De&ember 14, 1950 

Hon. Claude Isbell 

Executive Secretary 

Board of Regents 

Texas State TeachersColleges 

Austin, Texas Oplnlon~No. V-1133. 

Re: Issyance of Revenue 

Bonds under Article 

2654c-1, V.C.S. 

Dear Sir: 

In your recent letter you state that the Board 

of Regents of the Texas State Teachers Colleges desires 

to Issue certain bonds in behalf of one of the colleges 

for the purpose of constructing a classroom building and 

a boys' dormitory on the campus of the college, these 

bonds to be issued under the provisions of Article 2654c-1, 

V.C.S. (Acts 47th Leg., R.S., 1941, ch. 560, p. 908) and 

secured by a pledge of the building use fee authorized by 

such statute and a pledge of the net revenues to be derived from the operation of the boys' dormitory. 

Section 7 of the statute provides that governing boards of the colleges "shall not be permitted to contract bonded Indebtedness underthe terms of this Act In 

excess of eighty (80) per cent of the amount which can be 

amortized wlEh ihi rknues from said bulldln use fee 

estimated at the time of thexhorlza Ion of such rev- 

-7L-- 

enue bonds." (Emphasis added.) 

You state that the contemplated bonds could not 

be amortized by eighty (80) per cent of the building use 

fee, but that such bonds can easily be financed by such 

fee and pledged net revenues of the~dormltory, If the llmltatlon Imposed by Section 7 would not prevent the issuance 

thereof. Therefore, you wish to know whether the llmltatlon contained In Section 7 Is applicable where net revenues from the operation of the dormitory are pledged In 

addition to a pledge of the building use fee. 
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Hon. Claude Isbell - Page 2 (v-1133) 

Article 2654c-1 authorizes the Issuance of revenue bonds by the State Institutions of higher learning 

named therein for the purpose of constructing and equlp- 

.plng bulldings and power plants, the,pavlrig ot'streets, 

the purchase of land, and for' such..other capital lmprovements as may be needed from'tlme"to t'lme; .:In~:qrder to 

pay the Interest on and principal of.s.uch'bondgj.~the gov- 

.ernlng boards of the Institutions areauthorized to charge 

students a building use fee of not less than Five Dollars 

($5.00) per semester. 

i+ 

.vlded: 

Moreover, In Section 6 of the statute it Is pro- 

.', 

” 

. To assure the prompt payment of 

the pr&lpal and Interest of sald‘bdnds .iuch 

Board Is authorized to pledge aII or anyrportlon of the proceeds of the bulldlng ,use fee 

authorized In Section 1 of,thls'Act,',anp said 

bonds may be addltlonaIly'secured~.by a,pIedge 

of the net revenues from-bulldlngs~and',facl~,lties to be constructed; acqulred,".or 1,mproved 

with the proceeds of such bonds and from other 

buildings or facilities heretofore or her,iafter 

constructed or acquired." 

Therefore, under the statute'cleariy'the govern- 

'lng board ~has the authority to pledge not only,the building 

use fee but also the net revenues of the buildings to be 

constructed. 

.lows: 

Section 7 of the statute~provldekln part as fol- 

"The governing Boards of the aforesaid lnstl-. 

tutlons shall not be permitted to contract. 

bonded Indebtedness under the terms of this 

Act In excess of eighty (80) per cent of t,he 

amount which can be amortlzed.wlth the revenu'es from said building use fee:estlmated at 

the time of the authorization of such revenue. 

bonds. - . .'I 

The quoted language of Section 7, standing alone, 

Is clear and unambiguous, and would appear to prohibit the 

Issuance of any bonds "under the terms of this Act" unless 

-the bonds could be paid with not more than 8% of the bulldlng use fee estimated at the time that the bonds are issued, 

regardless of whether net revenues of.the Improvements are 
Hon. Claude Isbell - Page 3 (V-1133) 

pledged also. Standing alone, the provlslons of Section 7 

would be "so expllclt that lt ~111 admlt of no construction." City of Houston v. Allred, 123 Tex. 334, 350, 71 

S.W. 2d 251, 259 (1934) D 

However, It 1s a fundamental rule of statutory 

construction that the entfre statute must be considered In 

arriving at the Intent of the Legislature. It Is our oplnlon that the Legislature Intended no such construction to 

be placed on the provlslons of Section 7. 

Sectl~cn 6 of the statute provldes that, when the 

revenue bonds are secured solely by the bulldlng use fee, 

the overnlzig bod shall flx the amount of the fee (within 

the f 5.00 maximum 5 sufflclent to meet the bond requirements 

and set up a reasonable reserve In the Interest and sinking 

fund. Section 6 also provides: 

I( D 0 . When such bonds are secured In 

whole or In part by a pledge of the net Gvezfrorn bulldlngs or facllltles, lt shall 

be the duty of such governing body to fix 

rentals and charges for the buildings and facllltles whose net revenues are thus pledged, 

at rates sufficient to pay the maintenance 

and operatlon expense of such buildings and 

facllltles and to pro&ace net revenues which, 

to ether wlth the bulldln use fee authorized 

kofloi??hdwm besufflclent 

to pay the interest and irlnclpal of such bonds 

as they accrue and mature." (Emphasis added.) 

The statute in Sectlon 6 speaks of lssulng bonds 

secured ln whole by the net revenues pledged therefor. If 

Section 'ET;oere glven a literal lnterpretatlon, this provlslon would be meaningless. In other words, If, bonds were 

payable solely from net revenues, as Is provided In Set-, 

tlon 6, then they could never be issued because of the 8% 

building use fee provlslon of Section 7. 

It 1s our oplnlon that, construfng the act as a 

whole, the Legislature intended that Section 7 should be 

literally followed only when the revenue bonds are secured 

solely by the bulldlng use fee. It 1s also our opinion that 

the Leglslature established an 8% safety rule ln an effort 

to preclude the posslbllity of lnssfflclent funds to meet 

the bond requlrementa, 
Hon. Claude Isbell - Page 4 (V-1133) 

You are advised that It Is the opinion of this 

office that, if the requirements of the bonds can be met 

with not more than 80$ of the revenues of the building 

use fee and pledged net revenues estimated at the time 

of the authorization of the bonds, the provisions of Section 7 will be satisfied. 

SUMMARY 

Revenue bonds secured by a bulldlng use 

fee and net revenues from building facllities may pe Issued on behalf of the State lnstltutlons of higher learning under Article 

2654~~1, V.C.S., If the requirements of the 

bonds can be met with not more than 80$ of 

the revenues of the building use fee and 

pledged net revenues estimated at the time 

of the authorization of the bonds, provided 

the proceedings are otherwise proper. 

APPROVED: 

Everett Hutchlnson 

Executive Assistant 

Charles D. Mathews 

First Asilstant 

GWS : em 

Yours very truly, 

PRICE DANIEL 

Attorney General 

BY~~*)~&-~L/ 

Georg W. Sp ks 

Assistant