Could a Texas general-law city add a flat monthly fee to every homeowner's and business owner's utility bill to fund its police department?

Texas AG Opinion JM-338: Flat Police-Department Fee

Plain-English summary

The Parmer County Attorney asked whether Bovina, a general-law city, could place a $6 charge on every homeowner's and business owner's monthly utility bill and use the proceeds for the police department. The request also asked whether the city could cut off utility service when someone did not pay. The opinion described the proposed assessment as "a $6 charge against all home owners and business owners in Bovina." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0338.pdf

JM-338 treated the charge as a tax because its purpose was to raise revenue rather than cover the expense of providing utility services. It stated that "any charge or fee imposed by a municipality for the purpose of raising revenue is considered a 'tax.'" Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0338.pdf

The opinion concluded that a general-law municipality had only the taxing powers granted by the Legislature or the Texas Constitution. Although Texas law authorized ad valorem taxes and several other methods, JM-338 found "no statutory authority" for the proposed flat charge. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0338.pdf

Because the city lacked authority to impose the charge, the opinion did not decide whether Bovina could discontinue utility service for nonpayment. Its closing response said, "we do not address your second question." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0338.pdf

Currency note

This opinion was issued in 1985. 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.

Common questions

Why did JM-338 call the proposed police charge a tax?

The stated purpose was to raise money for the police department, not to recover the cost of utility service. The opinion said that meant the city was acting "in its governmental capacity, not in its proprietary capacity." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0338.pdf

Could a general-law city use any taxing method it considered useful?

No. JM-338 said general-law municipalities had "no inherent power to tax" and possessed only taxing powers expressly granted by the Legislature or the Constitution. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0338.pdf

Did the opinion say cities could fund police only with property taxes?

No. It identified ad valorem taxation as the basic municipal method and noted that the Legislature had authorized "various other methods of taxation." The defect was the absence of authority for this particular flat charge. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0338.pdf

Could Bovina disconnect utilities when a customer refused to pay the police fee?

JM-338 did not answer that question. Once it found the fee unauthorized, the opinion stated that it would not reach the proposed disconnection remedy. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0338.pdf

Background and statutory framework

JM-338 distinguished a municipality's proprietary role in providing utilities from its governmental role in raising revenue. Hatten v. City of Houston was cited for the proposition that a municipality furnishing utility services acted in a proprietary capacity and had to serve customers at reasonable, nondiscriminatory rates. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0338.pdf

County of Harris v. Shepperd supplied the opinion's rule that a municipal fee intended to raise revenue was a tax. Vance v. Town of Pleasanton supplied the limit on a general-law city's taxing power: authority had to come from an express legislative or constitutional grant. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0338.pdf

The opinion cited articles 1026 and 1027 for municipal ad valorem taxation and articles 1028, 1031, and 1066c as examples of other legislatively authorized taxes. It found no comparable authority for charging every home and business the same monthly police-department fee. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0338.pdf

Citations and references

• V.T.C.S. articles 1026, 1027, 1028, 1031, and 1066c
• Hatten v. City of Houston, 373 S.W.2d 525 (Tex. Civ. App. - Houston 1963, writ ref'd n.r.e.)
• County of Harris v. Shepperd, 291 S.W.2d 721 (Tex. 1956)
• Vance v. Town of Pleasanton, 261 S.W. 457, 458 (Tex. Civ. App. - San Antonio 1924), holding approved, 277 S.W. 89 (Tex. Comm'n App. 1925, judgm't adopted)

Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0338.pdf

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0338
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1985/jm0338.pdf

Original opinion text

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

The Attorney General of Texas

August 14, 1985

Honorable Charles F. Aycock
Parmer County Attorney
P. O. Box 286
Farwell, Texas 79325

Opinion No. JM-338

Re: Whether the city of Bovina may charge home owners and business owners a flat fee for maintenance of a police department

Dear Mr. Aycock:

You ask whether the city of Bovina, a city incorporated under the general laws, may assess a $6 charge against all home owners and business owners in Bovina. The charge would appear on monthly utility bills, and the proceeds would be used to finance the city's police department. You also ask whether the city could discontinue utility services to persons who do not pay the charge.

The facts set out in your letter make clear that the $6 charge is intended to raise revenue, not to cover the expenses of providing utility services. Thus, in imposing the charge, the city is acting in its governmental capacity, not in its proprietary capacity. See Hatten v. City of Houston, 373 S.W.2d 525 (Tex. Civ. App. - Houston 1963, writ ref'd n.r.e.) (explaining that when a municipality furnishes utility services, it acts in its proprietary capacity and is obliged to serve its customers at reasonable and nondiscriminatory rates). Because any charge or fee imposed by a municipality for the purpose of raising revenue is considered a "tax," we must characterize our inquiry as whether the city of Bovina has authority to use the method of taxation you describe. County of Harris v. Shepperd, 291 S.W.2d 721 (Tex. 1956).

Municipalities functioning under the general laws have no inherent power to tax. They possess only those taxing powers that the legislature or the constitution expressly grants them. Vance v. Town of Pleasanton, 261 S.W. 457, 458 (Tex. Civ. App. - San Antonio 1924), holding approved, 277 S.W. 89 (Tex. Comm'n App. 1925, judgm't adopted). The basic method of taxation by Texas municipalities is the ad valorem tax. See V.T.C.S. arts. 1026 and 1027. The Texas Legislature has also authorized general law municipalities to use various other methods of taxation. See, e.g., V.T.C.S. arts. 1028, 1031, 1066c. We find no statutory authority, however, for the method of taxation that you describe in your letter. Thus, the $6 charge against all home owners and business owners is not a proper method for raising revenue to support the police department.

In view of our response to your first question, we do not address your second question.

SUMMARY

A general law municipality has no authority to raise revenue by charging each home owner and each business owner in Bovina a flat fee.

Very truly yours,

JIM MATTOX
Attorney General of Texas

TOM GREEN
First Assistant Attorney General

DAVID R. RICHARDS
Executive Assistant Attorney General

ROBERT GRAY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Sarah Woelk
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Rick Gilpin, Chairman
Colin Carl
Susan Garrison
Tony Guillory
Jim Moellinger
Jennifer Riggs
Nancy Sutton
Sarah Woelk