Which groundwater district could tax severed mineral interests when surface owners annexed their land into a neighboring district?

Surface-owner annexation did not move separately owned mineral interests

Plain-English summary

The Legislature created the Santa Rita Underground Water Conservation District in Reagan County and allowed certain landowners to petition for annexation into the neighboring Glasscock County Underground Water Conservation District. Some surface owners who obtained annexation did not own all mineral rights beneath their land.

The Attorney General concluded that an annexation petition filed by a surface owner moved only that owner's property interest. It did not move a severed mineral estate owned by someone else. The separately owned mineral interest remained within the Santa Rita district and remained taxable there.

Water Code section 51.714 allowed an owner of land to petition a contiguous district to annex the owner's land. The opinion read owner and owner's land as limiting the petition to the estate or interest actually held by the petitioner. The special legislation's section 14 used the same owner-specific structure.

A severed mineral interest could move to the Glasscock County district if the mineral owner filed and obtained approval of a separate section 51.714 annexation petition. The opinion also allowed for an appropriate annexation petition after the mineral owner's interest had first been excluded from Santa Rita under section 14(b).

The result followed the rule that property was taxable only within the taxing unit where it was situated. Severed surface and mineral estates were separately owned interests, so annexing one owner's surface estate did not change the situs of another owner's mineral estate.

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, deadline, or remedy mentioned here.

What the opinion said for affected groups in 1990

Surface landowners

A surface owner's annexation petition moved the surface interest that owner held. It did not carry separately owned mineral rights into the new district.

Severed mineral-interest owners

A mineral owner retained a separate interest in land. Unless that owner separately petitioned for and obtained annexation, the mineral estate stayed in the original district.

Santa Rita district

Santa Rita retained authority to tax severed mineral interests that had not been annexed by their owners, even when the corresponding surface estates had moved to Glasscock County.

Glasscock County district

Glasscock County could tax a severed mineral interest only after the mineral owner completed the applicable annexation process for that interest.

Appraisal and tax officials

The opinion tied taxing authority to district boundaries and the location of each separately owned property interest. Surface and mineral estates could therefore be taxed by different districts.

Common questions

Did a surface owner's petition annex every property right beneath the tract?

No. The opinion read the petition as covering only the petitioning owner's estate or interest.

Which district taxed a mineral estate that had not been separately annexed?

The Santa Rita district, because the mineral interest remained within Santa Rita's boundaries.

Could a mineral owner move the mineral estate into Glasscock County?

Yes. The opinion said the owner could file a section 51.714 petition for that interest, or use an appropriate annexation petition after an approved section 14(b) exclusion.

Why did surface and mineral interests receive separate treatment?

Texas property law treated a severed mineral estate as a separately owned interest in land. The statutory references to the owner and the owner's land did not authorize one owner to move another owner's property.

Did the opinion say that land always means every estate in a tract?

No. It acknowledged that land can broadly include all estates, but said statutory context can use the term more narrowly. Here, the owner-specific petition language limited the transfer to the petitioner's own interest.

Background and legal framework

Article VIII, section 11 of the Texas Constitution and Tax Code section 21.01 placed property-tax authority where the property was situated. Water Code provisions governing district annexation and exclusion determined which district contained a particular interest.

Section 51.714 authorized a landowner to petition a contiguous district for annexation. Sections 51.716 and 51.718 addressed approval, elections, and territory. Comparable chapter 52 provisions used different terms, including landowners and territory, which the opinion contrasted with the narrower owner and owner's land language.

Section 14 of Senate Bill 1634 created a special path for certain Reagan County lands. Its text and legislative history focused on accommodating northern Reagan County farming interests, but did not authorize surface owners to transfer mineral estates they did not own.

Key citations

• Tex. Const. art. VIII, § 11
• Tax Code §§ 21.01 and 25.04
• Water Code §§ 51.714, 51.716, and 51.718
• Acts 1989, 71st Leg., ch. 653, § 14
• Harris County Drainage Dist. No. 12 v. Houston, 35 S.W.2d 118 (Tex. 1931)
• City of Corpus Christi v. Cartwright, 288 S.W.2d 836 (Tex. Civ. App. - San Antonio 1956, writ ref'd)
• Nueces County Water Control & Improvement Dist. No. 4 v. Wilson, 304 S.W.2d 281 (Tex. Civ. App. - El Paso 1957, writ ref'd n.r.e.)
• Averyt v. Grande, Inc., 717 S.W.2d 891 (Tex. 1986)
• Holloway's Unknown Heirs v. Whatley, 131 S.W.2d 89 (Tex. 1939)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1221
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1990/jm1221.pdf

Original opinion text

Best-effort transcription from a scanned PDF. The issue date was read directly from the first-page image. Obvious character-level OCR errors have been corrected where verified against the scan; minor errors may remain. The linked PDF is authoritative.

THE ATTORNEY GENERAL
OF TEXAS

JIM MATTOX September 14, 1990
ATTORNEY GENERAL

Honorable Rick Hamby Opinion No. JM-1221

District Attorney

Howard County Courthouse Re: Division of taxing au-

Big Spring, Texas 79720 thority over certain severed
mineral interests between two

Honorable Mark Edwards contiguous underground water

Reagan County Attorney conservation districts

P. O. Box 924 (RQ-1927), (RQ-1983)

Big Lake, Texas 76932
Dear Mr. Hamby and Mr. Edwards:
This opinion responds to the issues you each raise

under section 14 of Senate Bill 1634, which was enacted by
the legislature in 1989. Acts 1989, 71st Leg., ch. 653, at

2153-55. Senate Bill 1634 created the Santa Rita Under-

ground Water Conservation District [hereinafter the Santa
Rita district] in Reagan County, Texas. Section 14 of the
bill excludes certain lands from the Santa Rita district.
Your requests focus on the ad valorem taxation of the
severed mineral interests in the excluded lands that were
annexed into the Glasscock County Underground Water
Conservation District [hereinafter the Glasscock County
district].1

We understand that some of the Reagan County landowners
whose lands have been annexed into the Glasscock County
district did not own all of the mineral rights in the
annexed lands. You each ask whether the Santa Rita district
or the Glasscock County district is authorized to tax the
severed mineral interests since those interests were not

1. In 1981 the legislature created the Glasscock
   County district and provided that its boundaries were
   identical to those of Glasscock County. Acts 1981, 67th
   Leg., ch. 489, §§ 1-2, at 2104. Glasscock County is located
   immediately north of Reagan County.

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Honorable Mark Edwards

owned by the persons who filed the petitions for annexa-
tion.

Section 14(a) exempts from the district “any lands

• « « annexed into" the Glasscock County district under
  section 51.714 of the Water Code prior to June 14, 1989, the
  effective date of the act. Section 51.714 permits an “owner
  of land" to file with the Glasscock County district "a
  petition requesting that the land described by metes and
  bounds in the petition be included in the district."

Section 14(b), which establishes another means of ex-
cluding lands from the Santa Rita district, provides in part
that:

(1) Within one calendar year from the
effective date of this Act, the owner of land
who owns land with{in] a delineated critical
area? pursuant to Section 52.053, Water Code,
and whose lands are within the district may
file with the board a petition requesting
that the owner’s land be excluded from the
@Qistrict. The petition must describe the
land by legal description or by metes and
bounds or by lot and block number if there is
a recorded plat of the area to be excluded

from the district. This petition must be
signed and notarized by the owner of the
land.

(2) The board shall accept the petition
immediately and shall grant exclusion of the
land described in the petition, the only
requirement for review by the board being
that of conformity to Subdivision (1) of this
subsection. (Emphasis added.)

2. We have received correspondence indicating that
   the Santa Rita district asserts no right to tax mineral
   interests owned by the surface owners whose petitions for
   annexation were granted.

3. A “critical area" is an area designated and delin-
   eated by the Texas Water Commission as an area experiencing
   or expected to experience critical groundwater problems.
   Water Code § 52.001(14).

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Except for lands that have been excluded under either
section 14(a) or (b), the Santa Rita district includes all
territory located within Reagan County. Acts 1989, 71st
Leg., ch. 653, § 3, at 2153.

We have received correspondence indicating that some
Reagan County landowners timely filed petitions for annexa-
tion under section 51.714 of the Water Code with the
Glasscock County district and that those petitions were
granted prior to June 14, 1989. The sample petitions for
annexation that we have received refer to section 51.714 and
request the annexation of "the land described by metes and
bounds" in the exhibits attached to the petitions. The
metes and bounds descriptions neither expressly include nor
exclude minerals in or under the described land. We
understand that the sample petitions are typical of the
petitions filed under section i14(a).

We are also advised that some Reagan County landowners
timely filed petitions under section 14(b) to exclude their
lands from the Santa Rita district. We understand that
nearly all of the landowners who filed section 14(b) peti-
tions for exclusion with the Santa Rita district have also
filed petitions with the Glasscock County district for
annexation of the excluded lands.

The samples that we have received of annexation peti-
tions filed by landowners whose lands were excluded pursuant
to section 14(b) refer to section 52.521 of the Water Code,
which authorizes the owner of land contiguous to an under-
ground water district to file a petition for annexation.4

4. Section 52.521, along with the rest of subchapter K
   of chapter 52, was added to the Water Code by Senate Bill
   1212 and took effect September 1, 1989. Acts 1989, 71st
   Leg., ch. 936, § 14 at 3998, § 21, at 4001. Subchapter K
   provides for the annexation of territory to and consolida-
   tion of districts. Id. § 14, at 3998-4000. Subchapter K is
   applicable to underground water conservation districts
   created by special law. Water Code § 52.005 (subchapters D,
   J, and K applicable to special law districts). Prior to the
   passage of Senate Bill 1212, some underground water con-
   servation districts relied on the annexation provisions of
   chapter 51 of the Water Code, which covers water control
   and improvement districts. Section 51.714 is one of those

(Footnote Continued)

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The sample petitions describe the land to be annexed by
metes and bounds and neither expressly include nor exclude
minerals in or under the described land. We understand that
these samples are representative of the annexation petitions
filed with the Glasscock County district by owners of lands
excluded from the Santa Rita district pursuant to section
14(b).

On April 26, 1989, the Senate Committee on Natural
Resources conducted a public hearing during which it
received testimony on Senate Bill 1634. Two witnesses spoke
briefly in favor of the committee substitute for the bill.
No one spoke against the bill. Senator Bill Sims, the
bill’s sponsor, spoke first on behalf of the committee
substitute. His speech focused on section 14, which first
appeared in the committee substitute adopted by the Natural
Resources committee. 6 He referred to section 14 as the
agreement negotiated between the two districts that would
allow members of the farming community to annex into the
Glasscock County district. He stated that the arrangement
in section 14 had been worked out since some of the farming
community felt they could work better with the Glasscock
County district and that the Reagan County district thought
that would work well for both sides. Senator Sims made no
reference to the owners of the severed mineral interests.

(Footnote Continued)

provisions. See, e.g., Acts 1981, 67th Leg., ch. 489, § 4,
at 2104 (Glasscock County district may exercise powers
permitted by chapter 51).

5. We assume for purposes of this opinion that before
   approval of any annexation petition all applicable re-
   quirements were satisfied. See, e.g., Water Code §§ 51.716,
   52.523.

6. Sections 14(a) and 14(b) as added by the Senate
   Committee on Natural Resources are almost identical to the
   sections as enacted. On May 10, 1989, the House Committee
   on Natural Resources reported a substitute for Senate Bill
   1634 that modified section 14(b) to permit only owners of
   land within delineated critical areas to file petitions for
   exclusion. The Senate version of section 14(b) would have
   allowed any owner of land within the Santa Rita district to
   file a petition for exclusion.

n GAEL

Honorable Rick Hamby - Page 5 (JM-1221)
Honorable Mark Edwards

The next witness at the Senate hearing also did not
mention the owners of the severed mineral interests, and
only stated that section 14 was a closely negotiated
arrangement that was satisfactory to the representatives of

both districts. j on S.B. 1634 Before Senate
Comm. on Natural Resources, (April 26, 1989) (testimony of

Tom Massey). The focus in the House was also on the
settlement reached between the districts. Representative
Robert Junell referred to the division of the county between
the northern farming and the southern ranching communities
and stated that the controversy about the northern part of
the county had been settled by the parties. Public Hearing

on C.S.S.B. 1634 Before House Comm. on Natural Resources,
(May 10, 1989) (testimony of Rep. Robert A. Junell).

We are unaware of any constitutional provision restric-
ting the legislature’s choice of boundaries for conservation
districts or properties to include within such districts.
See Harris Count Drainage Dist. No. 12 v. Houston, 35
S.W.2d 118 (Tex. 1931); 36 D. Brooks, County and Special
District Law § 46.4, at 544-45; § 46.6, at 548-49 (Texas
Practice 1989) (district boundaries may overlap or coincide
with other governmental districts); Attorney General Opinion
JM-827 (1987) (holding valid a water district created
primarily to encompass a hazardous waste facility).7 Nor
has any brief submitted in conjunction with your requests
referred us to such a prohibition.

We note that section 14(a) references section 51.714
rather than section 51.718 of the Water Code. In contrast
to section 51.714, which permits a single landowner to
petition for annexation, section 51.718 authorizes two or
more landowners of a defined area of territory to petition
for annexation. A section 51.718 petition must be signed
either by a majority of the landowners in the territory or
by 50 landowners if the territory contains more than 50

7. Although the legislature possesses broad authority
   to select the boundaries of and the properties to be in-
   cluded within water districts, the legislature has delegated
   to the Texas Water Commission only circumscribed powers over
   district creation. See Attorney General Opinion JM-1115
   (1989) (while commission not authorized to create district
   excluding part of the mineral interests, district board
   could grant petition excluding such interests after district
   creation).

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Honorable Mark Edwards

landowners. Annexation of property within the territory
becomes final upon approval of a majority of the voters’ in
the territory to be annexed as well as in the annexing
district. Given the liability for district indebtedness and
taxes imposed on annexed territory, we believe that the
legislature would have referenced section 51.718 in section
14(a) if it had intended for property other than that of the
petitioning landowner to be annexed into the Glasscock
County district.8

We are unaware of any case construing either section
51.714 or 51.718 or their predecessors, articles 7880-75 and
7880-75b, V.T.C.S. See Acts 1925, 39th Leg., ch. 25, § 75,
and § 75b, as added by Acts 1929, 41st Leg., lst ¢.S., ch.
82, § 2. We think, however, that the courts would hold that
both the owners of the surface estates and the owners of the
severed mineral estates are separate landowners for purposes
of section 51.714 and 51.718. See City of Corpus Christi v.
Cartwright, 288 S.W.2d 836 (Tex. Civ. App. - San Antonio
1956, writ ref’d) (holding owners of severed mineral estates
and owners of surface estates were landowners for district
creation purposes and had to be considered in determining
the sufficiency of a petition filed under article 7880-10
{now section 51.013 of the Water Code]); see also Nueces
County Water Control & Improvement Dist. No. 4 v. Wilson,
304 S.W.2d 281 (Tex. Civ. App. - El Paso 1957, writ ref’d
n.r.e) (court has jurisdiction to review denial by water
district board of separate petitions filed under article
7880-76 [now section 51.692 of the Water Code} by owners of
surface estates and oil and gas leases to exclude their
interests in lands from the district).

Thus, we think the courts would construe section 51.714
to permit the annexation of lands only owned by the land-
owner filing the petition for annexation.? To the extent

8. Sections 52.521 and 52.525 are analogous to sec-
   tions 51.714 and 51.718. Section 52.521, as mentioned
   earlier in the text, authorizes a landowner to file a
   petition requesting that "the owner’s land be included
   within" an underground water district. Section 52.525, in
   contrast, permits two or more landowners to petition to
   include a defined area of territory.

9. If a petition is filed pursuant to section 51.714
   (Footnote Continued)

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Honorable Mark Edwards

the Glasscock County district has annexed prior to June 14,
1989, the lands owned by a landowner who filed an annexation
petition under section 51.714 in accordance with section
14(a), those lands will be taxable by the Glasscock County
district. The Santa Rita district and not the Glasscock
County district may tax the severed mineral interests in
those lands unless the owners of those severed interests
have filed a_ section 51.714 petition that was approved in
accordance with section 14(a).10

Section 14(b) reinforces our conclusion with regard to
section 14(a) and its reference to section 51.714. Sub-
division (1) of section 14(b) provides that "the owner of
land" may file "a petition requesting that the owner’s land
be excluded" and that the petition "must be signed by and

(Footnote Continued)

the district is permitted but not obligated to add the
petitioner’s lands. Water Code § 51.716. The district may
therefore refuse to add a severed mineral estate if the
owner of the estate files a petition for annexation under
section 51.714. See also Water Code § 52.523(a) (board has
discretion to grant or deny section 52.521 petitions filed
by single landowners). Since chapter 52, which governs
underground water districts, does not apply to oil and gas
wells permitted by the Texas Railroad Commission, some
districts may choose to deny such a petition. Water Code
§ 52.170(e) (nothing in chapter applies to wells permitted
by commission).

10. Article 8, section 11, of the Texas Constitution
    provides that all property shall be taxed in the county
    where situated. Texas courts have construed this provision
    in light of the common law to mean that governmental
    entities may tax only property within their jurisdiction.
    See, e.g., Great Southern Life Ins. Co. v. Austin, 243 S.W.
    778, 780 (Tex. 1922). Since we determine that the severed
    mineral interests in issue have not been excluded from the
    Santa Rita district by the action of the surface owners,
    Santa Rita possesses the requisite jurisdiction to tax
    those severed interests. See also Tax Code §§ 21.01, 25.04
    (separate estates or interests in lands are listed separa-
    tely by name of the owners and taxable if located in the
    district on January 1 of the tax year).

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Honorable Mark Edwards

notarized by the owner of the land."11 By using language
referring only to the owner of the land and the owner’s
land, the legislature has indicated its intent to authorize
certain landowners to petition for exclusion of only ‘their
property from the Santa Rita district. If the legislature
had intended the exclusion of all property rights in the
excluded lands, including those not held by the petitioning
owners, such as the severed mineral interests, we believe
the legislature would have so indicated by referring to
landowners and their territory as in sections 51.718 and
52.523 of the Water Code.

In summary, the Santa Rita district and not the Glass-
cock County district may tax the severed mineral interests
in the Reagan County lands that have been annexed into the
Glasscock County district upon approval of the annexation
petitions filed by the surface owners of those lands.
Nevertheless, the Glasscock County district and not the
Santa Rita district may tax a severed mineral interest if
the owner of the severed interest has filed either a section
51.714 petition that was approved in accordance with section
14(a) or an appropriate annexation petition that was
approved subsequent to the grant of the owner’s petition
excluding the interest from the Santa Rita district pursuant
to section 14(b).

11. Although the term "land" or "lands" as used by the
    Texas courts generally refers to all interests or estates in
    land including those held by the owners of oil and gas
    leases and other mineral estates, the context in which the
    term is used may determine whether the term is used broadly
    to refer to all rights in the land or narrowly to refer
    to only certain rights such as surface rights. See, e.g.,
    Averyt v. Grande, Inc., 717 S.W.2d 891, 893-4 (Tex. 1986);
    Holloway’s Unknown Heirs v. Whatley, 131 S.W.2d 89, 91-2
    (Tex. 1939). Our review of the legislative history and
    language of section 14 shows that the legislature intended
    to accommodate the interests of the farming community in
    northern Reagan County and accomplished this by authorizing
    any landowner holding any estate or interest in lands to act
    on his own to have his lands annexed into the Glasscock
    County district.

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SUMMARY

The Santa Rita Underground Water District
and not the Glasscock County Underground
Water District may tax the severed mineral
interests in Reagan County lands that have
been annexed into the Glasscock County
district upon approval of annexation peti-
tions filed by the owners of the surface
estates in those lands.

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

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Celeste Baker
Assistant Attorney General

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