PRICE DANIEL Autwx.xN H. .lk%Au

*T?oRWEYGEN?mAL June 28, 1947

Hon. **James F.**  Houllban, CountyAuditor, orange county, ; Orange,Texas

Bear nr. xoullhanr OpinionBo. V-271
Rer Atlthoritg

of Orange County to issue time uar- ,Mlnts against tbe

:z ana bFi.

Pour request for an opllllon of thls 4fzgErtme& is eotnrtuntia~ly ae follower 

### l Pz%or. to the date of thle request, it had been~the ctlstcm of the.Cormnlseioners’ court to paI%s

.anorder,whsch .saia olderlra8 retardedln .the

Minutes oS sala Co*t, .wbalWin the Ommlesioner ,d sanb pertianlarprscinctwas ~authorised to lsbue a eorip .+7- rant agalnst~

his p&m&act irmds payable ln one ‘ok two or more gears arter date, tith @ wIthoot SMxmest, whereu$on the .County Olerlc. wtmld **issue** an ‘ordinary scripwarrant dlrected to the County Treatvarer, aad in the lower left haml oorner 0r saia scripwarrant or elmwhere in the **body** of ealcl scrip warrant wtmld **tit0** In the **worde** ‘Payableon or berzzlA c l.lOth, 19189 or similar&tee, fob

-‘

. the words With Intereste> per

aamm.mesthese irarranta were payabfr to a bank an4 the Ooumdsaloner would a40 fbsl t0 the bank, discbunt them, and .~ bmm the pmoeeas depositedto hle preaiact amount, aad thereafter carrentwarrante wmld be dram against these funda to pay atrJw allared for the **arMnary** ana necef3- w expemea incurma in the construction gmm~tot+nc~ ,orroads and bridges in tbat

. .%metWea these scrip wamanta were &nwn to tbr order of t3ome particularf%rnI ah MivLaual ana given in payment f.or shell,iron. James F. Koullhan - Page 2 (V-271)

lumber,machinery, or other equipmentand supplies. This t

(1 c e of scrip warrantwhile payable In one two (2), or mope years. **from** date of Issue dia not always bear Iaterest.

. . a

. . . "1. Must all warrants Issued'against the roadand bridge funds of a county and payable out of revenueanticipatedIn some future year, sala warrantsbeing carriedas outstandingby the Treasurer,while other warrantswere being paid out of current fuule, be classedas time warrants7 a2. Must the CommIseIoners Court publish their intentionto Issue l!Ime Warrants as out?.Iaea

and provided for In Article 2s (NT

. ‘3. Can Orange County with a valuation of alight1 Ho/l00 dollars 9 over elgbteenmIllIon and $~~,OOO,,OOO.OO) lame arinetyfire Hun&red and l'?o/lOO Dollars ($9,500.00) la Time Warrants In'any one year against Its Read and Bridge funds without advertis T! Or publia~ or giving notice of the intea Ion of thoCfnmi~8lqaert3~Court to do sq?. .4. If the Ccumnlaaloners~ Court should x!&ias an'oraer authorizingany partloularaanml8slonerto issue a warrant, ecrlp 6r otheridme agamt his particularprecinct fUula, mile ln any year other than the current yap with or without~lnterest, aaId warrant tobe psed by said commlSslonerto purchase ~;cI, shell, or road buildingmatbrlal, 'or to be ticounted by said oommlasloner and tsr,pooeeds used to finance currentwork In Ua pzeolnot and to pay otherwarrants issued wt his preclaot funds to pay alaIms Iam Uto these wappaats are authorleed,Is * Ooamty Clerk requiped to Iesue said warxmts ammwh a court 

### orderana 

### ia the County ztgzaq to approve ana countersign

i - tnlml the Legislaturepaeeea what I8 aea- a# the %ond and Warrant.Law* (Art. 2368a,Hon. James F. Houllhan - Page 3 (V-271)

V.C.S.). The Bond,andWarrant Law, while it recognizes .Mme wrrad.6, and regulatesana lImIta their lseuance; do&t! not purport to.authorlzetheir Issuance;it does expressly authorize the funding OS euch warrants as **tire** validly Issued Into negotiablebonds’.The. manner ana mode OS such reSuaalag is careSullyand minutely ipeclriea. In the cases of the erectionof court houses, jails,aad the coastmotion of pub110ma&s, it has been oitea heltY

that the county hae the Implied power to ls-

. me time warrants~ to pay therefor (A&IUEJ VB. McOi.11, 146 S. W. (26) 332; San PatrlcloCouaty vs..McClane,58 **Tex.243; Oavls**  vs. Bumey, 58 Tex.~364;Stratton **~8.** CamIssloners~ Court, 137 S. W. 1170; Leeater vs. Lopez, 217 S. w. 373).

Section 7, Article Xl of he Constitutionof Tern8 providesIn partr

a lUo

debt for any purpose shall everbi 

### $krred in any manner by any city or oouaty lmlesa provision ia made at. the time of 

### creatingthe .eame,for leVylagaqd **oolleoting** a suSSluI~nttax to pay .thefinteremt**thereon** and **provide** at kmst- two per centattaslnklngSunQ,. .*. TM8 department,Ia disoueslag’ the above conetitutlaml p~ooialon, la Opinion Bo. O-6433, dated July 24, 1945, state&a - . : %a foregoingprovIsIoa Is a restrlctiara and lImItatioa,and it .Ms been held

. . : <.; that when no authority exists to levy a tax *.:

.. ‘.. to PJ a debt, no power can exist to Incur

tba &bt. (&mater v. Lopez, (Clv.App.) 202d. W. 1039, affirmed 130 Tex..179, 217

. S. Y. 373.) Wepoint out that the term

’ ‘bci#’

ab usea In the above oonstitutianal adsion is to be distinguished rrom obb OM payable Sran aurmnt revenues. The tern ‘tibt’,above referred to has been aeflmd *a8 ocunprehendIn& any pecuniaryobllgaWosrimposed by ooatract,exoept such as is **at** the date oS the agreementwithin ths la~Sul ti ,reasonable contemplation

OS t& mrtie8, to be eatiatled out of the ourmat revenuea for the year, or out OS some fueathen vUhU the immediate coxitrol of thm ~a.rloaors ' oourt Sdo.l21, p* 670). If ai'th!%iFi %*'- - . tractis made, it is contemplatedthat any&n. J-8 F. Houllban - Page 4 (V-271)

I

part 0s the purohaeeprice.18 to be *ia Srcm taxes levied and collectedfor ruttire years, the obligationaonatltutes a ‘debt’ wl$Un the meaning 0s the corurtitutional prohIbItion. *The legislature

has authorizedoounties to create ‘debts’ within the meaning 0s the oonstitution by authorlslngthe ismumoe of bonds and time warrants;and we are unablenna am lenalmeane by which a cam&esIonera’ courtma6 obll ate & )rhe

tax 

### revenue8

of the county for a Su ure year other than by complyingwith the statutory provIslom aa to the issuance oS bonds a&or time warranta.” The term “timewarrant’has beea.aeSIaea as includingany warrant iaeuea by a city or .couuty not pay able out of current funds ana those warrants.lssuedand payable out of aurreat Sunus ares Imown as yecrlpwarrints”. Therefore,your SIrst question shouldbe aamrered in .the affirmnrtive

%Mi8Inuch

as warranta issuedand payable, out oS antlaipated

revenue8 i,n

suture years shouldbe ‘c~Eu~sIsled aa time rarraat;s.

Seotion 2 of Article g3688, V. C. S., &ovSdes in part as r0~w8~

a

. . . liotice 0s the ti.mi3

and plaoe wha aad where mah coatraotshall be let s&l1 .bepublished in euoh oouity (i.S’ cons eardsg a aormty oontraot, or ooatract for mnh mbatvi~i0n 

### 0s suoh county) ana In m@t oi* (ff oonoeming a aity ooatract), ww a week $or two oonsecutive weeks prior to the time set for lettiag suoh oontract, m date OS the first publicationto be at lowt rowtesa aaya prior to the date set fw lot 9 Mid aontract,axid aaia oontwat rlml be let to the lowest respoattiWlo Mwr, oa the respeotlVetype oS oon- &met+ aelected.

.. . a prbritia, that la aaae of publia sty, whwe it.beoaneeaeaessary to aat at on00 to aT ropMate money to rellwi the neoesal y of the oitltene,or to~nezWe the property of such oouuty or *, or vb8a St Is neaeesarg to preeerveEon. James F. Houlihan - Page 5 (V-271)

or protedt the public health of the cltiZen8 of such county or city, or In caee of uaforeseen damage to public property,machinery or equipment,t&Is provisionahall not apply; and provided further, that it shall not be applied to contractsfor personal or for professionalservices,nor to work done by such county or city and paid for by the day, as’ such work progresses.”

1Owet Section 3 of Article 2368a, ,V.C.S., Is a8 Sol-

?fhen It shall be the Intention of the CommI~sIoners~ Court, or of the governing body, to lasue time warrants for the, payment of all or any part of the proposed aontract,the notlae to.bldaersrequ5lW under Section 2’of thIe Aot shall recite that fact, setting out the maximum amount of the proposed time warrant Inaebtedmee, the rate of Interest. such time Wmaats are to bear, and the xa&ci.mWnmatur?lty &ate thereof. Section 5 o* Article 2368a,V.C.S., Is substantifilly a8 r0ii0w8:

“The notice tibqulrea In Sectlom 2 and 3, aad the right to referendumelectiondeSimd in Section 4, shall not be applicable to expenditures

payable out of Our&eat funds or bond rum, a6 above aeacribea,aor to adtlltbaalexpenditure8by countiesunless In exaeeeOS Five Hundred Dollar6 eaccb dw Wllion Dollars ($500.00 ($l,OOO,OO,O.OO

1 for

, w a oart thereof, of taxableproperty in’sala oaaw, according to the last approved tax rollai

. . . andprovided further that no sti warraats shall ever be issued by a counla exoeee~

of One Hundred ThousandDollars %o ( ,OOO.OO) :z?pz for any one year, without the

ve & notice and the’ right to referenti in Section 3. Is in. exces8 of Uw W .the expenc¶lture cannot be au- #arUed uaiil the expirationof the time for aatha petition for referendum vote has

. . . In the oaee of Foreman vs. Gooch, et al, 184 S. W. (a) 481, the court stated as follows:_
eon. James F. Houllhan - Page 6 (V-271)

aAppellant,in hi.8 briefs, concedes that the &xmnlssioaers~ Court. has authority to Issue what Is commonlycalled 'Interest bearing time war.rants,' contendingthat such warrants are authorIz.ed by the provisions of Article 2368a, Vertion's Ann. Clv. St ., which statute Is known as the *Baodandwerrant Law.' With this conteatlm we are unable to agree. As we understand the decisions,the authority for a Camlssloners" Court to Issue Interestbearing time warrants is derivedfrom what now is Article 2351,Vernon'sAnn. Tex. CIv.St. San PatrlcloCounty v. Jno. McClane, 58 Tex. 243; Lasater v. Lopez, 110 Tex. 179, 217 S.W. 2;3. While Article 2368a,Vernon'sAnn.CIv.

., is a restrlotlonor llmItatloaupon the authority0s the CcnmnIssloaers~~CourtInissuisg suih warrants Section 5 oS said Artlcle urovldes that suoh Act does not apply to exmndltures DaYable out of aurreat funds." Therefore, In answer to your second question, It I? ths opinion of this departmentthat noticemust be. given of the:

intention of the C~seloaers 1 Court to 18~

sue tlWwaraWLtf3 is the expenditures are ia.excees 0s $5dO.OOfor tiaoh

$~,OOO,OOO.OOoS tax,valtitlonor your county,ud the notices requiredby Article 2368a, supra, mwtbe&tvela before the Commisslonera~ Court could legallyiwue time warrant.8 for such purposes. Your sekoad questionshouldbe answered In the aSSlrmatIve.

Xa uestlon 100..3

you askwhether O&nge County WlMue 19,500.00 "In time warrants ln any one year agalnstlts road -'bridge funds without advertisingor publleb4 m giving notice of the Intention of the CanIIISSS~-’ court t0. ‘a0 a?,* aqd it is assumed by this departmeatthatthe expeI&dIture is to bemade fromandthe wwraabS~wd against currentfunds. IS such be the aa8e.Y obvlarrsly your questionrelates to s~crlpwarraata Llbad OStime warrants as stated In your question, and lte be mma from the foregoing oaae oS~Foremamvs. (loodr, da, rw, that .the provlslons 0s Section 5 of 'Artl8leZ366a

do not apply to those expendIt~es.S~cnncurreatB,.but li the IndebtednessIs-to be evldeaoedby a tiwmt that is, oae r0r.a future year, then the '@ovi&a~ oS &ofion 5 would be applloable. Therefore, ltirfLopinSonoSthIs departmentthat Orange County, wboeaet&an lo alightly over $~~,ooo,ooo.o~, may Isstu$g~.OOirrro~pti~ants 

### from the current funds of its iarlrnd b&%dga funds without advertising,pt?blIshingi

. . .

Ilou. Jrupsa F. Eoullhan - Page 

### 7 (V-271)

or glvlag notice of Its Intention to do so. Your third questian should be answered in the afSIrmatIve. .;

Any warrant ordered issued by the Commlssloa- ; era1 Court; payable out of the reasonablyanticipated revenues for the currentyear Is a vaild warrant and should be Issued by the County Clerk ad approvedby 

### the CountyAuditor. But, if a warrant be atiered Issued agalhst future revenues of the.countyand not payable wlthla the year from current funds, the seme would be classedas a time warrant. .ThereSore, a prerequisite to the lsswiace of'timewarrantswould be the required notlce, a tax levy, and.the estabilsbmeatof a sinking Sun6 to care for the same. The County Clerk would be bound by the order of the CommIssI~ers~ Court to per

### Sms a sdalsterlal duty, but If the time warrants are 

### not In doaSormIty

with law the CountyAuditor Is'aot 

### legally

authorlsea~toapprove the same. .

: -SUMMARY 

### 1. A 

### ttie.'warra&

inaludea

say tirraat lssueaby a city or county not .payabl? Sroq 0-t Sunds and notice, a tax levy, ana the ore&lea .0ra sinklug fund are.prerequlsltes. for the ldsuarke 0s the same by a Comlssioners' Cotirt. .


### 2. The Cwml.ssIonersl 

### Court of Orange County,

vhosevalustloa

is sllghtly

over EighteeaiUlUoa Dollars, may IssueN%ae :~ Thweand Five madred wllsrs la scripwar- 

### &6 col

ifs 

### "c-at Suads"~wlthoutadVeT

### 2' %~-$j8i?ivc: ,"*l::~:a%aG::oh l t il, 

### 185 S.W. (2i) 

### I;Si;'&d Adamsvs. 146S.Y. (2a) 332. McGIli, :
. *Yours very.truli,



### . lHtlm,~*mw Assistant

'.

. .