Court Opinion

ID: 4130468
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:04:39.766924+00
Date Added: 2024-06-11T14:37:36.905788
License: Public Domain

THE   ATTORNEY       GESERAL
                      OF TEXAS

                       January 2, 1989

Dr. Wilbur L. Meier, Jr.       Opinion No.   JM-1001
Chancellor
University of Houston          Re:   Constitutional   author-
  System                       ity of an institution       of
4600 Gulf kreeway              nigner education    to refund
Suite 425                      bonds issued under      "prior
Houston, Texas 77023           law"  (RQ-1406)
Dear Dr. Meier:

     On behalf of the University of Houston System, you have
requested an opinion of this office interpreting a portion
of article VII, section    17, of the Texas Constitution.
Article VII, section   17, deals with appropriations     and
funding for agencies and institutions of higher   education.
Your letter reads in part:

            Subsection (e) of article VII, section  17
        provides in part that the governing board of
        any of the institutions of higher    education
        identified in subsection (b)'may issue bonds
        and notes for the purposes of refunding bonds
        or notes issued under this section or nrior
        a.    . . .' (Emphasis provided).  We request
        your opinion as to the meaning of the empha-
        sized language.      Specifically,  does   the
        phrase 'prior law' refer only to the prede-
        cessor of article VII, section 17, which was
        repealed on November    2, 1982, or does it
        refer to any statute existing prior to the
        adoption of the present article VII, section
        171

     To better orient the discussion that follows, pertinent
provisions of article VII, section 17, are set out here:

           Sec. 17 (a) In the fiscal year begin-
        ning September 1, 1985, and each fiscal year
        thereafter, there is hereby appropriated out
        of the first money coming into the state
        treasury not otherwise appropriated   by the

                             p. 5137
Dr. Wilbur L. Meier,        Jr. - Page 2 (JM-1001)

        constitution $100 million to be used by eli-
        gible agencies and institutions     of   higher
        education for the purpose of acquiring     land
        either with or without    permanent    improve-
        ments, constructing  and equipping buildings
        or other permanent improvements, major repair
        or rehabilitation   of buildings    or    other
        permanent improvements,  and acquisition     of
        capital equipment, library books and library
        materials.

           (e) Each governing    board authorized    to
        participate   in the distribution    of money
        under this section is authorized to expend
        all money distributed   to it for any of the
        purposes enumerated   in Subsection   (a).   In
        addition, unless a single bonding agency     is
        designated   as hereinafter   provided,    such
        governing board may issue bonds and notes for
        the purposes   of refunding bonds or notes
        issued under this section or orior law,
        acquiring land either with or without    perma-
        nent improvements, constructing and equipping
        buildings or other permanent     improvements,
        and for major repair and rehabilitation      of
        buildings or other permanent     improvements,
        and may pledge up to 50 percent of the money
        allocated to such governing board pursuant to
        this section to secure the payment of the
        principal   and interest of such bonds or
        notes. . . .    In lieu    of the    authority
        granted to each governing board herein,     the
        legislature by general law may designate      a
        single agency to issue bonds and          notes
        authorized under this section . . . .

            (f) The funds     appropriated    by  this
        section may not be used for the purpose of
        constructing,    equiwiwr      repairing,   or
        rehabilitating buildings    or other permanent
        improvements that are to be used for student
        housing,    intercollegiate    athletics,   or
        auxiliary enterprises.

            .   .   .   .

                                    p. 5138
Dr. Wilbur L. Meier, Jr. - Page 3 (JM-1001)

          (I) This section is self-enacting      upon
       the issuance of the governor's    proclamation
       declaring the adoption of the amendment,    and
       the state comptroller of public accounts    and
       the state treasurer     shall do all things
       necessary to effectuate   this section.   This
       section does not     impair any     obligation
       created by the issuance of any bonds and
       notes in accordance with prior law, and all
       outstanding bonds and notes shall be paid    in
       full, both principal and interest, in accor-
       dance with their terms. If the provisions of
       this section conflict with any other provi-
       sions of this constitution, then the provi-
       sions of this section shall prevail, notwith-
       standing   all such conflicting    provisions.
       (Emphasis added.)

     Section 17 uses the "prior law" phrase twice, once in
subsection (e) and again in subsection (L). We think it was
used in the same sense both times, and in the sense in which
the term is used by article VIII, section l-e of the Texas
Constitution.  In construing the meaning of a word or phrase
in the constitution, resort may be had to other sections  of
the instrument for the sense in which it is used. State v.
Gillette's Estate,  10 S.W.2d 984 (Tex. Comm'n App. 1928,
judgmt adopted); Attorney General Opinion JM-533 (1986).

     As it is now written,   section 17 of article VII was
added to the Texas Constitution November    6, 1984, but, as
you note, a previous version of article VII, section 17, was
repealed in 1982.   The repealed provision   also had as its
object the distribution of funds to colleges and univer-
sities for certain purposes, but under a different   formula.
See Attorney General Opinion H-1129 (1978).

     At the same time that former article VII, section 17,
was repealed in 1982 (thus eliminating its formula for the
distribution of ad valorem tax money to institutions    of
higher education),  the electorate   amended article VIII,
section l-e, of the constitution to read:

             Sec. l-e 1. No State ad valorem taxes
        shall be levied upon any property within this
        State.

             2. All receipts from previously author-
        ized State ad valorem taxes that are collect-
        ed on or after the effective date of the 1982

                             p. 5139
Dr. Wilbur L. Meier, Jr. - Page 4   (JM-1001)

        amendment to this section shall be deposited
        to the credit of the general fund of the
        county collecting   the taxes and may        be
        expended for county purposes.   Receipts   from
        taxes collected  before that date shall be
        distributed by the legislature among institu-
        tions eligible to receive distributions under
        prior  law.   Those receipts and       receipts
        distributed under nrior law may be expended
        for the purposes provided ynder orior law or
        for repair and renovation'of existing perma-
        nent improvements.   (Emphasis added.)

     Within two months after the repeal of the old article
VII, section   17, provision and the adoption of the new
article VIII, section l-e, language, this office construed
the phrase "under prior law," as used in the new article
VIII section to refer to the repealed article VII, section
17, provision.   m  Attorney General Opinion MW-594  (1982).
That conclusion was reiterated  in Attorney General Opinion
JM-77 (1983), which found fault with the MW-594 opinion   in
other respects -- but not in its conclusion that the phrase
"under prior   law," in article VIII, section    l-e, meant
former article VII, section 17:

           The new constitutional amendment [article
        VIII, section l-e] states   with respect   to
        receipts distributed  under prior law, that
        is, article VII, section 17, that they   ‘may
        be expended for . . . .I (Emphasis added.)

Attorney General Opinion JM-77 (1983), at 2.

     The new version   of article VII, section 17, added to
the constitution in 1984, was proposed by Texas House Joint
Resolution 19 -- a resolution adopted by the legislature      in
its final form on May 25, 1983. &9 H.J.R. 19, Acts         1983,
68th Leg., at 6701. Thus, the drafters of the resolutions
had available    to them Attorney      General Opinion MW-594
(1982) I which interpreted  the phrase  "under prior law" as it
related to the constitutionally-directed       distribution   of
funds to institutions      of higher education     pursuant   to
article VIII, section l-e.       It is our opinion      that in
re-using the phrase, "prior law," the drafters         (and the
electorate) intended it to have the same meaning in the new
article VII, section 17, provision     as it has in the exist-
ing, related provision, article VIII, section l-e.

                               P. 5140
Dr. Wilbur L. Meier, Jr. - Page 5   (JM-1001)

     The phrase, nprior law," if used in a different     con-
text, might be readily given a much broader     significance,
but in arriving at the intent of lawmakers, courts are not
limited to the literal language of a provision if it appears
from the entire law that a word or phrase was used in a more
limited sense. m    Moodv v. San Saba Countv Water Control
and Imnrovement District No. 1, 293 S.W. 845 (Tex. Civ. App.
- Austin 1927, writ ref'd); see also. . State ex rel. Grimes
County Taxuavers Ass'n v. Tex          Dal Power Aaency    565
S.W.Zd 258 (Tex. Civ. App. - ~hs~o~c;lst   Dist.] 1978,' writ
dism*d).l

     Subsection (a) of the current article VII, section     17,
is careful to limit the use of the distributed funds to four
purposes:    (1) "acquiring   land either with or without
permanent improvements,1' (2)   "constructing   and equipping
buildings  or other permanent     improvements,"    (3) "major
repair or  rehabilitation  of  buildings  or  other   permanent
improvements," and   (4) "acquisition  of  capital   equipment,
library books and library materials."

     Subsection (e) thereof also limits to four purposes the
use of bonds and notes secured by a pledge of money allocat-
ed by subsection (a): (1) "refunding bonds or notes    issued
under this section or prior law," (2) l'acguiring land either
with or without permanent improvements," (3) "constructing
and equipping  buildings or other permanent   improvements,"
and (4) "major repair and rehabilitation    of buildings   or
other permanent improvements."

     The four purposes for which subsection (e) allows bonds
to be used are independent of each other. If the phrase,
"prior law," as used in subsection      (e), were given  its
widest scope, there would be no restriction upon the type or
purpose of former bond issues that an institution of higher
education could refund with new bonds secured by constitu-
tionally-allocated funds. That result would be incompatible
with the spirit of subsection   (f) of section 17, article
VII, which forbids the use of such funds for "constructing,
equipping, repairing, or rehabilitating buildings or other

   1. The Woody and Grimes Countv Taxaavers Ass'n cases in-
volved construction of statutes, not the constitution,   but
rules for the construction of constitutional provisions  are
analogous to those for statutory construction.     Booth  V.
Stripnleman, 61 Tex. 378 (1884).

                               p. 5141
Dr. Wilbur L. Meier, Jr. - Page 6   (JM-1001)

permanent improvements  that are to be used      for student
housing, intercollegiate athletics, or auxiliary   enterpris-
es."

     Subsection (f) does not exnressly prevent    the use of
constitutionally-allocated funds to secure the refunding    of
bonds or notes issued for the purpose of erecting   buildings
dedicated to auxiliary   enterprises. It is not to be sup-
posed, however,   that an institution  of higher    education
could today issue revenue bonds for the construction of an
auxiliary enterprise   building pursuant  to still-existing
statutory authority therefor, see e.a. Educ. Code 55 55.13
61.003(14), and subsequently refund those bonds with bond:
secured by funds allocated pursuant to the current provi-
sions of section   17 of article VII. Neither is it to be
supposed, in our opinion, that bonds previously issued     for
auxiliary enterprise   purposes might be refunded    in that
manner. a      Educ. Code § 55.41 (refunding constitutional
bonds and notes).

     Attorney General Opinion H-1248     (1978) observed   that
(former) article VII, section 17, was amended      in 1965 to
forbid the use of proceeds under that section for auxiliary
enterprises.   See S.J.R. 24, Acts 1965, 59th Leg., at 2197.
When article VIII, section     l-e, was amended in 1982, it
restricted the use of distributions made to institutions     of
higher education   to those uses permitted by "prior law"
i.e., former article VII, section 17. H.J.R. 1, Acts      1982,
67th Leg., 2d C.S., 5 1, at 52. That restriction prevented
the use of distributed     funds for purposes   authorized   by
pre-existing statutes if not also authorized by the former
constitutional   provision.    See Attorney   General  Opinion
JM-77 (1983).

     We think it remains the intent and policy       of the
Constitution of Texas that institutions of higher  education
look to former article VII, section 17, to discover   "prior
law" and to determine what bonds or notes      issued under
"prior law" may~be   refunded by bonds secured with money
allocated to such institutions  by article VII, section  17,
of the Constitution    of Texas.    See aenerally   Attorney
General Opinion V-848 (1949).

                        SUMMARY

           The phrase,   "prior law," as used     *
        subsection (e) of section 17 of article VZ
        of the Texas Constitution,   as adopted  in
        1984, refers to the former provision of the

                              p. 5142
Dr. Wilbur L. Meier, Jr. - Page 7    (JM-1001)

        constitution, also designated   article     VII,

                              . J h
        section 17, that was repealed in 1982.

                                     Very truly y    s,

                                           AL
                                     JIM     MATTOX
                                     Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCRKARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Bruce Youngblood
Assistant Attorney General

                               P. 5143