December. 16, 1949,
Honorable Robert S. Calvert
Comptroller of Public Accounts
Austin, Texas opini0n.k v-97.2 ”
Rer Charges of pajting~ agent
of college ConstitutidnU
Qear Mr. Galgrt: tax bonds. .,
You request the opinion of the Attorney General on
queetians concernin& bonds issued under the College Building
Armendment, as follows:
“‘I have been asked to issue warrants out of
Xtis r,aisAS. from the five-cent tax levy for the
purpw8 of p*y&, the cost of retiring the bonds.,
I awe&i apprecia, t e yoqr ~JISW~P to ,the fo,llowing ‘;. :’
,guestions:
(4 If the cost of @%ying o; &fhecost af retfr-
ing tha.ss bbnds may be paid out of f&s
raised by the five-cent tax levy collected
under authority of the College Building
&nendment to the Texas Constitutidn? :
(2) Zf your answer to QueStion No. 1 is in the
negative, may the Schools use funds ap-
prbpriated from the State Treasury for
the support and maintenance for ,the purpose
of paying such costs? ”
Article Vtff, Section 17, Constitution oi Texas;.authofizes
the issuance of bonds or notes by the state colleges named there-
in fa,r t& purpose of acqui,ring, constructing,, and initi$&ly equip-
ping buildings or ather permanent improvements;, and~in payment
thereof this section provides for the levy of a state ad vbloreti tax
,of five cents.
The various colleges named in Se&on 17 have issued bonds,
and have designated as the paying agents of the interest and principal
of such bonds certain banks in Texas and in New York,
Honorable Robert S. Calvert, Page 2 (v-972)
You wish to know whether payment of the charges of
there b&c# for interest and principal payment of the bon& may
be made out of funds realieed from the state ad va.lorun tr* of
five cents.
Section 17 specifically grants to the colleges the power
to issue interest bearing negotiable bonds. It is manifest that
there must be a place of payment of bonds, and that certain duties
must be performed in such payment. Our Supreme Court has held
that whenever a power is granted, it impliedly authorizes what-
ever ie necessary or indispensable to the exercise or enjoyment
of the grant, and that the grant of an express power carries with
it by irnplicbtion, every incidental power that is necessary and
proper to the execution of the power expressly granted. Terra
w, 104 Tex, 191, 135 S.W. 519 (1911).
It lo recognized by all that paying agents will not gratu-
itoualy perform their duties. Thus, if there is a necessity for a
pryment agent, it follows that there is a necessity for the payment
of the reasonable charges of such paying agent for the performance
of its duties, Although Section 17 does not expressly mention the
payment of the charges of a paying agent, we think that the same is
necessarily implied. In other words, this power is necessarily im-
plied from the express power to issue bonds.
You cite ue to our Opinion No. V-798 and No. V-799. In
the first-mentioned opinion it was held that the five cent tax fund
“may not be withdrawn from the State Treasury except to pay
principal and interest reouirements of bonds or notes issued under
Section 17.” It is our opinion that the charges of the bank of pay-
ment would constitute a requirement. which would have to be paid.
In Opinion No. V-799 it was held that in the issuance of
the bonds authorized in Sections 17 and 18 of Article VII, it would be
necessary to Incur certain expenses such as printing and attorneys’
fees and that the college board could properly incur such expenses
“and pay for them out of legally available funds of the institution,
aeeuming, of course, that such expenses are reasonable.”
In that opinion not called upon to decide;and
we were we
did not decide, what constituted “legally available funds.” We do
not believe that Opinion No. V-799 is in any way inconsistent with
our hold.ing with respect to the payment of the charges of the bank
of payment.
To #how that the authority for the payment of such chargea
Honorable Robert S. Calvert, Page 3 (V-972)
must necessarily be implied from the express power to issue
the bonds, let us give a practical illustration. Without express-
ing any opinion as to what funds might be legally available (other
than the five cent tax fund), suppose that all public moneys were
earmarked by the Legislature for specific purposes, none of
which included the payment of the charges of the bank of payment.
If the bank of payment received no moneys for the performance
of its duties, then it could refuse to perform them. In such event,
there would be a default in the payment of the interest or princi-
pal, or both.
It is our opinion that Section 17 of Article VII, in express-
ly granting the authority to issue the bonds, impliedly authorizes
the payment of the charges of the paying agent out of the five cent
tax fund.
Our answer to your first question in the affirmative renders
unnecessary an answer to your second question.
SUMMARY
The charges of the paying agent of the bonds issued
by A college under Section 17 of Article VII, Constitution
of Texas (College Building Amendment), may be paid out
of funds raised for the benefit of such college out of the
state ad valorem tax of five cents levied by said constitu-
tional provision.
Very truly yours,
ATTORNEY GENERAL OF TEXAS
By & $rke
Assistant
QWS: u:v
APPROVED
FIRST ASSISTANT
ATTORNEYGENERAL