When a Texas city withdrew from a metropolitan transit authority, did its share of the authority's unencumbered liquid assets reduce what it still owed?

Texas AG Opinion JM-1011: Transit Authority Withdrawal Obligations

Plain-English summary

Westlake Hills withdrew from the Capital Metropolitan Transit Authority in January 1988. A legislator asked whether Capital Metro's liquid assets should reduce the city's share of the authority's outstanding obligations under former article 1118x.

The statute contained two competing withdrawal schemes, sections 6F and 6G, enacted during the same legislative session. Capital Metro fell under section 6F. Section 6G(h), however, expressly subtracted a withdrawing unit's population-based share of specified unencumbered assets, while section 6F(m) did not mention that subtraction.

The Attorney General read the provisions together. A literal reading of section 6F(m) would have made a withdrawing unit responsible for the authority's entire debt plus obligations tied specifically to that unit. JM-1011 concluded that the legislature instead intended the same population-ratio method and asset credit reflected in section 6G(h).

Westlake Hills therefore was entitled to a proportional credit for unencumbered cash and other liquid assets held by Capital Metro. The credit applied against taxes collected from the city after withdrawal for payment to the authority.

That internal allocation did not reduce creditors' rights. The opinion concluded that Westlake Hills, like the other constituent units, remained liable for then-existing, constitutionally protected contractual obligations if Capital Metro failed to discharge them. Statutory formulas could divide primary payment responsibility between the city and the authority, but could not impair bondholders' contract rights.

Currency note

This opinion was issued in 1989. 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.

What the opinion meant for those affected in 1989

Westlake Hills officials and taxpayers: The city received a proportional credit for the specified unencumbered liquid assets already held by Capital Metro. That credit reduced the post-withdrawal taxes collected from the city for payment to the authority.

Capital Metro and its constituent units: Capital Metro had primary statutory responsibility for retiring obligations existing at withdrawal, but the constituent units remained exposed to protected contractual claims if the authority defaulted.

Bondholders and other authority creditors: The withdrawal calculation could not remove or diminish contract remedies without an equally effective substitute. The opinion treated creditor protection as separate from the statute's internal allocation between public obligors.

Common questions

Did Westlake Hills get credit for Capital Metro's cash and liquid investments?

Yes. The opinion concluded that the city was entitled to a population-based share of the unencumbered assets listed in section 6G(h), including cash, deposits, certificates of deposit, bonds, stocks, and other negotiable securities.

Why did section 6G matter if Capital Metro was governed by section 6F?

Both sections were added to the same statute during the same legislative session and addressed the same withdrawal problem. The opinion read them together to carry out a consistent legislative purpose.

Did the credit erase Westlake Hills's liability to bondholders?

No. The credit adjusted responsibility between the city and Capital Metro. It did not impair existing contractual claims against the authority's constituent units if Capital Metro failed to pay.

Why was a literal reading of section 6F(m) rejected?

Read alone, its second sentence appeared to charge the withdrawing unit with the full amount of the authority's first five categories of obligations, plus the amount allocated specifically to that unit. The opinion found that result inconsistent with the statute's population-ratio formula and equitable purpose.

Were other constitutional issues decided?

No. Because the opinion adopted a construction that reconciled the sections and preserved contract rights, it did not reach equal-protection, uniform-taxation, or local-law questions.

Background and statutory framework

Former article 1118x governed metropolitan transit authorities. Subsections 6F(l) and 6G(g) listed six categories used to calculate a withdrawing election unit's financial obligation. The first five concerned authority-wide obligations; the sixth concerned obligations specifically related to the withdrawing unit.

Sections 6F(m) and 6G(h) then described how the calculation operated. Section 6G(h) expressly applied a population ratio and subtracted the unit's share of specified unencumbered assets. Section 6F(m) omitted that express subtraction even though it served the same general function.

JM-1011 relied on rules requiring related provisions enacted together to be read as one law and permitting courts to supply words needed to carry out clear legislative intent. It also treated the sixth computation's “necessary and appropriate” standard as requiring a reasonable allocation that accounted for assets the withdrawing unit had already helped contribute.

The Contracts Clauses in the United States and Texas constitutions remained an independent limit. A statute could redistribute primary responsibility among public obligors but could not withdraw creditors' remedies or security without an equally effective substitute.

Citations

Constitution and statute:

• Former article 1118x, V.T.C.S., sections 6F and 6G
• U.S. Constitution article I, section 10, clause 1
• Texas Constitution article I, section 16

Selected cases:

• Bryant v. Metropolitan Transit Auth., 722 S.W.2d 738 (Tex. App. - Houston [14th Dist.] 1986, no writ)
• City of Humble v. Metropolitan Transit Auth., 636 S.W.2d 484 (Tex. App. - Austin 1982, writ ref'd n.r.e.)
• Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528 (1985)
• Rodriquez v. VIA Metro. Transit System, 802 F.2d 126 (5th Cir. 1986)
• Morris & Cummings v. State ex rel. Gussett, 62 Tex. 728, 743 (1884)
• City of Aransas Pass v. Keeling, 247 S.W. 818 (Tex. 1923)
• Bexar County Hosp. Dist. v. Crosby, 327 S.W.2d 445 (Tex. 1959)
• Wheeler v. City of Brownsville, 220 S.W.2d 457 (Tex. 1949)
• Short v. W.T. Carter & Brother, 126 S.W.2d 953 (Tex. 1938)
• Morrison v. Chan, 699 S.W.2d 205 (Tex. 1985)
• Citizens Bank of Bryan v. First State Bank, 580 S.W.2d 344 (Tex. 1979)
• Sweeny Hosp. Dist. v. Carr, 378 S.W.2d 40 (Tex. 1964)
• Trimmier v. Carlton, 296 S.W. 1070 (Tex. 1927)
• Frost v. Frost, 695 S.W.2d 279 (Tex. App. - San Antonio 1985, no writ)
• Cass v. State, 61 S.W.2d 500, 504 (Tex. Crim. App. 1933)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1011
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1989/jm1011.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Obvious character-level OCR errors have been corrected where verified against the page images; minor errors may remain. The linked PDF is authoritative.

THE ATTORNEY GENERAL
OF TEXAS

January 25, 1989
JIM MATTOX
ATTORNEY GENERAL

Honorable Terral Smith Opinion No. JM-1011
Chairman

Natural Resources Committee Re: Computation of the out-
Texas House of Representatives standing obligations of a
P. O. Box 2910 metropolitan transit autho-
Austin, Texas 78769 rity when an election unit

withdraws from the author-
ity, and related matters
(RQ-1559)

Dear Representative Smith:

You have requested our opinion concerning a dispute
between the City of Westlake Hills and the Capital Metro-
politan Transit Authority (Capitol Metro), an authority
created under article 1118x, V.T.C.S. Until early in 1988,
the City of Westlake Hills constituted a "unit of election"
that, together with others (the principal one of which was
the City of Austin), comprised the authority. See V.T.C.S.
art. 1118x, § 5(f). On January 16, 1988, pursuant to
statutory leave, Westlake Hills withdrew from the authority.

When a unit of election withdraws from an article 1118x
metropolitan transit authority, the statute requires a
determination of the outstanding obligations of the authori-
ty as of the time of withdrawal. See V.T.C.S. art. 1118x,
§§ 6F, 6G. Specifically, you ask:

Should the liquid assets of a Metropolitan
Transit Authority be deducted from the amount
of bonded indebtedness to determine the
amount of debt as required by HB 943[?]

Article 1118x is a complex statute that governs the
creation and dissolution of metropolitan rapid transit
authorities. It has been judicially construed on very few
occasions. See Bryant v. Metropolitan Transit Auth., 722
S.W.2d 738 (Tex. App. - Houston [14th Dist.] 1986, no writ);
City of Humble v. Metropolitan Transit Auth., 636 S.W.2d 484
(Tex. App. - Austin 1982, writ ref’d n.r.e.). See also
Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528,

reh’q denied, 471 U.S. 1049 (1985); Rodriquez v. VIA Metro.
Transit System, 802 F.2d 126 (5th Cir. 1986).

The answer to your question is complicated because the
statute has two different sections, 6F and 6G, that purport
to control the withdrawal of units of election from metro-
politan transit authorities and the determination of an
authority’s obligations at the time. Both the sections were
added to article 1118x during the regular session of the
70th Legislature.1 Acts 1987, 70th Leg., ch. 790, at 2774;
Acts 1987, 70th Leg., ch. 804, at 2796. The operative part
of section 6G, for our purposes, is composed of subsections
6G(g) and 6G(h). The comparable parts of section 6F are
subsections 6F(l) and 6F(m).

A study of the parallel subsections reveals that two of
them are exactly alike, word for word. Both subsection
6F(l) and subsection 6G(g) read:

The withdrawal of a unit of election under
this section is subject to the requirements
of the federal and state constitutions pro-
hibiting the impairment of contracts. Taxes
shall continue to be collected in the unit of
election until an amount of taxes equal to

1. Another provision of article 1118x purporting to
   deal with withdrawals, section 6D, is obsolete because it
   authorizes withdrawals only pursuant to elections held "on
   any date from April 1, 1980, to September 1, 1980." Both
   sections 6F and 6G were added to article 1118x during the
   regular session of the 70th Legislature in 1987, but by
   different acts, neither of which expressly referred to the
   other. Section 6F was added as part of a bill (H.B. 943)
   finally passed on May 22, 1987, that was expressly made
   effective September 1, 1987. See Acts 1987, 70th Leg., ch.
   790, at 2774. The bill (H.B. 2008) containing the other
   withdrawal provision, section 6G, was finally passed on June
   1, 1987. It was passed later than the other bill but became
   effective August 31, 1987, one day before the other one took
   effect. See Acts 1987, 70th Leg., ch. 804, at 2796. Both
   statutory provisions generally speak of "obligations" rather
   than "debt" and, thus, include obligations not classified as
   "debt" for purposes of constitutional restrictions regarding
   the assumption of debt. Cf. Tex. Const. art. III, § 49;
   art. XI, §§ 5, 7; McNeill v. City of Waco, 33 S.W. 322 (Tex.
   1895).

the total financial obligations of the unit
of election to the authority has been col-
lected. To determine the amount of the total
financial obligations of the unit of elec-
tion, the board shall compute, as of the date
of withdrawal, the total of:

(1) the current obligations of the
authority authorized in the current budget
and contracted for by the authority;

(2) the amount of contractual obligations
outstanding at that time for capital or other
expenditures in the current or subsequent
years, the payment of which has not been made
or provided for from the proceeds of notes,
bonds, or other obligations;

(3) all amounts due and to become due in
the current and subsequent years on all
notes, bonds, or other securities or obliga-
tions for debt issued by the authority and
outstanding;

(4) the amount required by the authority
to be reserved for all years to comply with
financial covenants made with lenders, bond
or note holders, or other creditors or con-
tractors;

(5) any additional amount, which may
include an amount for contingent liabilities,
determined by the board to be the amount
necessary for the full and timely payment of
the current and continuing obligations of the
authority, to avoid a default or impairment
of those obligations; and

(6) any additional amount determined by
the board to be necessary and appropriate to
allocate to the unit of election because of
current and continuing financial obligations
of the authority that relate specifically to
the unit of election. (Emphasis added.)

It is important to realize that the six items of
computation are used to determine the obligation of the
withdrawing unit of election to the authority, and not the
continuing obligation of the withdrawing unit to the credi-
tors of the authority imposed by constitutional "contract"

clauses. The first five items of computation may be of aid
in illuminating the continuing financial exposure of both
the authority and the withdrawing unit to creditors of the
authority, but statutory provisions cannot control constitu-
tional requirements.

That is why the distinction is important. The statu-
tory provisions control the division of primary responsibi-
lity between the withdrawing city and the continuing transit
authority for the discharge of transit authority obligations
existing at the time of the withdrawal, but those provisions
do not purport to (and do not) control the actual liability
of either the city or the authority for the discharge of
such obligations. The liability of all components of the
authority is fixed by the contractual terms under which the
indebtedness was undertaken at the time, and subsequent
internal arrangements by component units for payment do not
affect their common obligation to pay constitutionally
protected third-parties in full if the transit authority

does not do so. Constitutionally-imposed liability pro-
tecting the obligation of contracts exists entirely apart
from statutory formulas attempting to define it. U.S.
Const. art. I, § 10, cl. 1; Tex. Const. art. I, § 16. See

Morris & Cummings v. State ex rel. Gussett, 62 Tex. 728, 743
(1884); Burns v. Dilley County Line Indep. School Dist., 295
S.W. 1091 (Tex. Comm’n App. 1927, judgmt. adopted); Attorney
General Opinions JM-605, JM-453 (1986). Cf. Cardenas v.
State, 683 S.W.2d 128 (Tex. App. - San Antonio 1984, no
writ).2

2. Neither subsection 6F(m) nor subsection 6G(h)
   expressly relieve a withdrawing unit of any part of the
   unretired contractual obligations of the transit authority
   in the "obligation of contract" sense. The withdrawing unit
   will remain liable to authority creditors if the authority
   defaults -- even after "an amount of taxes equal to the
   [statutorily defined] total financial obligations of the
   [withdrawing] unit" has been previously collected from the
   withdrawn unit. See City of Austin v. Cahill, 88 S.W. 542,
   reh’q denied, 89 S.W. 552 (Tex. 1905). That is particularly
   the case regarding obligations incurred before sections 6F
   and 6G were added to the statute. It could be argued that
   contractual obligations undertaken by the transit authority
   after sections 6F and 6G were added to the statute
   incorporated the new statutory provisions so as to limit the
   claims of those creditors against withdrawing units

(Footnote Continued)

The sixth item of computation is clearly of a different
sort than the first five. The first five measure obliga-
tions shared alike by all the units of election composing
the authority. The sixth concerns an amount to be "allocat-
ed" to the withdrawing unit alone.

Although the legislature cannot constitutionally with-
draw from creditors of the transit authority their contrac-
tual remedies for default (or curtail their security) with-
out substituting something of equal efficacy and value, see
City of Aransas Pass v. Keeling, 247 S.W. 818 (Tex. 1923),
the legislature can require, as between the public obligors,
a balancing of equities and an adjustment of primary respon-

sibility for the discharge of their joint obligations. See
Bexar County Hosp. Dist. v. Crosby, 327 S.W.2d 445 (Tex.
1959).

Just as private joint debtors may agree among them-
selves that one will individually pay their joint obliga-
tion for the benefit of both -- without such an agreement
affecting the right and opportunity of the creditor to
proceed against both debtors if the debt is not satisfied --
the legislature, in adjusting the relationship between the
authority and the withdrawing unit, can require that the
transit authority will be primarily responsible for satis-
fying the joint outstanding obligations once the withdrawing
unit has contributed a certain amount toward that end. In
arriving at the amount which the withdrawing unit must
contribute, the legislature may consider both the obliga-
tions of the authority that relate specifically to the
withdrawing unit and the unencumbered assets available to
the authority for use in discharging obligations. Cf.
Board of Managers v. Pension Bd., 449 S.W.2d 33 (Tex. 1969);
Wheeler v. City of Brownsville, 220 S.W.2d 457 (Tex. 1949)
(obligation to pay tax by reason of legislative adjustment
of equities). Such an internal adjustment between joint
debtors does not affect the rights of creditors. They may
still pursue -- against both debtors -- all remedies they
had before, so no impairment of the obligation of contract
occurs.

(Footnote Continued)

accordingly. See Cochran County v. Mann, 172 S.W.2d 689
(Tex. 1943). However, the statute itself makes no such

distinction between "obligations." We need not decide this
question here.

None of the six items mentions "liquid assets," al-
though the second item speaks of outstanding contractual
obligations "the payment of which has not been made or
provided for from the proceeds of notes, bonds, or other
obligations." This provision requires only that the compu-
tation of outstanding contractual obligations be reduced by
those funds committed to the payment of those obligations
("made or provided for from the proceeds"). It does not
require that unencumbered liquid assets possessed by the
authority be deducted from the liability of the withdrawing
unit to the authority.3

However, the six provisions of subsections 6F(l) and
6G(g) set out above establish only the items to be consid-
ered in computing the "total financial obligations of the
unit of election" to the authority. The manner in which the
computations are to be employed is controlled by subsections
6F(m) and 6G(h). Unlike the 6F(l) and 6G(g) subsections,

3. "Liquid assets" consist of cash, or assets
   immediately convertible to cash. Black’s Law Dictionary, at
   838 (5th ed. 1979). Prior to the withdrawal of a unit of
   election from an authority, creditors of the authority have
   a call upon the assets of the authority and sources of
   revenue contractually committed to satisfy their claims.
   The existence of other assets not so encumbered does not
   serve to release encumbered assets from any part of the
   claims against them. The later-discussed provision at
   issue in section 6G(h) would be constitutionally objection-
   able if read as an attempt to limit the liability of a

withdrawing unit -- so far as authority creditors are
concerned -- to an amount less than the total outstanding
amount of the financial obligations of the authority. The

prohibition against impairing the obligation of contracts is
not absolute, but, to avoid constitutional invalidity, a
statute that withdraws or substantially diminishes the con-
tractual security of holders of bonds or other obligations
issued by public bodies must substantially substitute an
equally effective remedy for that taken away. City of
Aransas Pass v. Keeling, supra. The statute makes no
attempt to substitute a new source of payment for the value
of "unencumbered" liquid assets that might be deducted from
the share of "obligations" to be assumed by a withdrawing
unit of election. Cf. Dallas County Levee Improvement Dist.
No. 6 v. Rugel, 36 S.W.2d 188 (Tex. Comm’n. App. 1931,
judgmt. adopted).

subsections 6F(m) and 6G(h) are not identical, although the
match is very good.

Subsections 6F(m) and 6G(h) are each composed of five
sentences. The final three sentences of each subsection are
exactly the same, and the only difference in the first
sentence of each one is the alphabetical designation of the
preceding subsection to which it refers. The important
difference is in the second sentence. The second sentence
of subsection 6F(m) reads:

The unit of election’s total financial
obligation is the sum of the first five
computations required by Subsection (l) of
this section plus the amount allocated
directly to the unit of election under the

last computation required by Subsection (l)
of this section.4

Comparison shows that subsection (h) of section 6G is
word-for-word the same as subsection (m) of section 6F
except in the passages underscored below -- most notably in
the second sentence. Subsection 6G(h) reads:

The unit of election’s share of the financial
obligations of the authority under the first
five computations required by Subsection (g)
of this section shall be in the same ratio
that the population of the unit of election
has to the total population of the authority,
according to the most recent and available
population data of an agency of the federal
government, as determined by the board. The
unit of election’s total financial obligation
is its share of the first five computations
required by Subsection (g) of this section
plus the amount allocated directly to the
unit of election under the last computation
required by Subsection (g) of this section

4. Although the form is somewhat different, the
   language of subsections 6F(l) and 6F(m) of article 1118x,
   V.T.C.S., is the same as that found in subsection 9A(j) of
   article 1118y, V.T.C.S., which controls the withdrawal of a
   unit of election from a regional transportation authority.
   The provision was added to article 1118y in 1985. Acts
   1985, 69th Leg., ch. 101, at 541.

and less the unit of election’s share of the
total amount of the unencumbered assets of
the authority that consist of cash, cash de-
posits, certificates of deposit, and bonds,
stocks, and other negotiable securities. The
unit of election’s share of those assets is
determined according to population in the
same manner as provided for determining the
unit of election’s share of the first five
computations required by Subsection (g). The

board shall certify to the governing body of
the unit of election and to the comptroller
of public accounts the amount of the total
financial obligation of the unit of election.
The comptroller of public accounts shall
continue to collect taxes in the unit of
election until an aggregate amount equal to
the total financial obligation of the unit of
election has been collected and actually paid
to the authority. After that amount has been
collected, the comptroller of public accounts
shall discontinue collecting in the unit of
election the taxes imposed under this Act.
(Emphasis added.)

It is readily apparent that subsection 6G(h) expressly
requires that certain unencumbered liquid assets be consid-
ered in applying the preceding calculations while subsection
6F(m) does not. On the surface, the language of subsection
6G(h) appears to be substantially more generous to withdraw-
ing units than the language of subsection 6F(m), but we have
concluded that the express provisions of section 6G(h) are
implicitly contained in subsection 6F(m), and that your
question should be answered in the subsection 6G(h) context.

That conclusion is important to the resolution of your
question because Capital Metro falls under section 6F, not
section 6G. Subsection 6G(a) declares that section 6G
applies "only" to an authority created before January 1,
1980, with a principal city having a population less than
1,200,000. Austin has a population of less than 1,200,000,
but the rapid transit authority at issue was not created
before January 1, 1980. See City of Austin Ordinance
83-1013U, October 13, 1983; Capital Metropolitan Transit
Authority Resolution No. CMTA-85-0126-10, January 28, 1985.
Section 6F(a) states, on the other hand, that section 6F
applies "only" to authorities in which the principal city
has a population of less than 750,000 and in which the rate
of sales and use tax is one percent. Capital Metro meets
each such criterion. See Capital Metropolitan Transit

Authority Resolution No. CMTA-84-1119-04, November 19,
1984.

Sections 6F and 6G are parts of the same statute, added
at the same session of the legislature. When different
sections of a statute are added during the same session by
different acts, they are to be read together as if embodied
in a single act. Shaddix v. Kendrick, 430 S.W.2d 461 (Tex.
1968); Shults v. State, 696 S.W.2d 126 (Tex. App. - Dallas
1985, writ ref’d n.r.e.). The subsection 6F(m) language must
be read in context with subsection 6G(h), and if its literal
meaning, when read alone, does not comport with the evident
underlying purpose of the complete statute, it will not be
construed literally. See Short v. W.T. Carter & Brother,

5. Because we have concluded that other passages
   clearly indicate that the legislature intended no difference
   in the manner in which the obligations of a withdrawing unit
   are determined, we need not explore all the implications of
   subsection 6F(c), which reads:

A unit of election may withdraw from an
authority created under this Act only in
accordance with this section. An attempt to
withdraw from an authority in a manner other
than that provided by this section is void.
(Emphasis added.)

Section 6F(c) introduces ambiguity because in referring to
"an authority created under this Act," it obviously refers
to article 1118x in its entirety. (The legislation that
amended article 1118x to add section 6F did not itself
create or authorize the creation of any rapid transit
authorities.) See Acts 1987, 70th Leg., ch. 790, at 2774;
2A N.J. Singer, Sutherland Statutory Construction § 22.35 at
296 (C. Sands 4th ed. 1985) (phrase "this act" in amended
section generally refers to whole act). It is equally
obvious that transit authorities governed by the section 6G
withdrawal provisions were created "under this Act" (i.e.,
article 1118x, V.T.C.S.). Under the literal language of
section 6F(c), units of election comprising section 6G
authorities may withdraw only in accordance with section 6F.
According to that section, an attempt to do so in any other
manner is void. It may be argued, of course, that
subsection 6G(a), enacted later than 6F(c), impliedly
repealed the indicated portion of 6F(c). See note 1, supra.
The conclusion we reach remedies the matter, in any event.

126 S.W.2d 953 (Tex. 1938). See also State v. Estate of
Loomis, 553 S.W.2d 166 (Tex. Civ. App. - Tyler 1977, writ

ref’d).

The primary objective in the interpretation of statutes
is to ascertain the intent of the legislature and, to do
that, courts look to an act as a whole and not to its
isolated provisions. Morrison v. Chan, 699 S.W.2d 205 (Tex.
1985). Once legislative intent is determined from a general
view of the enactment as a whole, the statute should be
construed so as to give effect to the purpose of the legis-
lature. Citizens Bank of Bryan v. First State Bank, 580
S.W.2d 344 (Tex. 1979). The statute is to be construed with
reference to its manifest object, and if it is susceptible
to one of two constructions -- one of which will carry out
and the other defeat the manifest object -- it should
receive the construction that carries out the legislative
intent. Id. at 345. With those principles in mind, we
examine the statutory provisions.

Notwithstanding the additional words in the 6G(h)
subsection, the purposes of both subsection 6F(m) and
subsection 6G(h) are apparently identical, i.e., to deter-
mine (using an identical population-ratio formula) "the
total amount of the financial obligations of the [with-
drawing] unit" as a percentage of the total financial ob-
ligations of the authority of which it has been a part --
equitably adjusting the financial responsibility of one to
another. There are no grounds for supposing, so far as we
can ascertain, that the legislature meant to impose an
inequitable adjustment of financial responsibilities upon
any participant, or any group of participants, composing any
metropolitan transit authority.

6. Section 6F(b) of article 1118x, V.T.C.S., allows
   the withdrawal of any "unit of election," including a
   "principal city." Section 6G(c), on the other hand, states:
   "In addition to any other manner provided by law, a unit of
   election other than a principal city may withdraw from an
   authority as provided by this section." (Emphasis added.)
   We do not believe this difference is intended to justify
   different treatment of withdrawing units. Some units of
   election, i.e., those participating in authorities created
   before January 1, 1980, with a principal city of less than
   750,000 people and with a one percent sales and use tax
   rate, could fall under the terms of both section 6F and
   section 6G.

When the second sentence of subsection 6F(m) is read
alone, without the advantage of the subsection 6G(h) text
for comparison, something is obviously missing; it obviously
does not correctly state the true legislative intention
because it states that the withdrawing unit’s "total finan-
cial obligation" is "the sum of [not its share of] the first
five computations . . . plus the amount allocated directly
to the unit . . . under the last computation." If the
second sentence of subsection 6F(m) were applied literally,
the withdrawing unit would be responsible to the authority
for the entire indebtedness of the authority plus a double
liability for any indebtedness relating specifically to the
unit.

It seems plain that the legislature intended the "total
financial obligations" of a subsection 6F(m) unit of elec-
tion, for the purpose of adjusting equities, to be its share
of the first five computations, as clarified by subsection
6G(h), rather than the total amount owed by the entire
authority, as the 6F(m) subsection literally reads. Cf.

Sweeny Hosp. Dist. v. Carr, 378 S.W.2d 40 (Tex. 1964). It
also seems plain to us that when subsection 6F(m) speaks
only of "the amount allocated directly to the unit of
election under the last [sixth] computation," its literal
language must be expanded if the underlying legislative
purpose is to be fully expressed -- a purpose clarified by
subsection 6G(h). Additional words are needed. Texas
courts will add words or phrases to statutes when it is
necessary to effect the legislative intent. See Sweeny

Hosp. Dist. v. Carr, supra; Trimmier v. Carlton, 296 S.W.
1070 (Tex. 1927).

In Trimmier v. Carlton, supra, the Texas Supreme Court
considered two statutes that were enacted as parts of one
act dealing with the creation of conservation and reclama-
tion districts. One statute expressly authorized the

consideration of certain factors by a commissioners court:

authorizing the creation of such a district, but the other,
which involved districts authorized by a state agency, did
not. The court said:

The language used with reference to the
duties of the commissioners’ court in the
creation of a one county district, and that
with reference to the duties of the board of
water engineers where the district lies in
more than one county, is not precisely the
same, but we think the meaning is the same in
each instance. Clearly the purpose of each
method of organization is the same -- that

is, to authorize the creation of a public
corporation, each of which is to have and
exercise precisely the same power and perform
the same functions.

. . . .

These articles of the statute are not only
in pari materia, but they are part of one and
the same act, having the same purpose, and
must, of course, be construed together in the
light of the general object of the law. . . .
Where the Legislature has provided a system
for the government of any subject, it is the
duty of the court to effectuate that inten-
tion by such a construction as will make the
system consistent in all its parts and
uniform in its operation. ‘When the Legisla-
ture has clearly laid down the rule for one
class of cases it is not readily to be
supposed that in its choice of words and
phrases, or in the enactment of various
provisions in the same act, it has prescribed
a different rule for another class of cases
within the same reason as the first.’ 25
R.C.L. p. 1024, § 259.

Applying the above rule, it is clear that
we ought to say, as we do say, that the
general, but comprehensive, language of
article 5107--80 (Vernon’s Supplement 1922)
has the same purpose and meaning as articles
5107--2, 5107--3 (Vernon’s 1918 Supplement),
and since the latter expressly authorizes the
commissioners’ courts to determine whether or

not the creation of a one county district

would be ‘a benefit to the lands included in
the district,’ the former in the use of the
statutory words intended to and did authorize
the board of water engineers to determine
whether or not the creation of a district
through them ‘would be a benefit to the lands
included in the district.’

296 S.W. at 1078.

Here, the sixth item in the computation of the "total
financial obligations of the unit of election" is

any additional amount determined by the board
to be necessary and appropriate to allocate
to the unit of election because of current
and continuing financial obligations of the
authority that relate specifically to the
unit of election. (Emphasis added.)

The statutory requirement that the amount determined by
the board be appropriate, as well as necessary, is a re-
quirement that any amount allocated to the withdrawing unit
be reasonable. See Frost v. Frost, 695 S.W.2d 279 (Tex.
App. - San Antonio 1985, no writ) ("appropriate" synonymous
with "reasonable"). The explicit terms of subsection 6G(h)
are implicit in subsection 6F(m) because the sixth item of
computation is designed to adjust the equities of the
situation on an appropriate basis -- an adjustment which, to
be reasonable and appropriate, must also take into account,
as subsection 6G(h) does, assets of the authority already
contributed by the unit of election that are available to
retire the joint obligations of the two entities. Cf.
Hirshfield v. Davis, 43 Tex. 155, 161 (1875); Cass v. State,
61 S.W.2d 500, 504 (Tex. Crim. App. 1933) ("reasonable,"
"fair," "honest," "impartial," and "equitable" equated).

In our opinion, the express requirement of subsection
6G(h) that there be subtracted from the computation of the
"amount of the total financial obligations" of the authority

the total amount of the unencumbered assets
of the authority that consist of cash, cash
deposits, certificates of deposit, and bonds,
stocks, and other negotiable securities

for purposes of determining the financial obligations for
which the withdrawing unit will remain responsible to the
authority, merely clarifies, but does not enlarge, the
subsection 6F(m) provision. Trimmier v. Carlton, supra.

Inasmuch as the situations of withdrawing units of
election under both section 6F and section 6G, and of the
authorities, are the same whether the authority is one
created before January 1, 1980, or later, and inasmuch as
their joint outstanding contractual obligations are based
upon identical items of computation without regard to when
the authority was created, the equitable considerations in
one case are the same as in the other. In our opinion, the
explicit language of subsection 6G(h) is implicit in sub-
section 6F(m).

In keeping with our understanding of the intent of the
legislature, we therefore advise that the City of Westlake
Hills, upon its withdrawal from the Capitol Metro transit
authority, was entitled to a proportional credit for cash
and other unencumbered liquid assets (specified by statute)
that remained in the hands of Capitol Metro, the credit to
be applied against the amount of taxes to be thereafter
collected from Westlake Hills for payment to Capitol Metro.
Statutory responsibility for the retirement of Capitol Metro
obligations existing at the time of the Westlake Hills
withdrawal rests with Capitol Metro, but Westlake Hills (in
common with all constituent units of the transit authority)
remains liable for the total amount of any then-existing,
constitutionally protected contractual obligations.

Because of the construction we give the statute, we
need not engage in the discussion of equal protection
issues, equal and uniform taxation issues, or local or spe-
cial law issues that a different construction would require.
Cf. U.S. Const. amend. XIV, § 1; Tex. Const. art. I, § 3;

art. III, § 56; Wheeler v. City of Brownsville, supra; City
of Humble v. Metropolitan Transit Auth., supra.
SUMMARY

Upon its withdrawal from the Capitol
Metro transit authority, the City of Westlake
Hills became entitled to a credit for unen-
cumbered liquid assets held by Capitol Metro,
the credit to be applied against the taxes to
be collected from the city thereafter for
payment to Capitol Metro. In common with the
other constituent units of the transit
authority, Westlake Hills remains liable for
certain (then-existing) Capitol Metro con-
tractual obligations if Capitol Metro fails
to properly discharge them. Constitutional
protection of contractual obligations
prevents the statute from operating to
relieve the withdrawing city of obligations
to bondholders.

Very truly yours,

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Bruce Youngblood
Assistant Attorney General