EATTORNEY GENERAL.
Q,F TEXAS
AcwrrIN 11. -n3mL4s
PRICE DANIEL j
ATTORNEY GENERAL
June 24, 1949
Hon. William L. Kerr, President
Board of Regents
State Teachers Colleges
Midland, Texas Opinion No. V-848.
Re: The legality of using funds
available under the College
Building Amendment to con-
struct and equip buildings
which will be revenue pro-
ducing.
Dear 6ir:
We quote fre.m:Yeur request for opinier as follows:
“You have heretofore advised our Board
of procedural matters under the Constitutional
Amendment Building Program. (Tex. Const.
Art. VII, Sec. 17; A, G, Opinion Nos, V-798, V-
799.) We now m&e further request and impase
upon you for addition&l opinion as to the use we
mry melce Of the 8vdlable money,
“‘Seven colleges are wnder the jurisdic-
tion of our Board. The needs of the respective
schools are varying. Far instmce, the meat
pressing need in the greater number of our
saheob is for class roem buildings, but as to
one or perhaps two, the urgent need ia for’ dir-
ing halls er dormitor,ies or combination of the
twe. As M one or perhapa 6rvm. the pressing
need is for nmhpsiums. In other werde, as m
some of the schools, the need is for buildings
which would be self-sustaiming in part and the
t~pc of building for which revenue bonds have
been issued in the past, under the Skiles Act.
(Ax& 26Mcc-A, V.C.S.)
.
HDL William L. Kerr, Page 2 (V-84g)
“‘FOP the use of our Board in detommia-
ing the type of buildings to be permitted tier
the Buildin(t Amendment, will you please &-
vime:
“‘May w.ar Board of Regents expend
funds available under the BuildSag AnePsl-
ment fom:
&km. Willhm L. Kerr, Pale 3 (V-84s)
or note4 iseued for the purpose of’acquiring, ooaotructiag and ini-
tially equipping s o a buildings or othar permanent improvements
at said respective institutions.” It neither describe4 n0r fines any
other limitations as to the types ‘of building4 or 0-r permbnent
improvements which may be wquir,ed or canrrtr.ucted. Therefore,
the bonds or notes may be i44ued to secure fund4 f,er ,the ~acquisi-
tion, construction and the initial equiyping of any tfnt of building
at the remp4ctive iw3Mulrioms whiob the pverning board properly
ikema recea4rry in eur#9hg wt tke PunctiEioaaof ita eQuoatiana1
in&it&&m, iacldizkg tAxtwo typea of buildings whick way be eor-
structsd under tha Asnerisian4 of Articles 260%~ 4r 2654-1, V.C.S.
However, Article 2603~ provides Get the conartruc-
tion or ecquisition of the improvemea~ therein authoriaed shall
be “without cost to the State of Texas,” and that any bonds issued
thereunder “4hall not be an indebtedness of th4 6tak Qf Tenas, but
shall be payable solely from the ,revenue4 Q be derived frem the
operation of 4rid buildie;li4 O‘* AAm, ir Article 2&4-f, it i4, po-
vided that the acqui4iti0is and 00M%kpue$i@n of ttVe im@rovansmto
provided for therein ‘“4hall bc llrlc without cost to the State of
Texas, ad no bonds ia4ued fez 41&h iegfovemeats r&&l oonsti-
tutc a debt of the State ef Texas in mny mann*r whatpoevor, but
&all be a charge only rpinst those ~evanuo4 gre,%ieaAAy pledged
for their p8yment.oa A, 0, Opimimu M~4kd-tZT3, O-1694, O-1707,
O-()36, O-6993, by prior. ddda*r&~ns. Thrse statute4 rould
apt preclude the i44uucs mf baa&m or note4 under Section 17 of
Article VII. H0aever, if revenue bonds were BP are 00 be issued
. u&er Article 26a3c or Article 2C54c-1, then these statute4 would
_ q@y to such reverie bWdr aid %luaUSI ol t#ibbprocreds. &i Other
..:: ,. WM-SLS~tbti bu~t##ag~ w+mqw-e~$s tm&# We Simwyal either by
t&d ,&ssuance of &a*& ,a*,,M&5* u&&k @#sXWSi 1,7 af &ptic.As VII or
,&t&4 issw8 oPs3iwMMkc bmula Mk&*r AH&tile 26&k or AWide
&&J6c-1, bitt @k-hl?p kw*.
It io cA.ew, tbesafwe, that tiw prwcedr from tzte
noJc*,gr bon& ieswd uader Scetiea 17 & Ahiclc VII, Gorstitu-
‘,.., ion df: Texas, o&a Lo wm~d ncitke~ to supplement fund4 0bttined
. ., bp, Ne ia.sqmce 08 pewsme baa&v *dim Article 2603~ o,r Article
UHO-1, nor te p*y t&e d*netiuction o,r acqui4ition costs 0f the
,~$@p@mvmmentscevcr~ad by such revezIue bonde, nor te ply my
#& of the intere4t *a and ppineipaA 0f ouch b0ikd4.
We ares unabble te an4wer your second question cnt-
rpzicplly because it involves fact considerations. Section 17
I
Ho& William L, Kerr, Page 4 (V-848)
. ‘,
provides, ae st&?d, that the mwey realiesd from the sale af the
bonds, shall be spent:
%ar the purpose of q2.quirhg, con,?,
structingl, and initiPdly equipping buildings “;
oh other permanent improvements a O .‘*
.1,
As staked by the Court af Civil &@erls:
“The primary purpose of the amen&
QleQt***r86~.* fw the pPrpeee of fiwrc-
ing (8tr ~~ns~paction Pnd~Jequipment of build-
ings sad akbiir pwinament improvements , a OR
Whit%aide v* Brvwn, 214 S.W,2d g44 (19483,
,er;ror refused).
The amendmrnt wits sefferred to by #at Court as it
was ad i6 c csnrnody denominated, the wCoLlepe 8J-j Amend-
ment, 84 The cap@i:tm on S,J& 4 (tit amendment as prapored by
the Lagislatawe) &&es that &he amendment provided:
“A meehod~of pqtmen$ for the WP-
strai&h~ and eepment of buildings ax
~rnuraot imprtwemebts a e .’
Coaretschq the histwy af the amendmInt it ir our
intarpreta%on tbaa it was intended by tie Legislature and the peo-
p&e to provide p&marfPy for the construction or acquisitian af
building& a& the construction or acquisititin of other permraent
improvements. There is no provision in the amendment for the
repair @f e&sting buildings out of such funds. On the contrary,
the amendment says dthaa &he participating colleges (except in
case of aalamity) ‘“shall not e e O receive any other state funds fer
the acqd&ng or constructing of btihW.gs or ether. permaaent im-
provemex& L/s qyD
It will be noted also that the ame&rne& uaas the
word ‘%~@%Cally”in maying ‘for the purpose of acquiria#.i, ceast*ti
buildings or other permaaent impsova-
lyw so rPsled further indic8tec trhrt the
people and the Legislature coniemplwkd the canntrwtien or AC-
quisition of such bui%diBfls or cuber permaaent imppevemeatti a@
might requite “inB&& equipme&@ That pwt ot the am-
Hon. William L. Kerr, Page 5 (V-B48)
calling for equipment" certainly docs not contemplate re-
“initial
pairs. ““InitiJ 0qdpa0at"'ixdcata6 equipmetrt fer the fiirt t+e,
p mr4!pdP6W U%d 6iSih Op4~4tiO~6 m8y ba paid
for out ef Gelleg* AmePdmoet money, then the L*eIaturr is pro-
hibited index the p6evS6ioa quoted above freti B aay ap#ro-
priation for such ~raS0ns during the effective life of’-i3i; amend-
ment. So a colle#e which cakuhted that it would rsceive 6 million
dollars under the amendment a not expend 6 million dollars
for the construction of buildings and initially equippiv them. It
would have to save back enough money to rep6ir and remodel its
laboratories, clrrclare08~6 ) et cet8ta. for *a whoAa effective life
of the amerdmont -- ha-0 it c& SW receive snf m0ney from
the generd revewe for 6ucL. items &axing th8t period.
The paople ud W k@slatuxe irtanded ne such
result, They %s- *$ @he -:6M be invert& in build-
iRg6 8nd similm ~-stimplP- ate at the collsges which
were se bully YIlJd by W &tar i&e hkr war, mad which will
be needed during the Jfec4kve lMe od the uaerdment. It called for
capitsi investment of the meaey --not the wm 0f it fer maintenance,
Jteratioru, and repairs.
Ths Bmrd of Rep&r of mate TeackaT6
CeIle~ea may *enid it6 Ce836t%tv&onrl U :
.
Ika. William L. Ke~a+~Page 6 (V-648)
u?aet lbiadiq hods (Tmx. Canst. Art, Ilr, aoc.
1 7 &) o@ra l0
cqG6itbaa @lg c~ishwctic+a aad iai-
t&J. oquip#og ob a9q tygbdsof building rt the in-
at6QIQsopLwbirb +&to Board properly deems net-
91-y h carrying cut the functions of its ia-
stf4oticm. tad&g those types of buildings au-
tb&z@d to ba constwcted under the provisions
of &ttcPms 2603~ or 2654c-1, v,c,s.
SW& &ads may net, however, be ekscd
b swpphanmt f&a &%&xed by the issuance
ef rwmaua beads u&m Article 2654c-1 or
2603~~ 01: b par pay papi oi t&e cos+rhctism
op1 lcq&sPWa coBbs ef the improviments cev-
axed by stxch rove-, bowls, or to pay opy past
86 tbm pPbaGip& ubd fnltotest Paquiramen*s of
such PQVmaambox&. A 6, OpworAs V-796,
v-799.