June 13, 1967 

Honorable Robert 5. Calvert 

Comptroller of Public Accounts 

Austin, Texas 

Dear Mr. Calvert: 

Opinion No. M-89 

Re: Construction of Article 

666b, Vernon's Civil Statutes, as amended by Senate 

Bill 504, Acts of the 

60th Legislature, relating 

to lease contracts entered 

Into by the State. 

Your request for an opinion on the above subject matter 

asks the following questioner 

"(1) Can I legally sign a contract for 

a period of time extending beyond the explratlon date of the appropriation for rent becoming available on September 1, 1967, which 

would be August 31, 19682 

"(2) If you hold that a contract can be 

made extending beyond August 31, 1968, must the 

entire amount of the contract be paid out of 

the appropriations available for the fiscal 

year beglnnln 

t 

September 1, 1967 and ending 

August 31, 19 8%'" 

Article 666b, Vernon's Civil Statutes, as amended by 

Senate Bill 504, Acts of the 60th Legislature, Regular Session, 

1967, provides In part: 

"Section 4. Hereafter all departments and 

agencies of the State Government, when rental 

space Is needed for carrying on the essential 

functions of such agencies or departments of the 

State Covernment, shall submit to the State 

Board of Control a request therefor, giving the 

type, kind, and size of building needed, together 

with any other necessary description, and stating 
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Ron. Robert S. Calvert, Page 2 (M-89) '* 

the purpose for which It will be used and the 

need therefor. 

'Section 2. The State Board of Control, 

upon receipt of such request, and if the money 

has been made available to pay the rental thereon, 

and If, In the discretion of the Board such space 

Is needed, shall forthwith advertise In a newspaper, 

which has been regularly published and circulated In 

the city, or town, where such rental space is sought, 

for bids on such rental space, for the uses lnd;;Fted 

and for a period of not to exceed four years. 

such leases shall be contingent upon the avallablrlty 

of funds to cover the terms of th 1 It I 

ther provided that monthly rental: my","% paid tn 

furadvance when required by the lease agreement and 

mutually agreed upon by the lessor and the lessee. 

After such bids have been received by the State 

Board of Control at Its principal office In Austin, 

Texas, and publicly opened, the award for such 

rental~contract will be made to the lowest and 

best bidder, and upon such other terms as may be 

agreed upon. The terms of the contract, together 

with the notice of the award of the State Board of 

Control will be submitted to the Attorney General 

of Texas, who will cause to be prepared and executed In accordance with the terms of the agreement, such contract In quadrupllcate; one of which 

will be kept by each party thereto, one by the State 

Board of Control, and one bv the Attorney General 

of Texas. The parties to such contract will be 

the department or agency of the government using 

the space as lessee and th t t1 

space as lessor." (Rmphas?sP%d~dr~n' ng 

th 

e 

Pursuant to the above quoted provisions the State Board 

of Control upon receipt of a request for rental space by a State 

agency will award rental contracts to the successful bidder for 

a period notto exceed four years. One of the provisions which 

we ~111 state In the written contract form will be as follows: 

"This contract and lease agreement Is made 

and entered Into In accordance with the provlslons 

of Senate Bill 504, Acts of the 60th Legislature, 

Regular Session, 1967, amending Article 666b, 

Vernon's Civil Statutes, and Is made contingent 

upon the avallablllty of funds appropriated by 

the Legislature to cover the term of the lease." 
, 

Hon. Robert S. Calvert, page 3 (M-89) 

Thus under the terms and conditions of the contract 

awarded by the Board of Control pursuant to the provisions of 

Article 666b, Vernon's Civil Statutes, the contract does not 

obligate the State beyond the avallablllty of funds appropriated 

by the Legislature. Accordingly, such contract will not create 

a debt, Cfty of BIR Spring v. Board of Control, 404 S.W.2d 810, 

(Tex.Sup.mb6). In that case an attack was made on the viilldlty 

of a contract for a subply of water to the State because the term 

of the contract was beyond current appropriations. In rejecting 

this contention the Supreme Court stated: 

"The contention that the purchase contract 

was Invalid because there then existed no leglslatlve appropriation to pay for the water to be 

furnished in the future Is answered by this Court's 

opinion In Charles Scrlbner's Sons v. Marrs, 114 

Tex. 11, 262 S.W. 722 (1924). In that case an 

attack was made on an order of the State Textbook 

Commission purchasing certain textbooks for the 

public schools of Texas from Scrlbner's Sons. 

Among other objections It was urged that the 

contract to buy textbooks for a five-year period 

was invalid because It was for longer than the 

two-year period of legislative appropriations and 

created a debt which could not be paid for out of 

reserves for the biennium fn which created, This 

Court said: 

UOThls contract obligates the state to lntraduce into and use relator's books In the public 

free schools for a period of five years. It obSfgates relator to furnish, offer,~and sell these 

books to the state each year for five years, upon 

the requisition of the school authorities each 

year for such books as may be needed. Payment 

,'for them Is to be made out of the current fund 

each year as they are purchased. 'Ihe obligation 

of the contract Is not to buy a fixed number or 

amount of books8 but only so many as are needed 

by the schools of the state. Liability Is fixed 

only for such amounts as are requisitioned by the 

trustees of the schools, The number of books purchased for any year and the amount of money applied thereto Is wholly within the control of the 

school authorltfes. 

'#The contract Is for uniform text-books for 1 

a period of five years. No quantity Is stipulated 

? 405 - 
Ron. Robert S. Calvert, page 4 (M-89) 

and no promise to,pay, only an agreement to use : 

the books In the schools. The statute and the 

contract provide that no debt Is created. The 

obligation to pay arises only upon the purchase 

and delivery of books for the year when need.ed, 

and according to the purchase. The books so 

furnished and so purchased during any year do not 

make a charge on the future resources of theism, 

state, but are paid for each year as the purchases are' made.' 

'This Court quoted from the case of City 

of Tyler v. L. L. Jester & Co., 97 Tex. 344, 78 

S.W. 1058 (1904), in which a long-term water purchase contract was attacked: 'The making of a contract for water for a number of years, to be 

delivered In the future dld~ not create a debt 

against the city, but the llablllty of the city 

arose,;pon the use by it of the water during each 

year. 

The Court then concluded: 

'The contract of the Board of Control with 

the City of Big Spring ia a valid contragt and 

Is not subject to the attack made on It; 

Under the contract Involved In Clty,of Big Spring v. 

Board of Control, supra, the city agreed to furnish water at a 

Id t .' long as the State of Texas shall In 

rna%aTi >dazperate said hospital on said site.' to 

Big Spring State Hospital.) 

In view of the provisions of Article 666b, Vernon,'s' 

Civil Statutes, as amended, the terms and conditions of the 

lease and rental contract entered Into pursuant thereto and In 

view of the decision of the Supreme Court In City of Big Spring 

v. Board of Control, it Is our opinion that any obligation created 

b th II f the proposed lease Andy rental agreement will 

t~rmlEatse?p% itie expiration of exlstlng appropriations for rent 

unless other appropriations for rent are made available prior to 

such termination. Therefore, no obligation exists beyong current 

revenues and such a lease and rental agreement would be valid. 

You are therefore advised that you may legally sign a 

lease ,and rental contract awarded by the Board of Control pursuant 

to the provisions of Article 666b, Vernon's civil Statutes, for a 

period not to exceed row years, in the event there is contained 

-4060 

:. 

,. 
. , 

Hon. Robert S. Calve&, page 5 (M-89) 

In such lease and rental agreement that the lease and rental 

aff;;ment Is made contingent upon the avallablllty of appropriated 

In answer4o,.ys:+z? second question, If a lease and rental 

contract Is entered Into pursuant to the provisions of Article 

666b, Vernon's,Clvll Statutes, for a period not to exceed four 

years, which period extends beyong August 31, 1968, and such coontract Is made contingent upon the avallablllty of funds appropriated by the Legislature, the entire amount of the contract 

need not be paid out of appropriations available for the fiscal 

year ending August 31, 1968, but may be paid In accordance with 

the terms and conditions of the lease and rental contract out of 

monies thereafter made available from appropriations by the Leglslature. 

SUMMARY 

Article 666b, Vernon's Civil Statutes, authorizes the execution of lease and rental agreements on behalf of State agencies for a period 

not to exceed four years and provides that such 

leases shall be contingent upon the avallablllty 

of funds to cover the terms of the lease. Such 

lease and rental agreements are valid If such 

agreements are made contingent upon the avallability of funds appropriated by the Legislature. 

Y&s very truly, 

C?i%?-- 

G&era1 of Texas 

Prepared by John Reeves " 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Hawthorne Phillips, Chairman 

W. V. Geppert, Co-Chairman 

John Banks 

Linward Shivers 

Alan Minter 

Monroe Clayton 

STAFF LEGAL ASSISTANT 

A. J. Carubbl, Jr. 

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