THEA'ITORNEY GENERAL 

OF TEXAS 

AUSTIN m.T-S 

October 25, 1961 

Honorable Weldon Holcomb 

Criminal District Attorney 

Smith County 

Tyler, Texas 

Dear Mr. Holcomb: 

Opinion No. WW-1174 

Re: Time Warrants and 

County Budgets. 

You inform us that the Commissioners' Court of 

Smith County inaugurated proceedings on August 14, 1961, 

looking to the issuance of interest bearing time warrants 

in the amount of $2,500,000.00 for the purpose of evidencing indebtedness arising from claims and accounts to 

be incurred in connection with the planned construction 

and improvement of roads within the county and the acquisition of rights-of-way therefor. 

You declare that the 1961 budget does not include 

the proposed expenditures under the program. Consequently, 

your questions are: 

"1. May the Commissioners Court 

commence expenditure of monies for which 

time warrants will be issued without having budgeted these items in the budget for 

the year 1961? 

"2 . If the County may expend these 

funds through the remainder of the year 

1961, may this be done through a separate 

bookkeeping system or must it be done by 

budget amendment? 

'I 3. If it may not be done by either 

of the means requested in Question No. 2, 

will you please state as a matter of law 

how monies from this account can be expended for the year 1961?" 
Honorable Weldon Holcomb, page 2 (WW-1174) 

Sections of the Uniform Budget Law applicable to 

counties are Articles 689a-9, as amended, through 689a-12, 

V.C.S. 

A portion of Article 689a-11, V.C.S., declares: 

When the budget has been finally 

approved by the Commissioners' Court, 

the budget, as approved by the Court 

shall be filed with the Clerk of the 

County Court, and taxes levied only in 

accordance therewith, and no expenditure of the funds of the county shall 

thereafter be made except in strict compliance with the budget as adopted by the 

Court. Except that emergency expenditures, in cases of grave public necessity, 

to meet unusual and unforeseen conditions 

which could not, by reasonably diligent 

thought and attention, have been included 

in the original budget, may from time to 

time be authorized by the Court as amendments to the original budget." 

Article 6716-1, V.C.S., provides that expenditures of the County Road and Bridge Fund shall be 'I. . . 

strictly in accordance with annual budgeted appropriations 

II . . . 

The time warrants will issue under the provisions 

of Article 2368a. as amended, V.C.S. Section 1 thereof 

defines a time warrant: 

"The term 'time warrant' as used in 

this Act shall include any warrant issued 

by a city or county not payable out of 

current funds." 
Honorable Weldon Holcomb, page 3 (WW-1174) 

Section 8, same Article, provides: 

"It is hereby made the duty of all 

Commissioners' Courts . . . to levy, and 

have assessed and collected, taxes sufficient to pay the interest as it accrues 

and the principal as it matures on all 

. . . time warrants issued in accordance' 

with the provision of this Act . . ." 

Section 7, Article XI, of our Constitution, declares: 

"No debt for any purpose shall ever 

be incurred in any manner by any city or 

county unless provision is made, at the 

time of creating the same for levying and 

collecting a sufficient tax to pay the 

interest thereon and provide at least 2% 

as a sinking fund." 

The Supreme Court in McNeil1 v. City of Waco, 89 

Tex. 83, 33 S.W. 322 (1895) defined a "debt". 

"An obligation binding the city to 

pay for a matter relating to its ordinary 

expenses, such payment being, in contemplation of the parties, not intended to be 

made out of the current funds of the year 

in which the expenditure is made, or any 

funds on hand lawfully applicable thereto, 

would be a debt within the meaning of the 

Constitution." 

In the instant case the time warrants are dated 

September 1, 1961, and mature serially from 1964 through 

1990. They bear 4% interest per annum, payable on July 1, 

1962, and semi-annually thereafter on January 1 and July 1 

in each year. 
Honorable Weldon Holcomb, page 4 (WW-1174) 

The order of the Commissioners' Court authorized 

the creation of a debt and pledged to its eventual retirement Constitutional Road and Bridge Fund taxes to be collected in the future. The time warrants themselves are but 

non-negotiable evidences of county indebtedness payable in 

the future to be from time to time exchanged for a like 

amount of claims and accounts arising from the project as 

its various aspects develop and contracts thereunder are 

performed. Lasater v. Lopez, 110 Tex. 179, 217 S.W. 373 

(1919); Nacoqdoches County v. Lafferty, 61 S.W.2d 994 

(Comm. App. 1933). In the sense of the Uniform Budget Law, 

the primary expenditure of county funds will occur on July 

1, 1962, the first interest payment date. 

Under the facts and for the reasons announced we 

advise that it is our opinion that the county budget for 

the year 1961 is not involved in nor is it controlling of " 

this situation. Expressed in the alternative, the time 

warrant program is not a matter for the 1961 budget,,but is 

a proper item for the 1962 budget. 

This conclusion provides the answer for questions 

two (2) and three (3). 

SUMMARY 

County funds will not be expended by 

the issuance of time warrants during 

1961: consequently, that year's budget 

is not affected thereby. 

Very truly yours, 

GW-s 

WILL WILSON 

Attorney General of Te 
i10norable !Jeld.un IIolcomb, page 5 (WY-11741 

APPROVED: 

OPINION COMMITTEE 

!J. V. Geppert, Chairman 

Arthur Sandlin 

J;>hn Reeves 

KDbert Lewis 

Bab Shannon 

REVIIWED FOR THE ATTORNE"I GENERAL 

By: Houghtz? Brownlee, Jr.