THE ATJTORNEY GENERAL 

OF TEXAS 

Hon. Leroy Jeffers, Chairman 

The Board of Regents 

University of Texas 

Esperson Building 

Houston 2, Texas 

Opinion No. WW-121 

Re: Interpretation of SeCtions 17 and 18 of Art. 

VII of the Constitution 

of Texas a5 they relate 

Hon. M. T. Harrlngton, Chancellor to the authority of the 

Texas A. & M. College Systam Board of Director5 of the 

College Station, Texas Agricultural and MechaniGentlemen: 

61 College of Texas to 

Issue bonds'or note5 

thereunder prior and subsequent to their repeal 

as of January 1, 1958. 

Your request for an opinion presents the following questions: 

1. Are the Boar~d of Director5 of the 

Agricultural and Mechanical College of Texas 

and the Board of Regents of the University 

of Texas authorized to issue bond5 or notes 

pursuant to Section 17 of Article VII of the 

Constitution of Texas on behalf of Prairie 

View Agricultural and Mechanical College of 

Texas, Tarleton State College and Arlington 

State College for purposes described ther.ein 

payable after January 1, 1958 from proceeds 

of taxes levied by said Section of the Constitution during or before the calendar year 

1957? 

2. If the answer to the first question 

is in the negative, will the Board be authorized to issue on behalf of such institutions 

bonds or notes after January, 1958, pursuant 

to Section 18 of Article VII of the Constitution for purposes described therein and use 

for payment of the principal of and the interest on such bond5 or note5 the proceeds of 

taxes levied by Section 17 of Article VII of 

the Constitution during or before the calendar 

year 19577 
Hon. Leroy Jeffers 

Hon. M. T. Harrington - Page 2 (WW-121) 

Article VII, Section 17, of the Constitution of Texas (ratified 

by the electorate in 1947) authorized the issuance of bonds or 

notes by designated State institutions of higher learning to 

acquire, construct and initially equip buildings or other permanent improvements. The obligation5 to be issued are to be secured by a pledge of the State ad valorem tax of 5k per one 

hundred dollars' valuation as apportioned to the various institutions. The Constitution states that the tax is to be levied 

for thirty years; requires that this time shall be divided into 

three ten-year periods; and prohibit5 the pledge of the tax proceeds to the payment of obligations except within the ten-year 

period in which such bonds are issued. The first ten-year period 

comes to a close on Decembe,r 31, 1957. 

In November of 1956, this constitutional provision was amended, 

with the provision that the amendment is to "become operative or 

effective so as to supersede or repeal the former provision5 

on January 1, 1958", which is the beginning of the second 

ten-year period originally prescribed. 

The two constitutional provisions (adopted in 1947 and 1956) 

are substantially the same, except a5 to the institutions who 

are eligible recipients of the proceeds of the ad valorem tax. 

Four schools are eliminated from participation in the proceeds 

of the future tax levies by the amendment which is to become 

operative on January 1, 1958, namely: Prairie View Agricultural 

and Mechanical College at Prairie View, Tarleton State College 

at Stephenvllle, Arlington State College at Arlington and Texas 

Western College of the University of Texas at El Paso. 

Simultaneously with this change in Article VII, Section 17, of 

the Constitution, these four institutions, as a part of the 

Texas Agricultural and Mechanical College and the University of 

Texas, were given the authority to issue bonds Secured solely by 

a pledge of the revenue5 of the Permanent University Fund by the 

change in the provisions of Article VII, Section 18, of the Constitution. 

Your first question is whether these four institutions may, after 

January 1, 1958, issue bonds or notes under the provisions of 

Article VII, Section 17, of the Constitution, and provide that 

such obli ations 

years 194 8 

will be payable from taxes levied during the 

-1957 which are not collected until after January 31, 

1957. 

Your first question is answered In the negative for the following reasons: 
Hon. Leroy Jeffers 

Hon. M. T. Harrlngton - Page 3 (WW-121) 

(1) On January 1, 1958, there will be no authority, 

under Article VII, Section 17, as amended, for these partlcular Institutions to Issue obligations of any type. It is 

fundamental that the power to issue negotiable bonds or notes 

must be implicit and express. 

(2) If operation under the 1947 amendment were permitted, the obligations -; by constitutional requirement -- 

would mature not later than December 31, 1957, which date would 

be prior to the date of their proposed issuance. Attorney General Opinion m-176 (1955). 

Your second question is whether these instltutlons, after January 1, 1958; may issue bonds or notes under the provisions of 

Article VII, Section 18, of the Constitution, and use the money 

receivedafter December 31, 1957, from taxes levied during the 

years 1948-57, inclusive, to pay such obligations. 

The stating of your question assumes that the four institutions 

will be entitled to receive a portion of"the money collected after December 31, 1957, from the levies made under the 1947 amendment which added Article VII, Section 17, to our Constitution 

in its present form. t 

Two prior opinions of this office, m-176 (1955') and MS-221 

(1955) , considered the constitutional provision-wherein itstates: 

"Fun&s raised from said Five (5#) Cents tax 

levy for the ten-year period beginning January 1, 1948, are hereby allocated to the following institutions . O . and in the following 

proportions . . O't 

Those prior opinions take the view that the Constltutlon itself, 

by the employment of the above language, makes the allocation 

for the first ten-year prior. We adhere to this view. 2 

,:. 

The provislon which becomes effective and operative on Jan$&ry 

1, 1958, reads, in part: 

: 

"Nor shall the provislons of this amendment $ 

affect in any way the prior allocation of the 

revenue for the ten-year period beginning 

January 1, 1948, as heretofore authorized bye ;! 

the provisions of Section 17, of Article VII, ': 

of this Constitution as adopted August 23, 

1947." 
Hon. Leroy Jeffers 

Hon. M. T. Harrfngton - Page 4 (WW-121) 

Thus, It 1s clear that your basic assumption is a correct one, 

the only question being, what disposition may be made of such 

money when received,bythe institutions? 

First, all bonds or notes issued during the first ten-year 

period must be paid as required by the old and new constitutional provlslons and by the contract rights of the holder of 

the obligations. 

Second, the Constitution requires that the tax moneys may be 

used only to pay the principal and interest on bonds or notes. 

Attorney General Opinions V-798, V-799(1949). Institutions 

have previously been cautioned not to issue bonds or notes in 

excess of the Comptroller of Public Accounts' estimate of available funds since the validity of such instruments necessarily 

depends upon adequate provision havina been made to nav the 

obligation. Cit; of Athens v. Moodg -115 Tex. 247 (i9!?6), 280 

S.W. 514, Owasso Board of Education ;. Short, 89 Okla. 2, 213 

UP. 857(1923). Attorney General Opinion MS-176 (1955). 

In Attorney General Opinion MS-176(1955), the distinction was 

drawn between the right to pledge taxes to the 

ligations to become due prior to January 1, f? 

yment of ob195 , and the paver 

to use the funds collected after that date where such funds were 

obtained from the tax levies for the years 1.948-1957 (whether 

delinquent or current collections) and stated: 

"After payment of notes or bonds issued 

during the initial period, any surplus 

thereafter remaininn mav be used bv the 

respective institutions"during the"succeeding periods for the purpose originally 

authorized." 

This opinion (MS-176) and Attorney General Opinion V-798 (1949) 

are, despite the subsequent amendment to the Constitution, controlling as to the use of the fundsfor the institutions included in both the 1947 and 1956 amendments to Article VII,' 

Section 17, of the Constitution of Texas, but do not control 

as to Section 18, as amended in 1956. 

As to these four institutions, however, you will note that 

Article VII, Section 18, of the Constitution (as amended in 

1956) reads, in part: 
Han, Leroy Jeffers 

Han, M, TO Rarrington - Page 5 (WW-121) 

"Any bonds issued hereunder shall be 

payable solely out of the income from 

the Permanent University Fund." 

It is, 

tlonal 

people 

qulres 

of course, necessary to construe all of the constituprovisions together in arriving at the intent of the 

in adopting such provisions. The Constitution rethat the moneys allocated to these four institutions . . - _ __ shall remaln In force ana effect, yet, have, in effect, prohibited the use of such tax proceeds to pay obligations issued under the provisions of either Article VII, Sections 17 

or 18, if all outstanding obligations have been paid. If it 

had been intended that such moneys could not be expended, then 

there would have been no necessity to preserve the previous 

allocation to these four institutions. 

You are, therefore, respectfully advised that the tax moneys 

allocated to these four institutions by the 1947 amendment to 

Article VII, Section 17, of the Constitution of Texas, may be 

used for acquiring, constructing and initially equipping buildings or other permanent improvements at such institutions without the issuance of bonds or notes under either Article VII, 

Sections 17 or 18, 

SUMMARY 

The Board of Directors of the Agricultural 

and Mechanical College of Texas and the 

Board of Regents of the University of Texas, 

for and on behalf of Prairie View Agricultural and Mechanical College at Prairie View, 

Tarleton State College at Stephenville, Arlington State, College at Arlington, and 

Texas Western College of the University of 

Texas at El Paso may not issue bonds or notes 

under Article VII, Section 17, of the Constitution. Nor may bonds or notes issued 

under Article VII, Section 18, of the Con,- 

stitution, be paid from t,axes levied during 

the years 1948-1957 but not collected until 

;;t;;epnuary 1, 1958. Such tax moneys may 

, without the issuance of bonds or 

notes, for the purpose of acquiring, 
. - 

-- -1 

Hon. Leroy JePPers 

Hon. M. T. Harrlngton - Page 6 (w-121) 

constructing, and initially equlpping 

buildings or other permanent improvements at such institutions. 

Very truly yours, 

WILL WILSON 

Attorney General 

BY - 

mAPPROVED: Assistant 

OPINION COMMITTEE: 

H. Grady Chandler, Chairman 

Marietta McGregor Payne 

R. E. Fletcher 

Edvin Horner 

REVIEWED FOR THE ATTORNEY GENERAL 

BY: Geo. P. Blackburn