Court Opinion

ID: 4137973
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:31:04.742657+00
Date Added: 2024-06-11T14:46:31.969982
License: Public Domain

THE     ATTORNEY    GENERAL
                              OF TEXk~
PRICE   DANIEL
                                  March 31, 1949

                 Hon. D. K. Woodward, Jr.
                 Chairman, Board of Regents
                 University of Texas
                 Kirby Building
                 Dallas 1, Texas              Oplnibn   X0.   V-799

                                              Re:   Use of tax levied
                                                    by Section 17, and
                                                    of proceeds of
                                                    bonds Issued under
                                                    Sections l'j,and18,
                                                    Artlole VII, Con-
                 Dear Mr. Woodward:                 stltutlon of Texas.
                        You request the opinion of the Attorney
                 General In your letter of March 18, 1949, as follows:
                              "Your opinion Is respectfully requested
                         upon the following questions which have a-
                         risen In connection with the efforts of the
                         beneficiary schools to put Into effect Sdc-
                         tlons 17 and lc of Article 7 of the Con-
                         stitution of the State of Texas.
                              "Question No. 1. May the proceeds of
                         the Five (5/) Cents tax,be used for any pur-
                         pose other than payment of principal and
                         Interest upon bonds or notes authorized to
                         be issued under Section 17 of Article 77
                              "Question Ho. 2. If question No. 1 Is
                         answered in the affirmative, then please         .
                         answer the followlng queetlons:
                              "(a) For what other purposes may
                                   the proceeds of said tax be
                                   used?
                              "(b) At what times and in what
                                   amounts may such proceeds be
                                   withdrawn by the governing
                                   boards of the respective in-
                                   stitutions whlkh may elect not
.   I

        Hon. D. X, Woodward, Page 2 (V-799)

                   to issue bonds?
                   "Question No. 3‘ Do the governing
              boards of the respective insiitutions have
              authority to incur and pay the reasonable
              and necessary expenses of issuing and sell-
              ing bonds authorized by Secticns 17 and 18
              of Article 7, such as prfntlng, shipping
              charges and attorneysl fees?
                   "Question No. 4, Do the governing
              boards of the respective instltutfons have
              authority to retain the proceeds of the
              sales of bonds authorized under Sections 17
              and 18 of Article 7 atidto deposit same as
              special trust funds for the purpose of ac-
              quiring,,constructing and initially equlp-
              ping buildings ,or other permanent lmprove-
              ments at the designated Institutions of
              higher learning, such deposits to be secured
              by the pledge of bonds or other evidences
              of indebtedness of the United States or bonds
              which are guaranteed as to both principal and
              interest by the United States In an amount
              not less than the amount so deposited?"
                    Section 17 of Article VII provides, In
         part, as follows:

                    II
                         .   0   .   there is hereby levied O s a
               a St+te ad valorem tax on property of fF,e
               cents (5#) e o e for the purpose of ac-
               quiring, constructing, and Initially
               equipping buildings or other permanent
               Improvements at the designated institu-
               tions of higher learning; land the govern-
               ing board of each of such Institutions of
               hlgher'learnfng is fully authorized to
               pledge all or any part of said funds allotted
               to such Institutions as hereinafter pro-
               vided, to secure bonds or notes Issued for
               the purpose of acquiring, constructing and
               lnltlally equipping such buildings o* other
               permanent improvements at said respective
               lnstltutlons. Such bonds or notes shall be
               Issued in such amounts ar,may be determlned
               by th$ governing boards of said institutions
               . . .
.   ,

        Hon. D. K. Uoodward, Jr - “age 3 (V-799)

               On March 30, 1949, the AttTrney General
        rendered Opinion No. v-798 to Honorable William L.
        Kerr, President of the Board of Reg nts of the State
        Teachers Colleges.   In speaking of section 17 of
        Article VII, it was held In that opln:on as follows:
               "This Constitutional Amendment clearly pre-
             scribes the terms and conditions rf the bonds
             and notes, and makes no other prou..slonfor
             evidencing a liability against the fund ex-
             cept by the Issuance of bonds or notes. Hence
             It Is our conclusion that this special fund
             may not be withdrawn from the State Treasury
             except to pay principal and Interest requlre-
             menta of bonds or notes issued under Section
             17."

               The above-quoted holding answers your first
        question and renders unnecessary an answer to your
        second question.
               You ask in your third question whether the
        governing boards of the respective lnstitutidns '.have
        the authority to incur and pay the reasonable and
        necessary expenses of lssulng and selling bonds
        authorized by Sections 17 and 18,~such aa printing,
        shipping charges, and attorneys' feee.
               It Is a well-established prlnolple of law
        that the grant of an express power to do a cert^-.n
        act carries with It the Implied powers r--cesei.ry
                                                         to
        perform such act. In order to Isa&e the bonds au-
        thorized In Sections 17 and 18, it would be necessary
        to Incur certain expenses such aa printing and aMor-
        neys' fees. We think It clear that the respective
        governing boards may properly Incur such expenses,
        and pay for them out of legally available funds of
        the Institution, assuming, of course, that such ex-
         enses are reasonable. Davis v.'Clty of San Antonio
        Pciv. App.), 160 S.W. 1161.
               We think It clear that Sections 17 and 18 do
        not contemplate that the Attorney General should pre-
        pare the bond proceedings. In both of these ~seetlons
        it is provided that the bonds should be approved by
        the Attorney General.   If these.provisions contem-
        plated the preparation of the transcript of proceed-
        ings and the bond8 by the Attorney General, then he
Hon. D. K. Woodward, Jr. - Page 4 (V-799)

would be put In the anomalous posltlon of preparing
the bonds and then approvlng his own work. It Is
evident from the requirement of a;Qroval of the
bonds by the Attorney General that these Constltu-
tlonal provfslons contemplated that the governing
boards of the respective Institutions would have
attorneys of their own employ to prepare the nec-
essary proceedings.   Your third queE :lon Is, there-
fore, answered In the affirmative.
       Your fourth question Is whether the govern-
ing boards qf the respective Institutions have the
authority to retain the bond proceeds and to deposit
the same as special trust funds, to be used for carry-
ing out the bond purposes9 such deposits to be secured
by bonds or other evidences of Indebtedness of the
United States, or bonds which are guaranteed as to
both prfnclpal and Interest by the United States In
an amount not less than the amount so depos:t.ed.
       In each Section 17 and Sectlon 18, It Is pro-
vlded, “!I%18amendment shall be self-enacting.” We
think that the amendments contemplate that bonds can
be Issued and,sold by the respective governing boards,
as outlined therein, and the proaecda of the sale
turned over to such governing boards to carry out the
bond purposes.   We do not think that the amendments,
either expressly or by lmpllcation, contemplate that
the proceeds would bs turned over to any other State
office or officer.   Only the reepectlve govern!,-*
boards are the agencies charged with the expend .fui*e
of the funds to carry out the bond purnnses.
       It Is manifest that the large sums of money
which may be realized from the aale of bonds cannot
be expended Immediately, and that the building pro-
gram of an Institution might cover several years.
Yet, In order to take advantage of an attractive
market, the governing boards may determine to Issue
bonds at one time In an amount which will be suffl-
clent to defray the entire cost of such building
program /  Such action, we think, Is clearly author-
ized by the Conitltutlonal amendment&, and that the
respective governing boards are the agencies to
retain the bond proceeds.   Your fourth question,
therefore, Is answered In the affirmative.
Hon. D. R. Woodward, Jr. - Page 5 (V-799)

         The proceeds of the Five (5+! Cents tax
levied by Section 17 of Article VII, Constitution
of Texas, may not be withdrawn from the State
Treasury   for any purpose other than payment of
principal and Interest upon bonds or notes author-
ized to be Issued under such constltut1onal pro-
vlslon.     Opinion No. v-798.
       The governing boards of the respective
educational Institutions named In Sections 17 and
18, Constitution of Texas, have the authority to
Incur and pay the reasonable and necessary ex-
penses of,lssulng and selling bonds authorized by
said sections, such as printing, shipping charges,
and attorneys' fees.
       The governing boards of the respective ln-
etltutlons have the authority to retain the pro-
ceeds of the sales of bonds and deposit the same
as special trust funds to be used In carrying out
the bond purposes, such deposits to be secured by
the pledge of bonds or other evidences of fndebted-
ness of the United States or bonds which are guaran-
teed as to both principal and interest by the United
States In an amount not less than the amount so de-
posited.
                             Very truly yours
                          ATTORNEY GENLrtALOF TEXAS

                                         Assistant
GUS-s-mde