                         EATTORNEY                         GENERAL.
                                   Q,F       TEXAS

                                   AcwrrIN     11.    -n3mL4s
PRICE   DANIEL     j
ATTORNEY GENERAL
                                         June 24, 1949



        Hon. William L. Kerr, President
        Board of Regents
        State Teachers   Colleges
        Midland,   Texas                             Opinion    No. V-848.

                                                     Re:   The legality of using funds
                                                           available   under the College
                                                           Building Amendment to con-
                                                           struct   and equip buildings
                                                           which will be revenue pro-
                                                           ducing.

        Dear   6ir:

                           We quote fre.m:Yeur         request    for opinier   as follows:

                            “You have heretofore   advised our Board
                   of procedural   matters under the Constitutional
                   Amendment Building     Program.      (Tex. Const.
                   Art. VII, Sec. 17; A, G, Opinion Nos, V-798, V-
                   799.) We now m&e further request and impase
                   upon you for addition&l opinion as to the use we
                   mry melce Of the 8vdlable     money,

                            “‘Seven colleges   are wnder the jurisdic-
                   tion of our Board.     The needs of the respective
                   schools are varying.      Far instmce,     the meat
                   pressing    need in the greater     number of our
                   saheob    is for class roem buildings,     but as to
                   one or perhaps two, the urgent need ia for’ dir-
                   ing halls er dormitor,ies    or combination of the
                   twe.   As M one or perhapa 6rvm. the pressing
                   need is for nmhpsiums.         In other werde,   as m
                   some of the schools,      the need is for buildings
                   which would be self-sustaiming       in part and the
                   t~pc of building for which revenue bonds have
                   been issued in the past, under the Skiles Act.
                   (Ax& 26Mcc-A, V.C.S.)




 .
HDL   William   L. Kerr,   Page   2 (V-84g)




                “‘FOP the use of our Board in detommia-
        ing the type of buildings to be permitted   tier
        the Buildin(t Amendment,    will you please    &-
        vime:

                 “‘May w.ar Board    of Regents  expend
           funds available  under    the BuildSag AnePsl-
           ment fom:
                  &km. Willhm     L. Kerr,    Pale   3   (V-84s)




                  or note4 iseued for the purpose of’acquiring,           ooaotructiag     and ini-
                  tially equipping    s o a buildings or othar permanent          improvements
                  at said respective     institutions.”    It neither describe4      n0r fines any
                  other limitations    as to the types ‘of building4 or 0-r            permbnent
                  improvements      which may be wquir,ed         or canrrtr.ucted.    Therefore,
                  the bonds or notes may be i44ued to secure fund4 f,er ,the ~acquisi-
                  tion, construction     and the initial equiyping of any tfnt of building
                  at the remp4ctive iw3Mulrioms whiob the pverning              board properly
                  ikema recea4rry       in eur#9hg      wt tke PunctiEioaaof ita eQuoatiana1
                  in&it&&m,     iacldizkg    tAxtwo typea of buildings whick way be eor-
                  structsd under tha Asnerisian4 of Articles         260%~ 4r 2654-1, V.C.S.

                                      However,   Article 2603~ provides     Get the conartruc-
                  tion or ecquisition of the improvemea~           therein authoriaed     shall
                  be “without cost to the State of Texas,”        and that any bonds issued
                  thereunder      “4hall not be an indebtedness     of th4 6tak Qf Tenas, but
                  shall be payable solely from the ,revenue4 Q be derived             frem the
                  operation of 4rid buildie;li4 O‘* AAm, ir Article 2&4-f,          it i4, po-
                  vided   that the acqui4iti0is and 00M%kpue$i@n of ttVe im@rovansmto
                  provided     for therein ‘“4hall bc llrlc    without cost to the State of
                  Texas,     ad no bonds ia4ued fez 41&h iegfovemeats            r&&l oonsti-
                  tutc a debt of the State ef Texas in mny mann*r whatpoevor,             but
                  &all be a charge only rpinst          those ~evanuo4 gre,%ieaAAy pledged
                  for their p8yment.oa A, 0, Opimimu M~4kd-tZT3,              O-1694, O-1707,
                  O-()36,    O-6993, by prior. ddda*r&~ns.             Thrse statute4 rould
                  apt preclude      the i44uucs    mf baa&m or note4 under Section 17 of
                  Article    VII. H0aever,     if revenue bonds were BP are 00 be issued
      .           u&er     Article   26a3c or Article 2C54c-1, then these statute4 would
 _                q@y     to such reverie     bWdr aid %luaUSI ol t#ibbprocreds.       &i Other
..:: ,.           WM-SLS~tbti bu~t##ag~ w+mqw-e~$s              tm&# We Simwyal either by
                  t&d ,&ssuance of &a*& ,a*,,M&5* u&&k @#sXWSi 1,7 af &ptic.As VII or
                  ,&t&4 issw8          oPs3iwMMkc bmula Mk&*r AH&tile 26&k or AWide
                  &&J6c-1, bitt @k-hl?p kw*.

                                   It io cA.ew, tbesafwe,  that tiw prwcedr    from tzte
                   noJc*,gr bon& ieswd uader Scetiea 17 & Ahiclc          VII, Gorstitu-
          ‘,..,   ion df: Texas,    o&a Lo wm~d ncitke~ to supplement fund4 0bttined
 . .,             bp, Ne ia.sqmce 08 pewsme baa&v *dim Article 2603~ o,r Article
                   UHO-1,    nor te p*y t&e d*netiuction  o,r acqui4ition costs 0f the
                  ,~$@p@mvmmentscevcr~ad by such revezIue bonde, nor te ply my
                  #&   of the intere4t *a and ppineipaA 0f ouch b0ikd4.

                                    We ares unabble te an4wer your second question cnt-
                  rpzicplly     because it involves fact considerations.  Section 17
                                                                                              I




       Ho&    William   L,   Kerr,   Page   4   (V-848)


. ‘,

       provides, ae st&?d, that the mwey             realiesd        from   the sale af the
       bonds, shall be spent:

                         %ar the purpose of q2.quirhg,     con,?,
                structingl, and initiPdly equipping buildings “;
                oh other permanent improvements       a O .‘*
                                                                                              .1,
                           As staked by the Court         af Civil   &@erls:

                          “The primary   purpose of the amen&
                QleQt***r86~.*        fw the pPrpeee of fiwrc-
                ing (8tr ~~ns~paction Pnd~Jequipment of build-
                ings sad akbiir pwinament improvements      , a OR
                Whit%aide v* Brvwn, 214 S.W,2d g44 (19483,
                ,er;ror refused).

                        The amendmrnt  wits sefferred to by #at Court as it
       was ad i6 c csnrnody denominated,     the wCoLlepe 8J-j      Amend-
       ment, 84 The cap@i:tm on S,J&  4 (tit amendment    as prapored by
       the Lagislatawe)   &&es that &he amendment provided:

                       “A meehod~of pqtmen$ for the WP-
                strai&h~ and eepment    of buildings ax
                ~rnuraot              imprtwemebts          a e .’

                        Coaretschq     the histwy    af the amendmInt       it ir our
       intarpreta%on    tbaa it was intended by tie Legislature         and the peo-
       p&e to provide p&marfPy       for the construction      or acquisitian    af
       building&   a& the construction      or acquisititin    of other permraent
       improvements.       There is no provision     in the amendment        for the
       repair @f e&sting buildings out of such funds.            On the contrary,
       the amendment says dthaa &he participating          colleges   (except in
       case of aalamity)    ‘“shall not e e O receive any other state funds fer
       the acqd&ng     or constructing    of btihW.gs    or ether. permaaent      im-
       provemex&     L/s qyD

                       It will be noted also that the ame&rne&        uaas the
       word   ‘%~@%Cally”in maying ‘for the purpose of acquiria#.i, ceast*ti
                                      buildings or other permaaent       impsova-
                                     lyw so rPsled further  indic8tec   trhrt the
       people and the Legislature    coniemplwkd     the canntrwtien    or  AC-
       quisition of such bui%diBfls or cuber permaaent imppevemeatti a@
       might requite   “inB&& equipme&@         That pwt ot the am-
Hon. William       L. Kerr,      Page    5 (V-B48)




calling   for         equipment" certainly docs not contemplate re-
                “initial
pairs.    ““InitiJ 0qdpa0at"'ixdcata6   equipmetrt fer the fiirt t+e,

                     p     mr4!pdP6W    U%d 6iSih    Op4~4tiO~6   m8y ba paid
for out ef Gelleg* AmePdmoet money, then the L*eIaturr                is pro-
hibited index the p6evS6ioa quoted above freti B                aay ap#ro-
priation for such ~raS0ns          during the effective life of’-i3i; amend-
ment. So a colle#e which cakuhted that it would rsceive 6 million
dollars under the amendment a             not expend 6 million dollars
for the construction of buildings and initially equippiv         them.      It
would have to save back enough money to rep6ir and remodel                 its
laboratories,   clrrclare08~6 ) et cet8ta. for *a whoAa effective       life
of the amerdmont -- ha-0           it c&    SW receive snf m0ney from
the generd    revewe     for 6ucL. items &axing th8t period.

                 The paople ud W k@slatuxe            irtanded ne such
result,    They %s-        *$  @he -:6M              be invert& in build-
iRg6 8nd similm     ~-stimplP-                ate at the collsges      which
were se bully YIlJd       by W    &tar     i&e hkr war, mad which will
be needed during the Jfec4kve lMe od the uaerdment.             It called for
capitsi investment of the meaey      --not   the wm  0f  it fer maintenance,
Jteratioru,   and repairs.




                     Ths Bmrd of Rep&r    of mate TeackaT6
          CeIle~ea     may *enid it6 Ce836t%tv&onrl U                            :
                                                               .




Ika.   William   L. Ke~a+~Page   6 (V-648)




         u?aet lbiadiq   hods    (Tmx. Canst.   Art,   Ilr,   aoc.
         1 7  &) o@ra l0
                       cqG6itbaa @lg c~ishwctic+a    aad iai-
         t&J. oquip#og   ob a9q tygbdsof building rt the in-
         at6QIQsopLwbirb +&to Board properly     deems net-
         91-y     h carrying   cut the functions of its ia-
         stf4oticm. tad&g      those types of buildings au-
         tb&z@d    to ba constwcted    under the provisions
         of &ttcPms 2603~ or 2654c-1, v,c,s.

                 SW& &ads may net, however, be ekscd
         b swpphanmt     f&a  &%&xed by the issuance
         ef rwmaua beads u&m       Article 2654c-1 or
         2603~~ 01: b par pay papi oi t&e cos+rhctism
         op1 lcq&sPWa   coBbs ef the improviments    cev-
         axed by stxch rove-,   bowls, or to pay opy past
         86 tbm pPbaGip& ubd fnltotest Paquiramen*s    of
         such PQVmaambox&.      A 6, OpworAs V-796,
         v-799.
