Untitled Texas Attorney General Opinion

January 20, 1967 Honorable Robert S. Calvert Opinion No. M- 13 Comptroller of Pub1.lcAccounts Austin, Texas Re: Construction of Article 678f, Vernon's Civil Statutes, a8 It relates to expenditures of ap- propriations for bulld- ing projects from which the State Building Fund Dear Mr. Calvert: is to be reimbursed. Your request for an opinion on the above subject matter asks the following questions: "1. Is the money appropriatedto a using agency for the fiscal year 1966 only, with which to build a building, obligated by the provisions of Article 678f, R.C.S. so that salaries and travel and other personal services performed on the building project by the Building Commission during the fiscal years 1967, 1968, and 1969, are reimbursable from the 1966 year appropriation? "2. If the above question is answered In the affirmativeand under the same conditions as set out In question number 1, would this be the only appropriationsuch services could be reimbursed from? "3. If money Is appropriated to a using agency for capital outlay for the fiscal year ending August 31r 1966, the using agency then through the Building Commission obligates the appropriationto remodel an existing building In the amount of twenty-five thousand dollars ($25,000.00)(Art. 4357, R.C.S.) Is the capital outlay appropriationfor 1966 obligated to re- imburse the Building Commission for salaries and travel performed on the remodeling project by the Building Commissionduring the fiscal - 48 - , . , Hdn. Robert S. Calve&, page 2 (M-13) years 1967, 1968, and 19697 "4. If question number 3 Is answered In the affirmativeand under the same conditions as set out In question number 3, would this be the only appropriationsuch services could be reimbursed from?" Subdivision (E) of Section 5 of Article 678f, Vernon's Civil Statutes,reads as follows: "The operating expenses of the State Building Commission shall, unless otherwise specifiedby the Legislature,be paid from appropriationsmade out of the State Building Fund. The State Building Fund shall be relm- bursed Tar such expendituresfrom the funds appropriatedby the Legislaturefor projects supervisedby the Commission. In order that each project shall bear Its fair and proper share of the Commission'sexpenses, the Com- mission shall Institute and maintain a cost accounting system which shall be devised by the State Auditor as soon after the effective date of this Act as possible.' (Emphasis added.) Section 6 of Article VIII of the Constitutionof Texas provides that no appropriationof State funds may be mad~efor a term of more than two years. Therefore, generally speaking, personal servicesmust be paid out of appropriationsmade for the year during which the personal services are rendered, At- torney General's Opinions O-2815 (1940) and V-1397 (1952). It Is clearly settled, however, that an appropriationfor one year In the case of capital expendituresmay legally be encumbered by contract even though the project for which It Is spent will not be completed and paid for until succeedingyears. Attorney General's Opinions 0-2631 (1940), V-11 9 (1950 V-1397 (1952), V-1535A (19521, Ww-40 (19571, and Ca25 (196i1. In Attorney General's Opinion V-1397, supra, it was held that a contract calling for the services of an erection supervisorIs ancillary to the main purpose of the purchase of a capital asset and is not a separate contract for personal services, and therefore expenditurefor such purpose may be paid from an appropriationcovering the cost of the constructioncon- tract. - 49 - Hon. Robert S. Calve&, pa& 3 (M-13) The reimbursable Items gdverned by the provisions of Article 678f are all items~lncldentalto a constructionproject which constitutesareapIta asset of the State. Therefore, such items may obligate appropriationsfor a term beyond the ex lra- tlon of the appropriation. Both Article 678f and Article e357, Vernon's Civil Statutes, recognize ,thatln the case of construc- tion projects monies obligated by the constructioncontract will not necessarily be finally expended.during the term of the ap- propriation. Article 4357 provides In part: ,I . .No claim shall be paid from approprla- tlons kless presented to the Comptrollerfor Payment within two (2) years from the close of the fiscal year for whlch'such appropriations were made, but any claim .notpresentedfor pay- ment within such period may be presentedto the Legislature as other claims for which no approprla- tlons are available. . . , "It Is specificallyprovided, however, that as to all approprlatlonsrelating to new con- struction contracts, and to repair and remodeling projects which exceed the sum of Twenty Thousand Dollars ($20,000.00),Including In either Instance furniture and other equipment, architects'and engineering fees, and other related costs, any claim may be presented for payment within four (4) years from the close of the fiscal year for which such appropriationswere made." In answer to your first and third questions,monies appropriatedto a using agency for projects governed b Article 678f are obligated by the provisions of Subdivision (E3 to reim- burse the State Building Fund for servicesrendered by the Bulld- lng Commission on the constructionproject. Therefore, you are advised that this reimbursement Is to be paid from the appropriation for the constructionproject regardless of the year In which the personal services were performed on the building project. The services outlined by you In questions one and three would be paid from the 1966 appropriation. In answer to your second and fourth questions, this would be the only appropriationfrom which the services could be reimbursed unless other appropriationsfor such project are apprdprlated or re-appropriatedas the case may be. SUMMARY Monies encumbered by a constructioncontract entered Into during the fiscal year 1966 may be - 50 - Hon. Robert S. Calvert, page 4 (M-13) used to reimburse the State Building Fund for operating expenses of the State Building Com- mission expended in connectionwith such construc- tion contract, and such reimbursementmay be made even though services performed by the Building Commission are performed during subsequentfiscal Art. 678f, v.c.s., Attorney General's ~~?iikn V-1397 (1952). Prepared by John Reeves Assistant Attorney General APPROVED: OPINION COMMI'ITEE Hawthorne Phillips, Chairman W. V. Geppert, Co-Chairman Mary K. Wall Kerns Taylor Pat Bailey John Grace Staff Legal Assistant A. J. Carubbl, Jr. - 51 -