Ron. Cliffora B. Jones Opinion No. O-1607
President Re: Building college print-
Texas Technological College ing shop. and issuing revenue
Lubbock, Texas bonds in payment thereof.
Dear Sir:
We have your letter wherein you request our opinion
on the following question:
“Does the Board of Directors of Texas Tech-
nological College have authority to issue evi-
dence of obligations for building a building
to house’ the college printing shop under a
pledge of revenues therefrom, same to: be built
from funds borrowed from sources other than the
United States Government?U
The authority of the Board of ~Directors to borrow
money to build a building to house the college printing shop
is’ contained in the provisions of Article 2603~ of Vernon’s
Annotated Civil Statutes, as amended. Section 1 of said Anti-
cle 2603~ as amended by Senate Bill 393, Acts of the Regular
Session, Porty-sixth Legislature, 1939, reads in part as fol-
lows:
“Section 1. That the Board of Regents of the
University of Texas and its branches, and the Board
of Directors of the Agricultural and Mechanical
College , and Its .:branche s, and the Board of Direc-
tors of Texas-Cal Collesei and the Board
of Regents of the State Teachers Co leges, and the
Board of Regents of the Texas State College for
Women and the, Board of Directors of the College
of Ar c s and Industries are hereby severally author-
sized and empowered to construct or acquire. through
funds or loans to be obtained from the Government
of the United States, or any agency or agencies
thereof, created under the National Recovery Act,
or otherwise created by the Federal Government or
from any other source private or aublic, without
cost to the State of Texas and accept title, sub-
ject to such conditions and .limitations as may be
. . ,.
Hon. Clifford B. Jones, page 2
prescribed by each of said Boards, dormitories,
kitchens and dining halls, hospitals, libraries,
student activity buildings, gymnasia, athletic
buildings and stadia, e
as mav be needed for the F
and the moral welfare and social conduct of ~the
students of such institutiong when the total
cost, type of construction, capacity of such
buildings, as well as the other plans and speci-
fications have been approved by the respective
Governing Boards; provided, however, that the Leg-
islature shall never make an appropriation out of
the general fund of this State, either in the reg-
ular appropriation bill or in a supplemental or
emergency appropriation bill, for the purpose of
equipping or for the purpose of purchasing and
installing any utility connections in any of the
buildings erected under and by virtue of the pro-
visions of this Act.” ‘~
Section 2 of said Article 2603, as amended by Chapter
459, Acts of the Second Called Session, Forty-fourth Legislature
(1934) provides that the Boards for the various colleges are au-
thorized to fix fees and charges for the use of the buildings
erected. Said section then further provides as foll’ows:
“The fees and charges thus fixed along with
all other indome therefrom shall be considered as
revenue derived from the operation of the build-
ings thus constructed. n
Section 3 of said Article 26o3~, as amended by Senate
BLlL ‘m, Ax-!!&rzf *Jm BfXJLLax.sks.mL, F~.fk.y-a&JL LvgA!!J&T%
(1939) reads in part as follows:
“Section 3. Subject ,to, the above restric-
tions, each of said Boards is given complete dis-
cretion in fixing the form,~conditionsand details
of such bonds or notes. ,&~y‘bonds ~,or notes issued
hereunder shall not be an indebtedness of the State
of Texas but shall be payable solely .from the reve-
nues to ge derived from the operation of said~ build-
ings; provided that such bonds may be ~refinanced by
the said~Boards whenever such action is, found by the
Board to be necessary.”
Section 4 of said Article: 2603~, as amended by Chapter
204, Acts of the Forty-fourth Legislature (1934) provides in
part as follows:
Hon. Clifford B. Jones, page 3
‘lSection 4. Each of said Boards is authorized
and empowered to pledge all or a part of such reve-
nues to the payment of such bonds or notes, and to
enter such agreements regarding the Imposition of
sufficient charges and the collection, pledge and
disposition of such revenues as It may deem proper.”
We believe that the above quoted provisions of Article
2603~ authorizes the Board of Directors of Texas Technological
College to issue evidence of obligations for building a building
to house the college printing shop under a pledge of revenues
derived from the operation of said building. Said bonds must be
paid solely from the revenues derived from the operation of the
building end no payment can be made from funds appropriated to
the College by the Legislature. Section 1 of said statute au-
thorizes the construction of buildings which "may be needed for
the good of the institution.11 However, we point out here that
the Board of Directors of said institution must in the exercise
of good faith and discretion determine whether or not said build-
ing is one that is needed for the good of the institution. Sec-
tion 1 of said statute also provides that such a loan may be ob-
tained from any source, either private or public. Under Section
2 of said article, as well as other portions of said statutes
above quoted, authority is given to execute notes bearing inter-
est as high as six per cent, payable over a period not exceed-
ing forty years. We might add that this department has, in
Opinion Number O-1694, addressed to Honorable Tom C. King, State
Auditor, Austin, Texas, held the above quoted statutory provi-
sions constitutional. Therefore, it is the opinion of this de-
partment that the Board of Directors of Texas Technological Col-
lege has authority to issue evidence of obligations for building
a building to house the college printing shop under a pledge of
revenues derived from the operation of said building same to
be built from funds borrowed from sources other than {he United
States Government.
Trusting that this satisfactorily answers your ques-
tion, we remain
APPROVED JAN 16, 1940 Very truly yours
/s/ W. F. Moore
FIRST ASSISTANT ATTORNEY GENERAZOF TEXAS
ATTORNEY GENERAL By /s/ Claud 0. Boothman
Claud 0. Boothman, Assistant
APPROVED:OPINIONCOMMITTEE
BWB, CHAIRMAN
:%-s:wb