THE ATTORNEY GESERAL 

OF TEXAS 

January 2, 1989 

Dr. Wilbur 

Chancellor 

University 

System 

L. Meier, Jr. 

of Houston 

4600 Gulf kreeway 

Suite 425 

Houston, Texas 77023 

Opinion No. JM-1001 

Re: Constitutional authority of an institution of 

nigner education to refund 

bonds issued under "prior 

law" (RQ-1406) 

Dear Dr. Meier: 

On behalf of the University of Houston System, you have 

requested an opinion of 

of article VII, section 

this office interpreting a portion 

17, of the Texas Constitution. 

Article VII, section 17, deals with appropriations and 

funding for agencies and institutions of higher education. 

Your letter reads in part: 

Subsection (e) of article VII, section 17 

provides in part that the governing board of 

any of the institutions of higher education 

identified in subsection (b)'may issue bonds 

and notes for the purposes of refunding bonds 

or notes issued under this section or nrior 

a. . . .' (Emphasis provided). We request 

your opinion as to the meaning of the emphasized language. Specifically, does the 

phrase 'prior law' refer only to the predecessor of article VII, section 17, which was 

repealed on November 2, 1982, or does it 

refer to any statute existing prior to the 

adoption of the present article VII, section 

171 

To better orient the discussion that follows, pertinent 

provisions of article VII, section 17, are set out here: 

Sec. 17 (a) In the fiscal year beginning September 1, 1985, and each fiscal year 

thereafter, there is hereby appropriated out 

of the first money coming into the state 

treasury not otherwise appropriated by the 

p. 5137 
Dr. Wilbur L. Meier, Jr. - Page 2 (JM-1001) 

constitution $100 million to be used by eligible agencies and institutions of higher 

education for the purpose of acquiring land 

either with or without permanent improvements, constructing and equipping buildings 

or other permanent improvements, major repair 

or rehabilitation of buildings or other 

permanent improvements, and acquisition of 

capital equipment, library books and library 

materials. 

(e) Each governing board authorized to 

participate in the distribution of money 

under this section is authorized to expend 

all money distributed to it for any of the 

purposes enumerated in Subsection (a). In 

addition, unless a single bonding agency is 

designated as hereinafter provided, such 

governing board may issue bonds and notes for 

the purposes of refunding bonds or notes 

issued under this section or orior law, 

acquiring land either with or without permanent improvements, constructing and equipping 

buildings or other permanent improvements, 

and for major repair and rehabilitation of 

buildings or other permanent improvements, 

and may pledge up to 50 percent of the money 

allocated to such governing board pursuant to 

this section to secure the payment of the 

principal and interest of such bonds or 

notes. . . . In lieu of the authority 

granted to each governing board herein, the 

legislature by general law may designate a 

single agency to issue bonds and notes 

authorized under this section . . . . 

(f) The funds appropriated by this 

section may not be used for the purpose of 

constructing, equiwiwr repairing, or 

rehabilitating buildings or other permanent 

improvements that are to be used for student 

housing, intercollegiate athletics, or 

auxiliary enterprises. 

. . . . 

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Dr. Wilbur L. Meier, Jr. - Page 3 (JM-1001) 

(I) This section is self-enacting upon 

the issuance of the governor's proclamation 

declaring the adoption of the amendment, and 

the state comptroller of public accounts and 

the state treasurer shall do all things 

necessary to effectuate this section. This 

section does not impair any obligation 

created by the issuance of any bonds and 

notes in accordance with prior law, and all 

outstanding bonds and notes shall be paid in 

full, both principal and interest, in accordance with their terms. If the provisions of 

this section conflict with any other provisions of this constitution, then the provisions of this section shall prevail, notwithstanding all such conflicting provisions. 

(Emphasis added.) 

Section 17 uses the "prior law" phrase twice, once in 

subsection (e) and again in subsection (L). We think it was 

used in the same sense both times, and in the sense in which 

the term is used by article VIII, section l-e of the Texas 

Constitution. In construing the meaning of a word or phrase 

in the constitution, resort may be had to other sections of 

the instrument for the sense in which it is used. State v. 

Gillette's Estate, 10 S.W.2d 984 (Tex. Comm'n App. 1928, 

judgmt adopted); Attorney General Opinion JM-533 (1986). 

As it is now written, section 17 of article VII was 

added to the Texas Constitution November 6, 1984, but, as 

you note, a previous version of article VII, section 17, was 

repealed in 1982. The repealed provision also had as its 

object the distribution of funds to colleges and universities for certain purposes, but under a different formula. 

See Attorney General Opinion H-1129 (1978). 

At the same time that former article VII, section 17, 

was repealed in 1982 (thus eliminating its formula for the 

distribution of ad valorem tax money to institutions of 

higher education), the electorate amended article VIII, 

section l-e, of the constitution to read: 

Sec. l-e 1. No State ad valorem taxes 

shall be levied upon any property within this 

State. 

2. All receipts from previously authorized State ad valorem taxes that are collected on or after the effective date of the 1982 

p. 5139 
Dr. Wilbur L. Meier, Jr. - Page 4 (JM-1001) 

amendment to this section shall be deposited 

to the credit of the general fund of the 

county collecting the taxes and may be 

expended for county purposes. Receipts from 

taxes collected before that date shall be 

distributed by the legislature among institutions eligible to receive distributions under 

prior law. Those receipts and receipts 

distributed under nrior law may be expended 

for the purposes provided ynder orior law or 

for repair and renovation'of existing permanent improvements. (Emphasis added.) 

Within two months after the repeal of the old article 

VII, section 17, provision and the adoption of the new 

article VIII, section l-e, language, this office construed 

the phrase "under prior law," as used in the new article 

VIII section to refer to the repealed article VII, section 

17, provision. m Attorney General Opinion MW-594 (1982). 

That conclusion was reiterated in Attorney General Opinion 

JM-77 (1983), which found fault with the MW-594 opinion in 

other respects -- but not in its conclusion that the phrase 

"under prior law," in article VIII, section l-e, meant 

former article VII, section 17: 

The new constitutional amendment [article 

VIII, section l-e] states with respect to 

receipts distributed under prior law, that 

is, article VII, section 17, that they ‘may 

be expended for . . . .I (Emphasis added.) 

Attorney General Opinion JM-77 (1983), at 2. 

The new version of article VII, section 17, added to 

the constitution in 1984, was proposed by Texas House Joint 

Resolution 19 -- a resolution adopted by the legislature in 

its final form on May 25, 1983. &9 H.J.R. 19, Acts 1983, 

68th Leg., at 6701. Thus, the drafters of the resolutions 

had available to them Attorney General Opinion MW-594 

(1982) I which interpreted the phrase "under prior law" as it 

related to the constitutionally-directed distribution of 

funds to institutions of higher education pursuant to 

article VIII, section l-e. It is our opinion that in 

re-using the phrase, "prior law," the drafters (and the 

electorate) intended it to have the same meaning in the new 

article VII, section 17, provision as it has in the existing, related provision, article VIII, section l-e. 

P. 5140 
Dr. Wilbur L. Meier, Jr. - Page 5 (JM-1001) 

The phrase, nprior law," if used in a different context, might be readily given a much broader significance, 

but in arriving at the intent of lawmakers, courts are not 

limited to the literal language of a provision if it appears 

from the entire law that a word or phrase was used in a more 

limited sense. m Moodv v. San Saba Countv Water Control 

and Imnrovement District No. 1, 293 S.W. 845 (Tex. Civ. App. 

- Austin 1927, writ ref'd); see also State ex rel. Grimes 

County Taxuavers Ass'n v. Tex 

. . Dal Power Aaency 

S.W.Zd 258 (Tex. Civ. App. 

dism*d).l 

- ~hs~o~c;lst Dist.] 1978,' 

565 

writ 

Subsection (a) of the current article VII, section 17, 

is careful to limit the use of the distributed funds to four 

purposes: (1) "acquiring land either with or without 

permanent improvements,1' (2) "constructing and equipping 

buildings or other permanent improvements," (3) "major 

repair or rehabilitation of buildings or other permanent 

improvements," and (4) "acquisition of capital equipment, 

library books and library materials." 

Subsection (e) thereof also limits to four purposes the 

use of bonds and notes secured by a pledge of money allocated by subsection (a): (1) "refunding bonds or notes issued 

under this section or prior law," (2) l'acguiring land either 

with or without permanent improvements," (3) "constructing 

and equipping buildings or other permanent improvements," 

and (4) "major repair and rehabilitation of buildings or 

other permanent improvements." 

The four purposes for which subsection (e) allows bonds 

to be used are independent of each other. If the phrase, 

"prior law," as used in subsection (e), were given its 

widest scope, there would be no restriction upon the type or 

purpose of former bond issues that an institution of higher 

education could refund with new bonds secured by constitutionally-allocated funds. That result would be incompatible 

with the spirit of subsection (f) of section 17, article 

VII, which forbids the use of such funds for "constructing, 

equipping, repairing, or rehabilitating buildings or other 

1. The Woody and Grimes Countv Taxaavers Ass'n cases involved construction of statutes, not the constitution, but 

rules for the construction of constitutional provisions are 

analogous to those for statutory construction. Booth V. 

Stripnleman, 61 Tex. 378 (1884). 

p. 5141 
Dr. Wilbur L. Meier, Jr. - Page 6 (JM-1001) 

permanent improvements that are to be used for student 

housing, intercollegiate athletics, or auxiliary enterprises." 

Subsection (f) does not exnressly prevent the use of 

constitutionally-allocated funds to secure the refunding of 

bonds or notes issued for the purpose of erecting buildings 

dedicated to auxiliary enterprises. It is not to be supposed, however, that an institution of higher education 

could today issue revenue bonds for the construction of an 

auxiliary enterprise building pursuant to still-existing 

statutory authority therefor, see e.a. Educ. Code 55 55.13 

61.003(14), and subsequently refund those bonds with bond: 

secured by funds allocated pursuant to the current provisions of section 17 of article VII. Neither is it to be 

supposed, in our opinion, that bonds previously issued for 

auxiliary enterprise purposes might be refunded in that 

manner. a Educ. Code § 55.41 (refunding constitutional 

bonds and notes). 

Attorney General Opinion H-1248 (1978) observed that 

(former) article VII, section 17, was amended in 1965 to 

forbid the use of proceeds under that section for auxiliary 

enterprises. See S.J.R. 24, Acts 1965, 59th Leg., at 2197. 

When article VIII, section l-e, was amended in 1982, it 

restricted the use of distributions made to institutions of 

higher education to those uses permitted by "prior law" 

i.e., former article VII, section 17. H.J.R. 1, Acts 1982, 

67th Leg., 2d C.S., 5 1, at 52. That restriction prevented 

the use of distributed funds for purposes authorized by 

pre-existing statutes if not also authorized by the former 

constitutional provision. See Attorney General Opinion 

JM-77 (1983). 

We think it remains the intent and policy of the 

Constitution of Texas that institutions of higher education 

look to former article VII, section 17, to discover "prior 

law" and to determine what bonds or notes issued under 

"prior law" may~be refunded by bonds secured with money 

allocated to such institutions by article VII, section 17, 

of the Constitution of Texas. See aenerally Attorney 

General Opinion V-848 (1949). 

SUMMARY 

The phrase, "prior law," as used * 

subsection (e) of section 17 of article VZ 

of the Texas Constitution, as adopted in 

1984, refers to the former provision of the 

p. 5142 
Dr. Wilbur L. Meier, Jr. - Page 7 (JM-1001) 

constitution, also designated article VII, 

section 17, that was repealed in 1982. 

Very truly y s, 

. J AL h 

JIM MATTOX 

Attorney General of Texas 

MARY KELLER 

First Assistant Attorney General 

LOU MCCRKARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Bruce Youngblood 

Assistant Attorney General 

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