March 

### 31,1952

Hon. C. H:Cavness Opinion No. V-1427. State Auditor Capitol Station Re: Authority of State colAustin, Texas leges, participants under the College Building Amendment,to use their appropriated local Dear Sir: funds for "Improvements**.

Youhave requested an opinion of this office relating to,Section 

### 17of Article VII of the Texas Constitution, the College Building Amendmentadopted in 

### 1947.,, ~This,amendmentconcerns chiefly the use of funds for the .acquiring andconstructing of buildings or other permanent improvements by the State's institutions of higher learning that participate in the proceeds of the ad.valorem tax levied thereunder. Yousubmit the following two questions:

Are the local funds nowrequired by stzkte to be deposited in the State Treasury by all of the State's colleges or universities, beginning with the current biennium, State funds to the sameextent, and subject to the samerestrictions for .appropriation by the Legislature andexpenditure by the various such institutions, as, .general revenue funds placed in the State Treasury from all sources?

2. WhatIs the meaning of the words llbulldings or other permanent improvements" in Section 

### 17where participating institutions are prohlbited from receiving any other State funds for the purpose of acquiring or constructing such?
Se&&ion

### 17of Article VII provides in part: I, there is hereby levfed D0 a stat: id'valorem tax on property of Fi;e (5#> Cents on the OneHundred ($100.30:. -
Hon. co HaCavness, page 

### 3 (v-1427)

Treasury." Acts 52ndLe 

### 841,codified as Art. 2 

### 3c,V.C.S. In view oh the 56" R.S. 1951, ch. 474 pti prevailing method in 1947whenthe College Building Amendmentwas adopted, the contention has been advanced that. institutional receipts were.not.intended to be classed as "state funds" within the meaning of the provision of Section 17which reads:. II of'higier all such designated Institutions

learning which participate in the.:allocation or re-allocation of such funds shall not thereafter receive w other state funds for the acquiring or constructing of buildings or other perma-

.nent improvements

. . ot' (Emphasis added, throughout.)
Thecorrectness of this contention depends onthe meaning to be ascribed to the term llotherstate "~'fundsl' as used in Section 17 of Article VII. Broadly speaking, state funds include ,a11public money, from' whatever source, which is received by or through agen- 'ties of the State. Under this broad general rule thfs 'office has held local funds to be "state funds" within the meanin Ops. 

### o-169

t of certain specific statutes. Att'y Gen. 

### (19399,O-7012 

### (1946). However, the term is sometimes used in a more restricted sense as paning public funds derived from limited sources. or ex* ample, the Banking Department Self-Support andAdministration Act (Art, 342-112, V.C+) provides that the

--~~,expenses incurred by the Banking Department shall be .' paid from the fees and revenues collected by It andi&at 1:"- no such expenses shall ever be a charge against the
:. .i."fuuds of this State." Similarly, the PlumbingLicense *. Law(Art. 6243-101, Sec. 

### 7,V.C.So), after providing :' :'.for the payment of expenses incurred under the act from .$'"r:fees collected by the Plumbing Board, further provides .*, j; that none of these expenses shall ever be a charge against the "funds of the State of Texas." Underthese statutes, :' ' the term "state funds ,$ .- I1does not include the fees coly, lected by the agencies. Certainly these fees are public p moneyandtheir expenditure is subject to the control of 'r. the Legislature, but they have been excluded from the CJ definition of "state funds" as used in those ~statutory .: :i
., g: Provisi0ns. whilethe terminology maynot be technically +;

. correct, the.use of the term "state funds" in varying .A,. :vWSes has been commonpractice.- .

Hon. C. H. Cavness, page 4 (V-1427)

Themeaning to be ascribed to terms used In aconstitutional provision is the meaning intended by its adopters. Sometimes the sameword is given a different meaningin different parts Aransas Countyv. Coleman-Fulton P&',the Constitution.
6 

### 55 ( &'(%%s~~~. Azp.l?$zi' ure 

### CQ.,108Tex. F 1 e,"Fo,,'"Ef";. Davis, 

### 217S.W.

Themeaningof a term in aparticular p?!ovision is determined from the context in which it is used, andthe history of the subject matter andthe purpose of the provision maybe considered in arriving at the intended meaning. Thus, the samemonies maybe state funds for one purpose and not for another, depending upon the intent of the adopters of the provision involved, as indicated from the context andthe history of the enactment. Townof Salina, 

### 58N.Y.S.2d 

### 797(App. Div.

At the time Section 

### 17of Article VII was adopted, the Legislature hadplaced institutional receipts in adifferent category from other appropriated funds for various purposes, both in its appropriation acts andin other statutes. 

### 2647c,v&s., For example, in Article

the Legislature provided for the flnancing of certain teacher training programs of State colleges from theirtllocal funds." Attly Gen. Op. 

### V-1333 (1951). TheLegislature regularly madeseparate appropriations of these funds to the collecting institution each biennium for Its "support, maintenance, operation, andimrovementl' t or other similar purposes. H.B. 2 

### 650. 6, Acts 50th Leg., see, e.g., 

### 1947,ch- 339 P. 

### 649,at P. In the appropriation act of 

### 1947these funds are referred to as "local funds" as distinguished from "legisative appropriations," the latter term obviously meaning appropriations from the General Revenue Fundor other funds then being deposited In the .State Treasury. 

### &B.246,,-, sec. 10, p. 

### 667. Wemaytake knowledge of the'fact that in both school andlegislative circles it was commonpractice to differentiate these institutional receipts from other appropriated funds by the terms t'local funds" and "state funds." While this use of the terms wasnot accurate in atechnical sense it hadbeen prevalent for along time andwas generally understood.
In addition to the biennial appropriation of institutional receipts for purposes which included improvements, the Legislature from time to time madeappropriations out of the General Revenue Fundor other. -

-‘

_

.. .

., ..3
!:

g

i! Hon. C. H. Cavness, page 5 (V-1427)

funds in the State Treasury for buildings andother permanent improvements at the State colleges as the need arose andas the financial condition of the State permitted. The fund fromwhich these latter appropriations were paid was ordinarily the.General Revenue Fund, which was derived in part froma State advalorem tax limited by Section 

### 9of Article VIII of the Constitution to 

### 35cents on the $100valuation. In setting up the five-cent advalorem tax for the college building program, Section 17of Article VII also reduced the general advalorem tax rate by five cents, thereby indicating that the five cents levied for "acquiring, constructing~and lnltially equipping buildings, or other permanent'improvements at the designated institutions" was to be substituted for funds formerly provided by the Legislature from tax revenues. In our opinion lt'.tias not intended as a substitute for institutiona i receipts also, which were regularly and customarily treated as being in a different category. The "other state find9 which the institutions were prohibited from receiving were those funds in categories from which the additional appropriations were madefrom time to time. Although institutional receipts are state funds within the broad meaning of that term weare of the opinion that It wasnot intended that Jhey be included in the term as used in Section 17 of Article VII.

This construction of the term llother state funds" in Section 17 of Article VII is borne out by other provisions in the joint resolution submitting this constitutional amendmentto the people. This joint resolution (S.J.R. 4, Acts 9th Leg., 1947, p. 

### 1184)also submitted Section 

### 18of Article VII, which tias adopted at the sameelection. Section 18provides that the Board of Regents of the University of Texas andthe Board of Directors of the Agricultural and Mechanical College of Texas shall have the right to lssuebonds against the income from the PermanentUnlversity Fundfor the samepurposes as are provided in Section 17 for the other colleges in Texas.

It is thus seen that the purpose of section 17was to place the schools namedin that section ona Parity with those schools which participate in the incomefrom the Permanent University Fund. Section 

### 18 does not contain a provision prohibiting the schools affected by it from receiving other state funds, but a- .

Hon. COH. Cavness, page 6 (v-1427)

comparable provision was 14 of Article VII, which already contained in Section provides: "

. . . no tax

. . shall be levied, and
- ^.. no moneyappropriatea, out 0s tne Peneral. revenue

. . . for the establishment, and erection of the buildings of the University of Texas."
This section has always been understood as not proubiting the appropriation of institutional receipts'for the erektlon of buildings at the institutions included in Section 

### 18. It is clear, then, that with regard to those schools sharing in the Permanent University Pund there is nolimitation as to the use of local funds h the construction of permanent improvements.

Tohold that "state funds" in Section 

### 17has a different meaningfrom "general revenue" in Section 14would be to discriminate against those schools whose building program is set upbySection 

### 17. This would certainly never have been the intent of the Legislature at the time of the proposal of the constitutional amendments in question nor of the people at the time of their adoption.
This conclusion is further borne out by the caption of Senate Joint Resolution No. 4, sunra, which states that the joint resolution proposes an amendment to the Constitution "providing a method of payment for the construction of buildings andother permanent lmprovements." It therefore appears that the Legislature intended that the use of the five-cent advalorem tax provided by Section 

### 17would not be the sole method of financing the construction of permanent improvements, andevidently the Legislature understood that there existed another method for such construction.

Theargument has been advanced that institutional receipts, even if not formerly within the term "state funds" as used in Section 

### 17of Article VII, are nowincluded inthe termbecause they must be deposited in the State Treasury. Wecannot agree with this contention. Themeaning of a constitutional provision is fixed by the intention of the adopters. Since institutional receipts were not included in the intended meaning of "state funds" at the time this amendmentwas adopted, no subsequent action of the Legislature can enlarge the term so as to include them. Thefact that the

### Hon.C.H. Cavness, page 

### 7 (v-1427)

Legislature has changed the method of deposit for these.fund.e has not changed the meaning of the constitutional provisLon.

It has been pointed out that although institutional receipts are not state funds within the meaning of Section 

### 17,they are nevertheless public moneywithin the control anddisposition of the Legislature end maybe disposed of by that body in any manner, within constitutional limits, which it may deemproper. While it is within the power of the Legislature to prevent the use of these funds for acquiring or constructing newbuildings and other permanent improvements, it has not done so. Article 2543~ requires that institutional receipts be kept separate andapart from other funds deposited in the State Treasury andconsequently there is no impediment to their appropriation for permanent improvements by reasonof a.commingling with other funds, Sections 2 and 31of Article Vof the current appropriation bill (H.B. 426 Acts 52nd Leg., RiS. 19% ch. 499, p. 1228, eatpp.:1482 1472) appropriate instiJutiona1 receipts to each collecting institution for purposes which in- ;; ; elude "operation, maintenance, andimprovement" and ?,I( '~"improvements and repairs." Wedo,not find any evi- $-i dence~of a legislative intent to limit the nature of g the~improvements for which these funds maybe used. 

### 8;: I k; In your second question you ask for a clarlfication of the meaning of "buildings or other permag: nent Improvements" for-which the constitutional-funds :.maybe used and, conversely, for which the participatlng insti,tutions are prohibited from receiving any ;,$other state,funds.

.. As observed earlier in this opinion, the purpose of the amendmentwas to provide for the expansion Offacilities at the articipating institutions. In QUA Opinion v-848 (19g9) it was stated that the people and,the Legislature did not intend that the moneymade available by the amendmentshould be used for mainte--- f nance,alterations andrepairs for existing facilities, " 'butrather that tiey intended that it should be invested

..in newbuildings andsimilar permanent improvements ~'which~ were so badly needed after the late war. It was Pointed out that a'construction of the amendmentrequir- ;: ing use of the funds for maintenance, repair, or alteration of buildings then existing or later acquired with amWaman+,

funds would tend to defeat the purnose for ;:

### 2rE-f; Hon. C. H. Cavne~ss,page 

### 8 (V-1427)

which it was adopted, viz., to acquire additional buildings andother permanent improvements. In Opinion 

### V-931 (1949),it wasfurther held that only those buildings andother permanent improvements acquired or constructed with amendmentbuilding tids maybe initially equipped at the expense of those funds. However, the funds maybe used for purposes of clearing, grading, drainage, or other surface improvements in anticipation of andnecessarily incidental to the construction of anewbuilding or other permanent improvement.

Wethink the reasoning andholdings in our cited opinions are sufficient to demonstrate that the purpose of the amendmentwasnot to cover all improvements that might be needed at the designated colleges for the thirty years of its duration. If the improvementcontemplated requires the construction or acquisition of anewstructure, for example, abuilding, a wing onabuilding, or other permanent structure, it would seemthe amendmentfunds were created for such purposes, requiring capital investments of major proportions which formerly and..generallywre provided for by specific appropriations from the general revenue. But if the improvement contemplated is merely to alter, remodel, or reconvert a classroom or rooms or a laboratory, or to improve anexisting water, heating, or sewer system or reroute a portion thereof, our former opinions have indicated that the amendmentfunds were not intended to be used for such purposes.

Wewill not attempt to lay downanyhard and fast line as to whenthere is an "acquirIngI or "constructionl' andwhenthere is a repairing or alteration. Thematter rests in the first instance within the sound discretion of the governing boards of the various institutions. Theresponsibility was placed there bythe people in the adoption of the amendment.

Section 17of Article VII does not prohibit the use of other state funds for repairs, alterations, and improvements for which the amendmentfunds maynot be expended tions ouEandthe Legislature is free to makeappropriaof anyavailable funds for such improvements. In the current appropriation act (H.B. 

### 426,m the Legislature has madeanappropriation to each institution under anitem listed as "General RevenueAppropriation for General Operating Expenses." Section 

### 30of. -
Hon. C. H. Cavness, page 

### 9 (V-1427)

Article V,ofthat act defines "General Operating Bxpenses" as including "

. . . improvements 

### aa repairs; physical plant operation andmaintenance;

. e .'I This appropriation is therefore available for improvements and repairs which are not within the scope of the College Building Amendment.
.' SUMMARY Institutional receipts of State institutions of higher learning, commonlyreferred to as "local funds," are not "other state funds" within the meaning,of that term as used in Section 

### 17of Article VII, Texas Constitution (College Building Amendment), Local funds appropriated to the colleges under Sections 2 and31 of Article V, H.B. 

### 426 Acts 52ndLeg., R.S. 195l, ch. 

### 499 p. 

### 1328, for purposes including ?improvemenCs~~maybe used for all needed improvements, including the acquisition or construction of buildings or other permanent improvements. TheCollege Building Amendmentdoes not restrict the Legislature insproviding appropriations from the General Revenue Fundor anyother available fund for those improvementswhich maynot be financed out of the amendmentfunds. Thephrase l'buildings or other permanent improvements81as used in Section 

### 17of the College Building Amendmentmeans, generally, additional structures or other permanent improvements for the expansion of existing facilities at the colleges. It does not include repairs andalterations to existing facilities.
Yours very truly, APPROVED:' PRICEDANIBL



### c. IL Richards Attorney General Trial &Appellate .Division
Charles D. Mathews ?itzg%Y
First Assistant J$zeid E. Jacobson m:EJ:wb Assistants