Court Opinion

ID: 4139260
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:45:35.906727+00
Date Added: 2024-06-11T14:30:46.494009
License: Public Domain

HEA~JTORNEY             GENERAL

                                 OFTEXAS

  GROVER SRDDRRS
A=rrORNncY   GENEHAI.

       Honorable John R. Shook
       Criminal District Attorney
       Bexar County
       San Antonio, Texas
       Dear Sir:                      Opinion NO. O-7054
                                      Re: Authorltg of county to issue
                                           time warrants for maintenance
                                           and operating expenses of county
                                           hospital.
                  We have your letter of July 6, 1946, in which you
        request an opinion from this department on the following
        question in behalf of the Bexar County Commissioners' Court:

                   "AZ to whether or not said Court is empowered
             under.the law to authorize the issuance of General Fund
             Time Warrants for the purpose of maintaining and operat-
             ing the Robert B. Green Memorial Hospital, San Antonio,
             Texas."
                  Attached to your opinion request is a letter from
        the County Judge of Bexar County, setting forth the background
        of this reouezt, and from which letter we quote in part as
        followz: -     -
                   "The (hospital) appropriation as made in the 1946
             Bexar County budget will practically be exhausted In its
             entirety not later than September 15th next. Unless it
             will be possible for the Commissioners' Court to provide
             funds by and through the issuance of General Fund Time
             Warrants for its continued operation and maintenance
             after said date to December 31zt, the end of the fiscal
             year, the Board of Managers of said Hospital will be
             faced with no alternative other than to close this
             institution."
                  In answering your question, we will consider first
        the general power of a county to issue time warrants.
                  Prior to 1903 there was no provision in our statutes
        for the issuance of bonds, and the courts held that counties
        had the implied authority to issue time warrants for the con-
        struction of permanent improvements. Stratton v. Commissioners'
Honorable John R. Shook, page 2         O-7054

Court of Kinney County, 137 S.W. 1170; Cowan et al v. Dupree
et al, 139 S.W. 887; Commissioners' Court of Floyd County et
al v. Nichols et al, 142 S.W. 37; Allen v. Abernathy et al,
151 S.W. 348.
          Some time after these decisions the Legislature
authorized the issuance of bonds for courthouses, jails,
public roads, etc.

          Later, in the case of Lazater v. Lopez, 217 S.W.
373, the Supreme Court held that it was within the discretion
of the Commissioners' Court whether they issued time warrants
or bonds for the construction of permanent improvements. In
this opinion Judge Phillips deals at length with the consti-
tutional and legislative enactments which gave the commiz-
zioners' courts authority to issue both warrants and bonds.
          In the more recent case of Adams v. McGill, 146 S.W.
(2d) 332, in which this department intervened, the court held
that under .a statute authorizing a county to provide for an-
nual exhibitions of horticultural and agricultural products,
the county had the implied power to issue time warrants pay-
able over a period of years for improvements to livestock and
agricultural buildings.
          The general rule, as stated in Adams v. McGill
(supra), that the county may issue time~warrantz in payment
for improvements which it is expressly authorized to con-
struct, is, we believe, extended by the Su reme Court in the
case of Bexar County v. Mann, 157 S.W. (2dP 134, to authorize
the issuance of time warrants In payment for debts created by
a county in accomplishment of any object for which it is
authorized by law to expend money.
          In the Bexar County case (supra) the county had en-
tered into a contract to purchase voting machines and had lz-
sued bonds therefor chargeable against the general~fund, pur-
suant to Art. 2997a, V.A.C.S., which authorized such purchase
and such bonds but which statute did not expressly provide
that such bonds were to be charged against the county general
fund. This department, the respondent in that case, conten-
ded that the constitutional twenty-five-cent general fund tax
should be applied only to the payment of the ordinary or cur-
rent operating expense of a county and that such expense does
not embrace or contemplate the payment of bonds or time war-
rants and the interest thereon, being confined to the payment
of officers' salaries, purchasing of supplies, caring for
paupers and providing for the actual and necessary day-to-day
expenses. We contended that if a county can appropriate part
of this tax for a series of future years, it can pledge all
of it and thus deprive itself of the revenues to pay current
Honorable John R. Shook, page 3          O-7054

operating expenses, and that pledging the current Income for
the payment of bonds or warrants and interest theron beyond
the current year would be subversive of the structure of the
county government itself. Judge Critz overruled our conten-.
tion in that case, holding:
          "In our opinion, our decisions have already settled
    it as the law of this State that the general fund tax of
    twenty-five cents, authorized to be levied by counties
    for 'county purposes' by Section 9 of Article VIII of our
    Constitution, can be pledged for the payment of obliga-
    tions or bonds, the maturities of which extend beyond the
    current fiscal year for which said tax was levied. It
    follows that the statute under consideration here, which
    authorizes bonds to be issued payable over a series of
    years out of a county's general fund tax, does not violate
    the above constitutional provision. Cazz County v. Wil-
    barger County,,25 Tex. Civ. App. 52, 60 S.W. 988, writ
    refused; Hidalgo County v. Haney, Tex. Civ. App., 67 S.W.
    (2a)   409.
            II
              .
             . . The only question here involved is the power
    of the commissioners' court to charge the twenty-five cents
    tax authorized by Section 9 of Article VIII of our Con-
    ztltution with obligations payable beyond the current year
    for which such ,taxis levied; and as to that power no
    difference can exist between warrants and bonds running
    beyond the current year. The only material difference
    between warrants and bonds is that warrants are not ne-
    gotiable, while bonds are.
             "In Hidalgo County v. Haney, zupra, the San Antonio
    Court of Civil Appeals had before it for decision the
    validity of $30,000 in county warrants payable out of the
    twenty-five cents general fund of the county, running over
    a number of gears, issued by Hldalgo County for tick
    eradication purposes by authority of Section 5 of H.B.
    ;0,,~77,   Ch. 53, Gen. Laws, 41st Leg. 1929, 1st called
              p. 128, Article 1525o, Section 5, Vernon's Penal
    Code;'lg36. We shall not attempt a full discussion of
    this opinion. It  is    sufficient to zag that it upholds
    the power of the Legislature to provide for the issuance
    of the warrants just described.
          (I
           . . . When we approach this case as an original
    queztlon, we are una'bleto find any words in the consti-
    tutional provizion involved which limit the power of a
    county to levy taxes thereunder for the current year only.
    The constitutional provision Itself simply llmitz the
    power to 'county purposes'.
Honorable John R. Shook, page 4         O-7054

Nothing is said about the current year, and certainly the
declzionz of this State have declined to read that provision
into it. The only provision in our Constitution which limits
the power to levy the twenty-five cents tax authorized by
the constitutional provision under discussion for debts pay-
able beyond the current year, is Section 7 of Article XI,
which provides: 'But no debt for any purpose shall ever be
incurred in any manner by any. . . . county unless provision
IS made, at the time of creating the same, for levying and
collecting a sufficient tax to pa the interest thereon and
provide at least two per cent (2%Y as a sinking fund.' This
last-mentioned constitutional provision has been complied
with in the order authorizing the issuance of these bonds."
          We believe it is therefore established by the a-
bove decision that a county has the authority not only to
issue time warrants for permanent improvements but also to
pledge ltz general fund for the issuance of time warrants to
pay for any pmllc purpose of the county authorized by law,
provided such expenditure does not come or fall under any
purpose for which a special fund has been provided, such as
permanent improvements.'
          In 1913 the Legislature of Texas authorized the
establishment of county hospitals and provided for the elec-
tion for the issuance of bonds for the cost of the erection
of same, and provided for their operation and maintenance
from general fund taxes. This act has been brought forward
in Vernon's Annotated Civil Statutes as Articles 4478 to 4495
and Article 4437a.
          In the case of Seydler et al v. Border et al, 150
S.W. (2d 72, the Galveston Court of Civil Appeals held that
Article 478 was constitutional and that the same authorized
counties to issue bonds for the construction and equipment
of county hospitals. The court also held that the issuance
of bonds for the construction and maintenance of hospitals by
county units for the care of the sick constituted "public
purpose" as distinguished from a private purpose.
          It is our understanding that the Robert B. Green
Hospital Is a county hospital and has been duly and legally
established under the authority of Articles 4478 to 4495,
V.A.C.S.
          Accordingly, we answer your question in the affirm-
ative, holding that the Commissioners' Court of Bexar County
has, subject to the express restrictions imposed by the
Constitution and General Laws, power to issue time warrants
for the payment of expenses Incurred in the operation and
    - -.-.

,

             Honorable John R. Shook, page   5        Q-7054

             maintenance of the county hospital, the same being 'a county
             public purpose", pledging therefore its general fund, provided
             that the applicable regulations relating to the issuance of
             such warrants are strictly observed.

                       We do not believe that our previous opinion No.
             O-6819, to which you refer in your letter, attempts to answer
             the specU'ic question raised herein, but if any part of such
             previous opinion 1s Inconsistent with the above answer, than
             such part of opinion No. O-6819 Is expressly overruled.
                       In your letter from which we quote as follows, you
             make a further request:
                         ow , in the event you hold that time warrants may
                       "Ii
                 be Issued under the circumstances set out In Judge Ander-
                 son's letter, then will you answer for us the following
                 questions:
                       "1 . Can such time warrants be issued after a budget
                 has been formulated and approved by the Commissioners'
                 Court, In which said budget the Robert B. Green Hospital
                 and the Tuberculosis Control Board had had budgeted for
                 their use the sum of 194 on the $100 valuation when the
                 maximum amount provided for such Institutions by the
                 Hospital Law is 20# on the $100 valuation?
                       "2 . Can such time warrants be Issued when the is-
                 suance of same, the expenditure of such money, Fncreases
                 the total amount of the budget for the year 1946 by the
                 sum sought to be issued?
                       “3 . Can the budget at this time be amended so as
                 to provide additional funds for the Robert B. Green Hos-
                 pital when such amendment would increase the amount spent
                 during the calendar year 1946 in an amount of $75,000
                 over and above the amount of cash on hand at the beginning
                 of the year, and the anticipated revenues for the current
                 year, as set up in the 1946 budget?
                       'Because of the urgent nature of Judge Anderson's
                 letter, we would appreciate your expediting the delivery
                 of your opln%on as much as possible."
                         Your first two questions apparently assume that the
             1946 budget   controls the issuance of time warrants; in other
             words,  that  the 1946 budget must have made provision for the
             issuance In 1946 of time warrants In order for such warrants
             to be valid.
                                                                  c

  Honorable John R. Shook, page   6           O-7054

             We believe the correct view is that the budget is
   prepared and adopted as a basis for levy for taxes and in
   contemplation of expendrtures for a particular fiscal year,
   such expenditures being based on such taxes. Thus any ex-
   penditure of funds pursuant to such budget would involve
   only...those
              obligations to be paid during the particular
', fiscal year covered by such budget, and such expenditure
  woulCrbe classified as a current expenditure.
            The issuance of time warrants is one of the methods
  authorized for the payment of-a debt against a county, and
  the term "debt" refers to obligations to be satisfied out of
  future revenuesderived from tax levies, as distinct from
  obligations to be satisfied out of current revenues.
           In view of the fact that the budget contemplates
 only"expenditures out of current revenues for the current
 fiscal year, and since time warrants when issued constitute
 a debt, and therefore involve only future levies to be ae-
 rived from taxation, then the matter of the issuance of time
 warrants during a current fiscal year would have no relation
 to the current year's budget. Of course, adequate provision
 must be made in the budget for future years, and a tax levy
 for the purpose of providing funds for the payment of such
 debt service must be made.
           Your third question is answered in the negative.
 Certainly the budget cannot provide for the expenditure of
 more funds than exist in the amount of cash on hand at the
 beginning of the year plus the anticipated revenues for the
 current year. It is to be noted, however, that the issuance
 of time warrants In 1946 will not operate to amend the 1946
 budget, as pointed out in our above answer to your first two
 questions.
           Trusting that we have fully answered all your
 questions we are
                                  Very truly yours
                               ATTORNEY GENERAL OF TEXAS
 WNB:fb:wc
                                      By s/W. N. Blanton
 APPROVED AUG 12, 1946                     W . N . Blanton' iz!
  s/Carlos C. Ashley                                  Assiitant
 *FIRST ASSISTANT
  ATTORNEY GENERAL
 Approved Opinion Committee By s/BWB Chairman