Honorable Dempsie Henley
Cha$rman
Texas Coamission for Indian Affairs
Livingston, Texas

                          Opinion No. M-44

                         R8:   Whether the Ala)rrm-Coushatta
                               Indian ReservatiomTqibal
                               Council, with the consent of
                               the Texas C~cumiSslonfor
                               Fdian Affairs 'has the author-
                               ity under Art. $4212, V.C.S.,
                               to borrw money $l;m a bank
                               for ths purposes sfated and
                               to execute security for the
                               loan on the chattels to be
                               purchased with the borrowed
                               money.

Dear Mr. Henley:

          Your letter of MarcR 8, 1967, requesting an opinion
of this office reads, in part, as follows:

         "The Alabama-Coushatta Indian Resgrvation-
    Tribal Council proposes to borrow the sum of
    $lZS,OOO.OO with interest at 6% from The First
    National Bank of Livingston, Texas, payable
    and conditioned as 6et out in the copy of such
    note attached hereto as attachment No. 1, This
    note will be a pakticipation loan between 'such
    bank, joined by two other local banks, and
    guaranteed to the extent of 71.2% by the Small
    Business Administration, an agency of the
    Federal Gwernmsnt.   The proceed& of the loan
    will be used for the purposes indicated in af-
    tachments No. 2 and No. 3 hereto.
                         - 208 -
Hon. DemQSie Henley, page 2 (M-44)



         "Question: Does the Alabama-Coushatta
    Indian Reservation-Tribal Council, with the
    consent of the Texas Commission for Indian
    Affairs, have the authority to borrow such
    sum of money for such purposes and to execute
    such proposed note on behalf of the Alabama
    and Coushatta Tribes of Texas as provided in
    Article 54212, Section 131

         "It is further proposed that such loan be
    secured in part bye security agxeement upon
    chattel property being purchased and paid for
    with such funds for use as improvements on the
    ,Reservatiog in an attempt to earn revenues for
    the Tribe, a,copy of the security agreement
    being attached hereto as attachment No. 4.

         "Question: Does the Alabama-Coushatta
    Indian Reservation-Tribal Council have author-
    ity to execute security agreements and other
    mortgage instrumentsupon personal property
    and chattels to be paxchased by such Alabama*
    Coushatta Indian Reservation-Tribal Council
    and used upon the Reservation for improve-
    ments and economic development of such
    Reservation?



          Section 13 of Article 54212, Vernon's Civil Statutes,
provides as follows:

         "Sec. 13. Subject tQ the written ap-
    proval of the Commission, the Tribal Council
    may issue revenue bonds or any other evidence
    of indebtedness, in order to finance the con-
    struct&on of improvements on the Reservation
    and for the purchase of additional lands neces-
    sary therefor or for improvement of the income
    and economic conditions of the Reservation.
    The bonds or other evidences of indebtedness
    may be secured bv the income from one or more
    revenue-rxoducingprooerties, interests, or
Hon. Dempsie Henley, Page 3 (M-44)



     facilities of the 3.071-acre tract of land
     which is held in trust by the State of Texas
     for the benefit of the Indians of the Alabama
     and Coushatta Tribes under the authority of
     Public Law 6,21,Acts of the 83rd Congress,
     1954, 68 Stat. 768, 25 U.S.C.A., Sections
     721 et seq." (Emphasis added.)

          In answer to your first question, it is the opinion
of this office that Section 13 of Article 54212, Vernon's
Civil Statutes, authorizes -the Tribal Council, subject to
the written approval of the Commission, whose primary responsi-
bility is the development of the Reservation, to execute a
note for the purpose of improving the income and economic
conditions of the Reservation.

          However, no note or other evidence of indebtedness.
issued by the Tribal Council shall be construed as creating
a debt against the State; Therefore, any such evidence of in-
debtedness issued by the,Tribal Council should have incorporated
within the instrument the underscored wording of Section 21 of
Article 54212, Vernon's Civil Statutes.,which reads as follows:

          "Sec. 21. No obligation created by a con-
    tract, bond, note, or other evidence of indebted-
    ne8s issued by the Tribal Council under this Act
    shall be construed as creating a debt against
    the State: and every such contract, bond, note,
    or other evidence of indebtedness shall contain
    this clause: 'The holder hereof shall never
    have the right to demand payment of this obli-
    sation out of anv funds raised or to be raised
    bv taxation. ’” (Underscoring added.)

          In answer to your second question, it is the opinion
of this office that under the stated factual situation, the
Tribal Council has the authority to execute the aforementioned
security agreement involving personal property and chattels
to be purchased'by the Tribal Council and used in development
of the Reservation.
                         - 210 -
.   .




        Hon. Dempsie Henley, page 4 (M-44)



                                SUMMARY

                  The Alabama-Coushatta Indian Reservation-
             Tribal Council, with the consent of the Texas
             Cosmnissionfor Indian Affairs, has the author-
             ity by virtue of the provisions of Section 13
             of Article 54212, V.C.S., to borrow money from
             a bank for the purposes stated, The Tribal
             Council has the authority to execute a security
             agreement for the loan on chattels to be pur-
             chased by the Tribal Council and used upon the
             Reservation to further its improvement and
             development.




                                             orney General of Texas

        Prepared by Alan Minter
        Assistant Attorney General

        APPROVED:
        OPINION COMMITTEE

        Hawthorne Phillips, Chairman
        W. V. Geppert, Co-Chairman
        John Reeves
        Wade Anderson
        Z. T. Fortescue

        STAFF LEGAL ASSISTANT
        A. J. Carubbi, Jr.




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