Honorable Dempsie Henley

Cha$rman Texas Coamission for IndianAffairs Livingston, Texas Opinion No. M-44

R8: Whether theAla)rrm-Coushatta Indian

### ReservatiomTqibal Council,with the consent of the **Texas** C~cumiSslonfor Fdian Affairs 'hasthe authority under Art. $4212, V.C.S., toborrw money $l;m a bank for ths purposes sfated and to execute security for the loan on the chattels to be purchasedwith theborrowed money.

Dear Mr. Henley:

**Your** letter of MarcR 8, 1967, requesting an opinion of this office reads, in part, as follows:

"TheAlabama-Coushatta Indian

### ResgrvationTribal Council proposes toborrow the sum of $lZS,OOO.OOwith interest at 6% from The First National Bank of Livingston, Texas, payable and conditioned as 6et out in the copy of such note attachedhereto as attachment **No.** 1, **This** note will be a pakticipation loan between 'such 

### bank, joinedby two other localbanks, and guaranteed to **the** extent of 71.2%by the Small 

### BusinessAdministration, an agency of the Federal Gwernmsnt. The proceed& of the loan will be used for 

### the purposes indicated in aftachmentsNo. 2 and No. 3 hereto.

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

"Question: Does theAlabama-Coushatta Indian Reservation-TribalCouncil,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 proposednote on behalf of theAlabama and Coushatta Tribes of Texas as provided in Article 54212, Section 131

"It is further proposed that such loanbe secured in part bye security agxeement upon chattel propertybeing purchased and paid for with such funds for use as improvements on the ,Reservatiogin an attempt to earn revenues for the Tribe, a,copy of the security agreement being attachedhereto as attachmentNo. 4.
"Question: Does the Alabama-Coushatta Indian Reservation-TribalCouncil have authority to execute security agreements and other mortgage instrumentsupon personal property and chattels tobe paxchasedby suchAlabama* Coushatta IndianReservation-TribalCouncil and used upon the Reservation for improvements and economic development of such Reservation?

Section 13 ofArticle 54212,Vernon's Civil Statutes, provides as follows:

"Sec. 13. Subject tQ thewritten approval of the Commission, the Tribal Council may issue revenuebonds 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 securedbv the income from one or more revenue-rxoducingprooerties, interests, orHon. Dempsie Henley, Page 3 (M-44)

facilities of the 3.071-acre tract of land which is held in trustby the State of Texas for thebenefit of the Indians of theAlabama 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." (Emphasisadded.)

In answer to your first question, it is the opinion of **this** office that Section 13 ofArticle 54212,Vernon's Civil Statutes, authorizes-theTribal Council, subject to thewritten 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. issuedby the Tribal Council shall be construed as creating
a debt against the State; Therefore, any such evidence of indebtedness issuedby the, Tribal Council shouldhave incorporated within **the** instrument the underscoredwording 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 thisAct 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: 'Theholder hereof shall never have **the** right to demand payment of this oblisation out of anv funds raised or to be raised bv **taxation. ’** **”** (Underscoringadded.)

In answer toyour 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.

**- 210**  **-**. .

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

SUMMARY

TheAlabama-Coushatta Indian ReservationTribal Council,with the consent of the Texas Cosmnissionfor IndianAffairs, has the authorityby 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 tobe purchased by the Tribal Council and used upon the Reservation to further its improvement and development.

orney General of Texas
Preparedby 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.

-211-