TIXEATPOWNEY 

## GENERAL OF TEXAS

k%USTIN. **-XAS** r8711 September 10, 1963

Honorable Robert S. Calvert Comptroller of Public Accounts Austin, Texas Opinion No. C-134 Re: Authority to execute a lease for a term beyond Dear Mr. Calvert: current appropriations.

Your request for an opinion reads in part as follows:

“H.B. 1086, 58th Legislature reads

as follows:

“‘Section I. TheDepartment of Public Safety, the Liquor Control Board, the Parks andWildlife Commission gndthe Comptroller of Public Accounts are hereby authorized to enter jointly Into a contract of lease of land andabuilding thereon located. or to be located In El Paso County, to bemusedby said agencies for reglbnal or district offices. The terms of the contract shall be agreed to by said agencies as one party to the contract, with each agency agreeing to pay a share of the rent or other consideration. Said agencies are authorized to execute a contract of lease for a term of twenty (20) years with an option to purchase at the end of the term for a consideration of TenDollars ($10); or said agencies mayexecute a contract of lease for anyterm of years leas twenty (20).
n . l .

“I will t‘hankyou to advise meif the departments namedIn the above act have the authority to execute a contract for a term which exceeds the current appropriations.”

-664-Hon. Robert S. Calvert, page 2 (C- 134)

Section 49 of Article III of the Constitution of Texas provides :

“Nodebt shall be created’by or on

behalf of the State except

. . .” (Exception not applicable). Section 

### 6of Article VIII of the Constitution of Texas prohibits anyapproprlatlon of moneyfor a term longer than twoyears.

Theleading cases pertinent to your Inquiry are Charles Scribnerls Sons v.Karrs, 

### 114Tex. 

### 11,262S.W. 722 Fort WorthCavalry Club v. Sheppard, 125Tex. 339, A1924);r 

### 3S.W. 2d bb0 (1935) Court wasdonsydering

I Lnarles Scrlbner's Sons v.Mar* supra, the

the validity of a contract forthe purchase ofcertain books for a period of five years. Theobllgation of the contract wasnot to buy a fixed numberOFamount of books but only so manyas needed by the schools of the State. TheCourt held, therefore, that since the contract did not make a charge onthe future revenues of the State, nodebt wascreated nor was Section 

### 6of Article VIII of the Constitution of Texas violated.Thecase of Fort Worth Cavalry Club, sura lease contract for a period of five years. &;U~Fv~:;l:d a that the contract wasvoid since the adjutant general hadthe .; Implied power to makea contract .only within the amounts of the appropriation and the period of the appropriation.

It washeld In Attorney General’s Opinion 

### O-6246(1944) that the Board of Regents of the University of Texas wasauthorized to enter into a five year contract for fire Insurance andto pay all of the premiumfrom current appropriation, stating:

“The llmltatIon that noappropriation of moneyshall be madefor a term longer than two years does not Imply a limitation on the power to makea contract for a greater time, where the contract does not require anappropriation beyond the two year period 

### (38Texas Jurlsprudence, p. 

### 845). With reference to the Insurance contract on the University LawBuilding, it is clear that no llablllty Is created against the State beyond the twoyear appropriation. II

. . .

-665-,

Hon. Robert S. Calvert, Page 3 (C-134)

"The Legislature has, time andtime again, appropriated funds for buildings, lmprovements and supplies of all kinds, which lasted as Investments of the State far beyond the term of that particular two-year approprlatlon. Appropriations have never been limited to those items where the benefits created by the appropriation would be exhausted by the end of the term of the two-year appropriation period. Froman analysis of the cases herein cited, It appea5?sthat the two-year limitation upon the power to contract has reference to the term of the obligation created against the Stat~ch contract, rather than to the period of time for which the benefits of the contract mayextend In favor of the State." In Attorney General's Opinion v-1067 (1950), it was held that payment of rental onbusiness machines did not violate~Sectlon 49 of Article III of the Constitution of Texas since such rental was to be paid out of current appropriations.

In view of the foregoln HouseBill 1086. Acts of the 

### 5th Legislature, Chapter 422, 8' you are advised that while page 1015, codified as Article 9783, note, Vernon's Civil Statutes, authorizes the Department of Public Safety, the Liquor Control Board, the Parks andWildlife Commission and the Comptroller of Public Accounts to enter jointly into a contract for a term of twenty years, such contract mustbe payable out of current appropriations; otherwise such a contract would constitute the creation of a debt In violation of the provisions of Section 49 of Article III of the Constltution of Texas.

Therefore, if the proposed contract Is payable out of future revenues of the State rather than current appropriations, the sameIs Invalid. In the event there are sufficient monies appropriated by the Legislature for the paymentof the entire lease term contemplated by the contract, a contract leasing land by these agencies'for'a longer term than twoyears would be valid, If paid out of current revenues. SUMMARY Section 49 of Article III of the Constltutlon of Texas prohibits the creation of a

-666-Hon. Robert S. Calvert, page 4 (C-134)

debt by the State andany lease contract not payable out of current appropriations would be void.

Yours very truly, WAGGONER

CARR Attorney General

Assistant JR:ms APPROVED: OPINIONCOMMITTEE W.V. Geppert, Chairman R. E. Richards Nicholas A. Irsfeld Bill Allen Paul Phy APPROVED

FORTHEATTORNEY

GENERAL By: Stanton Stone

-667-