**OFFICE OF**  **THE AITORNEY**  **GENERAL OF**  **TEXAS AUSTIN** 

‘cnorable YverrttR. Cain bcunty ?ttornry, ChambersCounty inehuao, TOXOS

-‘ear 

### Mr. Csln: oplnlon No. O-7045 Rer -%ea the Chambers-Liberty Counties Nerlgqaibn Cistrlot hare the authokitf to finrnoe end oonatruot 4 belt railroad

imately hwlre milda to X088



# a1 21‘trik*aAqrall )&~&or the development bf the lower eoSon of’,the a&d Gq,loest~ \Trlnltg 3lrtr and a part of Trinity Bay

3 y for navigation purpoaea. It Is also a neae\ tcrfitoaar,y/par,t of the iIiatriot*aplan to developthe y’elong the river and on the bayshore ior induetr$al and oomsrolal purposes. The **road** will rirst be use&.&marilg tohaul sulohur from a new nulphur mine being developed et Z’oae huff, but it 14 antiolpet4d that rioe, oattls end patroleumproduota in the are4will also be transported to oonnaot with the routhorn ?eoillo Lines at Liberty.
"The Fsdsral ‘:‘or!cs :.genog has requested the Slstrlot **to 44our4**  an opinion from **you 4a**  **to the**  Slstrtot’s **legal** authority to finanoe snd oonatruot this belt railroad. .icopy or the ?ederal :':or&4 .igonay9sletter is attachsd.::on. .verettH. Cain - ?aeo 2

"The Dietriotwsa orgnnlzod under Artlolea 826jh, 8247a ?nd 52476 of Vernon's imnotatodTex44 %atutea, snd ths sreatlon or the Xatriot has heretofore born approved by your Zeoartmont in **OOMOOtiOn** with the **144UOnO4 of**  5100,000 :levlqatlonAid 3ondr early In 1945.
"The iYlstrlot

la apooliloally authorized by Qotlon 1 31 .!rtlolo8247s to aoqulro,purohaae, oonetruot and opsrato 1

...beltrailroads...., and everything appurtenant thereto, togetherwith 411 othsr feoilitler or alda lnoldsnt to or ua4rul In th4 opsratlon or development of the Dlatrlot’s torts and waterways or in eld of navigation and oomnero~ thereon....' The Xstriot proposes to Issue revonuo bonds untisrthat atatuto for the puf~$lfrof fln4nolng the oon- :truotlon or the belt line.

The aooy oi the Pederal Yorks ;igenoy*sletter, which you statad 'J'Sztceohed to your requoat,was never received by this oiiIo4.
irtlale82678,Vernon's Annotated Civil Statutes, provldos in 72rt 69 follows:

$9 "40, 1. Anynavicatlon dlatrlotheretofor organized
or heraartierto bs organized undar any of the provlslons of the Constitution or laws of the Ptate of Texas, In addition to all other powers aonferred by law is hereby !:lvenauthority and shellhereafter ham powor in ths nonner heroinafter provided to aoqulro, purchase, oonatruot, **enlarge,** ortend, rspolr,maintain, operato or develop whorvca, dooks, warehouses, grain elevators, bunkering faollltles, be dlroada, floating plants, and iaollltle.4,lightorlng ieollit 3 4s and towing faolllti4s, and everything appurtenant thereto, togetherwith all other taollitlesor aide Incident to or uaerul In the operatloa or developmentoi the dlatrlot*a ports and watsrwaya or In aid ofnavigation and oommros thereon.

Toa. 3. The Eoard ofNaviaation and Canal Commissioners of 9 such nav~tiondl~r~ct Ica sderalxrqenoy Administretiono m .bors or the -4 hors T from the
'.'nlted Ctetea, or from any clthor department or agenoy oi the Znlted :?tates.or from any other scuroo, end In evidence thereof

forma of obligation or suoh 21strSotrayat -- revenues to bs derfvxiron shad introvenen%a ant rao111cle for the nEpos4 of obtamqmds to acculr4.,purchaae. CC --. -L meinGi5iY Gorate 0: issue the notes, werrants, certifloates z indebtedness or other )lf, sol+g out of the TT.R -

5 jnstruct, enlarge, extecd, repair, decks, warehounes, grain elevetol r?il;'oads,floatlnq clants and fscl~ltlea i:-dbvelop wharves, :i,bunkorinG faollitlss, belt

',li&terlnq faoiT3Xoa,205

Uon. herott 

### H. caln - paer 3

towine,

faoilitias, 

### and everything SppUrtSASAt thereto, i,oq.thbr

with 811 other f8OiUti48 or 8id8 IAOidOAt to or usaiul IA th4 oparatiOA or d4valopmeAt of the dlstrict'a port8 and watorwayr or in aid of AaligatioA RAd OOmmb?O. thor.iA.

"Ceo. 4. Zaoh iasu8 of 

### obligntionaauthorized hereunderShall OOAStItUtO 4 SbpSrCitbaoriee SAd shall be ap~roprlataly designated. C.‘uohobligations ohaU not OOA3tItUt8 .A IAdebt8dn888 or pl8Qe of the oredlt of suoh dietriot, sh8l.l A4Par be 

### paid in 

### wholeor in 

### part outot any fund8 rafsad or to be raioad by taxation, 

### and shalloontain8 rroitaltothetoffrot.*

““40. 

### 5. nA)fOblI@3tIOA8 iSSue& h4reuAd4rmay be 

### issuedgayablefrom snd 84our4dbl the pledge of all the rev4nu48 dsrirrd from the ooeretloA of the lmprotea4nte 

### cadisoilftIe8 

### of thedistriot,aroluaiteof any mvenuo8 dorived from taxation or aaa48amaAta, ormay bo payable 

### fromand aaoured by the plodgo of only l uoh r4v4nuea se my be derived from t&4 OporatfoA Oi the imprOvemeAts and faoilltlea aoquIr4dwith the proo44dr of the sale of suoh OblIqStiOAa, Or

### mm7 bapayableSr081SAd 8eOured by the pledge of a soboifled part of thr relcnuea derived from the OperatiOA Oi th8 lJQrOt4BI4AtS4Ad faOilfti88 Of th4 dlatrlot, all as my be iworldad in the proowcll~gr authoriziAg the iSSUSAO4 Of auoh tbll@tiOA8.

vao.17. 'Phi8Plotshall bS OOA8trusd 88 oU&tiatito authority for the ~OOO!S~lfSblllSAt Of the ~lirpOSS8

heroin m4AtiOAad Snd I8 AOt t0 bS Oonrtrusd t0 :894ai SAP 4ti9Jtfng law8 011the 8a1naaubjsot matter, it b4iAg thr purpose SAd b:bnt hereot to orest4 SA addltimal and 8lt4rA8tO method for+h4 SOOOIII~118hlSSAt Of 8UOh 9WQO848. 'Phi8 Aot, without 

### rsfsranobto 

### other statute8 of 

### the State of Tame, ah811 OOAStitUtO full authority ror th4 euthorlmtiOA SAd **faauaAO@** Of OblIgatIoAa herounder SAd iOr the aocomplIahmeAt of all thIAgs herein authorized tobe doAb, SAd no QrooesdIAg8 r4latIAg t0 th4 SuthorIzetIoA Or IsSusAO4 of aueh obligatfOA or the dOIAg of auah thing8 shall b4 A4oeaaary sxoept 8UOh aa are hsrrln required, sAd AaIthOr the Bond and :'iSrraAt **LOW**Of 1931 or OAY othsr **provisions** 

### or the laws **of** 

### the Stat0 Of TSXS8 PertiAOAt to the authorization or 18sua~04 oi obligations, thr OperatioA end meiAtenaAo4 of ports, 0aASl.a and waterwsg, tb4 granting offraAohIs48 or permits, the right t0 eleOtion8
or r4f4raAdum petitions, or In aAywis8 Impeding Or r4atrIOtjog the oarrylaq out of tha sot8 authorized to be done hereunder or sots done pUrSU4At thereto.***”:?OA.:yerett H. coin - Taga 4

"4 nota that **Art1018** 82670 euthorlzea AaVigatfm dlatrlota to 5aoulra,purchase, and oonstruot oortaln taollltleawithout tsxation and to aoouro funds for auoh purpoeo by the lasuanoa of obllqetlona oi the dlatrlot payable rolsly from th4 ravenuoa to be derived from th4 improvamanta and faoilitira of auohdietriot.

"'aal80 note that the Sot do48 AOt sp4oi?ioallyauthorize the issusnoe of the bonds. It is well aottlad iA thir "tat. that countlea, mu~loipal oorporatlona, and pOlftfO@l aubdlviaioA8 03MOt lSSU4 nsgotiablrbond8 urile888uoh power i8 expr6aaly @Onierredby law. 

### Merepower to borrow money oarrlea wlth it no suthorlty to ia8uanegotiabla bond8 therefor. 34 Texas Jurl8- nrudence 6390 217 --!.

';'* 37h Robertsonv. Rreedloro, 61 T8xsa 3161 Laaater v, Lopez,

:!owevar, we do not believe that tho type obllgstlon authorlzgd here iS a nagotiabla fAatrUQ4At. !74 quota from Jon68 011*Bonds and ?OAd ~4O~ftfOS", vol. 1, ~4OtiOA 289, peg4 302:

nZl~oS the status or muniolpal bands as nogbtiebl4 seouritiaa 1s to bs datermiAad by the provlalona OS the 1:Aiiorm

Megotlable Inrrtrumanta Law, it follows, as of course, that theymust oontain the eoaeAtiela daelgnated by thet law, OAd sinoe the UAiiOrEIaot 18 but, iA the seln, a oodifioatlAnof the law QerohaAt, Suoh bond8must therefore oontainthe aaa4Atlal8 Of 8 A4gOtiSbl8 instrument
as understood at oommon law. This lnoludea en uAooAditional promlao to pay a sum oertsln in money. If they aremade payable only upon a oontkigenoywhloh may A4var ooour, S oondltion 18 thereby ln~ootad fAt0 tha prOmi88,making tha ultimatepaymsnt problematloal, thur d4atroyiAg the uAoonditloAa1 oharaotor of the agreemoAt to pay at all events, SAd, at the Sam8 time, daatroyiAg the Aagotiability of ths lnatrumanta. Tuoh a altuatloA is damonqtratedwhere the bonds err made payable 8olely out of a apaoial iUAd tobe derived from da8ignSt6d aouroaa~ which louroasmay dry up before theyhero yielded th4 prooeadr nooessary to liquidate their amount in rull. Hero the prepondsranoa of judiolal thought ha8 arrived at the oonoluaion that auohaA arranngem4At, though oreating a probSblllty that thepromlsod paymant will be made in full, still leavea a poealblllty that it may not be, aAd this poaalblllty 16aV4a the 9rOQiS4 itB4lf UAcertain and, therefore, not UAaOAditiOnel~ The Aejiotirbflity of such bonds la not Savedby the faot that they aremade payable to bearer."Hon. 7verattHa Cain - Pago 5 

### 207

IA view of the SOrSgolAg, you are advised that ln our oolnlon the Chambora-Liberty Countle8N8vlgatloA Dlatiiot hss authority under Artlols 82470 to issue obllgtloAo oalled

-ravonuo bond8" **for** thepuxpoao 0s ffA8AOfAg the oonatruatlon o? a bolt railroad. '2uatlng this snmwera your **~u4atlona, we**  **art)**

Very truly yours,
ATTOFGYOENERAL CF ?EXX3

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