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                       THEATTORNEY                GENERAL
                                    OF   TEXAS




              Honorable Edna Cisneros         Opinion No. C-186
              County and District Attorney
              Willacy County                  Re: (I) Authority of Willacy
              Raymondville, Texas                  County to contract with
                                                   a private firm to make a
                                                   feasibility study of and
                                                   to recommend a financing
                                                   plan for a proposed cause-
                                                   way: (2) liability of coun-
                                                   ty for payment of princi-
                                                   pal and interest on County
              Dear Miss Cisneros:                  Causeway Revenue Bonds.

                        In your letter requesting an opinion of this office,
              you state that Willacy County is exploring the feasibility of
              building a causeway from Port Mansfield to Padre Island, the
              cost of the causeway to be financed with a proposed revenue
              bond issue. In connection with the financing problems, you
              advise that the Commissioners' Court has entered into an
              agreement with a firm specializing in municipal finance to
              act as fiscal agents to explore the ways and means of finan-
              cing the proposed causeway and to evolve, if feasible, a firm
              plan of financing for the consideration of the Commissioners'
              Court.

                        You have asked the following questions:

                        1.   "Does a county have the statutory authority
                             to enter into an exclusive contract with a
                             bonding firm granting to them the right to
                             make a feasibility study and to recommend a
                             financing program for the construction of
                             a causeway to be financed by a revenue bond
                             issue?"




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Honorable Edna Cisceros, page 2 (C-186)



          2.   "Can the bond or financial structure of
               a county be adversely affected in any
               way if said county should consummate
               an agreement with a private bonding
               firm to make a feasibility study to
               determine the feasibility of building
               a causeway from the mainland of said
               county to Padre Island to be financed
               by County Revenue Bonds if such feasi-
               bility is established and if the reve-
               nue of such causeway would be insuffi-
               cient to meet such bond requirements?"

          3.   "IS it legally possible for the county
               to be obligated for defaulting interest
               payments or principal payments in any
               way if the causeway built upon a purely
               revenue bond basis fails to sustain suf-
               ficient traffic to pay the interest on
               the indebtedness for four consecutive
               years or any period?"


          In answer to question number 1, supra, we find no
specific statutory authority for an agreement such as is
described in your request. However, Willacy County, by the
provisions of Article 679523, Vernon's Civil Statutes, is
authorized to construct, acquire, improve, operate, and
maintain a causeway from one point in the county to Padre
Island and to issue its revenue bonds payable solely from
the revenues to be derived from the operation thereof to pay
the cost of such construction, acquisition, or improvement.
We think it is manifest that in order to soundly exercise
this authority granted by the Legislature, the advice and
counsel of experts in the field of finance is necessary.
This is a highly technical field and one calling for advice
from persons highly trained in such matters. This being the
case, we think that authority to enter into such an agreement
as is outlined in your request is implied from the powers
that have been expressly granted to the Commissioners' Court.
Pritchard & Abbott v. Patrick H. McKenna, 162 Tex.617, 350
S.W.2d 333 (1961).



                            -899-
.I   --




          Honorable Edna Cisneros, page 3 (C-186)



                    To answer questions 2 and 3, supra, let us assume
          that county revenue bonds have been authorized, sold, and
          the proceeds used to finance construction of the causeway,
          and that the revenues derived, from the operation of the cause-
          way are insuff2cient to meet the principal and interest re-
          quirements of the bonds as such interest and principal become
          due. Article 6795b. Vernon's Civil Statutes, specifically
          provides in Section 1 that the bonds shall be ". . . payable
          solely from the revenues . . .".    Section 2 of said article
          provides that "NO bonds authorized hereunder shall ever be a
          debt of the county issuing them, but shall be solely a charge
          upon the revenues of the project and shall never be reokoned
          in determining the power of the county to issue any bonds for
          any purpose authorized by law. Each such bond shall contain
          this clause:   'The holder hereof shall never have the right to
          demand payment of this obligation out of any funds raised or
          to be raised by taxation.'   . . .". Therefore, at this point,
          it is clear that the financial structure of the county can
          not be adversely affected and the county can not legally be
          obligated for the defaulted payments insofar as tax moneys
          are concerned. &Xwse    v. Wils~a, 203 S.W.2d 791 (Tex.Civ.App.
          1947). As to what effect sueh defaults would have on the
          "credit rating" of the county, we can not say, as that is not
          a legal question. At the present time, there is only one way
          by which the county could become legally obligated to pay the
          principal and interest on outstanding causeway revenue bonds
          from tax funds. Article 795a, Vernon's Civil Statutes, au-
          thorizes the issuance of county tax bonds for the purpose of
          refunding such outstanding revenue bonds. Said article pro-
          vides that the Commissioners' Court shall not authorize the
          issuance of such refunding bonds unless authorized at an
          election at which only the qualified voters who reside in the
          county and who own taxable property therein and who have duly
          rendered the same for taxation shall be allowed to vote, and
          unless the majority of the votes cast thereat are in favor of
          issuing the bonds. Article 795a further provides "That the
          aggregate principal amount of bonds issued from time to time
          pursuant to this Act and at any time outstanding, shall not
          exceed a principal amount which will permit the interest on
          and the principal of such bonds to be paid from a tax levied
          within the eighty cent (800) limitation provided by Article
          8, Section 9 of the Texas Constitution . . ."



                                     -9oo-
Honorable Edna Cisneros, page 4 (C- 186) "



                       SUMMARY


            Willacy County has implied authority to
            contract with a private firm to make a
            feasibility study of and to recommend a
            financing plan for a proposed causeway.
            A county can not become obligated to pay
            the principal of and interest on cause-
            way revenue bonds from tax funds unless
            refunding bonds are authorized as pro-
            vided by Article 795a. Vernon's Civil
            Statutes.



                                    Very truly yours,

                                    WAGGONER CARR

                      .~         .;ynY?&99+




APPROVED:                                Assistant

OPINION COMMITTEE
W. V. Geppert, Chairman
Howard W. Nays
Dudley McCalla
Malcolm Quick



APPROVED FOR THE ATTORNEY GENERAL
By: Stanton Stone




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