THE ATTORNEY GESERAL
OF TEXAS
January 2, 1989
Dr. Wilbur L. Meier, Jr. Opinion No. JM-1001
Chancellor
University of Houston Re: Constitutional author-
System ity of an institution of
4600 Gulf kreeway nigner education to refund
Suite 425 bonds issued under "prior
Houston, Texas 77023 law" (RQ-1406)
Dear Dr. Meier:
On behalf of the University of Houston System, you have
requested an opinion of this office interpreting a portion
of article VII, section 17, of the Texas Constitution.
Article VII, section 17, deals with appropriations and
funding for agencies and institutions of higher education.
Your letter reads in part:
Subsection (e) of article VII, section 17
provides in part that the governing board of
any of the institutions of higher education
identified in subsection (b)'may issue bonds
and notes for the purposes of refunding bonds
or notes issued under this section or nrior
a. . . .' (Emphasis provided). We request
your opinion as to the meaning of the empha-
sized language. Specifically, does the
phrase 'prior law' refer only to the prede-
cessor of article VII, section 17, which was
repealed on November 2, 1982, or does it
refer to any statute existing prior to the
adoption of the present article VII, section
171
To better orient the discussion that follows, pertinent
provisions of article VII, section 17, are set out here:
Sec. 17 (a) In the fiscal year begin-
ning September 1, 1985, and each fiscal year
thereafter, there is hereby appropriated out
of the first money coming into the state
treasury not otherwise appropriated by the
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Dr. Wilbur L. Meier, Jr. - Page 2 (JM-1001)
constitution $100 million to be used by eli-
gible agencies and institutions of higher
education for the purpose of acquiring land
either with or without permanent improve-
ments, constructing and equipping buildings
or other permanent improvements, major repair
or rehabilitation of buildings or other
permanent improvements, and acquisition of
capital equipment, library books and library
materials.
(e) Each governing board authorized to
participate in the distribution of money
under this section is authorized to expend
all money distributed to it for any of the
purposes enumerated in Subsection (a). In
addition, unless a single bonding agency is
designated as hereinafter provided, such
governing board may issue bonds and notes for
the purposes of refunding bonds or notes
issued under this section or orior law,
acquiring land either with or without perma-
nent improvements, constructing and equipping
buildings or other permanent improvements,
and for major repair and rehabilitation of
buildings or other permanent improvements,
and may pledge up to 50 percent of the money
allocated to such governing board pursuant to
this section to secure the payment of the
principal and interest of such bonds or
notes. . . . In lieu of the authority
granted to each governing board herein, the
legislature by general law may designate a
single agency to issue bonds and notes
authorized under this section . . . .
(f) The funds appropriated by this
section may not be used for the purpose of
constructing, equiwiwr repairing, or
rehabilitating buildings or other permanent
improvements that are to be used for student
housing, intercollegiate athletics, or
auxiliary enterprises.
. . . .
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Dr. Wilbur L. Meier, Jr. - Page 3 (JM-1001)
(I) This section is self-enacting upon
the issuance of the governor's proclamation
declaring the adoption of the amendment, and
the state comptroller of public accounts and
the state treasurer shall do all things
necessary to effectuate this section. This
section does not impair any obligation
created by the issuance of any bonds and
notes in accordance with prior law, and all
outstanding bonds and notes shall be paid in
full, both principal and interest, in accor-
dance with their terms. If the provisions of
this section conflict with any other provi-
sions of this constitution, then the provi-
sions of this section shall prevail, notwith-
standing all such conflicting provisions.
(Emphasis added.)
Section 17 uses the "prior law" phrase twice, once in
subsection (e) and again in subsection (L). We think it was
used in the same sense both times, and in the sense in which
the term is used by article VIII, section l-e of the Texas
Constitution. In construing the meaning of a word or phrase
in the constitution, resort may be had to other sections of
the instrument for the sense in which it is used. State v.
Gillette's Estate, 10 S.W.2d 984 (Tex. Comm'n App. 1928,
judgmt adopted); Attorney General Opinion JM-533 (1986).
As it is now written, section 17 of article VII was
added to the Texas Constitution November 6, 1984, but, as
you note, a previous version of article VII, section 17, was
repealed in 1982. The repealed provision also had as its
object the distribution of funds to colleges and univer-
sities for certain purposes, but under a different formula.
See Attorney General Opinion H-1129 (1978).
At the same time that former article VII, section 17,
was repealed in 1982 (thus eliminating its formula for the
distribution of ad valorem tax money to institutions of
higher education), the electorate amended article VIII,
section l-e, of the constitution to read:
Sec. l-e 1. No State ad valorem taxes
shall be levied upon any property within this
State.
2. All receipts from previously author-
ized State ad valorem taxes that are collect-
ed on or after the effective date of the 1982
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Dr. Wilbur L. Meier, Jr. - Page 4 (JM-1001)
amendment to this section shall be deposited
to the credit of the general fund of the
county collecting the taxes and may be
expended for county purposes. Receipts from
taxes collected before that date shall be
distributed by the legislature among institu-
tions eligible to receive distributions under
prior law. Those receipts and receipts
distributed under nrior law may be expended
for the purposes provided ynder orior law or
for repair and renovation'of existing perma-
nent improvements. (Emphasis added.)
Within two months after the repeal of the old article
VII, section 17, provision and the adoption of the new
article VIII, section l-e, language, this office construed
the phrase "under prior law," as used in the new article
VIII section to refer to the repealed article VII, section
17, provision. m Attorney General Opinion MW-594 (1982).
That conclusion was reiterated in Attorney General Opinion
JM-77 (1983), which found fault with the MW-594 opinion in
other respects -- but not in its conclusion that the phrase
"under prior law," in article VIII, section l-e, meant
former article VII, section 17:
The new constitutional amendment [article
VIII, section l-e] states with respect to
receipts distributed under prior law, that
is, article VII, section 17, that they ‘may
be expended for . . . .I (Emphasis added.)
Attorney General Opinion JM-77 (1983), at 2.
The new version of article VII, section 17, added to
the constitution in 1984, was proposed by Texas House Joint
Resolution 19 -- a resolution adopted by the legislature in
its final form on May 25, 1983. &9 H.J.R. 19, Acts 1983,
68th Leg., at 6701. Thus, the drafters of the resolutions
had available to them Attorney General Opinion MW-594
(1982) I which interpreted the phrase "under prior law" as it
related to the constitutionally-directed distribution of
funds to institutions of higher education pursuant to
article VIII, section l-e. It is our opinion that in
re-using the phrase, "prior law," the drafters (and the
electorate) intended it to have the same meaning in the new
article VII, section 17, provision as it has in the exist-
ing, related provision, article VIII, section l-e.
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Dr. Wilbur L. Meier, Jr. - Page 5 (JM-1001)
The phrase, nprior law," if used in a different con-
text, might be readily given a much broader significance,
but in arriving at the intent of lawmakers, courts are not
limited to the literal language of a provision if it appears
from the entire law that a word or phrase was used in a more
limited sense. m Moodv v. San Saba Countv Water Control
and Imnrovement District No. 1, 293 S.W. 845 (Tex. Civ. App.
- Austin 1927, writ ref'd); see also. . State ex rel. Grimes
County Taxuavers Ass'n v. Tex Dal Power Aaency 565
S.W.Zd 258 (Tex. Civ. App. - ~hs~o~c;lst Dist.] 1978,' writ
dism*d).l
Subsection (a) of the current article VII, section 17,
is careful to limit the use of the distributed funds to four
purposes: (1) "acquiring land either with or without
permanent improvements,1' (2) "constructing and equipping
buildings or other permanent improvements," (3) "major
repair or rehabilitation of buildings or other permanent
improvements," and (4) "acquisition of capital equipment,
library books and library materials."
Subsection (e) thereof also limits to four purposes the
use of bonds and notes secured by a pledge of money allocat-
ed by subsection (a): (1) "refunding bonds or notes issued
under this section or prior law," (2) l'acguiring land either
with or without permanent improvements," (3) "constructing
and equipping buildings or other permanent improvements,"
and (4) "major repair and rehabilitation of buildings or
other permanent improvements."
The four purposes for which subsection (e) allows bonds
to be used are independent of each other. If the phrase,
"prior law," as used in subsection (e), were given its
widest scope, there would be no restriction upon the type or
purpose of former bond issues that an institution of higher
education could refund with new bonds secured by constitu-
tionally-allocated funds. That result would be incompatible
with the spirit of subsection (f) of section 17, article
VII, which forbids the use of such funds for "constructing,
equipping, repairing, or rehabilitating buildings or other
1. The Woody and Grimes Countv Taxaavers Ass'n cases in-
volved construction of statutes, not the constitution, but
rules for the construction of constitutional provisions are
analogous to those for statutory construction. Booth V.
Stripnleman, 61 Tex. 378 (1884).
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Dr. Wilbur L. Meier, Jr. - Page 6 (JM-1001)
permanent improvements that are to be used for student
housing, intercollegiate athletics, or auxiliary enterpris-
es."
Subsection (f) does not exnressly prevent the use of
constitutionally-allocated funds to secure the refunding of
bonds or notes issued for the purpose of erecting buildings
dedicated to auxiliary enterprises. It is not to be sup-
posed, however, that an institution of higher education
could today issue revenue bonds for the construction of an
auxiliary enterprise building pursuant to still-existing
statutory authority therefor, see e.a. Educ. Code 55 55.13
61.003(14), and subsequently refund those bonds with bond:
secured by funds allocated pursuant to the current provi-
sions of section 17 of article VII. Neither is it to be
supposed, in our opinion, that bonds previously issued for
auxiliary enterprise purposes might be refunded in that
manner. a Educ. Code § 55.41 (refunding constitutional
bonds and notes).
Attorney General Opinion H-1248 (1978) observed that
(former) article VII, section 17, was amended in 1965 to
forbid the use of proceeds under that section for auxiliary
enterprises. See S.J.R. 24, Acts 1965, 59th Leg., at 2197.
When article VIII, section l-e, was amended in 1982, it
restricted the use of distributions made to institutions of
higher education to those uses permitted by "prior law"
i.e., former article VII, section 17. H.J.R. 1, Acts 1982,
67th Leg., 2d C.S., 5 1, at 52. That restriction prevented
the use of distributed funds for purposes authorized by
pre-existing statutes if not also authorized by the former
constitutional provision. See Attorney General Opinion
JM-77 (1983).
We think it remains the intent and policy of the
Constitution of Texas that institutions of higher education
look to former article VII, section 17, to discover "prior
law" and to determine what bonds or notes issued under
"prior law" may~be refunded by bonds secured with money
allocated to such institutions by article VII, section 17,
of the Constitution of Texas. See aenerally Attorney
General Opinion V-848 (1949).
SUMMARY
The phrase, "prior law," as used *
subsection (e) of section 17 of article VZ
of the Texas Constitution, as adopted in
1984, refers to the former provision of the
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Dr. Wilbur L. Meier, Jr. - Page 7 (JM-1001)
constitution, also designated article VII,
. J h
section 17, that was repealed in 1982.
Very truly y s,
AL
JIM MATTOX
Attorney General of Texas
MARY KELLER
First Assistant Attorney General
LOU MCCRKARY
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Bruce Youngblood
Assistant Attorney General
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