Court Opinion

ID: 4133038
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:33:14.732972+00
Date Added: 2024-06-11T14:35:06.477435
License: Public Domain

July 2, 1974

The Honorable Leroy Jeffers                     Opinion No.   H-   348
President,  State Bar of Texas
P. 0. Box 12487                                 Re:   Proposal for financing
Austin,  Texas 78711                                  and constructing State
                                                      Bar Center
Dear Mr.   Jeffers:

     You have requested our opinion on the legality of a plan for
financing and constructing   a new State Bar Center.  Since your
original request was submitted you have altered your financing
plans and have submitted a revised question reflecting    those
changes.   Your question is:

       Can the State Bar bf Texas under the applicable
       law enter into a contract for the construction    of
       a new ‘building on the site of its present building
       and enter into a contract or contracts for the
       financing or partial financing of the costs of such
       construction   so long as such contract or contracts
       does not obligate or encumber the dues revenues
       of the State Bar of Texas beyond revenue for the
       current year at the time of entering such contract
       or contracts and so long as the sums that become
       due and payable under such contract or contracts
       are payable only from (1) monies contributed or
       pledged to be contributed to a fund for the express
       purpose of aiding in the payment of the costs of
       construction   of such new State Law Center; (2) reve-
       nues derived or which may become due and payable
       for the rental of space to others in the new building
        cashwdd    by the State Bar of Texas; and (3) ,such
       funds as may be contributed or pledged to be
       contributed to the costs of such construction    by
       the Texas Bar Foundation,     a private corporation,
       which is not an agency of the State of Texas?

                                      p. 1586
The Honorable   Leroy   Jeffers,   page 2

     The State Bar of Texas     was created    by the State Bar Act,
Article 320a-1,   V. T. C. S.    Subdivision   (a) of Sec. 2 of that Act
provides:

            There is hereby created the State Bar, which
        is hereby constituted an administrative   agency
        of the Judicial Department of the state, with
        power to contract with relation to its own affairs
        and which may sue and be sued and have such
        other powers as are reasonably    necessary   to
        carry out the purposes of this Act.

    Pursuant to the clear language of the statute this office has
consistently  held that the State Bar of Texas is a state agency.
Attorney General Opinions WW-202          (1957); MS-83 (1953); V-1299
(1951); V-480  (1948); O-2784   (1940).    The same subdivision creating
the Bar as an instrumentality     of the State gives it broad power to
conduct its own affairs.    Surely it is necessary     .for the Bar to
acquire adequate office space if it is~ to carry out its responsibilities
under the Act, and construction       of a new building is a reasonable
means of obtaining that space.      .

     The plan for construction   of the proposed State Bar Center is
similar to the method used for financing and constructing      the existing
building.   Given the failure of the Legislature   over 20 years to
object to this procedure    on the part of the State Bar coupled with
the Legislature’s  failure to include this type building program in the
general purview of the State Building Construction     Administration
Act, Article 678f, V. T. C.S.,    we are unable to say that the suggested
procedure is illegal.

    The Bar is, of course,   subject to the requirements   of the State
Bar rules.   Your revised question does not seek an interpretation      of
those rules, and for the purposes of this opinion we assume that the
construction  and financing of the building will be authorized in con-
formity with the State Bar rules.
                                                                         ..
    Any financing plan used by the B.ar is limited        by Article   3, Sec.   49
of the Texas Constitution which provides:

                                            p. 1587
The Honorable    Leroy   Jeffers,   page   3

             No debt shall be created by or on behalf of
         the State, except to supply casual deficiencies
         of revenue,  repel invasion, suppress insurrection,
         defend the State in war, or pay existing debt; and
         the debt created to supply deficiencies  in the reve-
         nue, shall never exceed in the aggregate at any one
         time, two hundred thousand dollars.

However,     the definition of debt, as used in this portion of the Constitution,
has been given a narrow meaning.          Debt does not include obligations
payable solely from revenues generated by renting or operation of the
project.    Texas National Guard Armory       Board v. McGraw,    126 S.W.2d
627 (Tex. 1939); Attorney General Opinion O-1694 (1939).        Furthermore,
no debt is created when payment is to be made from current ~revenues
only.    Charles Scribner’s    Sons v. Marts.   262 S.W. 722 (Tex. 1924);
Attorney General Opinion M-656        (1970).

    Under the proposal you submitted a lender could look only to rental
revenues and voluntary contributions      for payment in future years.     You
have not proposed a mortgage of state property.        Under these facts we
do not believe the Constitution- or statutes would prevent the Bar from
constructing  and financing a new State Bar Center.        As we have been
given no proposed contract we pass solely on the general outline you have
presented.    The l,egality of any particular  contract would depend on its
therms and provisions,     and this opinion is necessarily   limited to the query
posed.

                            SUMMARY

             The Constitution and statutes do not preclude the
         State Bar of Texas from constructing    and financing
         a new State Bar Center where a pledge of voluntary
         contributions    and revenues generated by the building
         is the only source to which the lender can look for
         +Lment     in future years.

                                           p. 1588
The Honorable   Leroy   Jeffers.   page 4

DAVID   M.   KENDALL,     Chairman
Opinion CornnGttee

                                        p. 1589