January 20, 1967 

Honorable Robert S. Calvert 

Comptroller of Pub1 .lc Accounts 

Austin, Texas 

Dear Mr. Calvert: 

Opinion No. M- 13 

Re: Construction of Article 

678f, Vernon's Civil 

Statutes, a8 It relates 

to expenditures of appropriations for bullding projects from which 

the State Building Fund 

is to be reimbursed. 

Your request for an opinion on the above subject matter 

asks the following questions: 

"1 . Is the money appropriated to a using 

agency for the fiscal year 1966 only, with which 

to build a building, obligated by the provisions 

of Article 678f, R.C.S. so that salaries and 

travel and other personal services performed on 

the building project by the Building Commission 

during the fiscal years 1967, 1968, and 1969, 

are reimbursable from the 1966 year appropriation? 

"2. If the above question is answered In 

the affirmative and under the same conditions 

as set out In question number 1, would this be 

the only appropriation such services could be 

reimbursed from? 

"3. If money Is appropriated to a using 

agency for capital outlay for the fiscal year 

ending August 31r 1966, the using agency then 

through the Building Commission obligates the 

appropriation to remodel an existing building 

In the amount of twenty-five thousand dollars 

($25,000.00) (Art. 4357, R.C.S.) Is the capital 

outlay appropriation for 1966 obligated to reimburse the Building Commission for salaries 

and travel performed on the remodeling project 

by the Building Commission during the fiscal 

- 48 - 
, . 

, 

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

years 1967, 1968, and 19697 

"4. If question number 3 Is answered In 

the affirmative and under the same conditions 

as set out In question number 3, would this be 

the only appropriation such services could be 

reimbursed from?" 

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 expenditures from the funds 

appropriated by the Legislature for projects 

supervised by the Commission. In order that 

each project shall bear Its fair and proper 

share of the Commission's expenses, the Commission shall Institute and maintain a cost 

accounting system which shall be devised by 

the State Auditor as soon after the effective 

date of this Act as possible.' (Emphasis 

added.) 

Section 6 of Article VIII of the Constitution of 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's Opinions 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 legally be encumbered by 

contract even though the project for which It Is spent will not be 

completed and paid for until succeeding years. Attorney General's 

Opinions 0-2631 (1940), V-11 9 

(19521, Ww-40 (19571, and Ca25 

(1950 

(196 i 1. 

V-1397 (1952), V-1535A 

In Attorney General's Opinion V-1397, supra, it was 

held that a contract calling for the services of an erection 

supervisor Is ancillary to the main purpose of the purchase of 

a capital asset and is not a separate contract for personal 

services, and therefore expenditure for such purpose may be paid 

from an appropriation covering the cost of the construction contract. 

- 49 - 
Hon. Robert S. Calve&, pa& 3 (M-13) 

The reimbursable Items gdverned by the provisions of 

Article 678f are all items~lncldental to a construction project 

which constitutes areapIta 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 e 357, 

Vernon's Civil Statutes, recognize ,that ln the case of construction projects monies obligated by the construction contract will 

not necessarily be 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 presented to the 

Legislature as 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 

furniture and other equipment, architects' and 

engineering fees, 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 

appropriated to a using agency for projects governed b Article 

678f are obligated by the provisions of Subdivision (E 3 to reimburse the State Building Fund for services rendered by the Bulldlng Commission on the construction project. 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 services were performed on the building project. The 

services outlined by 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 reimbursed unless other appropriations for 

such project are apprdprlated or re-appropriated as the case may 

be. 

SUMMARY 

Monies encumbered by 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 

operating expenses of the State Building Commission expended in connection with such construction contract, and such reimbursement may be made 

even though services performed by the Building 

Commission are performed during subsequent fiscal 

Art. 678f, v.c.s., 

~~?iikn V-1397 (1952). 

Attorney General's 

Prepared by 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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