Hon. TedR. Alexander Opinion No, 

### V-755.

Bond Investment Adviser

December 23, 1948

Board ofiducation Austin, Texas Re: Authority of State Board ofEducation to invest Permanent School Fund in Hospital Bonds issued by Board of Regents of The University of Texas. Dear Sir: Wsquote from your recent letter as follows:

“Atthe Novembe,r 8, 1948 meeting of the State Board ofMucation, 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 ofRegents of the University of Texas pursuant to the constitution and laws of the State of Texas, and particularly the provisions of Chapter 

### 5aActs of the Second Called Session of the 43rd Legislature, as amended (Article 

### 26030VACS). These bonds are not to be and will not constitute an lndebtedness of the State of Texas, but are special obligations to be issued byand in the name of the Board ofRegents of the University of Texas, and will bepayable both am to principal and interest, solely from aoomr pulsory group hospitalization fee to be imposed oneach student as apre-requisite to registration in the MainUniversity, 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 ofEducation authorized

‘the purohase OSsaid 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 Fundin bonds of this typeaHon. TedR. Alexander, page 2 (V-755)

TheState Board ofEducation, 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., welook 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 ofRduoation 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 commonschool 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 4ofArticle VII, Constitution of Texas, which reads in part:

1, eDD,The Comptroller shall invest the “’ proceeds of such sales and of those heretofore made as maybe 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 maybe prescribed by law 00n*(Em-s added.)Thefirst 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 ofEducation was authorized to invest the State permanent public free school fund.’ Thebonds described in your letter could only comeunder a classification such as that added by the amendment of 1929, wherein the said Fund was permitted to be invested inRon. TedR, 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 ofRegents of the University of Texas acting under authority ofArticles 2589~ and 

### 2603~, V, C. SOS are revenue bonds as distinguished from bonds voted by the people and supported bytaxation. Article’260jo, Section 

### 3,specifically provides that “any bonds Q0o 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 apledge of the University of Texas.

Further, Article 2589~ specifically authorizes the Board of Regents of TheUniversity of Texas “to build, equip, operate) and maintain ahospitaln 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 whenArtiole 

### 2669 was last amended in 1929, It was amended purposely to enable the Board ofEducation to invest the Public Free Sohool Fund in obligations and pledges of TheUniversity et Trxoe involving the revenues b the Available University ,Fund, See emergency clause ofj, B. 

### 11314lst ws. Ipage 

### 575#Acts 1929, TheUniversity 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 TheUniversity ofTexas” 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‘notbe invoked for the purpose of raising an ambiguity in a statute, or to control its plaim meaning or purpose. 39Tex, 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, aholding contrary to that expressed herein, Article 2669 is ageneral law and nowhere therein does it limit its application to specific obli-Hon. TedR. Alexander, page 4 (V-755)

gations and pledges. Heneed only to determine that the bonds under consideration constitute an obligation and the pledge of TheUniversity of Texas. Wehave so determined 0

It is our opinion, therefore, that the State Board ofXducation 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 TheUniversity 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 ofRegents of TheUniversity 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 bythe Attorney General,

Yours very truly,

ATTORNXYGliXZRAL

OFTiXLS

CiO:wb:bh

APPROVED: Chester &.Ollison

Assistant