E ATTORNEY GENERAL

Auwrnl 11.

-rExAs June 1, 1949

RonorableJesse State Treasurer Austin,Texas

Dear 3*: James OpinionNo. V-038 Re: Whetherbonds to be 

### issued mder Sets


### . 17 and 18, Artic10VII, Constitutionof Taxi&s, are eligibleas collateral for State deposits.

opinionof the AttorneyGenepal 8s to wnetner the bonas to be Issuedby The UniversStyof Texas and the Agricultural an& MechanicalCollege of Texas under the authority of Section 18, ArticleVII, Constitutionof Texas, come within the requirementsof Article 2529,Vernon.'s Civil Statutea,so as to make such bond eligibleas collateral for Statedeposits. You also ask whether the bonds to be Issuedby the several collegesunder the suthoritgof Section l? of said article are likewiseeligible. OF TEXAS

Article 2529 designatesthe type of obligationsor securitieswhich are acceptableas such collateral, To be eligible,the bonds in questionwould have to come within the scope of the followinglanguageof the statute:

nbondsof this State;bonds and other obllgations lasuedby the Universityof Texas"
Section 18 ,of

ArticleVII authorizesthe Board of Regents of The University.& Texas to issue not exceeding $10,000,000.00

of bor& or notes and the Board of Directors of the Agriculturaland MechanicalCollege of Texas to issue not exaeeding $5,000,000.00 of bonds or notes for building purposes,and said boards are authorizedto "pledgethe whole or any part of the respectiveinterestsof the Agriculturaland MechanicalCollege of Texas and of The University of Texas in the Incomefrom the PermanentUniversity Funa, aa such interestsare now apportionedby Chapter 42 a for the purpose of scouringthe paymentof the prlnii&&land interestof such bonds or notes.".

.

Honorable Jesse Jalgas - Page 2 (v-=83,8) :

It is clear that the bohde to be issued by the Board of Regents of The Univemlty of Texas are eligible securities e Furthermore, it Pa our opinion that the bonds to be issued by the Board of Directom of f;he A&- w.~t.~;nxsi~,~r$

MeobsalccLl College are eligible as bonds or Altho Unlveralty’of Texas“f h said college ia a branoh of,The Tex, Conat, Art. VII, Seas, 10 and 13; AFL 2607, V&.S.), we do not believe that thle fcbot alme would make tbnsa bonds e&%@&Le,o

,. However, it ir oux c+plnloti thrt rraZd. college $8,. 8 pet of oux S$.c&egovernment, and that the State is sot1% la a gov~rnasntsl capacity In ocmduoti fer -4Uwatioloal IMpp(Messnd fux+shi~, 0o.l 8 7 said college 

### repwe in o~~~rying~i3ut such pep ek, BIE9tb8 bugdp

t 170 S.W.Zd 652 Ter. Goam, Ap+po 1943), 9” held th+t “the state“f~ ~condua,tlng through A. & H. College its exP rlmental ~statlims, was wt~ing in a govermWta1 oepao ty es dletfaguiahed from 8 popr19tary, oepaolty.*

The bonds me to **bs** mmred **by.& pXmJg6t**  **of t$m**  intereets of the aollege in the Wrmbaent mDiv9mlty Fuasil'. alnllax to the pledge to **be** lpadeof the interests of The University of,Texas in the issuance of ’ bonds by the Board of Regents B a stat9 f&B%.

The PernmnentUalversitf Puad Is manifestly
It is, therefexe, ok o inion that the bapdo to be issued by the BoWl of R Texm anil by ‘the Board of 0 ei The UniversfliJ’of of the Agrieultaural~ and IUeohmQal College of Texas **under** Seotlon 18 of' Ar- , tlole VII are ~ell&lble sea~W4.e~ a8 collateral fm State deposits undo~ 1Lzctlole 25213.

It meybe argueb t&t the 6poifioIItipn of the

“bonds ~ahdother obligatloas ibsued by the Univerelt of T9x&Yn anmunts to an fmpiied negative of the eliglb;t 3: ef bonds lsaued by other State institutions of higher tV leewllne:

. However, It is our opinion that the point of this quoted language is mvely to lpeke “other obll&ionsv of the University of Te%as ell.@ble, fov “bonds of this State” would not include any evidence of indebtedness other than a bond. ‘Other obligations n ,kould concelv-

‘

. ably Include obligations payable fxon the Fevenuee of

self-liquidating properties I notes p et04 -- obligeti,ona

. . .* other than bonds, **Howevercp** Artlcls 2529 spwka of ’ bonds : ef+this State, and Sections 17 anQ‘18 of Article VII ,@. ,

Honorable JeseJamee - Pago 

### 3 (v-838)

authorice the iseuanee of the bou¶a in question,

Aa to the bonds to be issued by the several colleges under Section 17 of' Article VII, provision la made f'or'the payment therefor by the levy of "a state ad valorem tax on property of' Five 

### (5#) Cents" upon 811 the taxable poperty of' the State.

Webelieve that what we have said oboie with respeot tb the Agrlcultw?al and Meehanicsl College of Texa8 a8 8 p8rt of the State of' Texas applies equally to 811 lnrtltutions of higher leaning established 8nd m8lntalned by the State, In other words, the State of Texas: 14 pesrformlng a governmental run&ion in the eatablishment, owatlon, and msintenanae of such colleges.

Moxeover, these bonds ,are to be paid by 8 State t&x -- a tax levied on all the taxable property in the State of Tex88, crollected under State'law, and placed l.ri the State Treaeury, Such tax moneys will cotistitute State fund6, It follows that these bond8 will be State obllgats.onR

. ft ia our opinion, tbeMk?re, that the bonds to be hsued under the povieioncr of Section 

### 17 of Article **VII wiLl**  **be** boti8s of the State of Tbx88, and 88 suoh will be eligible as oollaterrl for State deposits under Article 

### 2529.

Bonds to be irrued by the State education81 institutiona of hisher learning under the provisions of Seotions 17 and 

### 18,Anticle VII, Constitution of Texab, will be eligible as .collateral for State daporltl under APtkale 

### 2529,Vernon's Clvll Statutes.

IRST ASSISTANT ATTORNEY

EtHERAL Very truly yours ATTORNEYGENERAL

OFTEXAS