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**. 

You have requested an opinion of this office 

relating to,Section 17 of Article VII of the Texas 

Constitution, the College Building Amendment adopted in 

1947.,, ~This ,amendment concerns chiefly the use of funds 

for the .acquiring and constructing 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. You submit the following two questions: 

Are the local funds now required 

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 same extent, 

and subject to the same restrictions for 

.appropriation by the Legislature and expenditure by the various such institutions, as, 

.general revenue funds placed in the State 

Treasury from all sources? 

2. What Is the meaning of the words 

llbulldings or other permanent improvements" 

in Section 17 where participating institutions are prohlbited from receiving any 

other State funds for the purpose of acquiring or constructing such? 

Se&&ion 17 of Article VII provides in part: 

I, there is hereby levfed D 0 

a stat: id'valorem tax on property of Fi;e 

(5#> Cents on the One Hundred ($100.30: 

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Hon. co Ha Cavness, page 3 (v-1427) 

Treasury." Acts 52nd Le 

841, codified as Art. 2 56" 3c, V.C.S. In view oh the 

R.S. 1951, ch. 474 pti 

prevailing method in 1947 when the College Building 

Amendment was 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 17 which 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.) 

The correctness of this contention depends 

on the meaning to be ascribed to the term llotherstate 

"~'fundsl' as used in Section 17 of Article VII. Broadly 

speaking, state funds include ,a11 public 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 and Administration 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 and i&at 

1:"- no such expenses shall ever be a charge against the 

:. .i. "fuuds of this State." Similarly, the Plumbing License 

*. 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." Under these statutes, 

:' ' the term "state funds ,$ .- 

I1 does not include the fees coly, lected by the agencies. Certainly these fees are public 

p money and their 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 may not be technically 

+; . correct, the.use of the term "state funds" in varying 

.A,. :vWSes has been common practice. 
- . 

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

The meaning to be ascribed to terms used In 

a constitutional provision is the meaning intended by 

its adopters. Sometimes the same word is given a different meaning in different parts 

Aransas County v. Coleman-Fulton P 

&',the Constitution. 

6 55 ( 

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

ure CQ., 108 Tex. 

F 1 

e,"Fo,,'"Ef";. 

Davis, 217 S.W. 

The meaning of 

a term in a particular p?!ovision is determined from 

the context in which it is used, and the history of the 

subject matter and the purpose of the provision may be 

considered in arriving at the intended meaning. Thus, 

the same monies may be 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 and the history of the enactment. 

Town of Salina, 58 N.Y.S.2d 797 (App. Div. 

At the time Section 17 of Article VII was 

adopted, the Legislature had placed institutional receipts in a different category from other appropriated 

funds for various purposes, both in its appropriation 

acts and in 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). The Legislature regularly made separate appropriations of these funds to the collecting institution 

each biennium for Its "support, maintenance, operation, 

and im rovementl' 

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 1947 these funds are 

referred to as "local funds" as distinguished from "legisative appropriations," the latter term obviously meaning appropriations from the General Revenue Fund or 

other funds then being deposited In the .State Treasury. 

&B.246,,-, sec. 10, p. 667. We may take knowledge 

of the'fact that in both school and legislative circles 

it was common practice to differentiate these institutional receipts from other appropriated funds by the 

terms t'local funds" and "state funds." While this use 

of the terms was not accurate in a technical sense it 

had been prevalent for a long time and was generally 

understood. 

In addition to the biennial appropriation of 

institutional receipts for purposes which included improvements, the Legislature from time to time made appropriations out of the General Revenue Fund or other 
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. . . 

., ..3 

!: 

g 

i! 

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

funds in the State Treasury for buildings and other 

permanent improvements at the State colleges as the 

need arose and as the financial condition of the 

State permitted. The fund from which these latter 

appropriations were paid was ordinarily the.General 

Revenue Fund, which was derived in part from a State 

ad valorem tax limited by Section 9 of Article VIII 

of the Constitution to 35 cents on the $100 valuation. In setting up the five-cent ad valorem tax 

for the college building program, Section 17 of Article VII also reduced the general ad valorem 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 made from time to time. 

Although institutional receipts are state funds within 

the broad meaning of that term we are of the opinion 

that It was not 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 amendment to the people. This 

joint resolution (S.J.R. 4, Acts 9th Leg., 1947, p. 

1184) also submitted Section 18 of Article VII, which 

tias adopted at the same election. Section 18 provides 

that the Board of Regents of the University of Texas 

and the Board of Directors of the Agricultural and 

Mechanical College of Texas shall have the right to lssue bonds against the income from the Permanent Unlversity Fund for the same purposes as are provided in Section 17 for the other colleges in Texas. 

It is thus seen that the purpose of section 

17 was to place the schools named in that section on a 

Parity with those schools which participate in the income from 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. CO H. 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 money appropriatea, 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 no limitation as to the use of local funds h 

the construction of permanent improvements. 

To hold that "state funds" in Section 17 has 

a different meaning from "general revenue" in Section 

14 would be to discriminate against those schools whose 

building program is set up by Section 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 and other permanent lmprovements." It therefore appears that the Legislature 

intended that the use of the five-cent ad valorem tax 

provided by Section 17 would not be the sole method of 

financing the construction of permanent improvements, 

and evidently the Legislature understood that there existed another method for such construction. 

The argument has been advanced that institutional receipts, even if not formerly within the term 

"state funds" as used in Section 17 of Article VII, are 

now included inthe term because they must be deposited 

in the State Treasury. We cannot agree with this contention. The meaning 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 amendment was 

adopted, no subsequent action of the Legislature can enlarge the term so as to include them. The fact 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 

money within the control and disposition of the Legislature end may be disposed of by that body in any 

manner, within constitutional limits, which it may 

deem proper. While it is within the power of the Legislature to prevent the use of these funds for acquiring or constructing new buildings and other permanent 

improvements, it has not done so. Article 2543~ requires that institutional receipts be kept separate 

and apart from other funds deposited in the State 

Treasury and consequently there is no impediment to 

their appropriation for permanent improvements by reasonof a.commingling with other funds, Sections 2 and 

31 of Article V of the current appropriation bill 

(H.B. 426 Acts 52nd Leg., RiS. 19% ch. 499, p. 1228, 

eat pp.:1482 1472) appropriate instiJutiona1 receipts 

to each collecting institution for purposes which in- 

;; 

; elude "operation, maintenance, and improvement" and 

?,I ( '~"improvements and repairs." We do,not find any evi- 

$-i dence~ of a legislative intent to limit the nature of 

g the~improvements for which these funds may be 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 

:. may be 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 amendment was to provide for the expansion 

Of facilities at the articipating institutions. In 

QUA Opinion v-848 (19g9) it was stated that the people 

and,the Legislature did not intend that the money made 

available by the amendment should be used for mainte--- 

f nance,alterations and repairs for existing facilities, 

" 'butrather that tiey intended that it should be invested 

. . in new buildings and similar permanent improvements 

~'which~ were so badly needed after the late war. It was 

Pointed out that a' construction of the amendment requir- ;: 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 and other permanent improvements. In 

Opinion V-931 (1949), it was further held that only 

those buildings and other permanent improvements 

acquired or constructed with amendment building tids 

may be initially equipped at the expense of those 

funds. However, the funds may be used for purposes 

of clearing, grading, drainage, or other surface improvements in anticipation of and necessarily incidental to the construction of a new building or 

other permanent improvement. 

We think the reasoning and holdings in our 

cited opinions are sufficient to demonstrate that the 

purpose of the amendment was not to cover all improvements that might be needed at the designated colleges 

for the thirty years of its duration. If the improvement contemplated requires the construction or acquisition of a new structure, for example, a building, a 

wing on a building, or other permanent structure, it 

would seem the amendment funds 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 an existing water, heating, or 

sewer system or reroute a portion thereof, our former 

opinions have indicated that the amendment funds were 

not intended to be used for such purposes. 

We will not attempt to lay down any hard and 

fast line as to when there is an "acquirIngI or "constructionl' and when there is a repairing or alteration. 

The matter rests in the first instance within the sound 

discretion of the governing boards of the various institutions. The responsibility was placed there by the 

people in the adoption of the amendment. 

Section 17 of Article VII does not prohibit 

the use of other state funds for repairs, alterations, 

and improvements for which the amendment funds may not be 

expended 

tions ou E 

and the Legislature is free to make appropriaof any available funds for such improvements. 

In the current appropriation act (H.B. 426, m the 

Legislature has made an appropriation to each institution under an item listed as "General Revenue Appropriation for General Operating Expenses." Section 30 of 
. - 

Hon. C. H. Cavness, page 9 (V-1427) 

Article V ,of that act defines "General Operating Bxpenses" as including " . . . improvements aa repairs; physical plant operation and maintenance; . 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, commonly referred 

to as "local funds," are not "other state 

funds" within the meaning,of that term as 

used in Section 17 of Article VII, Texas Constitution (College Building Amendment), Local funds appropriated to the colleges under 

Sections 2 and 31 of Article V, H.B. 426 

Acts 52nd Leg., R.S. 195l, ch. 499 p. 1328, 

for purposes including ?improvemenCs~~ may be 

used for all needed improvements, including 

the acquisition or construction of buildings 

or other permanent improvements. 

The College Building Amendment does not 

restrict the Legislature ins providing appropriations from the General Revenue Fund or 

any other available fund for those improvements which may not be financed out of the 

amendment funds. 

The phrase l'buildings or other permanent 

improvements81 as used in Section 17 of the 

College Building Amendment means, generally, 

additional structures or other permanent improvements for the expansion of existing facilities at the colleges. It does not include repairs and alterations 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