Franklin Special School District - Avoiding County Tax for Bonds for School Purposes

Op. Tenn. Atty. Gen. 00-004 (January 6, 2000). 1 The governing body of a special school district, by a regularly adopted resolution, may waive its rights to all 2 or part of its pro rata share and return the funds to the county trustee. Tenn Code Ann. § 9-21-129(b) and § 49-3- 1003(c)(2). S T A T E O F T E N N E S S E E OFFICE OF THE ATTORNEY GENERAL 425 FIFTH AVENUE NORTH NASHVILLE, TENNESSEE 37243 February 15, 2000 Opinion No. 00-024 Franklin Special School District - Avoiding County Tax for Bonds for School Purposes QUESTION If a county issues general debt service bonds for financing elementary and middle schools only, may a special school district operating within that county refuse to participate in the division of funds generated by said bonds and thereby avoid the tax from said bonds, within the boundaries of the special school district? OPINION No. Even if the special school district waives its pro rata share of general debt service bonds issued for school purposes, the special school district cannot avoid the county tax. ANALYSIS As this Office stated in its recent opinion, the county has the authority to tax all property 1 within its boundaries, including property within the special school district. Tenn. Code Ann. §9-21- 107(7); §49-2-101(5); §49-3-1005(a) (1999 Supp.). When levying a tax sufficient to pay off bonded indebtedness, a county, in its discretion, may choose to tax only property outside the special school district’s boundaries. If it does so, the county does not have to share the school bond proceeds with the special school district. Tenn. Code Ann. §49-3-1005(b) (1999 Supp.). Thus, the county has the discretion not to tax the property within the special school district. We can find no authority, however, that would entitle a special school district to exempt itself from a county imposed tax. Therefore, refusing to participate in the division of bond funds will not mean 2 that the special school district can avoid the county tax. If a county issues general debt service bonds for financing elementary and middle schools only, may a special school district operating within that county refuse to participate in the division of funds generated by said bonds and thereby avoid the tax from said bonds, within the boundaries As this Office stated in its recent opinion,¹ the county has the authority to tax all property within its boundaries, including property within the special school district. Tenn. Code Ann. 9-21- 107(7); §49-2-101(5); §49-3-1005(a) (1999 Supp.). When levying a tax sufficient to pay off bonded indebtedness, a county, in its discretion, may choose to tax only property outside the special school district's boundaries. If it does so, the county does not have to share the school bond proceeds with Thus, the county has the discretion not to tax the property within the special school district. We can find no authority, however, that would entitle a special school district to exempt itself from a county imposed tax. Therefore, refusing² to participate in the division of bond funds will not mean 1 Op. Tenn. Atty. Gen. 00-004 (January 6, 2000). 2 The governing body of a special school district, by a regularly adopted resolution, may waive its rights to all or part of its pro rata share and return the funds to the county trustee. Tenn Code Ann. § 9-21-129(b) and § 49-3- Page 2 This opinion is not intended to address or affect any particular bond issue. PAUL G. SUMMERS Attorney General and Reporter MICHAEL E. MOORE Solicitor General KATE EYLER Deputy Attorney General Requested by: The Honorable Mike Williams State Representative 17 Legislative Plaza Nashville, TN 37243