July 2, 1974 

The Honorable Leroy Jeffers 

President, State Bar of Texas 

P. 0. Box 12487 

Austin, Texas 78711 

Dear Mr. Jeffers: 

Opinion No. H- 348 

Re: Proposal for financing 

and constructing State 

Bar Center 

You have requested our opinion on the legality of a plan for 

financing and constructing a new State Bar Center. Since your 

original request was submitted you have altered your financing 

plans and have submitted a revised question reflecting those 

changes. Your question is: 

Can the State Bar bf Texas under the applicable 

law enter into a contract for the construction of 

a new ‘building on the site of its present building 

and enter into a contract or contracts for the 

financing or partial financing of the costs of such 

construction so long as such contract or contracts 

does not obligate or encumber the dues revenues 

of the State Bar of Texas beyond revenue for the 

current year at the time of entering such contract 

or contracts and so long as the sums that become 

due and payable under such contract or contracts 

are payable only from (1) monies contributed or 

pledged to be contributed to a fund for the express 

purpose of aiding in the payment of the costs of 

construction of such new State Law Center; (2) revenues derived or which may become due and payable 

for the rental of space to others in the new building 

cashwdd by the State Bar of Texas; and (3) ,such 

funds as may be contributed or pledged to be 

contributed to the costs of such construction by 

the Texas Bar Foundation, a private corporation, 

which is not an agency of the State of Texas? 

p. 1586 
The Honorable Leroy Jeffers, page 2 

The State Bar of Texas was created by the State Bar Act, 

Article 320a-1, V. T. C. S. Subdivision (a) of Sec. 2 of that Act 

provides: 

There is hereby created the State Bar, which 

is hereby constituted an administrative agency 

of the Judicial Department of the state, with 

power to contract with relation to its own affairs 

and which may sue and be sued and have such 

other powers as are reasonably necessary to 

carry out the purposes of this Act. 

Pursuant to the clear language of the statute this office has 

consistently held that the State Bar of Texas is a state agency. 

Attorney General Opinions WW-202 (1957); MS-83 (1953); V-1299 

(1951); V-480 (1948); O-2784 (1940). The same subdivision creating 

the Bar as an instrumentality of the State gives it broad power to 

conduct its own affairs. Surely it is necessary .for the Bar to 

acquire adequate office space if it is~ to carry out its responsibilities 

under the Act, and construction of a new building is a reasonable 

means of obtaining that space. . 

The plan for construction of the proposed State Bar Center is 

similar to the method used for financing and constructing the existing 

building. Given the failure of the Legislature over 20 years to 

object to this procedure on the part of the State Bar coupled with 

the Legislature’s failure to include this type building program in the 

general purview of the State Building Construction Administration 

Act, Article 678f, V. T. C.S., we are unable to say that the suggested 

procedure is illegal. 

The Bar is, of course, subject to the requirements of the State 

Bar rules. Your revised question does not seek an interpretation of 

those rules, and for the purposes of this opinion we assume that the 

construction and financing of the building will be authorized in conformity with the State Bar rules. 

. . 

Any financing plan used by the B.ar is limited by Article 3, Sec. 49 

of the Texas Constitution which provides: 

p. 1587 
The Honorable Leroy Jeffers, page 3 

No debt shall be created by or on behalf of 

the State, except to supply casual deficiencies 

of revenue, repel invasion, suppress insurrection, 

defend the State in war, or pay existing debt; and 

the debt created to supply deficiencies in the revenue, shall never exceed in the aggregate at any one 

time, two hundred thousand dollars. 

However, the definition of debt, as used in this portion of the Constitution, 

has been given a narrow meaning. Debt does not include obligations 

payable solely from revenues generated by renting or operation of the 

project. Texas National Guard Armory Board v. McGraw, 126 S. W. 2d 

627 (Tex. 1939); Attorney General Opinion O-1694 (1939). Furthermore, 

no debt is created when payment is to be made from current ~revenues 

only. Charles Scribner’s Sons v. Marts. 262 S. W. 722 (Tex. 1924); 

Attorney General Opinion M-656 (1970). 

Under the proposal you submitted a lender could look only to rental 

revenues and voluntary contributions for payment in future years. You 

have not proposed a mortgage of state property. Under these facts we 

do not believe the Constitution- or statutes would prevent the Bar from 

constructing and financing a new State Bar Center. As we have been 

given no proposed contract we pass solely on the general outline you have 

presented. The l,egality of any particular contract would depend on its 

therms and provisions, and this opinion is necessarily limited to the query 

posed. 

SUMMARY 

The Constitution and statutes do not preclude the 

State Bar of Texas from constructing and financing 

a new State Bar Center where a pledge of voluntary 

contributions and revenues generated by the building 

is the only source to which the lender can look for 

+Lment in future years. 

p. 1588 
The Honorable Leroy Jeffers. page 4 

DAVID M. KENDALL, Chairman 

Opinion CornnGttee 

p. 1589