January 20, 1967

Honorable Robert S. Calvert Comptrollerof Pub1 .lcAccounts Austin, Texas

Dear Mr. Calvert: Opinion No. M- 13
Re: Constructionof Article 678f, Vernon's Civil Statutes, a8 It relates to expendituresof appropriations for bullding projects from which the State Building Fund is to be reimbursed.
Your request for an opinion on the above subjectmatter asks the following questions:

"1

. Is the money appropriatedto a using agency for the fiscal year 1966 only, with which to build a building, obligatedby the provisions of Article 678f, R.C.S. so that salariesand travel and other personal services performed on the building project by the Building Commission during the fiscal years 1967, 1968, and 1969, are reimbursablefrom the 1966 year appropriation?
"2. If the above question is answered In the affirmativeand under the same conditions as set out In question number 1, would this be the only appropriationsuch services could be reimbursed from?
"3. If money Is appropriatedto a using agency for capital outlay for the fiscal year ending August 31r 1966, the using agency then through the Building Commissionobligates the appropriation

to remodel an existing building In the amount of twenty-fivethousand dollars ($25,000.00) (Art. 4357, R.C.S.) Is the capital outlay appropriationfor 1966 obligated to reimburse the Building Commissionfor salaries and travel performed on the remodelingproject by the Building Commissionduring the fiscal

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Hdn. Robert S. Calve&, page 2 (M-13)

years 1967, 1968, and 19697
"4. If questionnumber 3 Is answered In the affirmative

and under the same conditions as set out In questionnumber 3, would this be the only appropriationsuch services could be reimbursedfrom?" Subdivision (E) of Section 5 of Article 678f, Vernon's Civil Statutes,reads as follows:

"The operating expenses of the State Building Commission shall, unless otherwise specified

by the Legislature, be paid from appropriations

made out of the State Building Fund. The State Building Fund shall be relmbursed Tar such expendituresfrom the funds appropriated

by the Legislaturefor projects supervised

by the Commission. In order that each project shall bear Its fair and proper share of the Commission'sexpenses, the Commission shall Instituteand maintain a cost accountingsystemwhich shall be devised by the State Auditor as soon after the effective date of this Act as possible.' (Emphasis added.) Section 6 of ArticleVIII of the Constitutionof Texas provides that no appropriation of State funds may be mad~e for a term of more than two years. Therefore, generally speaking, personal services

must be paid out of appropriations made for the year during which the personal services are rendered, Attorney General'sOpinions O-2815 (1940) and V-1397 (1952). It Is clearly settled,however, that an appropriation for one year In the case of capital expenditures may legallybe encumberedby contract even though the project for which It Is spent will not be completedand paid for until succeedingyears. Attorney General's Opinions 0-2631 (1940),V-11 9 (19521,Ww-40 (19571, and Ca25 (1950 (196 1. i V-1397 (1952),V-1535A

In Attorney General'sOpinion V-1397, supra, it was held that a contract calling for the services of an erection supervisorIs ancillary to the main purpose of the purchase of a capital asset and is not a separate contract for personal services,and therefore expenditurefor such purposemay be paid from an appropriation covering the cost of the constructioncontract.

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The reimbursable Items gdvernedby the provisions of Article 678f are all items~lncldental to a construction

project which constitutesareapIta asset of the State. Therefore, such items may obligate appropriations for a term beyond the ex lratlon of the appropriation. Both Article 678f and Article e357, Vernon's Civil Statutes,recognize ,that ln the case of construction projectsmonies obligatedby the construction contractwill not necessarilybe finally expended. during the term of the appropriation. Article 4357 provides In part:

,I

. .No claim shall be paid from approprlatlons kless presented to the Comptroller for Payment within two (2) years from the close of the fiscal year for whlch'such appropriations were made, but any claim .not presented

for payment within such period may be presentedto the Legislatureas other claims for which no approprlatlons are available.

. . , "It Is specifically provided,however, that as to all approprlatlons relating to new construction contracts,and to repair and remodeling projects which exceed the sum of Twenty Thousand Dollars ($20,000.00),Including In either Instance furnitureand other equipment,architects' and engineeringfees, and other related costs, any claim may be presented for payment within four (4) years from the close of the fiscal year for which such appropriations were made."

In answer to your first and third questions, monies appropriatedto a using agency for projectsgovernedb Article 678f are obligatedby the provisions of Subdivision (E 3 to reimburse the State Building Fund for servicesrendered by the Bulldlng Commissionon the constructionproject. Therefore,you are advised that this reimbursement Is to be paid from the appropriation for the construction project regardless of the year In which the personal serviceswere performed on the building project. The services outlinedby you In questions one and three would be paid from the 1966 appropriation. In answer to your second and fourth questions,this would be the only appropriation from which the services could be reimbursedunless other appropriationsfor such project are apprdprlatedor re-appropriated as the case may be.
SUMMARY

Monies encumberedby a construction contract entered Into during the fiscal year 1966 may be

- 50 -Hon. Robert S. Calvert,page 4 (M-13)

used to reimburse the State Building Fund for operatingexpenses of the State Building Commission expended in connectionwith such construction contract,and such reimbursement may be made even though servicesperformedby the Building Commissionare performedduring subsequentfiscal

Art. 678f, v.c.s., ~~?iikn V-1397 (1952). Attorney General's

Preparedby John Reeves Assistant Attorney General
APPROVED: OPINION COMMI'ITEE Hawthorne Phillips,Chairman W. V. Geppert, Co-Chairman Mary K. Wall Kerns Taylor Pat Bailey John Grace Staff Legal Assistant A. J. Carubbl, Jr.

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