Hon. Ted R. Alexander Opinion No, V-755. 

Bond Investment Adviser 

December 23, 1948 

Board of iducation 

Austin, Texas 

Re: Authority of State Board 

of Education to invest 

Permanent School Fund in 

Hospital Bonds issued by 

Board of Regents of The 

University of Texas. 

Dear Sir: 

Ws quote from your recent letter as follows: 

“At the Novembe,r 8, 1948 meeting of the 

State Board of Mucation, the Board of Regents of the University of Texas offered for 

sale to the State Board of &ducation #J,OOO,- 

000.00 3% Hospital Bondsproposed to be lesued by the Board of Regents of the University 

of Texas pursuant to the constitution and 

laws of the State of Texas, and particularly 

the provisions of Chapter 5a Acts of the Second Called Session of the 43rd Legislature, 

as amended (Article 26030 VACS). These bonds 

are not to be and will not constitute an lndebtedness of the State of Texas, but are 

special obligations to be issued by and in 

the name of the Board of Regents of the University of Texas, and will be payable both am 

to principal and interest, solely from a oomr 

pulsory group hospitalization fee to be imposed on each student as a pre-requisite to 

registration in the Main University, not to 

exoeed $4.00 per student for any semester or 

for any one summer session, and from any‘other net revenues of the proposed hospi tale 

“The State Board of Education authorized 

‘the purohase OS said bonds as an investment 

ror the Permanent School Fund, subject to an 

opinion of the Attorney General that the 

Board has the authority to invest the State 

Parmqnent School Fund in bonds of this typea 
Hon. Ted R. Alexander, page 2 (V-755) 

The State Board of Education, therefore, respectfully requests your opinion whether the 

proposed bonds herein above described are an 

authorized investment for the Permanent Sohool 

Fund of Texas under the laws of this State.” 

Assuming the 3% Hospital Bonds under consideration will bear the approval of the Attorney General 

in accordance with Article 2670, V. C. S., we look to 

Article 2669, V. C. S., as amended, which authorizes the 

State Board of dduoation to invest the public free school 

funds in certain designated bonds. 

Article 2669 provides: 

“The State Board of Rduoation is authorized and empowered to invrst the permanent 

public free school funds of the State in 

bonds of the United States, the State of Texas, 

or any county thereof, and the independent or 

common school districts, road precinots, arainaga, irrigation, navigation and levee districts 

in this State, and the bonds of incorporated 

cities and towns, and oblinations and pledges 

of the University of Toxs8.v (timphasis added7 

This statute is the enabling law enacted pursuant to Section 4 of Article VII, Constitution of Texas, 

which reads in part: 

1, e D D, The Comptroller shall invest the “’ 

proceeds of such sales and of those heretofore made as may be directed by the Board of 

Education herein provided for, in the bonds 

of the United States, the State, or in such 

other securities and under suoh restriotions 

as may be prescribed by law 0 0 n * (Em-s 

added.) 

The first such enabling statute appears in 

Acts 1905, page 263. 

page 216. 

It was later amended in Aots 190% 

gaoh amendment including the last, Aots 1929, 

41st Leg:., page 573# Soction 1, designated other bonds 

in which the Board of Education was authorized to invest 

the State permanent public free school fund.’ The bonds 

described in your letter could only come under a classification such as that added by the amendment of 1929, 

wherein the said Fund was permitted to be invested in 
Ron. Ted R, Alexander, pago 3 (V-755) 

*obligations and pledges of the University of Texas.” 

A. G, ,Opinion No. O-3428. 

These hospital bonds to be issued and sold by 

the Board of Regents of the University of Texas acting 

under authority of Articles 2589~ and 2603~, V, C. SOS 

are revenue bonds as distinguished from bonds voted by 

the people and supported by taxation. Article’260jo, 

Section 3, specifically provides that “any bonds Q 0 o 

issued hereunder shall not be an indebtedness of the 

State of Texas, but shall be payable solely from the 

revenues to be derived from the operation of such 

buildings. * Further D “the fees and charges (Section 2) 

thus fixed along with all other income. therefrom shall 

be considered as revenue derived from the operation of 

the buildings thus constructed.* Clearly, the bond lssue thus created and sold would oonstitute a pledge of 

the University of Texas. 

Further, Article 2589~ specifically authorizes the Board of Regents of The University of Texas “to 

build, equip, operate) and maintain a hospitaln under 

Article 2603~, and to levy and colleot ~the fee not to 

exceed $4.00 per student per semester* 

It is pertinent to note that when Artiole 2669 

was last amended in 1929, It was amended purposely to 

enable the Board of Education to invest the Public Free 

Sohool Fund in obligations and pledges of The University 

et Trxoe involving the revenues b the Available University ,Fund, See emergency clause of j, B. 1131 4lst 

ws. I page 575# Acts 1929, The University Available 

~Fund consists of revenues of the University Permanent 

Fund. Article 2592, V, C. S. 

Thr provision in Article 266g9 as amended, 

authorizing the Board to invest the public sohool~fund 

in “obligations and pledges of The University of Texas” 

is clear and.unambiguous. Its intent is plain, not re- 

&;ing the invocation of rules of statutory oonst2uoThis being true, expressions in the emergenay 

clauie cited may ‘not be invoked for the purpose of raising an ambiguity in a statute, or to control its plaim 

meaning or purpose. 39 Tex, Jur., page 228, Nor wouI4 

the fact that Article 2603~ was first enacted in:1934, 

subsequent to Article 2669 as amended in 1929, require, 

in our opinion, a holding contrary to that expressed 

herein, Article 2669 is a general law and nowhere 

therein does it limit its application to specific obli- 
Hon. Ted R. Alexander, page 4 (V-755) 

gations and pledges. He need only to determine that 

the bonds under consideration constitute an obligation 

and the pledge of The University of Texas. We have so 

determined 0 

It is our opinion, therefore, that the State 

Board of Xducation is authorized under Article 2669, 

v. c. s as amended, to invest the public free school 

fund of’$exas in the hospital bonds to be issued and 

sold by the Board of Regents of The University of Texas 

acting under authority of Articles 25890 and 2603c, V. 

c. s., as amended, when same have been approved by the 

Attorney General. 

The State Board of Mucation has authorized under Article 2669, V, C, S., as amended, 

to invest the public free school fund of Texas 

in hospital bonds to be issued and sold by the 

Board of Regents of The University of Texas 

acting under authority of Articles 2589~ and 

2603, v. c. ii., as amended after the same 

have been lawfully authorized and have been 

approved by the Attorney General, 

Yours very truly, 

ATTORNXY GliXZRAL OF TiXLS 

CiO:wb:bh 

APPROVED: 

Chester &. Ollison 

Assistant