When a Texas city annexes land inside a rural fire prevention district, does the district keep taxing and serving that area, or is the area automatically removed?

Texas AG Opinion JM-605: Fire District Annexation

Plain-English summary

A state representative asked what happens to a rural fire prevention district when a city annexes land inside the district: does the district keep providing fire service and collecting taxes there, and how does the area come off the district's tax rolls?

JM-605 answered by pointing to a 1985 amendment to article 2351a-6. Annexation by itself does not pull the area out of the district. The territory stays part of the rural fire prevention district until the city takes the formal step in section 14b: agreeing to provide fire protection to the area and notifying the district's board of fire commissioners in writing. Once the city does that, the board must stop serving the area, exclude its taxes by order, and redefine the district's boundaries.

There is one lasting obligation. Drawing on an earlier opinion (JM-453), JM-605 explained that the excluded area still has to pay its pro rata share of the district's bond debt that existed when it left, because cutting off that revenue could impair the district's contract with its bondholders. And if the city never removes the area, it simply stays in the district, which keeps the same powers and duties it had before. A city and a special-purpose district like a rural fire district can overlap in territory. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0605.pdf

Currency note

This opinion was issued in 1986 and construes article 2351a-6, V.T.C.S., the rural fire prevention district statute, which has since been recodified into the Health and Safety Code. Treat this page as historical context, not current legal advice, and verify current law before relying on any procedure or citation mentioned here.

Common questions

Does annexing land automatically take it out of the rural fire district?

No. The opinion concluded the territory "remains part of the district unless the city removes it from the district pursuant to section 14b of article 2351a-6, V.T.C.S." Removal is a separate, deliberate step. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0605.pdf

What does the city have to do to remove the area?

Agree to provide fire protection and give written notice. Under section 14b, once the city agrees to protect the area and notifies the secretary of the board of fire commissioners in writing, "the board shall cease to provide further service to the area, exclude the taxes by order from the district, and redefine the district's boundaries." Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0605.pdf

Does the removed area still owe anything to the district?

Yes, its share of existing bond debt. The opinion, following Attorney General Opinion JM-453, said an area removed from the district "would still be required to pay its pro rata share of such obligations existing when the territory is withdrawn," because cutting the revenue could impair the district's contract with bondholders. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0605.pdf

Background and statutory framework

Article 2351a-6 provides for creating and governing rural fire prevention districts, under the authority of article III, section 48-d of the Texas Constitution. Senate Bill 783 in 1985 amended section 8A and added sections 8B and 14b to deal with district territory that lies within a city or its extraterritorial jurisdiction. Section 8B generally bars including city or ETJ territory in a district without the city's written consent, and section 14b lets a city that already has territory in a district exclude that territory by agreeing to provide fire protection and notifying the board.

The tax and debt consequences come from the contract clause. Because a district's obligations to bondholders are protected by the contract clauses of the federal and Texas Constitutions, removing the revenue that repays those bonds without an equal substitute could impair the obligation of contract. The opinion cited City of Aransas Pass v. Keeling on that principle and relied on Attorney General Opinion JM-453, which held that article 2351a-6 is not facially unconstitutional but could be unconstitutional as applied if an excluded area escaped paying its pro rata share of pre-existing bond debt. Finally, the opinion confirmed that a city governed by the article 1269m civil service law and a rural fire district can overlap in territory, citing City of Pelly v. Harris County Water Control & Improvement District No. 7. Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0605.pdf

Citations and references

Constitution and statutes:

• Article 2351a-6, V.T.C.S. (rural fire prevention districts), sections 8A, 8B, and 14b
• Article 1269m, V.T.C.S. (firemen's and policemen's civil service)
• Texas Constitution article III, section 48-d; article I, section 16; United States Constitution article I, section 10 (contract clauses)

Cases (as cited in the opinion):

• City of Pelly v. Harris County Water Control & Improvement District No. 7, 198 S.W.2d 450 (Tex. 1946)
• City of Aransas Pass v. Keeling, 247 S.W. 818, 821 (Tex. 1923)

Prior opinions relied on: Attorney General Opinions JM-453 (1986), JM-591 (1986), JM-400 (1985), MW-337 (1981), O-1205 (1939).

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0605
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1986/jm0605.pdf

Original opinion text

Best-effort transcription from a scanned PDF. The original scan is heavily OCR-degraded, especially on the final page; case names and citations have been corrected against the reporter where verifiable. The linked PDF is authoritative.

December 30, 1986

Honorable Terral R. Smith
Chairman
Criminal Jurisprudence Committee
Texas House of Representatives
P. O. Box 2910
Austin, Texas 78769

Opinion No. JM-605

Re: Whether a rural fire prevention district must continue to provide services to and assess taxes against residents of an area recently annexed by a municipality

Dear Representative Smith:

You ask two questions about the status of an area of a rural fire prevention district annexed by a city. These questions, in reverse order, are as follows:

1. What procedures are necessary to remove a full-purpose municipal annexation area from the tax rolls and obligations of a rural fire prevention district created prior to September 1, 1985?

2. Must a rural fire prevention district created prior to September 1, 1985, assess taxes, provide direct services and be liable to residents of a recently annexed area into an article 1269m, V.T.C.S., civil service municipality which was within the boundaries of the fire district prior to full-purpose annexation of the area into the municipality?

Article 2351a-6, V.T.C.S., provides for creating and governing rural fire prevention districts. See Tex. Const. art. III, section 48-d (authorizing legislature to provide for establishment and creation of rural fire prevention districts). A 1985 amendment to article 2351a-6, V.T.C.S., added provisions dealing with the inclusion in a rural fire prevention district of territory in the corporate or extraterritorial jurisdiction of a city. The enactment of Senate Bill No. 783 amended section 8A of article 2351a-6, V.T.C.S., and added sections 8B and 14b to article 2351a-6, V.T.C.S. See Acts 1985, 69th Leg., ch. 93, at 525. Section 8A now requires the commissioners court to determine that the proposed district would provide certain public benefits within any extraterritorial jurisdiction of a city that it proposes to encompass, as well as any area within the city limits. Section 8B, a new provision, provides that territory within a city or its extraterritorial jurisdiction may not be included in a rural fire prevention district unless the governing body of the city gives written consent to the inclusion. V.T.C.S. art. 2351a-6, section 8B(a). If the governing body does not consent, voters and property owners of the territory proposed for inclusion in the district may petition the city government to provide it with fire protection. Id. section 8B(b). The failure or refusal of the governmental body to provide fire protection constitutes consent to inclusion of the area in the proposed district. Id. section 8B(c).

Section 14b is a new section which provides as follows:

Sec. 14b. (a) The governing body of a city that has an area within its corporate or extraterritorial jurisdiction included within a rural fire prevention district may, on agreeing to provide fire protection to the area as provided by Section 8B of this Act . . . notify the secretary of the board of fire commissioners in writing that the area is excluded from the district's territory.

(b) On receipt of the notice under Subsection (a) of this section, the board shall cease to provide further service to the area, exclude the taxes by order from the district, and redefine the district's boundaries.

The bill analysis of Senate Bill No. 783 states of section 14b:

This section provides that if a city has territory within a district and the city agrees to provide fire protection to the territory . . . the governing body shall notify the secretary of the board of fire commissioners in writing of this change. On receipt of this notice, the board shall cease to provide service.

Bill Analysis to S.B. No. 783, prepared for House Committee on Urban Affairs, filed in Bill File to S.B. No. 783, Legislative Reference Library.

In Attorney General Opinion JM-453 (1986) this office determined that section 14b applies to the removal of territory from rural fire prevention districts created before September 1, 1985. See Attorney General Opinion JM-453 (1986). See also Attorney General Opinion JM-591 (1986). Attorney General Opinion JM-453 (1986) also considered how the removal of territory from a rural fire prevention district would affect its tax rolls and obligations. The opinion noted that except for the issuance of bonds and notes, the district could contract only that indebtedness payable out of excess funds on hand or current revenues for the year. Thus, the obligations at issue were obligations to bondholders, obligations protected by the contract clauses of both the federal and Texas Constitutions. See U.S. Const. art. 1, section 10, cl. 1; Tex. Const. art. I, section 16; Attorney General Opinion JM-453 (1986) and authorities cited therein. Legislation which removes the source of repayment to bondholders without substituting something of equal efficacy may impair the obligation of contract and violate the constitution. City of Aransas Pass v. Keeling, 247 S.W. 818, 821 (Tex. 1923); Burns v. Dilley County Line Independent School District, 295 S.W. 1091, 1094 judgment adopted (Tex. Comm'n App. 1927); Attorney General Opinions JM-453 (1986); O-1205 (1939).

Attorney General Opinion JM-453 concluded that an area removed from a rural fire district would still be required to pay its pro rata share of such obligations existing when the territory is withdrawn from the district. It stated as follows:

Article 2351a-6 contains no express provision for payment of the excluded territory's pro rata share of an existing district indebtedness. Cf. Water Code sections 53.268, 54.731 (on payment of pro rata share of existing district indebtedness, excluded territory and its taxpayers are released from liability to the district and payment of taxes). It is our opinion that article 2351a-6, as recently amended to authorize the exclusion of a city from a district, is not facially unconstitutional. In particular situations where the obligation of contract to bondholders would be impaired, the statute may be unconstitutional as applied without the collection of taxes from the excluded area to pay its pro rata share of obligations to bondholders that are in existence at the time the city is withdrawn from the district. See Attorney General Opinion MW-337 (1981).

Attorney General Opinion JM-453 (1986) at 4.

The quoted holding of Attorney General Opinion JM-453 is applicable where the territory detached from the rural fire prevention district constitutes less than the entire city. Thus, Attorney General Opinion JM-453 provides the answer to your first question. See, e.g., art. 2351a-6, sections 19-22.

Our answer to question one also provides a partial answer to question two, which asks as follows:

Must a rural fire prevention district created prior to September 1, 1985, assess taxes, provide direct services and be liable to residents of a recently annexed area into a 1269m, V.T.C.S., civil service municipality which was within the boundaries of the fire district prior to full-purpose annexation of the area into the municipality?

Even if the city government removes the recently annexed area from the rural fire prevention district, its pro rata share of the district's obligations must be fulfilled. After removal, however, the board of fire commissioners of the district "shall cease to provide further service to the area. . . ." V.T.C.S. art. 2351a-6, section 14b.

In the event that the city does not remove the recently annexed area from the fire district, that area will continue to be part of the district. Article 1269m, V.T.C.S., establishes a firemen's and policemen's civil service in cities within the statutory description, but it does not deal with the firefighting responsibilities of those cities. The district will continue to have the same powers and duties toward the residents of the annexed area as it had prior to the annexation. A city, with its broad statutory police powers, may overlap in territory with a special purpose municipal entity, such as a rural fire protection district. City of Pelly v. Harris County Water Control & Improvement District No. 7, 198 S.W.2d 450 (Tex. 1946); Attorney General Opinion JM-400 (1985).

SUMMARY

When a municipality annexes territory within a rural fire prevention district created prior to September 1, 1985, the territory remains part of the district unless the city removes it from the district pursuant to section 14b of article 2351a-6, V.T.C.S. When a municipality removes an annexed area from the district, the district is to cease providing services to that area.

JIM MATTOX
Attorney General of Texas

JACK HIGHTOWER
First Assistant Attorney General

MARY KELLER
Executive Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Susan L. Garrison
Assistant Attorney General