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## GENERAL THEA=• RNEY

OF TE,XAS

May 9, 1961
Honorable Ben Ramsey Lieutenant Governor Capitol Station Austin 11, Texas

Dear Sir: Opinion No.W-1048 Re:Whether the Legislature may retire outstanding bonds issued by Texas Southern University, and related questions. You have requested an opinion on the following questions: "1. Would an appropriation by the Legislature

from theGeneral Revenue Fund for the retirement of outstanding bonds issued by Texas Southern University pursuant toArticle 2643g, be avalid and effective means of liquidating such indebtedness? One aspect of this question iswhether such outstanding bonds are callable without the consent of thebond-holders. "2. If themethod indicated in the question above is avalid and effective means, would it result in freeing up Texas Southern University's share of the College Building Fund for the construction of additional buildings now needed at that institution? "Onboth questions, the last clause in Section 17. Article 7of the Constitution appears tobe pertinent. "3. If, inyour consideration of questions 1and 2,you find themethod tobe of doubtful validityHonorable Ben Ramsey, Page 2 W-1048)

or effectiveness, would the enactment of anewbill containing for Texas Southern University provisions similar toArticle 2643g, be avalid and effective way of assuring that University with available moneys forbuilding construction purposes?" Section 17 ofArticle VII of the Constitution, as amended in 1956, establishe:sa state advalorem tax for the purpose of creating a special fund forbuildings and improvements at certain State institutions ofhigher learning, to be allocated and periodically reallocated by the Comptroller of Public Accounts to the participating institutions. It further provides, inpart, as follows:

. . .all such designated institutions of higher learning which participate in the allocation or re-allocation of such funds shall not thereafter receive any General ~:'r::,~' Revenue funds for the acquiring or constructing ofbuildings or other permanent improvements forwhich said Five Cent (50)ad valorem tax isherein provided, except in case of fire, flood, storm, or earthquake . . . . Chapter 330,Acts, Regular Session, Fifty-third Legislature ,&ticle 2643g. Vernon's Civil Statutes_7 is repealed upon the effective date of this Amendment: but the principal and interest due on any obligations incurred by the governing boards of Lamar State College of Technology at Beaumont and of Texas Southern University at Houston under theprovisions of said Chapter 330prior to its repeal shall be paid from the allocations to Lamar State College of Technology and Texas Southern University from the funds raised by the Five Cent (5c)advalorem tax levy as provided in this Section, . . .II In reply toyour first question, it is our opinion that these provisions prohibit an appropriation from theGeneral Revenue Fund for the retirement of outstanding bonds issuedby Texas Southern University pursuant toArticle 2643g.Honorable Ben Ramsey, page 3 (WW-1048)

Since your first question is answered in the negative we donot reach the second question.

We have reviewed the provisions ofArticle 2643g, V.C.S., which was repealed upon the effective date of the 1956 amendment of Section 17 ofArticle VII of the Constitution of Texas, and your third question is answered in the affirmative. Bonds were heretofore authorized and issued by Texas Southern University forbuilding construction purposes under Article 2643g, V.C.S., andwe see no legal impediment to such issuance in the future under anew statute containing similar provisions.

SUMMARY

The outstanding bonds of Texas Southern University cannot be retired by an appropriation from theGeneral Revenue Fund as Section 17 ofArticle VII of the Constitution provides that such obligations shall be paid from the Five Cent (Se) ad valorem taxprovided therein. There would be no legal bar to issuance ofbonds by theUniversity under anew statute similar toArticle 2643g, V,C.S., now repealed.

Yours very truly, WILL WILSON Attorney General of Texas

HWM-s Assistant IHonorable Ben Ramsey, page 4 (W-1048)

APPROVH): OPINION COMMITTEE W. V. Geppert, Chairman C. K. Richards J. Arthur Sandlin Larry Hargrove Bill Allen REVIEWED FOR THEATTORNEY GENERAL By: Morgan Nesbitt