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. The Department of Public 

Safety, the Liquor Control Board, the Parks 

and Wildlife Commission gnd the Comptroller 

of Public Accounts are hereby authorized to 

enter jointly Into a contract of lease of land 

and a building thereon located. or to be located In El Paso County, to bemused by 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 Ten Dollars ($10); or said 

agencies may execute a contract of lease for 

any term of years leas twenty (20). 

n . l . 

“I will t‘hank you to advise me if the 

departments named In the above act have the 

authority to execute a contract for a term 

which exceeds the current appropriations.” 

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

Section 49 of Article III of the Constitution of Texas 

provides : 

“No debt shall be created’by or on 

behalf of the State except . . .” (Exception not applicable). 

Section 6 of Article VIII of the Constitution of Texas 

prohibits any approprlatlon of money for a term longer than 

two years. 

The leading cases pertinent to your Inquiry are Charles 

Scribnerls Sons v.Karrs, 114 Tex. 11, 262 S.W. 722 

Fort Worth Cavalry Club v. Sheppard, 125 Tex. 339, A 

1924);r 

3 S.W. 2d 

bb0 (1935) 

Court was donsydering 

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

the validity of a contract forthe purchase of certain books for a period of five years. The obllgation of the contract was not to buy a fixed number OF amount 

of books but only so many as needed by the schools of the State. 

The Court held, therefore, that since the contract did not make 

a charge on the future revenues of the State, no debt was created 

nor was Section 6 of Article VIII of the Constitution of Texas 

violated. 

The case of Fort Worth Cavalry Club, su ra 

lease contract for a period of five years. &;U~Fv~:;l:d a 

that the contract was void since the adjutant general had the .; 

Implied power to make a contract .only within the amounts of the 

appropriation and the period of the appropriation. 

It was held In Attorney General’s Opinion O-6246 (1944) 

that the Board of Regents of the University of Texas was authorized to enter into a five year contract for fire Insurance and to 

pay all of the premium from current appropriation, stating: 

“The llmltatIon that no appropriation of 

money shall be made for a term longer than two 

years does not Imply a limitation on the power 

to make a contract for a greater time, where 

the contract does not require an appropriation 

beyond the two year period (38 Texas Jurlsprudence, p. 845). With reference to the Insurance 

contract on the University Law Building, it is 

clear that no llablllty Is created against the 

State beyond the two year appropriation. 

II 

. . . 

-665- 
, 

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

"The Legislature has, time and time 

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. 

From an analysis of the cases herein cited, It 

appea5?s that 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 may extend 

In favor of the State." 

In Attorney General's Opinion v-1067 (1950), it was 

held that payment of rental on business 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 

House Bill 1086. Acts of the 5 8' th Legislature, Chapter 422, 

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 and Wildlife Commission and 

the Comptroller of Public Accounts to enter jointly into a 

contract for a term of twenty years, such contract must be 

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 same Is Invalid. In the event there are sufficient monies 

appropriated by the Legislature for the payment of the entire 

lease term contemplated by the contract, a contract leasing 

land by these agencies'for'a longer term than two years 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 and any lease contract 

not payable out of current appropriations 

would be void. 

Yours very truly, 

WAGGONER CARR 

Attorney General 

Assistant 

JR:ms 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

R. E. Richards 

Nicholas A. Irsfeld 

Bill Allen 

Paul Phy 

APPROVED FOR THE ATTORNEY GENERAL 

By: Stanton Stone 

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