Can a Texas hospital district hold an election to raise the maximum tax rate set when it converted?

Plain-English summary

A small Texas hospital district had converted years earlier from one statutory scheme (chapter 282 of the Health and Safety Code) to another (chapter 286). When voters approved that conversion, they also set a maximum property tax rate of forty cents per $100 of taxable value, even though the law would have let them go as high as seventy-five cents. Later the district's board wanted to raise that ceiling toward the higher figure and asked the county attorney whether it could hold an election to do so. The Attorney General concluded it could not.

The reasoning is short. A political subdivision in Texas has no inherent power to call an election. It can hold one only where the constitution or a statute expressly grants that power. Chapter 286 spells out how to hold the original conversion or creation election that sets a maximum tax rate, but it says nothing about a later election to raise that rate. Because the legislature did not provide for such an election, the board had no authority to conduct one.

The opinion pointed out that the legislature knew how to authorize rate-change elections when it wanted to. A different statute (section 283.122) lets certain other hospital districts vote to increase their creation tax rate, and chapter 286 districts can vote to adopt or change a separate sales-and-use tax. The absence of any comparable provision for raising the chapter 286 property tax ceiling was treated as a deliberate gap, not an oversight the Attorney General could fill. The opinion noted it might agree such an election would serve the district's residents, but agreement on policy could not substitute for the missing legal authority.

Currency note

This opinion was issued in 2000. Subsequent statutory amendments, court decisions, or later Attorney General 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.

What the opinion meant for those who asked

The Chambers County Attorney who asked (what the opinion held): The opinion answered that the Chambers County Public Hospital District No. 1, governed by chapter 286, could not hold an election to raise its forty-cent maximum tax rate, because no constitutional or statutory provision authorized that kind of election.

Hospital district boards under chapter 286 (what the opinion held for them): At the time, the opinion treated the maximum rate set in a conversion or creation election as fixed by that vote. A board could levy up to that approved ceiling, but it had no statutory path to call a fresh election asking voters to raise the ceiling.

Residents and taxpayers of such a district (what the opinion held for them): The opinion meant that the tax-rate ceiling locked in at conversion was the operative limit, and the district could not return to the ballot to move it upward under chapter 286 as the law then stood.

Common questions

Could the hospital district hold an election to raise its property tax ceiling?
No. The opinion concluded that chapter 286 of the Health and Safety Code does not authorize an election to increase the maximum tax rate that voters set in the conversion election, so the board had no power to call one.

Why does it matter that a statute "expressly" authorizes an election?
The opinion explained that in Texas a political subdivision has no inherent right to hold an election. It needs an express grant of authority from the constitution or the legislature, and where that grant is missing, the election cannot be held.

The maximum allowed was seventy-five cents, but voters approved only forty. Couldn't the board just move toward seventy-five?
Not through a rate-increase election under chapter 286. The opinion treated the forty-cent figure approved at conversion as the controlling ceiling and found no statutory mechanism to raise it by a later vote.

Did the Attorney General say other districts can raise their rates by election?
The opinion noted that section 283.122 lets certain other hospital districts vote to increase their creation tax rate, and that chapter 286 districts may vote on a separate sales-and-use tax. It used those examples to show the legislature provided no equivalent property-tax-increase election for chapter 286 districts.

Background and statutory framework

A county with a population of 75,000 or less can create a hospital district under chapter 282 of the Health and Safety Code if a majority of qualified voters approve (§§ 282.002, .003). Such a district may then convert into a district operating under article IX, section 9 of the Texas Constitution and chapter 286, again by voter approval (§§ 282.121, .122, .127(a)). The conversion ballot must state a maximum annual tax rate "not to exceed 75 cents" per $100 of valuation (§ 282.123). Once converted, the board may impose property taxes annually at a rate no higher than the maximum "approved by the voters at the election authorizing the levy of taxes" (§ 286.161(a)), and never above the seventy-five-cent constitutional and statutory cap (Tex. Const. art. IX, § 9; § 286.161(b)).

The opinion turned on the rule that a political subdivision may hold an election only with express constitutional or statutory authority, drawing on Counts v. Mitchell and earlier Attorney General opinions. Chapter 286 details how to run the creation or conversion election that fixes the maximum rate (§§ 286.023, .025, .028) but provides no procedure for a later election to raise that rate. By contrast, the legislature expressly allowed rate-increase elections elsewhere, including section 283.122 for certain other hospital districts and sales-and-use-tax elections under section 285.061. The general-versus-specific canon in Government Code § 311.026 framed the analysis, but because the district was organized under the general chapter 282 predecessor with no special enabling law, the opinion answered using general law alone.

Citations

Statutory provisions:

• Tex. Health & Safety Code Ann. §§ 282.121, .122(a), .123, .127(a) (Vernon 1992)
• Tex. Health & Safety Code Ann. §§ 282.002, .003 (Vernon 1992)
• Tex. Health & Safety Code Ann. § 283.122 (Vernon 1992)
• Tex. Health & Safety Code Ann. § 285.061 (Vernon Supp. 2000)
• Tex. Health & Safety Code Ann. § 286.161 (Vernon 1992)
• Tex. Health & Safety Code Ann. §§ 286.022(a)(6), .023(e), .026, .028, .161 (Vernon 1992 & Supp. 2000)
• Tex. Health & Safety Code Ann. § 775.0742(b) (Vernon Supp. 2000)
• Tex. Health & Safety Code Ann. § 794.0181(a) (Vernon Supp. 2000)
• Tex. Const. art. IX, § 9
• Tex. Gov't Code Ann. § 311.026 (Vernon 1998)
• Tex. Loc. Gov't Code Ann. § 326.094(a) (Vernon 1999)

Cases:

• Counts v. Mitchell, 38 S.W.2d 770, 774 (Tex. 1931)
• Ellis v. State, 383 S.W.2d 635, 636 (Tex. Civ. App.-Dallas 1964, no writ)
• Smith v. Morton Indep. Sch. Dist., 85 S.W.2d 853, 857 (Tex. Civ. App.-Amarillo 1935, writ dism'd)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/john-cornyn/jc-0247
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2000/jc0247.pdf

Original opinion text

Best-effort transcription from the official scanned PDF. Minor character-level errors from the source OCR have been corrected; the linked PDF is authoritative.

OFFICE OF THE ATTORNEY GENERAL - STATE OF TEXAS

JOHN CORNYN

July 7, 2000

The Honorable Charles S. Brack
Chambers County Attorney
P.O. Box 1200
Anahuac, Texas 77514

Opinion No. JC-0247

Re: Whether a hospital district governed by chapter 286 of the Health and Safety Code may hold an election to increase the maximum tax rate set in its conversion election (RQ-0189-JC)

Dear Mr. Brack:

A hospital district created under chapter 282 of the Health and Safety Code may convert to a hospital district governed by chapter 286 of the same code if a majority of the district's qualified voters approve a ballot proposition to convert. See TEX. HEALTH & SAFETY CODE ANN. §§ 282.121, .122(a), .123, .127(a) (Vernon 1992). The ballot proposition presents not only the conversion of a hospital district, but also the "levy of annual taxes for hospital purposes at a rate not to exceed (insert amount not to exceed 75 cents) on each $100 valuation of all taxable property in the district." Id. § 282.123. You ask whether a converted hospital district, now governed by chapter 286, that has an approved maximum tax rate of forty cents per one-hundred dollars valuation may hold an election to propose increasing the maximum tax rate. See Letter from Honorable Charles S. Brack, Chambers County Attorney, to Honorable John Cornyn, Texas Attorney General (Feb. 15, 2000) [hereinafter "Request Letter"]. Because chapter 286 does not expressly provide for such an election, the hospital district may not conduct one.

You inquire on behalf of the Chambers County Public Hospital District No. 1 (the "District"), which, you state, "was organized under" the statutory predecessor to chapter 282 of the Health and Safety Code. Request Letter, supra, at 1. In 1991 the District converted to a chapter 286 district in accordance with chapter 282, subchapter G, which allows a chapter 282 hospital district to convert to a hospital district governed by chapter 286. See TEX. HEALTH & SAFETY CODE ANN. §§ 282.121-.127 (Vernon 1992); Request Letter, supra, at 1. As required by statute, the ballot proposition proposed a maximum annual tax rate for the converted district. See TEX. HEALTH & SAFETY CODE ANN. § 282.123 (Vernon 1992); Request Letter, supra, at 1. While section 282.123 permits voters to authorize a maximum annual tax rate of up to seventy-five cents on each one-hundred dollars valuation of taxable property in the chapter 286 district, the ballot measure proposed and "the voters . . . authorized a tax rate . . . set at [forty cents] on each [one-hundred dollars] valuation of taxable property in the District." See TEX. HEALTH & SAFETY CODE ANN. § 282.123 (Vernon 1992); Request Letter, supra, at 1. Now, according to your letter, the District's Board of Directors "would like to hold an election to raise its maximum tax rate from" forty cents to seventy-five cents "as allowed by section 286.161(b)" of the Health and Safety Code. Request Letter, supra, at 1.

A hospital district's authority is limited by applicable constitutional and statutory provisions, as well as any special laws enabling a particular district. See Tex. Att'y Gen. Op. No. JC-220 (2000) at 2. A hospital district may be created by general or special law. See TEX. CONST. art. IX, § 9. Generally, the terms of a specific enabling act prevail over an incompatible general law. See TEX. GOV'T CODE ANN. § 311.026 (Vernon 1998) ("Special or Local Provision Prevails Over General"). Because you inform us that the District was "organized under" the statutory predecessor to chapter 282 of the Health and Safety Code, see id., we presume no special laws apply. We answer your question solely with reference to constitutional and applicable general law.

The commissioners court of a county with a population of 75,000 or less may create a hospital district under chapter 282 of the Health and Safety Code if a majority of qualified voters residing in the proposed district approve the district's creation. See TEX. HEALTH & SAFETY CODE ANN. §§ 282.002, .003 (Vernon 1992). A chapter 282 hospital district may be converted into a district operating under article IX, section 9 of the Texas Constitution following an election called and held to consider the conversion. See id. §§ 282.121, .122. The ballot proposition for the conversion election presents the conversion as well as a maximum tax rate:

The ballot for the election shall be printed to permit voting for or against the proposition: "The conversion of the ______ County Public Hospital District No. ___ (name of district) from a district operating under Chapter 282, Health and Safety Code, to a district operating under Article IX, Section 9, of the Texas Constitution, and the levy of annual taxes for hospital purposes at a rate not to exceed ___ (insert amount not to exceed 75 cents) on each $100 valuation of all taxable property in the district."

Id. § 282.123.

If the proposition passes, the district is governed by article IX, section 9 of the Texas Constitution and by chapter 286 of the Health and Safety Code. See id. § 282.127(a); see also Master Disposition Table (Vernon 2000) (listing disposition of former article 4494q-1, Texas Revised Civil Statutes, as various sections of chapter 286, Health & Safety Code). Article IX, section 9 of the Texas Constitution authorizes a hospital district to provide "for the levy of annual taxes at a rate not to exceed seventy-five cents . . . on the One Hundred Dollar valuation of all taxable property within such district for the purpose of meeting the requirements of the district's bonds, the indebtedness assumed by it and its maintenance and operating expenses, providing that such district shall not be created or such tax authorized unless approved by a majority of the qualified voters thereof voting at an election called for the purpose." TEX. CONST. art. IX, § 9. Section 286.161 of the Health and Safety Code authorizes the hospital district board annually to impose property taxes at a rate that does not exceed the maximum rate "approved by the voters at the election authorizing the levy of taxes." TEX. HEALTH & SAFETY CODE ANN. § 286.161(a) (Vernon 1992). Voters may not, of course, be asked to approve a tax rate higher than seventy-five cents on each one-hundred dollars valuation of the district's taxable property. See id. § 286.161(b). The district may use the taxes only to pay the district's indebtedness and maintenance and operating expenses. See id. § 286.161(c). The district may not use taxes to pay the principal or interest on revenue bonds. See id. § 286.161(d).

A political subdivision of the state may hold an election only if it has express constitutional or statutory authority to do so. See Tex. Att'y Gen. Op. No. JC-0220 (2000) at 4. "'It is basic to our chosen form of government that the people of this State have no right to vote or hold an election in the absence of some statutory or constitutional provision which provides therefor.'" Id. (quoting Tex. Att'y Gen. Op. No. C-380 (1965) at 2). Likewise, "[t]he right to hold an election cannot exist or be lawfully exercised without express grant of power by the Constitution or Legislature." Counts v. Mitchell, 38 S.W.2d 770, 774 (Tex. 1931); see also Ellis v. State, 383 S.W.2d 635, 636 (Tex. Civ. App.-Dallas 1964, no writ); Smith v. Morton Indep. Sch. Dist., 85 S.W.2d 853, 857 (Tex. Civ. App.-Amarillo 1935, writ dism'd).

Nothing in the constitution or statutes authorizes a chapter 286 hospital district to hold an election to change the maximum tax rate approved in a conversion election. Article IX, section 9 does no more than authorize a hospital district to levy annual taxes at a rate no higher than seventy-five cents per one-hundred dollars valuation on real property. See TEX. CONST. art. IX, § 9. Chapter 286 likewise does no more than provide for the setting of a maximum tax rate as part of a conversion or creation election. See TEX. HEALTH & SAFETY CODE ANN. §§ 282.123, 286.022(a)(6), .023(e), .026, .028, .161 (Vernon 1992 & Supp. 2000). While chapter 286 provides detailed instructions for the conduct of an election to create a hospital district, see, e.g., id. §§ 286.023 ("Filing of Petition; Hearing; Ordering Election"), .025 ("Notice"), .028 ("Commissioners Court Order") (Vernon 1992 & Supp. 2000), it provides no comparable instructions with respect to an election to change the maximum tax rate.

Other statutes, by contrast, expressly provide for elections to change the maximum rate of various taxes. Notably, section 283.122 of the Health and Safety Code, applicable to certain hospital districts not under chapter 286, specifically permits a district to increase "[t]he tax rate approved in the creation of the district" if the proposal is approved by a majority of the qualified voters "who vote in an election called and held for that purpose." See id. § 283.122 (Vernon 1992). In addition, a hospital district that is authorized to impose ad valorem taxes (including, we presume, a chapter 286 hospital district) may adopt a sales-and-use tax and may change the rate of the sales-and-use tax in an election called for the specific purpose. See id. § 285.061 (Vernon Supp. 2000); cf., e.g., id. § 775.0742(b) (Vernon Supp. 2000) (permitting board of emergency services district to order election to increase tax rate); id. § 794.0181(a) (Vernon Supp. 2000) (permitting board of commissioners of rural fire prevention district located in Harris County to order election to increase maximum tax rate); TEX. LOC. GOV'T CODE ANN. § 326.094(a) (Vernon 1999) (authorizing board of library district to call election to change or abolish local sales-and-use-tax rate).

We accordingly conclude that a hospital district governed by article IX, section 9 and chapter 286 of the Health and Safety Code does not have the authority to put the issue of a tax increase to the voters. Although we may agree with the statements in your letter that permitting an election to raise the maximum tax rate, not to exceed seventy-five cents, "is in the best interest" of the hospital district's residents and preserves a balance of legislative and local control, see Request Letter, supra, at 2, the fact is that neither the constitution nor chapter 286 expressly authorizes the District to hold such an election. Cf. Tex. Att'y Gen. Op. No. JM-859 (1988) at 9 (admitting that legislature may delegate to voters in hospital district authority to change tax rates). Given our conclusion, we do not answer your second question.

SUMMARY

A hospital district governed by chapter 286 of the Health and Safety Code may not hold an election to increase the maximum tax rate that the voters approved in an election to convert from a chapter 282 hospital district.

JOHN CORNYN
Attorney General of Texas

ANDY TAYLOR
First Assistant Attorney General

CLARK KENT ERVIN
Deputy Attorney General - General Counsel

ELIZABETH ROBINSON
Chair, Opinion Committee

Kymberly K. Oltrogge
Assistant Attorney General - Opinion Committee