March 30. 1949

Hon. William L. Kerr, President Board of Regents State Teachers Colleges First National Bank Building Midland, Texas Opinion No. V-798 Re: Availability offunds collected through the tax levied under the College Building Amendment to the Texas Constitution. Dear Mr. Kerr:

You request the opinion 

### oftheAttorney General as follows:

“It has been announced that the litigation concerning the college building amendment has been brought to a close with the overruling ofmotions for rehearing in the Supreme Court. Therefore, itbecomes important that we of our Board know of our authority to obtain or pledge funds realized from the tax levy heretofore made. During the pendency oflitigation, as we understand it, the authorized tax was levied for the benefit ofour colleges and collection has been made from this levy.May we, therefore, ask **your** opinion and advise as follows:

‘1. Will the present collected funds (in proper proportionate part) be available to the State Teachers Colleges for authorized buildings, even though bonds have not as yet been issued?

“2. May our Board of Regents request transfer of present accumulated funds from the treasury to the respective colleges under ourjurisdiction to permit such funds tobe used for building construction?, Hon. William L. Kerr, Page 2 (V-798)

“3. Ifsuch atransfer ofpresent funds from the treasury may notbe permitted, may the Board authorize building construction, payable out offunds already collected and presently held by the State Treasurer?” We quote the following from this Constitutional Amendment:
u there is hereby levied,

. . .aState advalorem tax’dn property offive cents (Se)

.,.,~.for the purpose ofcreating a special fund for the.purpose ofacquiring, constructing, and initially equipping buildings or other permanent improvements at the designated institutions ofhigher learning: and the governing board of each ofsuch institutions ofhigher learning is fully authorized to pledge all or any part of said funds allotted to such institutions as hereinafter provided, to secure bonds or notes issued for the purpose ofacquiring, constructing and initially equipping such -buildings or other permanent improvements at said respective institutions. Such bonds or notes shall be issued in such amount as may be determined by the governing boards of said respective institutions, shall bear interest not to exceed three (3%) per cent per annum and shall ma**tur.e** serially

. . . .” This Amendment further provides: “Funds raised from said Five (5.C)Cents tax
. . . are hereby allocated to the following institutions of higher learning, and inthe following proportions to wit: ”

. . .Section 17concludes: “This amendment shall be self-enacting. The State Comptroller of Public Accounts shall draw all necessary and proper warrants uponthe State Treasury in order to carry out the purposes ofthis amendment; and the State Treasurer shall pay warrants so i.ssued out of the special fund hereby created for said purpose.“’ Assuming for the purpose ofthis opinion that the funds now onhand have been allocated, or credited to therespective State Teachers Colleges. it is.clear that the Board of Regents has the authority by the express terms ofthis Amendment to the Constitution,to issueHon. William L. Kerr, Page 3 (V-798)

bonds or notes tobe secured by a pledge ofthese funds. The bonds require the approval oftheAttorney General, but the notes provided for inSection 17do not. Both the bonds and notes issued by the University ofTexas andA. andM. College require the approval of the Attorney General. This Constitutional Amendment clearly prescribes the terms and conditions ofthe bonds and notes, andmakes no other provisions for evidencing ofliability against the fund except by the issuance ofbonds or notes. Hence it is our conclusion that this special fund may not be withdrawn from the State Treasury except to pay principal and interest requirements ofbonds or notes issued under Section 17.

The issuance ofshort-term notes or bonds should serve the purpose offacilitating the payment of obli.gations legally incurred by the governing boards inthe furtherance ofthe purposes authorized by this Amendment. You will observe that there is amaximum date ofmaturity provided, but nominimum date. Itwould, therefore, be permissible for the governing boards to issue short-term bonds or notes. Funds already collected and in the **Treasury may.**  of **course,** be used for the payment of such bonds or notes.

There is necessarily involved in **your** request, though not definitely presented, the question ofwhether or notthese funds are subject to legislative appropriation as a prerequisite to expenditure by the colleges. 

### We deem itappropriate to answer that question now. The answer is in the negative. This Constitutional Amendment, by its express terms; is self-enacting in all ofits details. It ’ specifically levies the tax, designates the **use** to which the fund created by the tax levy shall be applied by the Board ofRegents, and directs the Comptroller totissue and the State Treasurer to pay warrants drawn upon this special fundthus created. An appropriation ina constitutional sense may be by legislative act or constitutional declaration. This is ofthe latter class. The effect ofthe explicit directions found inthis Constitutional Amendment, now a part ofthe organic law ofthis State, levying the tax. creating a special fund from such levy, specifying the purposes for which itmay be spent, and directing the manner ofits disbursement, clearly remove this special fund from the limitations ofArticle VIII, Section 

### 6ofthe Constitution ofthis State, which provides: “No money shall be drawn from the treasury but inpursuance of specific appropriation made by law; nor shall any appropriation ofmoney **be** made for a longer term than twoyears.” City ofAransas Pass v. Keeling, 112 Tex. 339, 247 S.W. 818; Braeos River Conservation &R. District v. Mct;;w, 126 Tex. 

### 506, 91 S.W. (2d) 665: Dorsey v. Petrott, 12A. (2d)

.

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Hon. William L. Kerr, Page 4 (V-798)

SUMMARY The accumulated funds from taxes levied by virtue ofSection 17 ofArticle VII (the College Building Amendment) may be allocated by the Comptroller to the respective colleges entitled to receive the same in proportion to the formulas provided in such constitutional amendment for the payment ofbonds or notes issued thereunder. No legislative appropriation ofsuch funds is necessary since the amendment is self-enacting. Very truly yours ATTORNEYGENERALOF TEXAS



### BY

LPL/mwb APPRO,VED



# v IRST ASSISTANT ATTORNEY GENERAL