. .

ORNEY GENERAL 0wT~xAs

RonorableArthur B. Knickerbocker Adjutant General of Texas Austin, Texas
Dear Sir: OpinionNo. o-569.5 Re: Right of Adjutant General on behalf of State to enter into lease rental contractwith the Texas National Quard Armory Board.
Reference ismade to your letter of October 25, 1943, to which you attached theproposed lease contract to be,executed by you, and'to your letter of November 5, 1943, supplementingyour request. Your letters are as follows:

"You are deliveredherewith a proposed contractby and between the TexasNational Guard Armory Board as lessor, and the State of Texas as lessee, to be executed by me.

"Youwill note that Paragraph 7 provides that the lessee (State)promises to pay an installmentof $6,200.00 on or before October 31, 1943, and 22 other installmentsof $3,100.00each, for 22 consecutivemonths, aggregatinga total of $74,400.00 for the biennum. The 48th Legislature made no provision for thepayment of this sum of money, or any other amount by the Adjutant General.

"Willyou kindly letme have the answers to the following questions: %

"1. Do I have the legal right, as Adjutant General of Texas, to bind the State of Texas, under the law, to pay to the TexasNational Quard Armory Board for the time contemplatedby theproposed contract the aforesaid sum of money?

"Youwill note that Item 4, page 234, of the appropriationmade by the 48th Legislature for the use and benefit of the TexasNational Guard Armory Board for each- .

Honorable ArthurB. Knickerbocker -page 2 (O-5695)

year of the next bienniumprovides for $&O,OOO.OO to pay rentals on property leased by said Board to the State of Texas under authority of law.

"2D Would the TexasNational Guard Armory Board have the right to pay the installmentof$6,,200,00 on or before October 31, 1943, and 22 other installments of $3,100,00each, as contemplatedby the above referred to paragraph of theprop,osedcontract,out of the aforesaid appropriationmade to the Armory Board.,for and in behalf of the State of Texas, shou1.d Iexecute theproposed agreement as Adjutant General for the State of Texas.

“3D In the event thisproposed contractwas made, or any contractentered intoby and, between theparties proposed,would the lessee have the right to take the proceeds of the lease and apply the same to thepayment of an indebtednessof any character,or would it be necessary for the aforesaidTexasNationa, Guard Armory Board and the State, by the Adjutant General, to pay theproceeds of such rental contract into the Treasury of the State of Texas, as is generallyprovided by law."
Your supplemental inquiry of November 5 is as follows:
"Does the AdjutantGeneral have any discretion as to whether he will or will not sign a contractwith the Armory Board

a As a matter of fact?

I 1 b As a matter of law? "Willyou kindly incorporateyour reply to the above inquiries in your answer to questions submittedon the aforesaid date?"

In connectionwith the three questions in your original letter which we will consider first in this opinion, the provisions of Article 589013, Vernon's Annotated Civil Statutes must be looked to in determining the authority of the Texas National Guard Armory Board to sub-lease the property in questionto the State and your authority to execute such lease as agent of the State. The provisions of this Article applicable to your questions are as follows:

"Section2. The Board hereby created shallbe and it is hereby constituteda body politic and corporate. It. .

HonorableArthur B. Knickerbocker -page 3 10-5695)

shall succeed to the ownership of all property of, and all lease and rental contractsentered intoby, the Texas National Guard Armory Board that was createdby pri,orstatues and all the obligations contractedor assumed by the last mentioned Board with respect to any suchproperty and contracts shall be the obligationsof theBoard createdby this Act. With this exception,no obligation of said former Board shallbe binding upon the Board hereby created. It shallbe the duty of said Board to have charge of the acquisition, construction,rental, control,maintenance and operation of all Texas National Guard Armories, including stables,garages, rifle ranges, hangers and all other property and eauipmentnecessary or useful in connection therewith, and the said Board shallpossess all powers necessary and convenient for the accomplishmentof such duty, including, but without being limited thereto, the following express powers:
. O e

"(f) To acquire, by gift or by purchase, for use as building sites or for any other purposes deemed by said Board to be neceqsary or desirable in connectionwith or for use of units of the Texas National Guard,property of any and every description,whether real, personal or mixed, incl,uding, but without limitation on the foregoing, leasehcidestates in real property, and hold, maintain, sub-lease, convey and exchange such property, in whole or in part, and/or to pledge the rents, issues and profits thereof in whole or l.n part; also, to acquire, by gift or purchase or by constructionof the same, furnitureand equipment suitable for Armory purposes and to hold,maintain, sub-lease, convey,'andexchange such furniture and equipment, in whole or in part.

"(g)To constructbuildings on any of its real property, whether held in fee simple or otherwise, and to furnish and equip the same and to hold,manage andmaintain all of said property and to lease to the State of Texas, o D

"(h) From time to time, 3borrowmoney, and to,i~ssue and sell bonds, debenturesand other evidences of indebtedness for thepurpose of acquiring one or more building sites and buildings, O O "andto be secured as follows: Sy a pledge of, and payable solely from, the rents, issues and profits of all of the property of the Board; or by a pledge of, and payable solely from the rents, issues and profits, of theproperty acquired or constructedby the Board, o D I

"(i) To execute and deliver leases, or sub-leases in the cpsr or bui1dinp.q lr-ate? unon leraehold statutesn~cnuired by the Board, demising and leasing to the State of Texas through. .

HonorableArthur B. Knickerbocker -page 4 (O-5695)

the AdjutantGeneral,who shall execute the same for said State, for such lawful term as may be determinedby the Board, any building or buildings and the equipment therein and the site or sites therefor, to be used for Armory and other purposes and to renew such leases 01"sub-leases from time to time;provided, however, that if at any time the State of Texas shall fail or refuse topay the rental reserved in any such lease or sub-lease, or shall fail or refuse to lease or sub-lease,any such building and site, or to renew any existing lease or sub-lease thereon at the rentalprovided to be paid, then the Board shallhave thepower to lease or sublease such building and equipment and the site therefor to any person or entity and upon such terms as the Board may determine. D

.The annual rental (whichmay be made payable in such installmentsas the Board shall determine) to be charged the State of Texas for the use of suchproperty leased OP subleased to it by the Board shallbe sufficient to provide for the operation andmaintenance of theproperty so leased or subleased, to pay the interest on the bonds, debentures or other evidences of indebtedness, if any, issued for thepurpose of acquiring, constructingor equiping suchproperty to provide for the retirement of such bonds, debentures or the other evidences of indebtedness, if any, and the payment of the expenses incident to the issuance therecf,as well as the necessary and proper expenses of the Board not otherwiseprovided for."

The Act as amended by the 45th Iegislature in 193'7, was brou$ht before the Supreme Court in the case of Texas National Guard Armory Board vs, M&raw> 126 S. W. (2nd) 627,, SOP the purpose of determining its constitutionality. The Armory Board, by originalmandamus proceedings, sought to compel the Attorney General to approve the record concernirlg the bonds executedby the Board. In this case the Attorney General in questioning the validity of the Act raised, among others, the following objections.

"First, The following sub-paragraphsof section 2 of said Act (Vernon'sAnnotated Civil Statutes, Article 58 Ob, Section 2), are void for unconstitutionalityin that (i 3 authorizes the creation of a debt on behalf of the State in violation of Section 49, Article III of the Constitutionof Texas (Vernon'sAnnotated Civil Statutes) and (g), (h), and (i) taken together constitute the giving or lending and a Dled&t? of the rrpait of the State in violation of Section 50 of saidArticle; and (i) in so far as it authorizes then Board to fix and determine the rentals to be Daid bv the State is a delefation of le islativeauthorit in violation of Section 1 of rticle 2 an

j!i of Section 1 of 1rticle 3 of said Constitution.”

HonorableArthur B, Knickerbocker -page 5 (o-5695)

"Third, That the Board is without authority to acquire OP hold sites for armoryI buildings or to pledge the revenues from buildings ereci,ed thereon if the title in said Board is by way of a long term leave and not in fee simple absolute,

"Fourth. That, whether or not the thirdproposition be true, the Board is without authority to lease to the State of Texas any buildings itmay erect on the sites held by the Board on long term lease since to do so would be a subleasingnot contemplatedor authorized in said~Act.

"Fifth, That the leases of the Board to the State of Texas, which the said Act contemplatesto be made, can not be validly executed by or inbehalf of the State of Texas from which it follows that any pledge such as is contained in the said indenture,of the rents to be derived from leases to the State would be void and without effect," Mrgr. Justice Sharp wrote themajority opinion upholding the validity of this Act and answered all questi.ons raised by the Attorney General. The holding of the Court is found in the following twoparagraphs:

"This Act places the burden on the Board to do whatever is necessary to carry out its objects and purposes, and such contractsor leases are to bemade Ithroughthe Adjutant is eneral oerde' for such lawful terms asmay be determinedby the

The Board is authorized to acquire sites for armory purposes, hy g*ft or purchase, and topledge the rents or profits thereof,and to execute bonds, debentures and other evidence of indebtedness therefor,payable solely from the rents, issues and profits thereof; and it is expressly agreed that said bonds OP other evidences of indebtedness shallnot constitutenor be deemed a debt of the State of Texas, nor is the credit of the State of Texas pledged for thepayment

. thereof.

"In our opinion, thisAct does not violate any of the provisions of the Constitution,and we find adequate grounds on which to base its validity."

In connectionwith your request, thatpart of the appropriationact of the 48th Legislature to the TexasHonorable Arthur B. Knickerbocker -page 

### 6 (o-5695)

National Guard ArmoryBoard, relating to the questionshere, is set out below:

"TEXASNATIORAL GUARD ARMORY BOARD, Beginning Sept. 1, 

### 1943E$"$l, 

### 1945 Maintenance and Miscellaneous: 

### 4, Armory rentals, including headquarters,offices and motor vehicle storage;available either to pay rental contracted to be paid by the ArmoryBoard, or to pay rentals on property leased by said board to the State of Texas under authoritv of law

_ _ _ _ _ _ _ _ _ - 

### $40,000,00 $40,000,00"
We consider this appropriation to be applicable to lease contracts such as ispresented here. A total of forty thousand ($40,000.00)dollars for each year of the beinnium ismade available as is stated in the Act:

board to-the State of Texas under authority of law.

.or to pay rentals on property leased bx said

In accordancewith the provisions of Article 5890b, it is the opinion of this department that the first two of yaw? questions shouldbe answered in the affirmative,

In response to your third question,we find that the Act provides that the rents and profits derived from such leasesmay be pledged to secure indebtedness incurredby the board, and that theymay be used topay necessary expenses not otherwise provided for, Therefore, it is our opinion that the Armory Bond is to receive themoney derived from such rental contracts. Having answered the o,uestions in your letter of October 25, 1943, in the affirmative,we will attempt to answer the questions in your letter of November 5, 1943, which are as follows:

"Does the Adjutant General have any discretion as to whether he will or will not sign a contractwith the Armory Board.

Honorable ArthurB. Knickerbocker -page 7 (o-5695)

a As a matter of Fact? 

# II b As a matter of Law?
In the considerationof this question,we look to the history of the Act creating the TexasNational Guard Armory Board. During the early days of thepresentNational Administration, the Congress of the Unites States, while considering the Federal EmergencyRelief Appropriation,was requested by the War Department to "earmark" a portion of their %nds to be used for the constructionof National Guard Armories in the several States upon the advice and approval of the War Department. The Texas allotmentwas tentatively set at six million dollars. The Congress acted favorably on this request. The funds were to be used under the direction of the Public Works Administration,whose regulations required State sponsorship of Armory Projects, and grants to the several States were contingenton a substantial contribution of them.

Following this, the 44th Texas Legislature,Acts of 1935, created the TexasNational Guard Armory Board,making it the duty of the Board to have chargeof the construction, rental, control,maintenance and operation of all National Guard Armories in Texas. The emergency clause of thisAct, after stating the availability of these Federal funds, said:

11

. D .andthe further fact that the State of Texas is now paying annually one hundred thousand ($lOO,OOO.OO)dollars

or more for armory rentals; and the further fact that there is at this timeno specificboard createdby the laws of Texas authorized to cooperatewit,hthe Federal Government for the purpose of securing said allotment."

This Act was amendedby the 45th Legislature, 1937, Chapter 

### 366,Page 740, and was codified inVernonPs Annotated Civil Statutes as Article 589013.

The Act as amendedhas been quoted from freely in this opinion. However, it should be noted that in Section 2 of the Amendment the word "acquisition"was added. In addition to the duty of having charge of the construction,control, etc. of all armories, it was to have charge of the acquisition of all Texas National Guard Armories.

In addition, as quoted from heretofore, it was autho,rlzed to borrowmoney, issue bonds and other forms ofHonorable Arthur B. Knickerbocker - Page 8 (C-5695)

indebtedness,pledging the rents and profits as security, lease to the State, and otherpowers not necessary to mention here.

The Act was again amended in 1939, but the changes are not important in this discussion,

It was the Act as amended in 1937 thatwas before the Supreme Court. This questionpresented here was not specificallydecidedby the court i,n the opini,onit rendered, However,we have carefullyexamined the file of this case in the Attorney Ceneralts office and when considering it and the opinion of the court together,we find the question was indirectlypresented and inferentially included, in the opinion.

The TexasNational Guard Armory Board in its brief and argument to the Supreme Court sai.din connectionwith thispower of the Board to lease the armories to t,he State: "What is presented here is a statutewhich attempts to authorize the creation of an obligation on the part of the State and itmust be determinedwhether or not such an obligation is a debt prohibitedby the Constifution.

"That the expense of renting armories is a current expense of the State is indicatedby the fac.tthat the Constitution,Art. XVI, Set, 

### 46,makes it the duty of the Legislature toYprovideby law for organizing and disciplining the Militia of the State in suchmanner as they shall deem expedient.I'

In response ,tothis proposition and argument, the court said:

"Finally,we held that the bonds provided for by the Act under considerationwould createno debt against the State of Texas; nor is'the credit of the State pledged for the payment of such bonds, or interest thereon, or any part thereof, Such bonds would be payable solely from the rents, issuesand profits to be derived from the operation or leasing of theArmory buildings; unless the Legislature in the exercise of itspower and discretion, should see fit, when making its biennium appropriation, to include therein a sufficient sum of money to pay such bonds, or any part thereof.

"Theact
**is** also assailed on the ground that the Legislaturehas exceeded its ConstitutionalauthoritybyHonorable Arthur B. Knickerbocker -page 9 

### (O-5695 

### ‘1

the undertaking to delegate to the Board thepower to fix the rentals to be paid by the State, and that such effort on thepart of the Legilature to delegate suchpower is in violation of Section 1 of Article 2 and Section 1,of Article 

### 3, of the Constitution.

"Thegeneral rule prevails that, unless there is express authoritygiven in the Constitution,thepower of general legislationmay not be delegatedby the Legislature. See 9 Tex. Jur., Sec. 

### 68,p. 493. However there aremany powers that the Legislaturemay delegate to other bodies, in many instances,where the Legislature cannot itselfpractically or efficientlyperform the functions required, there can be no doubt of its authority to designate some tribunal to perform the duties required to carrv out the ourposes of such legislature. In this State the Legislaturehas created the Railroad Commission, the Live Stock Commission, the Highway Commission,andmany other agencies; and the trend of modern decisions is to uphold such laws."

It seems that the courthas, at least by implication, held that the statute imposed a duty on the Adjutant General to execute such lease contracts,an agent of the State, as are presented to him by the Board under theprovisions of the Statute.

In 1935, the Supreme Court in the case of Fort Worth Cavalry Club v, Sheppard, 

### 83 S. W. (2nd)

### 660, in discussing thepower of the Adjutant General to execute leases for National Guard Armories held thatunder the laws of this State the Adjutant General had no express right to execute lease contracts, such right was only by implication,and that right was found in the wording of the AppropriationActmaking funds available to his department for his purpose. Thereafter in 1939, the 

### 46thLegislature amendedArticle 5790,V.A.~ C.S., giving the Adjutant General the express right to execute lease contracts for armories, but thispower was limited as follows~

11 e D * .andthe Adjutant General shallnot lease or subleaseany property for armorypurposes in OP about any municipality from any person other than the Texas National Guard Armory Board, so long as adeauate facilities for such armorypurposes in or about suchmunicipality are available for renting from the Texas National Guard Armory Board." This amendment to Article 5790,when consideredwithHonorableArthur B. Knickerbocker -page 10 (o-5695)

Article 58901,seems conflicting, However, the evident purpose was to strengthenArticle 58gOb by giving the Adjutant Qeneral the express right to execute leaseswith the Armory Board, since the Supreme Court had held in the Fort Worth Cavalry Club v. Sheppard, supra, that he had no express~power under thestatutesC.o do this. we take thisposition since under theprovision of Article 589Ob, the TexasNational Guard Armory Board is expressly created for thepurpose of acquiring, constructing , rending, controll'ing andmaintaining all National Guard Armories in the State of Texas, - Sub-sec!Ezfj, the provisions in Article 589013, Section 2, wherein it is provided, II

. 0 "that if at any time the State of Texas shall fail or refuse to pay the rental reserved in such lease or sublease, or shall fail or refuse to lease or subleaseany such building and site, or to renew any existing lease or sublease thereon at the rental provided to be, paid.

. D" is applicable only to the Legislature of this State, and does not vest any discretionaryrights in the Adjutant General.

Finally, we conclude that the Legislature intended that the Armory Board be vested with power to do all that is necessary to provide the State with National Guard Armories. To further thispurpose, the Board was authorized to borrow money, to pledge the rents and profits to secure such indebtedness,suchprofits to be derivedby ren%ing Armories to the State within the limitation of currentappropriations made to saidBoard, and the Adjutant Generalwas designated to act as the out the purposes intended. Fur,therthat the Adjutant General in executing these lease contractswas to perform a mere ministerial act, and was not vestedwith any discretion in thematter.

JWR:mb

APPROVEDDEC 2,1943 Yours very truly
ATTORNEY OENERAL OF TEXAS
BY GeraldC.Mann Attorney General of Texas

This Opinion Considered in Limited Conference and Approved. Jack W. Rowland Assistant