. 

Hon. C. H. Cavness Opinion No. V-1365 

State Auditor 

Austin, Texas Re: Several questions pertaining 

to the use of soil conservaDear Sir: tion district funds., 

You have submitted for our consideration several 

questions pertaining to the expenditure of funds by soil consexvation districts. The first question is the following: 

“1. Of the following types of revenue normally 

received by soil conservation districts from their operations, which, if any, should be deposited to State 

appropriated funds . . .?: 

‘A. Rental from equipment purchased from 

State appropriated funds. 

“B. Sale of seed, fertilizer or chemicals purchased from State appropriated funds. 

“C, Refunds on other expenditures made from 

State appropriated funds, 

“D, Sale of obsolete equipment purchased from 

State appropriated funds.” 

House Bill 97, Acts 51st Leg,, R.S. 1949, ch. 5401 p. 

1000 (Art. l65a-8, V.C.S.), appropriated to the several soil conservation districts of Texas two and a half million dollars for 

each of the fiscal years of 1950 and 1951. Section 5 of HouseBill 

97 provided that “any funds granted hereunder to atiy soil constirvation districts which shall remain unexpended at the end of the 

biennium shall revert to the General Fund,” In Opinion V-999 

(1950) we advised you that the use of granted funds to purchase 

seed to be resold would ‘not constitute an expenditure of the funds 

so as to prevent the moneys received upon the resale from being 

a part of the granted funds. 

The fact that fertilizer or chemicals were the subject 

matter of the sale would, of course, make no difference in this 

conclusion. By analogy, we think moneys received from refunds 

on expenditures made from State appropriated funds have not been 
. 

I 

c 

Hon. C. H. Cavness, Page 2 (V-1365) 

“expended” and remain a part ,of the, granted funds. so, too, 

moneys obtained from the sale of obsolete equipment purchased 

with State appropriated funds have not been “expended” in the 

sense that would prevent their classification as State appropriated funds. You are therefore advised that revenue received by 

a soil conservation district from the sale of seed, fertilizer, or 

chemicals purchased from State appropriated funds, refunds on 

other expenditures made from State appropriated funds, and the 

revenue received from the sale of obsolete equipment purchased 

from State appropriated funds should be deposited to ““State appropriated funds.” 

In our Opinion V-999, supra, in stating that the use of 

State appropriated funds to purchase seed to be resold would not 

constitute an expenditure of the funds so’ as to prevent the moneys 

received upon the resale from being a part of the granted funds, 

we assumed that the districts did not resell the seed at a profit. 

It is our opinion that the amount realized upon the resale over and 

above the amount expended for the seed would be in the nature of 

earnings of the district and uiould not constitute a part of “State 

appropriated funds” and should be deposited by the district in its 

local fund account. 

It is our opinion that rentals received by a soil conservation district from equipment purchased from State appropriated funds would be in the nature of earnings of the soil conservation district and would not constitute State appropriated funds and 

should be deposited by the district in its local fund account. 

Your second question is the following: 

“2. Most districts which we have examined to 

date have local funds which have been accumulated 

principally through donations, the purchase and sale 

of seed and/or fertilizer at a profit, and the rental of 

equipment purchased by the district or granted or 

loaned to the district. Are the expenditures from 

these local funds subject to the statutory regulations 

imposed upon the expenditures from State appropriated funds provided in House Bill 97, 51st Legislature, 

Regular Session as amended by House Bill 190, 52nd 

Legislature, Regular Session? ” 

To the extent that soil conservation districts may exercise only such powers as have been conferred upon them by law 

and must operate pursuant to the statutes creating them and‘regulating their operation, all funds of such districts, must be expended 

consistently with the prov,isions of House’Bill 97,, supra, and House 

WH 190, Acts 52nd Leg., R.S. 1951, ch. 497, po 12-t. 165a:9, 
. 

Hon. C. H. Cavness, Page 3 (V-1365) 

V.C.S.). Thus, Section 3 of House Bill 190, re-enacting Section 6 

of House Bill 97, providing:foT and regulating the deposit:and withdrawal of all grants of assistance and funds received by a district, 

applies equally to State appropriated funds and to funds received 

from other sources. Likewise, the restrictions on purcha,sfng or 

repairing machinery (Sec. 2a, H.B. 97;‘Sec. 2, H.B. 190), the provisions regulating surety bonds (Sec. 4, H.B. 97: Sec. 4; H.B. 190), 

audits (Sec. 4, H.B. 190). sale of equipment, seed; and fertilizer 

(Sets. 7. 8, H.B. 190) are protective provisions which would apply 

regardless of the original source of the funds involved. Your second question is therefore answered in the affirmative. 

Your next question reads as follows: 

“3. Can the followfng types of expenditure,s be 

legally made from either State appropriated funds or 

local funds or both: 

“A. Awards for essay c&tests on vaiious sOi 

conservation subjects. 

,.. 

*B. Contributions to the Texas Association of 

Soil Conservation District Supervisors. 

“C. Awards for various soil conservation projects. 

‘D. Purchased entertainment for the promotion 

of soil conservation. One District sponsored a ‘Bankers Relation Banquet,’ and invited all of the bankers 

and heads of other loan agencies in the District0 The 

purpose of the banquet was to acquaint the bankers and 

other guests with the soil conservation program and 

needs of the District. The costs of the banquet were 

paid from the State appropriated funds,” 

The very broad purposes and over-all policies of our 

State soil conservation laws are set forth in Section 2 of Article 

IbSa-4, V.C.S. It is difficult to conceive of a greater, and at the 

same time valid, grant of powers or d one more general in terms 

than that bestowed upon the State Soil Conservation Board by Scction 4 of Article 165a-4, V.C.S., and upon the supervisors of soil 

conservation districts by Section 7, Article 1658-4, substantially 

re-enacted in Section 4E. Article 165a-8, V.C.S. (w.B.‘.97)~, and 

Section 13 of House.Bill 196. Nevertheless, WE do~not believe 

tit the Legislature intended to authorize the expenditure of either 

SW&e appropriated or local funds for the giving of awards for essay contests on vafious soil conservation subjects, or for the giving of awards for var”lous soil conservation projects,‘or for the 
Hon. C. H. Cavness, Page 4 (V-1365) 

purchase of entertainment for the promotion of soil conservation. 

A presumption will be indulged that the Legislature desired and 

intended to enact a valid law, Pickle v. Finley, 91 Tex. 484, 44 S,W. 

480 (1898); Maud V, Terrell, 109 Tex. 97, 200 S.W. 375 (1918); 9 

Tex. Jur. 481, Constitutional Law, Sec. 61. Since a statutory authorization for expenditures for the purposes enumerated in subdivisions A, C and D of your third question would be unconstitutional, as we will hereinafter show, we are of the opinion that such 

expenditures were not contemplated or authorized by the Legislature, Section 52 of Article III of the Constitution of Texas provides: 

“The Legislature shall have no power to authorize any county, city, town or other political corporation or subdivision of the State to lend its credit or to 

grant public money or thing of value in aid of, or to 

any. individual, association, or corporation whatsoever, *. 

e . . 

This provision is broad enough to embrace not only State appro- .: 

priated funds but funds or things of value donated to the political 

subdivision by others. 

If, as we have been advised occurred in one instance, 

the Chamber of Commerce of a certain city saw fit to donate funds 

for the purpose of providing entertainment designed to promote 

soil conservation, the organization could accomplish this result 

only by paying for the entertainment itself because once the funds 

are donated to the political subdivision of the State, they become 

public money and the property of the political subdivision. 

In subdivision B of your third question you request our 

opinion as to whether expenditures may be made by a soil conservation district from kither State appropriated funds or local funds 

or both as “contributions to the Texas Association of Soil Conservation District Supervisors.” We were unable to determine the 

nature of the organization referred to as the “Texas Association 

of Soil Conservation District Supervisors” iti that nowhere in our 

soil conservation law could we find that such an association was 

provided for. However, you have advised us orally that the district 

supervisors of all the soil conservation districts in Texas have ’ 

organized themselves into an association for the purpose of carrying out the over-all purposes of the soil conservation program. We 

believe that the supervisors had the authority to associate themselves together by virtue of Section 11 of Article 165a-4, which 

reads as follows: 

,-The supervisors of any two (2) or more districts 

organized under the provisions of this Act may cooperate with one another in the exercise of any or all powers 

conferred in this Act.” 
. . 

Hon. C. H. Cavness, Page 5 (V-1365) 

The legislative determinations land declaratiotis of 

policy contained in Section 2 of Article 165a-4. V.C.S.,,the State 

Soil Conservation Law, set forth in general terms the.brbad purposes Andy over-all policies of our State soil conservatibn laws. 1 

Soil conservation districts created under theauthorization of Section 5~of Article 165a-4 are governmentalxubdivisions of the State, public bodies corporate and politic. See Sets. 

5F, 7, Art. Ma-4, and Opinion V-999. 

The supervisors of such districts,,under~ Section 6 of 

Article 165a-4, have express rights, powers,and dutiesconferred 

upon them. We quote the following excerpt from Section 6: 

I“Sec. 2. (c) The Appropriate Corrective Methods, ,That to 

conserve ~soil resources hnd control and prevent soil erosion, Lt : 

is necessary that land-use practices contributing to sol1 waNage 

and s,oil erosion may be discouraged and discontinued, and appropriate soil-conseruing land-use practices be adopted and carried 

out; tM among the procedures necessary fog aldespread’rdoption, ar~e the’ carrying on of engineering operatfyrPs such as the 

cmftruction d terraces, terrace outlets, check dams, dikes, ponds, 

ditches. and t&e l*e; the utilization of strip cropping, lister furrowing, cm cultivating, and contour furrowing; land iwigatfoa, 

seeding and pknCdmfi of waste, sloping, abandoned, or eroded land@ 

to arrter-conserving and erosti-preventing plants, trees, and 

prarrsen; tiestation and re&restation; rotation of crops, soil staMlizatioa with trees, grasses, legumes, and other thick-growing, 

sdl-hold&g crops, retardation of runoff by increasing absorption 

ef rahhl’t; and retirement from cultivation of steep, highly erosive areas and areas now badly Bullied or otherwise eroded, 

“(d) Declarstfon of Policy. ft,is hereby declared to be the 

policy of the Legislature to provide for the cotiservation of soil 

and soil resources of this State, and for the control and prevention 

# soil erosion, and thereby to preserve natural resources, controi fkmds. prevent impairment of dams and reservoirs, assist in 

maintitiing the navigability of rivers and harbors, preserve wildlife. protect the tax base, protect public lands, and protedt and 

pomote the health, safety, and general welfare of the people of 

this State, ind thus to carry out the mandate expressed in Article 

XVI, Section 59a, of the Constitution of Texas. It is further declared as a matter of Legislative intent and determination of policy that the agencies created, powers conferred and the activities 

contemplated in this Act for the conservatton of soil and water 

resources and for the reduction of public damage resulting from 

failure to conserve such natural resources, shall be supplementary and complementary to the work of various river and other 

authorities now established in the State and to other State officers, 

agencies, and distaicts engaged in closely related projects. and 

shall not be duplicative thereof nor conflicting therewith.” 
Hon. C. H. Cavness, Page 6 (V-1365) 

“The supervisors may employ such officers. 

agents, and employees, permanent and temporary, as 

they may require, and shall determine their qualifications, duties, and compensation. The supervisors 

may delegate to their chairman, to one or more supervisors, or to one or more agents or employees, 

such powers and duties as they may deem proper. 

The supervisors shall furnish to the State Soil Conservation Board, upon request, copies of such ordinances, rules, regulations, orders, contracts forms, 

and other,documents as they shall adopt or e A-l ploy, 

and such other information concerning their activities 

as it may require in the performance of its duties under this Act.” 

Section 7 of Article 165a-4 likewise confers powers 

upon districts and supervisors, the pertinent powers being summarized below: 

“( 1) To carry out preventive and control measures within the district including, but not limited to, 

engineering operations, methods of cultivation, . , . 

and the measures listed in Subsection 0, of Section 2 

of this Act, on lands owned or controlled by this State 

or any of its agencies, with the cooperation of the agency . . . having jurisdiction thereof,, and on any other ,lands within the district upon obtaining the consent 

of the occupiers . . . 

“(2) To cooperate . . . with, and, within the limits of appropriations duly made available to it by law, 

to furnish financial or other aid to, any agency . . . or 

any occupier of lands within the district, in the carrying on of erosion control and prevention operations 

within the district I . . . 

“(3) To obtain options upon and to acquire, by 

purchase, exchange, lease, gift, grant, bequest, devise, 

or otherwise, any property, real or personal, or rights 

or interests therein; to maintain, administer, and improve any properties acquired, to receive income from 

such properties, and to expend such income in carrying out the purposes and provisions of this Act; and to 

sell, lease. or otherwise dispose of any of its property 

or interests therein in furtherance of the purposes and 

the provisions of this Act; s . . 

“(6) To develop comprehensive plans for the conservation of soil resources and for the control and preventlcm of soil erosion within the district, which,plans 
Hon. C. H. Cavness, Page 7 (V-1365) 

shall specify in such detail as may be possible, the 

acts, procedures, performances., and avdidanc,es 

which are necessary or desirable for the effectuation ‘, 

. of such plans, including the specification~of engmeering operations, methods of cultivation, the growing of 

vegatation, cropping programs, tillage practices,~and ‘j 

changes in use of land; and to publish such plans and ” 

information and bring them to the attention of occupiers of lands within the district; . . .” 

The Texas Association of Soil Conservation District 

Supervisors elected a president and five vice-presidents. The 

Association authorized and directed the president and five vicepresidents to form a corporation under the name of “Soil and 

Water Conservation, Inc.” In August, 1951, the corporation was 

granted,,a charter under Subdivision 2 of Article 1302 of the Texas Revised Civil Statutes of 1925. The purpose clause as incorporated in its charter provides: 

“(1) To promote to the utmost the conservation 

of soil and water resources for the security of our 

country and its people. 

“(2) To bring about exchange of information that, 

will secure a constructive conservation program. 

“(3) To disseminate scientific data and factual 

information concerning soil erosion control and flood 

prevention. 

“(4) TO encourage uniformity of basic policies 

and objectives in ,soil and water conservation work. 

“(5) To foster and develop active farmer participation and leadership in conservation and in the affairs 

of soil conservation districts. 

“(6) To encourage the closest co-operation possible between soil conservation districts and a coordinated effort on their part. 

‘(7) To publish a periodical and any other’publications which would further the purposes of this corporation. 

“(8) To make gifts of money or of real or: personal property or of other things of value to non-profit 

chaeitable, benevolent, literary, religious, agx%xdtural 

or educational organizations in the furtherance of the 

purposes of this corporation.” 
Hon. C. H. Cavness, Page 8 (V-1365) 

The charter further provides that the president and 

five vice-presidents of the T,exas Association of Soil Conservation District Supervisors elected for each year shall comprise 

the board of directors of the corporation. We were furnished 

with a copy of the by-laws of Soil and Water Conservation, Inc., 

and find nothing contained therein that is inconsistent with our 

soil conservation laws, We are of the opinion that the means or 

instrumentalities to be used by the soil conservation districts in 

effectuating the powers and duties conferred on such districts 

were left to the sound discretion of the districts, and that the 

means employed as outlined above in cooperating with one another in the exercise of the powers conferred in the soil conservation laws is a legitimate exercise of the discretion reposed in 

the soil conservation districts. 

The State Soil Conservation Board informed us that 

the main purpose of the cooperative program is to publish jointly a monthly magazine, in order to publish plans and information 

as to water and soil conservation and to bring them to the attention of the various soil conservation districts and to the occupiers 

of land within the various soil conservation districts. The corporation, as agent for the various districts, will publish and circulate the magazine. It is our opinion that the soil conservation 

districts may use either State appropriated funds or local funds 

in making “contributions” or payments to the Texas Association 

of Soil Conservation District Supervisors to be used by it or its 

agent, Soil and Water Conservation, Inc., in carrying out the “comprehensive plans for , . . conservation of soil resources” and in 

disseminating “information throughout the State concerning the activities and programs of . . . Soil Conservation Districts” (Art. 

165a-4, Sec. 4G(4) and in bringing them to the attention of the 

various districts and “occupiers of lands within the districts; . . .” 

Your next question reads as follows: 

“4. Do such funds represented by inventories 

of, or accounts receivable resulting from the sale of, 

seeds, fertilizers and chemicals bought to be resold 

but on hand on August 31st, 1951, that were originally 

paid for out of proceeds of the State Appropriation provided in House Bill 97 of the 51st Legislature constitute a part of the unexpended State Appropriation that 

is reappropriated by the provisions of House Bill 190 

of the 52nd Legislature? (Since your answer to Question 4 in your Opinion No. V-999 (p. 20 thereof) holds 

such stocks are a part of unexpended State funds, the 

proceeds will now go to General Revenue unless reappropriated by House Bill 190.)” 
Hod. C. H. Cavness, Page 9 (V-1365) 

Opinion V-999 does hold, in effett, that stocks of 

seed purchased to be resold constitute a part of any unexpended 

State appropriated funds. The opinion further points out that 

“if at the end of the biennium a soil conservation district has 

purchased seed on hand that is later resold, the amount received 

from the resale should then be paid into the General Fund of the 

State Treasury.” However, since House Bill !90 appropriates ~ 

the unexpended balances of all the sums appropriated and,gra,nted to the several soil conservation districta foe the fiscal year 

ending August 31, 1950, and for the fiscal year endlng Auggst 31, 

1951, it follows that the amount received from the resale of seed 

after the biennium would not be ,paid to the General Fund byt 

8&aiid be retained by U&i- soil e6e8crvstion dirtricte. 

Preceeda from resale of fertilizers ad &cmicslr rcceivid after the close of the fiscal rear ending Augur,t 31, 1951, khould 

likewisa be retained by the individual districts. Alset it makes 

aa difference ihether the proceeds were received by ‘reason of 

an recount receivable resulting frox% ulc d t&e srads, fertflirer, 

er chemicala ptior to’the tnd d the Fiscal year OP whether the 

sale itself took place after the et@ of the fiscal yabr. 

Question No. 6 reada &s ‘follows: 

“6. In our ruditr we have found where one District purchased 1 New Headberg ‘Uni-Grader’ with 9’ 

C~~cyor Elevator, Serial Noi 548, Model 12, Ford En- 

+e #1172-AlbAT D 162 S Super V Belt - $2,,695.00. 

Other ,Districts have entered into rental purchase a-c 

grecments which have resulted in eqaipment being ” 

boa*t for amounts in exceso of $l,OOO.OO. One Dis- ” 

trict entered into a rental purchase agreement and 

paid t&z ialtial monthly installments from the District’s 

locally earned furdr. However, four monthly installment! at $350.00 each, totrlling $1,400.00, were paid 

from tkc StaLc A*proprhtad funds durin&,the purchase 

.~..,.agr’eame~t,peribd’. In~tittker~of thr8c instances did 

the Districts.plaee their elders through the Board of 

Control. 

l See, 2a of Htmse Bill No, 97 d the 51rt Legislature reads as follows: 

” ‘Any item of machhery or eqtripmcat, the purthee price of which excoode One Thousad Dollars 

#&),OMj, dull be purchased through the Bwrd of Conttel u&r sack regtiatioms ad tcrme .WS is requirsd 
Hon. C. H. Cavness, Page 10 (V- 1365) 

by State Law governing purchases for the State or any 

of its political subdivisions which make purchases 

through the Board of Control.’ 

“Do these acts on the part of the Board of District Supervisors of the Soil Conservation Districts 

constitute illegal expenditure of State Appropriated 

funds, and if so to whom and to what extent are they 

liable 7” 

The provisions of Section 2a above quoted are clearly 

mandatory. Both the State appropriated funds hnd the local funds 

used for these purposes were illegally expended. The Board of 

District Supervisors of the Soil Conservation Districts are officers of the districts (so referred to in Article 165a-4, Sec. 5, 

par. F) and the length of their employment is described as their 

*term of office” (165a:4, Sec. 6). We quote the following summation of the rules governing the responsibility of officers for public funds from 34 Tex. Jur. 473-474, Public Officers, Sec. 86: 

“Officers are personally responsible for any .; 

unauthorized or improper disbursement or misapplication of public funds. This liability extends to members of a board who participate in the misapproprfalion or diversion and to a married woman who is a 

member of such a board. But of course an officer not 

shown to have participated in the diversion or misappropriation is not responsible therefor.” 

Under this rule district supervisors who were responsible for the illegal expenditure of the State and local funds are 

liable to their respective districts to the extent of damage, if any, 

suffered by the particular district. 

SUMMARY 

Revenues of a soil conservation district derived 

from the sale of seed, fertilizer, or chemicals originally purchased with State appropriated funds for resale, with the exception of profits realized therefrom; 

money received from refunds on expenditures made 

from State appropriated funds; and revenue received 

from the sale of obsolete equipment purchased with 

State appropriated funds should be deposited to “State 

appropriated funds.” 

Rentals received by a soil conservation district 

for the use of equipment are, in the nature of earnings 
Hon. C. H. Cavness, Page 11 (V- 1365) 

of the soil conservattnn district and should be deposited by the district in its local fund account. 

Expenditures from local funds are subject to the 

statutory regulations imposed upon expenditures from 

State appropriated funds by Arts. 165a-8 and 165a-9, 

V.C.S. The following types of expenditures cannot be 

made from either State appropriated funds or local 

funds: (I) awards for essay contests on various soil 

conservation subjects; (2) awards for various soil 

conservation projects; (3) costs of a banquet at which 

bankers and heads of other loan agencies were guests 

of the district for the purpose of acquainting them 

with the district soil conservation program. Soil conservation districts may use either State appropriated 

funds or local funds in making contributions to the 

Texas Association of Soil Conservation District Supervisors to be used by it or its agent, Soil and Water 

Conservation, Inc., in carrying out the objects and 

purposes of the soil conservation laws. 

State appropriated funds represented by accounts 

receivable and by inventories of seeds, fertilizers, and 

chemicals bought to be resold but on hand on August 31, 

1951, are covered by the appropriation made by Art. 

165a-9. 

Section 2a of Art. 165a-8 requires that any item 

of machinery or equipment which costs more than $1,000 

must be purchased through the Board of Control. This 

provision is mandatory, and State appropriated funds 

and local funds used to pay in whole or in part for machinery or equipment costing in excess of $1,000 and 

not purchased through the Board of Control were illegally expended. 

‘KFYfEIPBVED: 

Yours very truly, 

PRICE DANIEL 

Attorney General 

Ewes&t Wchinson 

Exe,&ve Assistant 

W. V. Geppert 

Charles D. Mathews 

First Assistant 

WVG/&fMC/mwb 

Mrs. Marietta MC 

Assistants