Honorable Dempsie Henley 

Cha$rman 

Texas Coamission for Indian Affairs 

Livingston, Texas 

Opinion No. M-44 

R8: Whether the Ala)rrm-Coushatta 

Indian ReservatiomTqibal 

Council, with the consent of 

the Texas C~cumiSslon for 

Fdian Affairs 'has the authority under Art. $4212, V.C.S., 

to borrw money $l;m a bank 

for ths purposes sfated and 

to execute security for the 

loan on the chattels to be 

purchased with the borrowed 

money. 

Dear Mr. Henley: 

Your letter of MarcR 8, 1967, requesting an opinion 

of this office reads, in part, as follows: 

"The Alabama-Coushatta Indian ResgrvationTribal Council proposes to borrow the sum of 

$lZS,OOO.OO with interest at 6% from The First 

National Bank of Livingston, Texas, payable 

and conditioned as 6et out in the copy of such 

note attached hereto as attachment No. 1, This 

note will be a pakticipation loan between 'such 

bank, joined by two other local banks, and 

guaranteed to the extent of 71.2% by the Small 

Business Administration, an agency of the 

Federal Gwernmsnt. The proceed& of the loan 

will be used for the purposes indicated in aftachments No. 2 and No. 3 hereto. 

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Hon. DemQSie Henley, page 2 (M-44) 

"Question: Does the Alabama-Coushatta 

Indian Reservation-Tribal Council, with the 

consent of the Texas Commission for Indian 

Affairs, have the authority to borrow such 

sum of money for such purposes and to execute 

such proposed note on behalf of the Alabama 

and Coushatta Tribes of Texas as provided in 

Article 54212, Section 131 

"It is further proposed that such loan be 

secured in part bye security agxeement upon 

chattel property being purchased and paid for 

with such funds for use as improvements on the 

,Reservatiog in an attempt to earn revenues for 

the Tribe, a,copy of the security agreement 

being attached hereto as attachment No. 4. 

"Question: Does the Alabama-Coushatta 

Indian Reservation-Tribal Council have authority to execute security agreements and other 

mortgage instrumentsupon personal property 

and chattels to be paxchased by such Alabama* 

Coushatta Indian Reservation-Tribal Council 

and used upon the Reservation for improvements and economic development of such 

Reservation? 

Section 13 of Article 54212, Vernon's Civil Statutes, 

provides as follows: 

"Sec. 13. Subject tQ the written approval of the Commission, the Tribal Council 

may issue revenue bonds or any other evidence 

of indebtedness, in order to finance the construct&on of improvements on the Reservation 

and for the purchase of additional lands necessary therefor or for improvement of the income 

and economic conditions of the Reservation. 

The bonds or other evidences of indebtedness 

may be secured bv the income from one or more 

revenue-rxoducingprooerties, interests, or 
Hon. Dempsie Henley, Page 3 (M-44) 

facilities of the 3.071-acre tract of land 

which is held in trust by the State of Texas 

for the benefit of the Indians of the Alabama 

and Coushatta Tribes under the authority of 

Public Law 6,21, Acts of the 83rd Congress, 

1954, 68 Stat. 768, 25 U.S.C.A., Sections 

721 et seq." (Emphasis added.) 

In answer to your first question, it is the opinion 

of this office that Section 13 of Article 54212, Vernon's 

Civil Statutes, authorizes -the Tribal Council, subject to 

the written approval of the Commission, whose primary responsibility is the development of the Reservation, to execute a 

note for the purpose of improving the income and economic 

conditions of the Reservation. 

However, no note or other evidence of indebtedness. 

issued by the Tribal Council shall be construed as creating 

a debt against the State; Therefore, any such evidence of indebtedness issued by the, Tribal Council should have incorporated 

within the instrument the underscored wording of Section 21 of 

Article 54212, Vernon's Civil Statutes., which reads as follows: 

"Sec. 21. No obligation created by a contract, bond, note, or other evidence of indebtedne8s issued by the Tribal Council under this Act 

shall be construed as creating a debt against 

the State: and every such contract, bond, note, 

or other evidence of indebtedness shall contain 

this clause: 'The holder hereof shall never 

have the right to demand payment of this oblisation out of anv funds raised or to be raised 

bv taxation. ’ ” (Underscoring added.) 

In answer to your second question, it is the opinion 

of this office that under the stated factual situation, the 

Tribal Council has the authority to execute the aforementioned 

security agreement involving personal property and chattels 

to be purchased'by the Tribal Council and used in development 

of the Reservation. 

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. . 

Hon. Dempsie Henley, page 4 (M-44) 

SUMMARY 

The Alabama-Coushatta Indian ReservationTribal Council, with the consent of the Texas 

Cosmnission for Indian Affairs, has the authority by virtue of the provisions of Section 13 

of Article 54212, V.C.S., to borrow money from 

a bank for the purposes stated, The Tribal 

Council has the authority to execute a security 

agreement for the loan on chattels to be purchased by the Tribal Council and used upon the 

Reservation to further its improvement and 

development. 

orney General of Texas 

Prepared by Alan Minter 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Hawthorne Phillips, Chairman 

W. V. Geppert, Co-Chairman 

John Reeves 

Wade Anderson 

Z. T. Fortescue 

STAFF LEGAL ASSISTANT 

A. J. Carubbi, Jr. 

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