Court Opinion

ID: 4135931
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:07:58.165453+00
Date Added: 2024-06-11T14:19:33.946540
License: Public Domain

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              THEA=•              RNEYGENERAL
                           OF   TE,XAS

                            May 9, 1961

 Honorable Ben Ramsey               Opinion No. W-1048
 Lieutenant Governor
 Capitol Station                    Re: Whether the Legislature
 Austin 11, Texas                       may retire outstanding
                                        bonds issued by Texas
                                        Southern University, and
 Dear Sir:                              related questions.

          You have requested an opinion on the following ques-
 tions:

          "1. Would an appropriation by the Legislature
          from the General Revenue Fund for the retire-
          ment of outstanding bonds issued by Texas
          Southern University pursuant to Article 2643g,
          be a valid and effective means of liquidating
          such indebtedness?  One aspect of this question
          is whether such outstanding bonds are callable
          without the consent of the bond-holders.

          "2 . If the method indicated in the question
          above is a valid and effective means, would it
          result in freeing up Texas Southern University's
          share of the College Building Fund for the con-
          struction of additional buildings now needed at
          that institution?

          "On both questions, the last clause in Section 17.
          Article 7 of the Constitution appears to be perti-
          nent.

          "3 . If, in your consideration of questions 1 and
          2, you find the method to be of doubtful validity
Honorable Ben Ramsey, Page 2 W-1048)

           or effectiveness, would the enactment of
           a new bill containing for Texas Southern
           University provisions similar to Article
           2643g, be a valid and effective way of
           assuring that University with available
           moneys for building construction purposes?"

           Section 17 of Article VII of the Constitution, as
amended in 1956, establishe:s a state ad valorem tax for the
purpose of creating a special fund for buildings and improve-
ments at certain State institutions of higher learning, to
be allocated and periodically reallocated by the Comptroller
of Public Accounts to the participating institutions.   It
further provides, in part, 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 construc-
          ting of buildings or other permanent improve-
          ments for which said Five Cent (50) ad valorem
          tax  is herein provided, except in case of fire,
          flood, storm,  or earthquake . . . . Chapter
          330, Acts, Regular Session, Fifty-third Legis-
          lature ,&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
          the provisions of said Chapter 330 prior 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) ad valorem tax levy as pro-
          vided in this Section, . . .II

          In reply to your first question, it is our opinion
that these provisions prohibit an appropriation from the Gen-
eral Revenue Fund for the retirement of outstanding bonds is-
sued by Texas Southern University pursuant to Article 2643g.
Honorable Ben Ramsey, page 3 (WW-1048)

           Since your first question is answered in the
negative we do not reach the second question.

           We have reviewed the provisions of Article 2643g,
V.C.S., which was repealed upon the effective date of the
1956 amendment of Section 17 of Article VII of the Constitu-
tion of Texas, and your third question is answered in the
affirmative.   Bonds were heretofore authorized and issued
by Texas Southern University for building construction pur-
poses under Article 2643g, V.C.S., and we see no legal im-
pediment to such issuance in the future under a new statute
containing similar provisions.

                           SUMMARY

           The outstanding bonds of Texas Southern
           University cannot be retired by an appro-
           priation from the General Revenue Fund as
           Section 17 of Article VII of the Consti-
           tution provides that such obligations
           shall be paid from the Five Cent (Se)
           ad valorem tax provided therein. There
           would be no legal bar to issuance of bonds
           by the University under a new statute sim-
           ilar to Article 2643g, V,C.S., now re-
           pealed.

                                Yours very truly,

                               WILL WILSON
                               Attorney General of Texas

HWM-s                                 Assistant                I
Honorable 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 THE ATTORNEY GENERAL
By: Morgan Nesbitt