XVI, § 59
• Tex. Const. art. III, § 1
• Water Code § 54.011
• Water Code § 54.201(b)(7)
• Water Code § 54.012
• Water Code § 54.501
• Water Code §§ 54.771(a)(2)-(5), (b), 54.773
• Acts 1971, 62d Leg., ch. 84, at 775
• Acts 1985, 69th Leg., ch. 100, at 538

Cases:

• Quincy Lee Co. v. Lodal and Bain Engineers, Inc., 602 S.W.2d 262 (Tex. 1980)
• Deason v. Orange County Water Control & Improvement Dist. No. 1, 244 S.W.2d 981 (Tex. 1952)
• Harris County Water Control & Improvement Dist. No. 110 v. Texas Water Rights Commission, 593 S.W.2d 852, 855 (Tex. Civ. App.-Austin 1980, no writ)
• Parker v. San Jacinto County Water Control & Improvement Dist. No. 1, 273 S.W.2d 586 (Tex. 1954)
• Milam County v. Bateman, 54 Tex. 153 (1880)
• Langever v. Miller, 76 S.W.2d 1025 (Tex. 1934)

Prior Attorney General opinions cited: H-491 (1975), MW-313 (1981).

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1173
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1990/jm1173.pdf

Original opinion text

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

May 10, 1990

Honorable John Whitmire
Chairman
Health And Human Services Committee
P. O. Box 12068
Texas State Senate
Austin, Texas 78711

Opinion No. JM-1173

Re: Authority of the Spencer Road Public Utility District to buy land for a public park (RQ-1814)

Dear Senator Whitmire:

You have asked us to address the following question:

May a municipal utility district, operating under chapter 54 of the Texas Water Code, contract for the purchase of real property to be used as a public park within the district by making payments under the contract from taxes where voters in the district have approved the same?

Municipal utility districts are created under and subject to the authority, conditions, and restrictions of article XVI, section 59, of the Texas Constitution. Water Code § 54.011.

A municipal utility district can exercise no authority that has not been clearly granted by the legislature. Quincy Lee Co. v. Lodal and Bain Engineers, Inc., 602 S.W.2d 262 (Tex. 1980). The legislature can only grant such a district such powers and rights that come within the contemplation of article XVI, section 59 (the Conservation Amendment), or other applicable provisions of the constitution. Deason v. Orange County Water Control & Improvement Dist. No. 1, 244 S.W.2d 981 (Tex. 1952).

In 1980, the Austin Court of Civil Appeals considered whether a municipal utility district could provide park and recreational facilities (including a community center, three swimming pools, four tennis courts, and a club house) under the provisions of Texas Water Code section 54.201(b)(7). At that time, section 54.201 read in its entirety:

(a) A district shall have the functions, powers, authority, rights, and duties which will permit accomplishment of purposes for which it was created.

(b) A district is authorized to purchase, construct, acquire, own, operate, maintain, repair, improve, or extend inside and outside its boundaries any and all works, improvements, facilities, plants, equipment, and appliances necessary to accomplish the purposes of its creation including all works, improvements, facilities, plants, equipment, and appliances incident, helpful, or necessary to:

(1) supply water for municipal uses, domestic uses, power, and commercial purposes and all other beneficial uses or controls;

(2) collect, transport, process, dispose of, and control all domestic, industrial, or communal wastes whether in fluid, solid, or composite state;

(3) gather, conduct, divert, and control local storm water or other local harmful excesses of water in a district;

(4) irrigate the land in a district;

(5) alter land elevation in a district where it is needed;

(6) navigate coastal and inland waters of the district; and

(7) provide parks and recreational facilities for the inhabitants in the district. (Emphasis added.)

See Acts 1971, 62d Leg., ch. 84, at 775.

Because of the language limiting the district's authority to that "necessary to accomplish the purposes of its creation," and notwithstanding the statutory provision expressly authorizing districts to acquire all facilities necessary to "provide parks and recreational facilities" for the inhabitants in the district, the court said:

We have concluded that the proposed facilities, which include a community center, three swimming pools, four tennis courts, and a clubhouse, do not further a purpose of section 54.012 of the Water Code. . . .

(Emphasis added.)

Harris County Water Control & Improvement Dist. No. 110 v. Texas Water Rights Commission, 593 S.W.2d 852, 855 (Tex. Civ. App.-Austin 1980, no writ); see Attorney General Opinion H-491 (1975) (recreational use of waters and forests, "once developed and conserved," may be within contemplation of the constitution).

The following year, in 1981, this office was asked whether the construction of certain park and recreation facilities by the Upper Guadalupe River Authority, "on its soon to be completed reservoir," would be in furtherance of the purposes for which the district was created. The "facilities" were reservoir areas to be landscaped: areas to be made suitable for swimming, parking, restrooms, boat ramps, picnic tables, lighting, roads, and fencing. (The resulting opinion did not explicitly confirm that payment was to be made from taxes, but, because of the holding of the opinion, that consideration is not relevant here.)

Attorney General Opinion MW-313 (1981) observed in that connection:

The reservoir in this case is being constructed primarily to control and store water on the Guadalupe River as a surface water supply for the city of Kerrville, in compliance with the constitutional purposes of the district and the statutory priorities of water usage. One secondary use of the reservoir as enumerated by the legislature is recreation and pleasure.

The opinion read the Harris County Water Control and Improvement District case as saying that "recreational facilities per se" are not prohibited, but

are limited by the standard set out by the court, to-wit: "[t]he power to construct recreational facilities must be exercised to further a purpose of section 54.012 [Texas Water Code] to be justified and constitutional." Id. at 854. The court had previously stated that "[s]ection 54.012 of the Texas Water Code, entitled 'Purposes of a District,' parallels the language of article XVI, § 59(a) (Texas Constitution)." Id. at [853]. . . . there must be a close relationship between the recreational facilities and the constitutional purpose of the district. (Emphasis added.)

Attorney General Opinion MW-313 at 3. The attorney general held construction of the facilities permissible because:

The Harris County W.C.I.D. #110 opinion prohibited construction of a complex of recreational buildings and facilities which were unrelated to the constitutional purposes of the district. It is our understanding that the facilities you propose to build are related to a relatively minor portion of the total reservoir project and serve to promote the full use and enjoyment of the reservoir by the public. We feel that the improvements you propose are ordinary and necessary to the proper control, management, and regulation of public reservoirs and lakes, and are in furtherance of the constitutional purposes of "the conservation and development of all of the natural resources of this State . . . including the control, storing, preservation and distribution of . . . the waters of its rivers and streams, for irrigation, power and other useful purposes . . . ." Tex. Const. art. XVI, § 59(a).

Id. at 4.

Taken together, the 1980 Harris County Water Control and Improvement District case and the 1981 attorney general's opinion teach that the provision of facilities for recreation and pleasure is not among the constitutional purposes for which water districts may levy and expend ad valorem taxes, but that the provision of recreational facilities may be considered a proper secondary activity for a district if furnishing them promotes a constitutional purpose.

In 1985, chapter 54 of the Water Code was amended to add subchapter I. At the same time, section 54.201(b)(7) was changed by adding the words, "subject to subchapter I of this chapter" to the provision that authorized municipal utility districts to provide parks and recreational facilities. Section 54.501 was amended to delete any legislative authority for municipal utility districts to issue bonds for the purpose of providing parks and recreational facilities. See Acts 1985, 69th Leg., ch. 100, at 538.

Section 54.771(a)(2) of the new subchapter I provisions declares it to be the policy of the state "to encourage the people in municipal utility districts to provide parks and recreational facilities for their use and benefit." Id.; Parks & Wild. Code § 25.001 et seq. Section 54.773 states that in addition to the other purposes for which a district is created, a district is created for the purpose of developing and maintaining recreational facilities. It also states that a district is "authorized to accomplish this purpose as provided in this subchapter."

In apparent anticipation of constitutional challenge, subsections (a)(3), (a)(4), (a)(5), and subsection (b), of section 54.771, subchapter I, assert:

(a) The legislature finds that:

. . . .

(3) within constitutional limitations, the power to enact laws vested in the legislature by Article III, Section 1, of the Texas Constitution is supreme;

(4) there is no constitutional inhibition that would prohibit the legislature from authorizing municipal utility districts to acquire, own, develop, construct, improve, manage, operate, and maintain parks and recreational facilities; and

(5) the general legislative power is adequate to support the enactment of this subchapter . . . without reference to any specific constitutional authorization.

(b) This subchapter is cumulative of other laws governing municipal utility districts and is not limited by a provision of any other law. This subchapter provides complete authority to a municipal utility district to develop and maintain recreational facilities. (Emphasis added.)

The legislature cannot overturn by declaration or enactment a construction of the constitution previously pronounced by the supreme court. Milam County v. Bateman, 54 Tex. 153 (1880); see also Langever v. Miller, 76 S.W.2d 1025 (Tex. 1934); 67 Tex. Jur. 3d Statutes § 156 at 789.

Prior to the enactment of the subchapter I "parks and recreation" provisions respecting municipal utility districts, the Texas Supreme Court delineated the authority of the legislature to delegate power to a municipal utility district created pursuant to article XVI, section 59, of the Texas Constitution. In Deason v. Orange County Water Control & Improvement Dist. No. 1, the Texas Supreme Court had before it a legislative enactment declaring that "water control and improvement districts now existing, or hereafter to be created, may include in their purposes and plans all works, facilities, plants, equipment, and appliances in any and all manner incident to, helpful or necessary . . . to purchase, own, and operate fire-fighting equipment and appliances." In another case, Parker v. San Jacinto County Water Control & Improvement Dist., 273 S.W.2d 586 (Tex. 1954), the statute at issue delegated to a water control and improvement district the power to install a sanitary and storm sewer disposal system.

Both cases concerned the issuance of tax bonds, and in both cases the statutory provisions were attacked as unconstitutional. In the Deason case, concerning fire-fighting equipment, the court held:

Section 59(a) . . . contains no language which would support a holding that the people in enacting the amendment contemplated that a water control and improvement district created for the purpose of conserving and developing the natural resources of the district would have the power to provide fire-fighting equipment and appliances for a town within said district.

Deason at 984. In the Parker case, the court said:

Plaintiffs' attack upon the statute fails because the power to erect and operate a sewerage disposal plant is clearly within Sec. 59a, Art. 16, Texas Constitution. The water brought into the area by the district is not destroyed by use but must be returned to the hydrological cycle. The Conservation Amendment to our State Constitution would certainly permit the purification of water before it returns to the groundwater table and the river system. The protection of the purity of the waters of this State is a public right and duty under the Conservation Amendment.

Parker at 586.

The difference in the results of the two cases is explained by the observation of the Deason court that the fundamental purpose in construing a constitutional provision is to ascertain and give effect to the intent of the framers of the constitution. Although the incidental use of already-owned property belonging to a water control and improvement district for park and recreational purposes may be condoned when it aids the accomplishment of a Conservation Amendment purpose, the constitution contains no language which would support a holding that the people, in enacting article XVI, section 59, contemplated that a municipal utility district created for the purpose of conserving and developing the natural resources of the district would have the power to use taxes to provide parks and recreation facilities unrelated to the conservation and development of natural resources. Harris County Water Control and Improvement District, supra.

Information accompanying your request for an opinion indicates that the request is prompted by the wish of Spencer Road Public Utility District, a municipal utility district in Harris County,[1] "to acquire some six acres of land within its boundaries to develop and maintain a park." You have also supplied information indicating that the park would include playgrounds, volleyball and basketball courts, picnic tables and grills, and a jogging trail. In light of that information, we need not consider whether a municipal utility district could use taxes to acquire land for the limited purpose of conservation and development of the natural resources contained therein.

We are constrained to advise you that, in our opinion, a municipal utility district, operating under chapter 54 of the Texas Water Code may not use taxes to purchase real property for the independent purpose of having it used as a public park and developed recreational area, and that the language of subchapter I of chapter 54 is not to be given a reading that would contradict or overrule the construction given article XVI, section 59, of the Texas Constitution by the Supreme Court of Texas.[2]

1. The Spencer Road Public Utility District was created by Acts 1971, 62d Leg., ch. 699, at 2285.

2. Following the supreme court's holding in Deason that the constitution did not permit the legislature to delegate to municipal utility districts the power to use taxes to provide fire fighting facilities within the district, article XVI, section 59 of the constitution was amended by the people to allow it. See H.J.R. 42, Acts 1977, 65th Leg., at 3374; Acts 1979, 65th Leg., Table 2, Votes on Amendments to Constitution, at 3267. That avenue is also open, of course, with respect to parks.

SUMMARY

A municipal utility district operating under chapter 54 of the Texas Water Code may not purchase real property for the independent purpose of having it used as a public park. The language of subchapter I of chapter 54 is to be given a reading consistent with the purposes of article XVI, section 59 of the Texas Constitution.

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Bruce Youngblood
Assistant Attorney General