TIXEATPOWNEY GENERAL
OF TEXAS
k%USTIN. -XAS r8711
September 10, 1963
Honorable Robert S. Calvert
Comptroller of Public Accounts
Austin, Texas
Opinion No. C-134
Re: Authority to execute a
lease for a term beyond
Dear Mr. Calvert: current appropriations.
Your request for an opinion reads in part as fol-
lows:
“H.B. 1086, 58th Legislature reads
as follows:
“‘Section I. The Department of Public
Safety, the Liquor Control Board, the Parks
and Wildlife Commission gnd the Comptroller
of Public Accounts are hereby authorized to
enter jointly Into a contract of lease of land
and a building thereon located. or to be locat-
ed In El Paso County, to bemused by said agen-
cies for reglbnal or district offices. The
terms of the contract shall be agreed to by
said agencies as one party to the contract,
with each agency agreeing to pay a share of
the rent or other consideration. Said agen-
cies are authorized to execute a contract of
lease for a term of twenty (20) years with an
option to purchase at the end of the term for
a consideration of Ten Dollars ($10); or said
agencies may execute a contract of lease for
any term of years leas twenty (20).
n . l .
“I will t‘hank you to advise me if the
departments named In the above act have the
authority to execute a contract for a term
which exceeds the current appropriations.”
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Hon. Robert S. Calvert, page 2 (C- 134)
Section 49 of Article III of the Constitution of Texas
provides :
“No debt shall be created’by or on
behalf of the State except . . .” (Excep-
tion not applicable).
Section 6 of Article VIII of the Constitution of Texas
prohibits any approprlatlon of money for a term longer than
two years.
The leading cases pertinent to your Inquiry are Charles
Scribnerls Sons v.Karrs, 114 Tex. 11, 262 S.W. 722 1924);r
Fort Worth Cavalry Club v. Sheppard, 125 Tex. 339, A3 S.W. 2d
bb0 (1935) I Lnarles Scrlbner's Sons v.Mar* supra, the
Court was donsydering the validity of a contract forthe pur-
chase of certain books for a period of five years. The obllga-
tion of the contract was not to buy a fixed number OF amount
of books but only so many as needed by the schools of the State.
The Court held, therefore, that since the contract did not make
a charge on the future revenues of the State, no debt was created
nor was Section 6 of Article VIII of the Constitution of Texas
violated.
The case of Fort Worth Cavalry Club, su ra
lease contract for a period of five years. &;U~Fv~:;l:d a
that the contract was void since the adjutant general had the .;
Implied power to make a contract .only within the amounts of the
appropriation and the period of the appropriation.
It was held In Attorney General’s Opinion O-6246 (1944)
that the Board of Regents of the University of Texas was authoriz-
ed to enter into a five year contract for fire Insurance and to
pay all of the premium from current appropriation, stating:
“The llmltatIon that no appropriation of
money shall be made for a term longer than two
years does not Imply a limitation on the power
to make a contract for a greater time, where
the contract does not require an appropriation
beyond the two year period (38 Texas Jurlspru-
dence, p. 845). With reference to the Insurance
contract on the University Law Building, it is
clear that no llablllty Is created against the
State beyond the two year appropriation.
II . . .
-665-
,
Hon. Robert S. Calvert, Page 3 (C-134)
"The Legislature has, time and time
again, appropriated funds for buildings, lm-
provements and supplies of all kinds, which
lasted as Investments of the State far beyond
the term of that particular two-year approprla-
tlon. Appropriations have never been limited
to those items where the benefits created by
the appropriation would be exhausted by the end
of the term of the two-year appropriation period.
From an analysis of the cases herein cited, It
appea5?s that the two-year limitation upon the
power to contract has reference to the term of
the obligation created against the Stat~ch
contract, rather than to the period of time for
which the benefits of the contract may extend
In favor of the State."
In Attorney General's Opinion v-1067 (1950), it was
held that payment of rental on business machines did not
violate~Sectlon 49 of Article III of the Constitution of
Texas since such rental was to be paid out of current appro-
priations.
In view of the foregoln you are advised that while
House Bill 1086. Acts of the 58'th Legislature, Chapter 422,
page 1015, codified as Article 9783, note, Vernon's Civil
Statutes, authorizes the Department of Public Safety, the
Liquor Control Board, the Parks and Wildlife Commission and
the Comptroller of Public Accounts to enter jointly into a
contract for a term of twenty years, such contract must be
payable out of current appropriations; otherwise such a con-
tract would constitute the creation of a debt In violation of
the provisions of Section 49 of Article III of the Constltu-
tion of Texas.
Therefore, if the proposed contract Is payable out of
future revenues of the State rather than current appropriations,
the same Is Invalid. In the event there are sufficient monies
appropriated by the Legislature for the payment of the entire
lease term contemplated by the contract, a contract leasing
land by these agencies'for'a longer term than two years would
be valid, If paid out of current revenues.
SUMMARY
Section 49 of Article III of the Constl-
tutlon of Texas prohibits the creation of a
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Hon. Robert S. Calvert, page 4 (C-134)
debt by the State and any lease contract
not payable out of current appropriations
would be void.
Yours very truly,
WAGGONER CARR
Attorney General
Assistant
JR:ms
APPROVED:
OPINIONCOMMITTEE
W. V. Geppert, Chairman
R. E. Richards
Nicholas A. Irsfeld
Bill Allen
Paul Phy
APPROVEDFOR THE ATTORNEY
GENERAL
By: Stanton Stone
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