PRICE DANIEL 

Autwx.xN H. .lk%Au 

*T?oRWEY GEN?mAL 

June 28, 1947 

Hon. James F. Houllban, 

County Auditor, 

orange county, ; 

Orange, Texas 

Bear nr. xoullhanr 

Opinion Bo. V-271 

Rer Atlthoritg of Orange County to 

issue time uar- 

,Mlnts against tbe 

:z . ana bFiPour 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 .an order, whsch .saia older lra8 

retarded ln .the Minutes oS sala Co*t, .wbalWin the Ommlesioner ,d sanb pertianlar prscinct was ~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 scrip warrant dlrected to the County Treatvarer, aad in the lower 

left haml oorner 0r saia scrip warrant or 

elmwhere in the body of ealcl scrip warrant 

wtmld tit0 In the worde ‘Payable on or berzzlA c 

l.lOth, 19189 or similar &tee, fob 

-‘. 

the words With Interest e> per 

aamm.mes these irarranta were payabfr to a bank an4 the Ooumdsaloner would 

a40 fbsl t0 the bank, discbunt them, and .~ 

bmm the pmoeeas deposited to hle preaiact 

amount, aad thereafter carrent warrante 

wmld be dram against these funda to pay 

atrJw allared for the arMnary ana necef3- 

w expemea incurma in the construction 

gmm~tot+nc~ ,or roads and bridges in tbat 

. 

.%metWea these scrip wamanta were 

&nwn to tbr order of t3ome particular f%rnI 

ah MivLaual ana given in payment f.or shell, 
iron. James F. Koullhan - Page 2 (V-271) 

lumber, machinery, or other equipment and 

supplies. This t 

(1 c 

e of scrip warrant while 

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 revenue anticipated In some 

future year, sala warrants being carried as 

outstanding by the Treasurer, while other 

warrants were being paid out of current 

fuule, be classed as time warrants7 

a2. Must the CommIseIoners Court publish their intention to 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 elgbteen mIllIon 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 

publia~ or giving notice of the intea T! Ion Or

of thoCfnmi~8lqaert3~ Court to do sq?. 

.4. If the Ccumnlaaloners~ Court should 

x!&ias an'oraer authorizing any partloular aanml8sloner to issue a warrant, ecrlp 6r otheridme agamt his particular precinct fUula, 

mile ln any year other than the current 

yap with or without~lnterest, aaId warrant 

tobe psed by said commlSsloner to purchase 

~;cI, shell, or road building matbrlal, 

'or to be ticounted by said oommlasloner and 

tsr,pooeeds used to finance current work In 

Ua pzeolnot and to pay other warrants issued 

wt his preclaot funds to pay alaIms Iam Uto these wappaats are authorleed, Is 

* Ooamty Clerk requiped to Iesue said warxmts am mwh a court order ana ia the County 

ztgzaq to approve ana countersign 

i 

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

V.C.S.). The Bond,and Warrant Law, while it recognizes 

.Mme wrrad.6, and regulates ana lImIta their lseuance; 

do&t! not purport to.authorlze their Issuance; it does 

expressly authorize the funding OS euch warrants as tire 

validly Issued Into negotiable bonds’. The. manner ana 

mode OS such reSuaalag is careSully and minutely ipeclriea. In the cases of the erectionof court houses, 

jails, aad the coastmotion of pub110 ma&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 Patrlclo Couaty 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 Constitution of 

Tern8 provides In partr 

a lUo debt for any purpose shall 

ever bi $krred in any manner by any city 

or oouaty lmlesa provision ia made at. the 

time of creating the .eame, for leVylag aqd 

oolleoting a suSSluI~nt tax to pay .the finteremt 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 foregoing provIsIoa 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.) 

202 d. W. 1039, affirmed 130 Tex..179, 217 

. S. Y. 373.) We point 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 pecuniary obllgaWosr imposed by ooatract, exoept such 

as is at the date oS the agreement within 

ths la~Sul ti ,reasonable contemplation OS 

t& mrtie8, to be eatiatled out of the ourmat revenuea for the year, or out OS some 

fuea then vUhU the immediate coxitrol of 

thm ~a.rloaors ' oourt 

Sdo.l21, p* 670). If ai'th!%iFi %*' - - . 

tract is made, it is contemplated that any 
&n. J-8 F. Houllban - Page 4 (V-271) 

I 

part 0s the purohaee price.18 to be *ia 

Srcm taxes levied and collected for ruttire 

years, the obligation aonatltutes a ‘debt’ 

wl$Un the meaning 0s the corurtitutional 

prohIbItion. 

*The legislature has authorized oounties to create ‘debts’ within the meaning 

0s the oonstitution by authorlslng the ismumoe of bonds and time warrants; and we 

are unablenna am lenal meane by which 

a cam&esIonera’ court ma6 obll ate 

& 

)rhe tax 

revenue8 of the county for a Su ure year 

other than by complying with the statutory 

provIslom aa to the issuance oS bonds 

a&or time warranta.” 

The term “time warrant’ has beea.aeSIaea as 

including any warrant iaeuea by a city or .couuty not pay 

able out of current funds ana those warrants .lssued and 

payable out of aurreat Sunus ares Imown as yecrlp warrints”. 

Therefore, your SIrst question should be aamrered in .the 

affirmnrtive %Mi8Inuch as warranta issued and payable, out 

oS antlaipated revenue8 i,n suture years should be ‘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 coatraot shall be let 

s&l1 .be published 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 publication to 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 respeotlVe type oS oon- 

&met+ aelected. . . . 

a prbritia, that la aaae of publia 

sty, whwe it.beoanee aeaessary to 

aat at on00 to a 

T 

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 preeerve 
Eon. 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 provision ahall 

not apply; and provided further, that it 

shall not be applied to contracts for personal or for professional services, 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.bldaers requ5lW 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.mWn matur?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 referendum election deSimd in Section 4, shall not be applicable 

to expenditures payable out of Our&eat funds 

or bond rum, a6 above aeacribea, aor to adtlltbaal expenditure8 by counties unless In 

exaeee OS Five Hundred Dollar6 

eaccb dw Wllion Dollars 

($500.00 

($l,OOO,OO,O.OO 1 

for 

, w 

a oart thereof, of taxable property 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 Thousand Dollars 

%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 expiration of 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 commonly called 'Interest 

bearing time war.rants,' contending that 

such warrants are authorIz.ed by the provisions of Article 2368a, Vertion's Ann. 

Clv. St ., which statute Is known as the 

*Baod andwerrant Law.' With this conteatlm we are unable to agree. As we understand the decisions, the authority for a 

Camlssloners" Court to Issue Interest bearing time warrants is derived from what now 

is Article 2351, Vernon's Ann. Tex. CIv.St. 

San Patrlclo County v. Jno. McClane, 58 Tex. 

243; Lasater v. Lopez, 110 Tex. 179, 217 S.W. 

2;3. While Article 2368a, Vernon's Ann.CIv. 

., is a restrlotlon or llmItatloa upon the 

authority 0s the CcnmnIssloaers~~Court Inissuisg 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 department that notice must 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.OO oS tax,valtitlon or your 

county,ud the notices required by Article 2368a, supra, 

mwtbe&tvela before the Commisslonera~ Court could legallyiwue time warrant.8 for such purposes. Your sekoad 

questionshould be answered In the aSSlrmatIve. 

Xa uestlon 100..3 you askwhether O&nge County WlMue 1 9,500.00 "In time warrants ln any one year 

agalnstlts road -'bridge funds without advertising or 

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 current funds. IS such be the 

aa8e. Y obvlarrsly your question relates to s~crlp warraata Llbad OS time warrants as stated In your question, 

and lte be mma from the foregoing oaae oS~Foremam vs. 

(loodr, da, rw, that .the provlslons 0s Section 5 of 

'Artl8leZ366a do not apply to those expendIt~es.S~cnn curreatB,.but li the Indebtedness Is-to be evldeaoed by 

a tiwmt that is, oae r0r.a future year, then the 

'@ovi&a~ oS &ofion 5 would be applloable. Therefore, 

ltirfLopinSonoSthIs department that Orange County, 

wboea et&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?blIshing 
i . 

. . 

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 reasonably anticipated 

revenues for the current year Is a vaild warrant and 

should be Issued by the County Clerk ad approved by 

the County Auditor. But, if a warrant be atiered Issued 

agalhst future revenues of the.county and not payable 

wlthla the year from current funds, the seme would be 

classed as a time warrant. .ThereSore, a prerequisite 

to the lsswiace of'time warrants would be the required 

notlce, a tax levy, and.the estabilsbmeat of a sinking 

Sun6 to care for the same. The County Clerk would be 

bound by the order of the CommIssI~ers~ Court to perSms a sdalsterlal duty, but If the time warrants are 

not In doaSormIty with law the County Auditor Is'aot 

legally authorlsea~to approve the same. . 

: 

-SUMMARY 

1. A ttie.'warra& inaludea say tirraat 

lssuea by a city or county not .payabl? Sroq 

0-t Sunds and notice, a tax levy, ana the 

ore&lea .0r a sinklug fund are.prerequlsltes. 

for the ldsuarke 0s the same by a Comlssioners' Cotirt. 

. 

2. The Cwml.ssIonersl Court of Orange 

County, vhose valustloa is sllghtly over 

EighteeaiUlUoa Dollars, may Issue N%ae :~ 

Thweand Five madred wllsrs la scrip war- 

&6 col ifs "c-at Suads"~wlthout adVeT2' %~-$j8i?ivc: ,"*l::~:a%aG::oh 

l t il, 185 S.W. (2i) I;Si;'&d Adams vs. 

146 S.Y. (2a) 332. 

McGIli, 

: . 

* Yours very. truli, 

. lHtlm,~*mw Assistant 

'. 

. .