Honorable Tom C. King

StateAuditor and Efficlency~Expert Austin, Texas

Dear Sir: OpinionNO. O-1693 Re: Does Senate Bill#455 purport to validate ’ the procedure so as to give the sanction of the Legislature to an originallyunlawful pledge of funds?

Your request for an opinion has been received by this department. We quote from your letter as follows:

"Chapter5, Acts 43-dLegislature, 2nd, CalledSession, provides for bona issuesby the Board of Regents of the State Teachers College to secure loans to the various fnstitutions under their charge, for the purpose of constructlngneeded buildings. The Act, in specifying themoney available for payment of the bonds, limits the same 'solely'to revenues derived from the operation of the buildings constructed under its authority. This Act, with its amendments, has been codified as Art. 2603~ In Vernon'sAnnotated Statutes.

:"Senate

Bill 455, 46th Legislature purports to validate all Acts of the Board, theretofore had in issuingbonds 'toaccomplish purposes authorizedunder the provisions of Chapter 5’., ThisAct **is** codifiedby Vernon as Art. 2603~1:

"Your opinion is respectfully requestedas follows:

"1. If a bond Issuewas made, under color of the authority of the said Chapter5, but which in fact provlded for the use of repayment fundsnot available for thatpurpose under the Act, does Senate Bill 455 purport to valll8ate the procedure so as to give the sanction of the Legislature to the ariginallgunlawful pledge of funds?--.-/

Honorable Tom C. King, page 2 o-1693

"2

. Is the Act (SenateBill 455) effective in thus providingaaaitlonal funds for such purposes than those allowed under the originalAct, at least as to the issues executedbetween their respectivedates?'
Inanswering this request we enclosea copy of our OpinionNo. o-1662, addressed toHonorable'Tom C. King, State Auditor and Efficiency Expert,Austin, Texas,which holds that the Board of Regents of the State Teachers College is not authorized to use eitherappropriations from the general fund or local or institutionalfunds in payment of bonds Issuedunder Chapter5, Acts of the Forty-third Legislature, Second Called Session.

Senate Bill 455 provides as follows:

"Art.2603~1. Validation of proceedingsand bonds purchased by Federal Agencies.

"That severallyall the acts of the.Board ofRegents of the University of Texas, the Board ofDirectors of the Agricultural and Mechanical College of Texas, the Board ofDirectors of Texas TechnologicalCollege, the Board of Regents of the State Teachers Colleges, the Board of Regents of the Texas State College for Women, and the Board ofDirectors of the Texas College of Arts and Industries,heretoforehad in the authorization, issuance,and'deliverg of bonds, notes or warrant&, evidencing loans made to accomplishpurposes authorized under the provisions of Chapter 5, Acts of the Second Called Session of the Forty-third Legislature,and amendments thereto, and all other laws of the State of Texas, relating to such bonds, notes or warrants, lneluding the construction,acqulsltionand equipping of dormitories,kitchens and dining halls, hospitals, libraries, student activity buildings, gymnasia, athletic buildings and stadia,and otherbuildings, are hereby in all things validated. dng such bonds, notes or warrants heretofore Issued, or that may be issuedhereafter, pursuant to any order or resolution of any such Board of Directors or Board of Regents heretoforeadopted, are In all things fully validated,and such bonds, notes or warrants, the pledge of the revenues by any such Board of Directors or such Board ofRegents to secure and assure the payment of such obligations, and the provisions and covenantsas to rates and charges supporting such pledges, are in all things ratified, and such bonds, notes orwarrants are hereby declared to be the valid and binding special obligations of suchHonorable Tom C. King, page 3 o-1693

Board ofDirectors or suchBoar& of Regents, to be paid out of revenuespled.ged and not otherwise obligations of such respe,ctlve~~.institutlons. It

**is** hereby made the duty of said Boards of Directors and of ,saiaBoards of Regents to fix, maintain and collect charg,es or,rates, sufficient for, a reasonable reserve and to.pay the'interest as it accrues and the principal as it ~maturesof any such bonds,:notes or warrants heretofore or hereafter authorizedby suchBoards.
"Provided,however, that the provisions of thisAct shall apply only to such bonds, notes
or warrants ashave heretofore or may hereafter be purchasedby the Government of the United States or some agency thereof, or which bonds, notes, or warrants are under contract of purchase by the Federal Government or any agency there,of.Acts ,1939,46th Leg., S.B. #455, Sec.1."

It seems to be the settled law of this State that the Legislaturemay legalize unauthorized acts of surbordlnate agencieswhere samewould have been valid under*'legislatlve sanctionprevlouslggiven. Louisiana Ry, & Nav. Co.
v. State, 298 S.W. 462,dff. 7 S.W. Dist. No. 8 vs. Pollard, 296 S.W. A2) 71; Anderson Co. Rd. 10 2.

Under the statement of facts given In your letter the Legislature could not at this time validate the unlawful pledging .offunds ormake,additional appropriation out of public funds to pay principal and interest on bonds issued iunder Chapter 5, Acts of the Forty-third Legislature, Second Called Session. An aaditlonal appropriation from the funds in the State Treasury or from local or institutionalfunds would be In violation of Article 3, Section 44 of the Constitution of Texas,which provides, in part, that the Leglslature shallnot "grant,by appropriation or otherwise,any money out of the Treasury of the State, to any Individual,
on a claim, real or pretended,when the same shallnot have been provided for by preexisting law.!'

There being no 1labFlity against the State because under the expressedprovlsion of the statute authorizing the constructionof buildings and the Issuing of the bonds in question, therewould be no "preexistinglaw" to serve as the basis of the appropriations of any public funds to repay the loan, and such appropriationswould be in violation of Article 3, Section 44 of the Constitution. Ft. Worth Cavalry Club vs. Sheppard, 83 S.W. 660.Honorable Tom C. King, page 4 o-1693

For reasons above
- _ _. _*_ stated, and also as set out in the enclosea oplnlon, It 1s the opinion of this department that Senate Bill 455, Forty-sixth Legislature,does not purport to validate the procedure so as to give the sanction of the Legislature to the originallyunlawful pledge of funds, and also does not attempt to provicle additional funds for :.~: suchpurposes than those allowed under the originalAct.

Trusting that this answers both of your questions,
we are
Very truly yours

ATTORWYGRRWdL OF TRKAS

By s/Claud 0. Boothman Claud 0. Booth&n

Assistant

COB:s:wc

APPROVED FEB 27, 1940 S/W. F. Moore FIRST ASSISTANT ATTORNEY GERRRdL

This Opinion Consideredand Approved in Limited Conference