### THE ATTORNEY GESERAL OF TEXAS

January 2, 1989

Dr.Wilbur Chancellor University System L.Meier, Jr.

ofHouston

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:

Onbehalf of theUniversity ofHouston System, you have requested an opinion of of article VII, sectionthis office interpreting a portion 17,of the Texas Constitution. Article VII, section 17, deals with appropriations and funding for agencies and institutions ofhigher education. Your letter reads inpart:

Subsection (e)of article VII, section 17 provides inpart that the governing board of any of the institutions ofhigher education identified in subsection (b)'may issue bonds and notes forthe purposes of refunding bonds
ornotes issued under this section or nrior
a. . . .' (Emphasisprovided). We request your opinion as to themeaning 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 Specifically, does the phrase 'prior law' refer only to the predecessor of article VII, section 17,which was repealed on November 2, 1982, or does it refer to any statute existing prior to the adoption of the present article VII, section 171

Tobetter orient thediscussion 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 ishereby appropriated out of the first money coming into the state treasury not otherwise appropriated by the

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constitution $100million tobe 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 allmoney distributed to it for any of the purposes enumerated inSubsection (a). In addition, unless a single bonding agency is designated as hereinafter provided, such governing board may issuebonds and notes for the purposes of refunding bonds or notes issued under this section or orior law, acquiring land either with orwithout permanent improvements, constructing and equipping buildings or other permanent improvements, and for major repair and rehabilitation of buildings or other permanent improvements, andmay pledge up to 50percent of the money allocated to such governing board pursuant to this section to secure thepayment 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 tobeused for student housing, intercollegiate athletics, or auxiliary enterprises.

. . . .

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(I) This section is self-enacting upon the issuance of the governor's proclamation declaring the adoption of the amendment, and the state comptroller ofpublic 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 inaccordance with prior law, and all outstanding bonds andnotes shall bepaid in full, both principal and interest, in accordance with their terms. Ifthe 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 17uses the "prior law"phrase twice, once in subsection (e)and again in subsection (L). We think itwas used in the same senseboth times, and in the sense inwhich the term isused by article VIII, section l-eof the Texas Constitution. In construing themeaning of aword orphrase inthe constitution, resortmay be had to other sections of the instrument for the sense inwhich it isused. State v. Gillette's Estate, 10S.W.2d 984 (Tex. Comm'n App. 1928, judgmt adopted); Attorney General Opinion JM-533 (1986).

As it is nowwritten, section 17of article VII was added to the Texas Constitution November 6, 1984, but, as you note, aprevious 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 adifferent formula. SeeAttorney 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 advalorem 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 advalorem taxes shall be levied upon anyproperty within this State.

2. All receipts frompreviously authorized State advalorem taxes that are collected on or after the effective date of the 1982

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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 lawmay be expended for the purposes provided ynder orior law or for repair and renovation'of existing permanent improvements. (Emphasis added.)

Within twomonths 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," asused 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 inAttorney General Opinion JM-77 (1983),which found fault with theMW-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 newversion 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 onMay 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)Iwhich interpreted thephrase "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 ittohave the samemeaning in the new article VII, section 17,provision as ithas inthe existing, related provision, article VIII, section l-e.

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The phrase, nprior law," ifused inadifferent context, might be readily given a much broader significance, but inarriving at the intent of lawmakers, courts are not limited to the literal language ofaprovision if itappears from the entire law that aword orphrase was used inamore 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 PowerAaency 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, iscareful 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 librarymaterials."

Subsection (e)thereof also limits to four purposes the
use ofbonds and notes secured by apledge ofmoney allocatedby subsection (a): (1) "refunding bonds ornotes issued under this section orprior law," (2)l'acguiringland either with orwithout permanent improvements," (3) "constructing and equipping buildings or other permanent improvements," and (4) "major repair and rehabilitation ofbuildings or other permanent improvements."

The fourpurposes forwhich subsection (e)allows bonds tobe 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 newbonds secured by constitutionally-allocated funds. That resultwould 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. TheWoody andGrimes 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, 61Tex. 378 (1884).

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permanent improvements that are tobe 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 ornotes issued for thepurpose of erecting buildings dedicated to auxiliary enterprises. It is not tobe 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 17of article VII. Neither is itto be supposed, inour opinion, that bonds previously issued for auxiliary enterprise purposes might be refunded in that
manner. a Educ. Code §55.41 (refunding constitutional bonds andnotes).

Attorney General Opinion H-1248 (1978)observed that (former) article VII, section 17, was amended in 1965 to forbid the use ofproceeds 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 ofdistributions 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., 2dC.S., 5 1,at 52. That restriction prevented the use of distributed funds forpurposes authorized by pre-existing statutes ifnot 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 ofhigher education look to former article VII, section 17, todiscover "prior law" and to determine what bonds ornotes 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 17of article VZ of the Texas Constitution, as adopted in 1984, refers to the former provision of the

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constitution, also designated article VII, section 17, thatwas repealed in 1982.

Very truly y s,



# .J h

AL JIM MATTOX Attorney General of Texas

MARY KELLER FirstAssistant Attorney General

LOUMCCRKARY 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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