..
THEA=• RNEYGENERAL
OF TE,XAS
May 9, 1961
Honorable Ben Ramsey Opinion No. W-1048
Lieutenant Governor
Capitol Station Re: Whether the Legislature
Austin 11, Texas may retire outstanding
bonds issued by Texas
Southern University, and
Dear Sir: related questions.
You have requested an opinion on the following ques-
tions:
"1. Would an appropriation by the Legislature
from the General Revenue Fund for the retire-
ment of outstanding bonds issued by Texas
Southern University pursuant to Article 2643g,
be a valid and effective means of liquidating
such indebtedness? One aspect of this question
is whether such outstanding bonds are callable
without the consent of the bond-holders.
"2 . If the method indicated in the question
above is a valid and effective means, would it
result in freeing up Texas Southern University's
share of the College Building Fund for the con-
struction of additional buildings now needed at
that institution?
"On both questions, the last clause in Section 17.
Article 7 of the Constitution appears to be perti-
nent.
"3 . If, in your consideration of questions 1 and
2, you find the method to be of doubtful validity
Honorable Ben Ramsey, Page 2 W-1048)
or effectiveness, would the enactment of
a new bill containing for Texas Southern
University provisions similar to Article
2643g, be a valid and effective way of
assuring that University with available
moneys for building construction purposes?"
Section 17 of Article VII of the Constitution, as
amended in 1956, establishe:s a state ad valorem tax for the
purpose of creating a special fund for buildings and improve-
ments at certain State institutions of higher learning, to
be allocated and periodically reallocated by the Comptroller
of Public Accounts to the participating institutions. It
further provides, in part, as follows:
. . . all such designated institutions of
higher learning which participate in the
allocation or re-allocation of such funds
shall not thereafter receive any General ~:'r::,~'
Revenue funds for the acquiring or construc-
ting of buildings or other permanent improve-
ments for which said Five Cent (50) ad valorem
tax is herein provided, except in case of fire,
flood, storm, or earthquake . . . . Chapter
330, Acts, Regular Session, Fifty-third Legis-
lature ,&ticle 2643g. Vernon's Civil Statutes_7
is repealed upon the effective date of this
Amendment: but the principal and interest due on
any obligations incurred by the governing boards
of Lamar State College of Technology at Beaumont
and of Texas Southern University at Houston under
the provisions of said Chapter 330 prior to its
repeal shall be paid from the allocations to
Lamar State College of Technology and Texas
Southern University from the funds raised by
the Five Cent (5c) ad valorem tax levy as pro-
vided in this Section, . . .II
In reply to your first question, it is our opinion
that these provisions prohibit an appropriation from the Gen-
eral Revenue Fund for the retirement of outstanding bonds is-
sued by Texas Southern University pursuant to Article 2643g.
Honorable Ben Ramsey, page 3 (WW-1048)
Since your first question is answered in the
negative we do not reach the second question.
We have reviewed the provisions of Article 2643g,
V.C.S., which was repealed upon the effective date of the
1956 amendment of Section 17 of Article VII of the Constitu-
tion of Texas, and your third question is answered in the
affirmative. Bonds were heretofore authorized and issued
by Texas Southern University for building construction pur-
poses under Article 2643g, V.C.S., and we see no legal im-
pediment to such issuance in the future under a new statute
containing similar provisions.
SUMMARY
The outstanding bonds of Texas Southern
University cannot be retired by an appro-
priation from the General Revenue Fund as
Section 17 of Article VII of the Consti-
tution provides that such obligations
shall be paid from the Five Cent (Se)
ad valorem tax provided therein. There
would be no legal bar to issuance of bonds
by the University under a new statute sim-
ilar to Article 2643g, V,C.S., now re-
pealed.
Yours very truly,
WILL WILSON
Attorney General of Texas
HWM-s Assistant I
Honorable Ben Ramsey, page 4 (W-1048)
APPROVH):
OPINION COMMITTEE
W. V. Geppert, Chairman
C. K. Richards
J. Arthur Sandlin
Larry Hargrove
Bill Allen
REVIEWED FOR THE ATTORNEY GENERAL
By: Morgan Nesbitt