Untitled Texas Attorney General Opinion

                      March 31, 1952

Hon. C. H:Cavness            Opinion No. V-1427.
State Auditor
Capitol Station              Re:    Authority of State col-
Austin, Texas                       leges, participants
                                    under the College Build-
                                    ing Amendment, to use
                                    their appropriated local
Dear Sir:                           funds for "Improvements**.
            You have requested an opinion of this office
relating   to,Section  17 of Article VII of the Texas
Constitution,    the College Building Amendmentadopted in
1947.,,  ~This ,amendment concerns chiefly  the use of funds
for the .acquiring and constructing     of buildings or other
permanent improvements by the State's      institutions  of
higher learning that participate     in the proceeds of the
ad.valorem tax levied thereunder.       You submit the fol-
lowing two questions:
                 Are the local funds now required
      by stzkte     to be deposited in the State
      Treasury by all of the State's      colleges    or
      universities,    beginning with the current
      biennium, State funds to the same extent,
      and subject to the same restrictions        for
    .appropriation     by the Legislature    and expen-
      diture by the various such institutions,         as,
     .general revenue funds placed in the State
      Treasury from all sources?
            2.  What Is the meaning of the words
     llbulldings or other permanent improvements"
     in Section 17 where participating     institu-
     tions are prohlbited   from receiving   any
     other State funds for the purpose of acquir-
     ing or constructing   such?
            Se&&ion 17 of Article     VII provides    in part:
           I,       there is hereby levfed D 0
     a stat: id'valorem   tax on property of Fi;e
     (5#>  Cents on the One Hundred ($100.30:
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             Hon. co Ha Cavness,       page 3     (v-1427)


             Treasury."    Acts 52nd Le      R.S. 1951, ch. 474 pti
             841, codified   as Art. 2 56"3c, V.C.S.   In view oh the
             prevailing   method in 1947 when the College Building
             Amendment was adopted, the contention      has been ad-
             vanced that. institutional    receipts  were. not.intended
             to be classed as "state funds" within the meaning of
             the provision   of Section 17 which reads:.
                    II          all such designated Institutions
                    of'higier     learning which participate      in
                    the.:allocation     or re-allocation     of such
                    funds shall not thereafter         receive w
                    other state funds for the acquiring or
                    constructing      of buildings    or other perma-
                  . nent improvements . . ot' (Emphasis added,
                    throughout.)
                                The correctness     of this contention depends
                 on the meaning to be ascribed to the term llotherstate
              "~'fundsl' as used in Section 17 of Article VII.                 Broadly
                  speaking, state funds include ,a11 public money, from'
                 whatever source, which is received by or through agen-
                'ties of the State.         Under this broad general rule thfs
                'office    has held local funds to be "state funds" within
                  the meanin of certain specific             statutes.     Att'y Gen.
                  Ops. o-169t (19399, O-7012 (1946). However, the term
                  is sometimes used in a more restricted               sense as pan-
                  ing public funds derived from limited sources.                  or ex*
                  ample, the Banking Department Self-Support                and Adminis-
                  tration Act (Art, 342-112, V.C+)               provides that the
          --~~, expenses incurred by the Banking Department shall be
             .' paid from the fees and revenues collected                 by It and i&at
        1:"- no such expenses shall ever be a charge against the
        :. .i. "fuuds of this State."             Similarly,     the Plumbing License
             *.
         :' :'.   Law   (Art.   6243-101,   Sec.   7, V.C.So),     after providing
                  for the payment of expenses incurred under the act from
        .$'"r:fees       collected    by the Plumbing Board, further provides
        .*,       that none of these expenses shall ever be a charge against
        j;        the "funds of the State of Texas."              Under these statutes,
        :' ' the term "state funds I1 does not include the fees col-
        ,$ .-
        y,        lected by the agencies.          Certainly these fees are public
        p         money and their expenditure is subject to the control of
         'r.      the Legislature,       but they have been excluded from the
        CJ
        .:        definition     of  "state  funds" as used in those ~statutory
        :i.,      Provisi0ns.       whilethe     terminology may not be technically
        g:
        +; . correct,          the.use of the term "state funds" in varying
         .A,. :vWSes has been common practice.
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Hon. C. H. Cavness,     page 4   (V-1427)


            The meaning to be ascribed to terms used In
a constitutional    provision is the meaning intended by
its adopters.     Sometimes the same word is given a dif-
ferent meaning in different         parts &',the Constitution.
Aransas County v. Coleman-Fulton P              ure CQ., 108 Tex.
   6             55 (            F 1             Davis, 217 S.W.
&'(%%s~~~.        Azp.l?$zi'     e,"Fo,,'"Ef";.    The meaning of
a term in a particular       p?!ovision is determined from
the context in which it is used, and the history of the
subject matter and the purpose of the provision may be
considered in arriving at the intended meaning.              Thus,
the same monies may be state funds for one purpose and
not for another, depending upon the intent of the adopt-
ers of the provision     involved,      as indicated    from the
context and the history of the enactment.
Town of Salina, 58 N.Y.S.2d 797 (App. Div.
            At the time Section 17 of Article        VII was
adopted, the Legislature       had placed institutional      re-
ceipts in a different      category from other appropriated
funds for various purposes, both in its appropriation
acts and in other statutes.         For example, in Article
2647c, v&s., the Legislature          provided for the flnanc-
ing of certain teacher training programs of State col-
leges from theirtllocal       funds."    Attly Gen. Op. V-1333
(1951).    The  Legislature    regularly   made separate appro-
priations   of these funds to the collecting        institution
each biennium for Its "support, maintenance, operation,
and im rovementl' or other similar purposes.           see, e.g.,
H.B. 2t 6, Acts 50th Leg., 1947, ch- 339 P. 649, at P.
650. In the appropriation        act of 1947 these funds are
referred to as "local funds" as distinguished           from "leg-
isative   appropriations,"     the latter    term obviously mean-
ing appropriations     from the General Revenue Fund or
other funds then being deposited In the .State Treasury.
&B.246,,-,         sec. 10, p. 667. We may take knowledge
of the'fact    that in both school and legislative         circles
it was common practice      to differentiate     these institu-
tional receipts     from other appropriated      funds by the
terms t'local funds" and "state funds."          While this use
of the terms was not accurate in a technical           sense it
had been prevalent for a long time and was generally
understood.
             In addition to the biennial appropriation  of
institutional    receipts for purposes which included im-
provements, the Legislature    from time to time made ap-
propriations    out of the General Revenue Fund or other
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                      Hon. C. H. Cavness,    page 5    (V-1427)


                      funds in the State Treasury for buildings          and other
                      permanent improvements at the State colleges            as the
                      need arose and as the financial       condition    of the
                      State permitted.     The fund from which these latter
                      appropriations    were paid was ordinarily      the.General
                      Revenue Fund, which was derived in part from a State
                      ad valorem tax limited by Section 9 of Article             VIII
                      of the Constitution    to 35 cents on the $100 valua-
                      tion.   In setting up the five-cent       ad valorem tax
                      for the college building program, Section 17 of Ar-
                      ticle  VII also reduced the general ad valorem tax
                      rate by five cents, thereby indicating         that the five
                      cents levied for "acquiring,       constructing~and      lnl-
                      tially  equipping buildings,      or other permanent'im-
                      provements at the designated institutions"          was to be
                      substituted    for funds formerly provided by the Legis-
                      lature from tax revenues.        In our opinion     lt'.tias not
                      intended as a substitute      for institutiona    i receipts
                      also, which were regularly       and customarily treated as
                      being in a different     category.    The "other state find9
                      which the institutions     were prohibited     from receiving
                      were those funds in categories       from which the addi-
         -‘_          tional appropriations     were made from time to time.
             .. .     Although institutional     receipts    are state funds within
                       the broad meaning of that term we are of the opinion
                       that It was not intended that Jhey be included in the
                       term as used in Section 17 of Article        VII.
                                  This construction   of the term llother state
                      funds" in Section 17 of Article      VII is borne out by
                      other provisions    in the joint resolution     submitting
        .,      ..3   this constitutional      amendment to the people.    This
        !:
                      joint resolution     (S.J.R. 4, Acts 9th Leg., 1947, p.
        g             1184) also submitted Section 18 of Article VII, which
                      tias adopted at the same election.       Section 18 provides
                      that the Board of Regents of the University        of Texas
        i!



                      and the Board of Directors     of the Agricultural    and
                      Mechanical College of Texas shall have the right to ls-
                      sue bonds against the income from the Permanent Unlver-
                      sity Fund for the same purposes as are provided in Sec-
                      tion 17 for the other colleges      in Texas.
                                 It is thus seen that the purpose of section
                      17 was to place the schools named in that section on a
                      Parity with those schools which participate    in the in-
                      come from the Permanent University   Fund. Section 18
                      does not contain a provision  prohibiting   the schools af-
                      fected by it from receiving  other state funds, but a
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Hon. CO H. Cavness,   page 6   (v-1427)


comparable provision was already contained      in Section
14 of Article VII, which provides:
            " . . . no tax shall be levied, and
                       . . -        ^..
     no money appropriatea,   out 0s tne Peneral.
     revenue . . . for the establishment,   and
     erection of the buildings   of the Univer-
     sity of Texas."
This section has always been understood as not proub-
iting the appropriation   of institutional  receipts'for
the erektlon of buildings at the institutions      included

in Section 18. It is clear, then, that with regard to
those schools sharing in the Permanent University Pund
there is no limitation   as to the use of local funds h
the construction  of permanent improvements.
            To hold that "state funds" in Section 17 has
a different   meaning from "general revenue" in Section
14 would be to discriminate    against those schools whose
building program is set up by Section 17. This would
certainly   never have been the intent of the Legislature
at the time of the proposal of the constitutional     amend-
ments in question nor of the people at the time of their
adoption.
           This conclusion     is further borne out by the
caption of Senate Joint Resolution No. 4, sunra, which
states that the joint resolution        proposes an amendment
to the Constitution     "providing a method of payment for
the construction    of buildings    and other permanent lm-
provements."     It therefore    appears that the Legislature
intended that the use of the five-cent         ad valorem tax
provided by Section 17 would not be the sole method of
financing   the construction     of permanent improvements,
and evidently    the Legislature    understood that there ex-
isted another method for such construction.
           The argument has been advanced that institu-
tional receipts,  even if not formerly within the term
"state funds" as used in Section 17 of Article    VII, are
now included inthe    term because they must be deposited
in the State Treasury.    We cannot agree with this con-
tention.   The meaning of a constitutional  provision   is

fixed by the intention   of the adopters.  Since institu-
tional receipts  were not included in the intended mean-
ing of "state funds" at the time this amendment was
adopted, no subsequent action of the Legislature     can en-
large the term so as to include them. The fact that the
          Hon. C. H. Cavness,    page 7    (v-1427)


          Legislature    has changed the method of deposit for
          these.fund.e   has not changed the meaning of the con-
          stitutional    provisLon.
                  It has been pointed out that although in-
     stitutional    receipts   are not state funds within the
     meaning of Section 17, they are nevertheless               public
     money within the control and disposition              of the Leg-
     islature    end may be disposed of by that body in any
     manner, within constitutional          limits,    which it may
     deem proper.     While it is within the power of the Leg-
     islature    to prevent the use of these funds for acquir-
     ing or constructing      new buildings       and other permanent
     improvements, it has not done so.             Article   2543~ re-
     quires that institutional         receipts    be kept separate
     and apart from other funds deposited in the State
     Treasury and consequently there is no impediment to
     their appropriation      for permanent improvements by rea-
     sonof    a.commingling with other funds,             Sections 2 and
     31 of Article     V of the current appropriation           bill
      (H.B. 426 Acts 52nd Leg., RiS. 19%               ch. 499, p. 1228,
     eat pp.:1482    1472) appropriate        instiJutiona1     receipts
     to each collecting      institution      for purposes which in-
;;
; ( elude "operation,
?,I
                            maintenance, and improvement" and
    '~"improvements and repairs."          We do,not find any evi-
$-i   dence~ of a legislative      intent to limit the nature of
g    the~improvements for which these funds may be used.
8;: I
                       In your second question you ask for a clarl-
k;       fication     of the meaning of "buildings     or other perma-
g:       nent Improvements" for-which the constitutional-funds
      :. may be used and, conversely,        for which the participat-
         lng insti,tutions     are prohibited    from receiving any
   ;,$other       state,funds.
     ..               As observed earlier     in this opinion,      the pur-
        pose of the amendment was to provide for the expansion
        Of facilities     at the articipating       institutions.        In
        QUAOpinion v-848 (19g9) it was stated that the people
        and,the Legislature       did not intend that the money made
        available by the amendment should be used for mainte---
  f nance,alterations            and repairs for existing       facilities,
  " 'butrather         that tiey intended that it should be invested
    . . in new buildings      and similar permanent improvements
      ~'which~were so badly needed after the late war.                It was
        Pointed    out  that  a' construction   of  the   amendment
  ;: ing use of the funds for maintenance, repair, or altera-           requir-
        tion of buildings      then existing    or later acquired with
        amWaman+,funds would tend to defeat the purnose for
  ;:
2rE-f;   Hon. C. H. Cavne~ss, page 8      (V-1427)



         which it was adopted, viz.,     to acquire additional
         buildings    and other permanent improvements.    In
         Opinion V-931 (1949), it was further held that only
         those buildings    and other permanent improvements
         acquired or constructed with amendment building tids
         may be initially     equipped at the expense of those
         funds.    However, the funds may be used for purposes
         of clearing,    grading, drainage, or other surface im-
         provements in anticipation     of and necessarily  inci-
         dental to the construction     of a new building or
         other permanent improvement.
                     We think the reasoning and holdings in our
         cited opinions are sufficient      to demonstrate that the
         purpose of the amendment was not to cover all improve-
         ments that might be needed at the designated colleges
         for the thirty years of its duration.        If the improve-
         ment contemplated requires the construction       or acqui-
         sition of a new structure,     for example, a building,      a
         wing on a building,    or other permanent structure,      it
         would seem the amendment funds were created for such
         purposes, requiring capital      investments of major pro-
         portions which formerly and..generallywre       provided for
         by specific   appropriations   from the general revenue.
         But if the improvement contemplated is merely to alter,
         remodel, or reconvert a classroom or rooms or a labora-
         tory, or to improve an existing water, heating,        or
         sewer system or reroute a portion thereof,       our former
         opinions have indicated that the amendment funds were
         not intended to be used for such purposes.
                       We will not attempt to lay down any hard and
         fast line     as to when there is an "acquirIngI   or "con-
         structionl'    and when there is a repairing   or alteration.
         The matter     rests in the first  instance within the sound
         discretion     of the governing boards of the various insti-
         tutions.      The responsibility  was placed there by the
         people in     the adoption of the amendment.
                     Section 17 of Article   VII does not prohibit
         the use of other state funds for repairs,     alterations,
         and improvements for which the amendment funds may not be
         expended and the Legislature      is free to make appropria-
         tions ou E of any available   funds for such improvements.
         In the current appropriation     act (H.B. 426, m         the
         Legislature   has made an appropriation   to each institu-
         tion under an item listed as "General Revenue Appropria-
         tion for General Operating Expenses."      Section 30 of
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        Hon. C. H. Cavness,      page 9    (V-1427)


        Article  V ,of that act defines "General Operating Bx-
        penses" as including " . . . improvements aa re-
        pairs; physical plant operation and maintenance; . e .'I
        This appropriation   is therefore available for improve-
        ments and repairs which are not within the scope of
        the College Building Amendment.
                                       SUMMARY .'
                       Institutional     receipts   of State institu-
                tions of higher learning,         commonly referred
                to as "local      funds," are not "other state
                funds" within the meaning,of that term as
                used in Section 17 of Article         VII, Texas Con-
                stitution     (College Building Amendment), Lo-
                cal funds appropriated        to the colleges   under
                Sections 2 and 31 of Article         V, H.B. 426
                Acts 52nd Leg., R.S. 195l, ch. 499 p. 1328,
                for purposes including        ?improvemenCs~~may be
                used for all needed improvements, including
                the acquisition      or construction    of buildings
                or other permanent improvements.
                       The College Building Amendment does not
                restrict   the Legislature   ins providing appro-
                priations   from the General Revenue Fund or
                any other available     fund for those improve-
                ments which may not be financed out of the
                amendment funds.
                        The phrase l'buildings  or other permanent
                improvements81 as used in Section 17 of the
                College Building Amendment means, generally,
                additional    structures   or other permanent im-
                provements for the expansion of existing       fa-
                cilities    at the colleges.    It does not in-
                clude repairs and alterations      to existing   fa-
                cilities.
                                                 Yours very truly,
        APPROVED:'                                 PRICEDANIBL
                                                 Attorney General
        c. IL Richards
        Trial    & Appellate   .Division
                                                  ?itzg%Y
        Charles D. Mathews
        First Assistant                            J$zeid
                                                   E. Jacobson
        m:EJ:wb                                         Assistants