                            QMficeof tfy 2Wxnep @enera
                                          65tate of Qexae
DAN MORALES                                November 10.1992
 ATTORNEY
      GENERAL
     Mr. Kenneth H. Ashworth                          Opinion No. DM-178
     Commissioner
     Texas Higher Education                           Re: Whether a junior college may
      CoordinatingBoard                               borrow money to rehabilitate a historic
     P. 0. Box 12788                                  building under section 20.45 of the
     Austin,Texas 78711                               Education Code (RQ-79)

     Dear Commissioner Ashworth:

            You ask whether St. Philip’s College, a branch of the Alamo Community
     College District, has authority under section 20.45 of the Education Code to borrow
     money to rehabilitate historic buildings. This provision states as follows:
                     The board of trustees of any school district of Texas is
                hereby authorized to pledge its delinquent school taxes levied
                for local maintenance purposes for specific school years as
                security for a loan, and such delinquent taxes pledged shall be
                applied against the principal and interest of the loan as they are
                collected. Provided, there shall be no pledging of delinquent
                taxes levied for school bonds for purposes herein set out. Funds
                secured through such loans may be employed for any legal
                maintenance expenditure or purpose of the school district.
                Provided further, that such loans may bear interest at a rate not
                to exceed the maximum rate provided by.. . [section 2(a) of
                article 717k-2, V.T.C.S.].
     Educ. Code 9 20.45.’

             Q’bcrcis DOjudicial decision addrcsing the constituti~ty   of sxtioa 20.45 of the JZducation
     code, but tbe court ia AUm Y. CZhmdkv       Indq. Sch. Disk, 347 S.W.Zd 2l (TCJLCiv. App-Waco
     l%l, writ rcf’d) addracd a similar statute, formerlyV.T.C.S. article 27f%, now sxtioa 20.43 of the
     Educatioo Code. Section 20.43 autbh        school distrh to issue time wanants for cpmitkd purposes,
     payable out of any funds available at maturity,and “in effect, pkdgcs delinquent taxes (except bond
     taxes), pc~Ities and interest to payment of outstanding warrants.’ 341 S.WJ.d at 28. The Texas
     tJmstimtion plac~ limits on deficit finan+ by cities and counties,m Tea Cast. art. JU, 00 57, but
     ~WSnot plaec.&nit timitson schooldistric%.347 S.WS!dat 29 n.1. The Allen amt found that
     former artivtidc
                    27%~. did not violate article W, section 3 of the Texas Gmstithon, the constitutional
     provision rdatiq to school fulandng.



                                              p. 930
Mr. Kenneth H. Ashworth - Page 2         (DM-178)




       Your specific question is as follows:

               Does Tex. Educ. Code 020.45 apply to St. Philip’s College,
          permitting it to pledge delinquent school taxes levied for local
          maintenance purposes as security for a loan, the pmceeds of
          which will be used to rehabilitate historic buildings on tbe
          college campus?
       We assume for purposes of this opinion tbat rehabilitating the buildings will
serve the educational purposes of the junior college district. See Tcrru A&pith
Gmmiffee u. Dalh Comfy Commun& College Dirt, 554 S.WZd 924,930-31 (Tex.
1977).

       We first must decide whether the board of trustees of a junior college district
may borrow money under the authority of section 20.45 of the Education Code.
Section 20.45 expressly applies only to the “board of trustees of arty school dirfkt of
Teravr,”and does not refer to the board of trustees of a ammmnity college district.
B.&c. Code 0 20.45 (emphasis added). However, section l30.084 of tbe Education
code provides as follows:
               The board of trustees of junior college districts shall ba
          governed in the establishment, management and control of the
          junior college by the general law governing the establishment,
          management and control of independent school districts insofar
          as the general law is applicable.
         We must ascertain whether section 20.45 of the Education Code is a Jaw
“governing the establishment, management and control of independent school
districts.” In Son Antonio Union Junior Gdkge Dkt. v. Daniel, 206 S.W.2d 995 (Tex.
1947). the Texas Supreme Court considered whether section 5 of former article
28154 V.T.C.S., the predecessor of section 130.084, authorized a junior college
district to issue refunding bonds under a statute applicable to independent school
districts. Junior college districts had express authority to issue bonds, but the statute
was silent as to refunding bonds. The court concluded that V.T.C.S. article 28154
section 5 did not confer upon junior college districts the independent school
districts’ statutory authority to refund bonds. The provision, which consisted of the
same wording as section l30.084 of the Education Code, was described as follows:
          [Tlhe language is clearly limited to the authority of tbe trustees
          todirectthe&egeand...         it has no reference to their authority
          with respect to the disfrid, which alone can issue bonds.
206. S.W.2d at 998 (emphasis in original).

                                      p. 931
Mr. Kenneth H. Ashworth - Page 3         W-179)




        The above description of the predecessor of section 130.084 is difkult to
apply to other questions under that provision, because the board of trustees’
authority with respect to the district often camtot be distinguished from its authority
with respect to the colleges of the district. For example, ad valorem taxes are levied
by the governing board of a junior college district for the purpose of maintaining the
colleges. Educ. Code 0 130.122(a). However, other reasoning in the Son Antonio
Union Junior College D&&t, opinion illuminates its remarks about the predecessor
of section 130.084. The court cited both the long-standing opinion of the attorney
general tbat junior college districts had no power to issue retknding bonds and the
legislature’s practice of expressly granting political subdivisions authority to issue
refunding bonds. 206 S.W.2d at 998-1000. Since the power to issue refimding bonds
had to be expressly conferred by statute on a governing body, that power could not
be conferred on a junior college district by section 130.084, which does not expressly
refer to refunding bonds.

       The San Antonio Union Jwtior College Dibct       opinion indicates that there are
limits to the school district powers that section 130.084 confers on junior college
districts, but these appear to be narrow limits. Moreover, in Skpheni v. San Jacinto
Junior Co&ge Disk, 363 S.W.2.d 742 (Tex. 1%2), the supreme court decided that
junior college districts are “school districts” within the constitutional authorization
for ad valorem taxation found in article VII, section 3 of the Texas Constitution. By
tinding that junior college districts are school districts for purposes of the
constitutional provision on ad valorem taxatioq the Shepknf case supports the
conch&on that provisions on ad valorem taxation relating to independent school
districts may apply to junior colleges through section 130.084 of the Education
Code.

        Although we have found no judicial decisions on section 130.084 subsequent
to Son Antonio Union Junior Cdlege Dish?, several attorney general opinions have
addressed this provision. This office has found that section 130.084 confers upon
the governing board of a junior college district the authority of a school district to
spend local maintenance funds pursuant to section 28.48 of the Education Code,
Attorney General opinion WW-892 (1960). and to exercise the right of eminent
domain under section 23.31 of the Education Code, Attorney General Opinion
M-700 (1970). Attorney General Gpiion M-878 (1971) determined that section
20.43 of the Education Code, authoriahrg school districts to issue time warrants to
repair, renovate, and equip school buildings, applied to a junior college district
under a predecessor of section l30.084. Accordingly, we conclude that the board of
trustees of the Alamo Community College District may borrow money secured by


                                      p. 932
Mr. Kenoetb H. Ashworth - Page 4           W-178)




delinquent maintenance tax revenues pursuan t to section 20.45 of the Education
Code.

        We finally consider whether the purposes for which a loan secured under
section 20.45 may be used include the rehabilitation of a historic building. Section
20.45 allows the district to pledge taxes levied for local maintenance purposes and to
use funds secured through the pledge “for any legal maintenance expenditure or
purpose of the district” This language appears to restrict the loan funds to
expenditures for maintenance puqnxs, but you argue that section 29.45 should be
read to say that funds secured thereunder may be used “for any legal maintenance
expenditure or [legal] purpose of the district” According to your COnStructiOn, funds
secured under section 29.45 may be used for any legal purpose of the junior college
district, and are not subject to the statutory limits applicable to revenue collected for
maintellance purposes.

        Pursuant to constitutional authoriaation, the legislature may author& school
districts to levy and collect an ad valorem tax “for the further maintenance of public
free schools, and for the erection and equipment of school buildings.. . .” Tex.
Cmst. art VII, 0 3; see Shepherd, 363 S.WZd 742. Although the constitution appears
to refer to a single tax to be voted for maintenance and school building purposes,
the legislature has traditionally treated taxes for maintenance and taxes for school
building purposes as separate taxes, each requiring separate voter approval, and
each to be used only for the purpose for which it was collected. Educ. Code
00 20.02,20.04,130.122, Madeley v. Trurtees of Came Indep. Sch. Dkt., 130 S.WZd
929 (Tex. Civ. App.-Beaumont 1939, writ dism’d, judgm’t ax.); Attorney General
Opinion H-339 (1974); 2 G. BIUDEN, DIE CONSTITUTIONOF -ITIE STATE OF
TFLW AN ANNOTATEDAND COMPARATIVE                  ANALYSIS518 (1977). In Mud&y,
130 S.W.2d 929 the court construed two statutes that respectively authorized school
districts to levy and collect taxes and descrii      the pmposes for which the taxes
could be spent.2 The court stated as follows:
          The trustees of an independent school district by these two
          articles are given the power (a) to levy and collect a local tax for
          the maintenance of the district public free scboo4 and (b) to
          levy and collect a tax “for the purchase, wnrrn&m, repair or




                                      p.   933
Mr. Kenneth H. Ashworth - Page 5       (*I781




         equi>ment ofpublicjiee   school bd&i&s   within the limits of such
         district.”
l30 S.W.2d at 933 (emphasis added).

       Made@ concluded that the term “maintenance” of schools did not include
the construction of school houses.3 Made&y, l30 S.W&l at 9% see ako Love v.
Itochd    I&p. Sch. Dirt., 194 S.W. 659 (Tex. Civ. App.-Dallas 1917. writ refd).
“[M@intenance’ means current operating expenses and does not include capital
expenditures.” G. BRADEN,id. (citing iUad&y, 130 S.WZd at 929 and Love, 194
S.W. 659); see Stattford v. State Dep’t. of Highways & R&. Tmnrp., 635 S.W.2d 581
(T’ex.App.-Dallas 1982, writ refd n.r,e.) (maintenance of highways as that which is
required to preserve highway as originally constructed); People a ml. Rogem v.
Chicogo, 107 NE. 222 (Ill. 1914) (“maintenance” may include ordinary repairs).

       On reading article 20.45 as a whole, including its emergency clause, we
conclude that a loan secured under its provisions may be used only for maintenance
purposes of the district. See Gov’t Code 0311.023(7) (a court may consider the
emergency clause of a statute as an aid to ascertaining legislative intent). Article
20.45 of the Education Code was adopted with the following emergency clause:

              The fact that there are school districts with outstanding
         delinquent taxes sufficient to impair the opemtk of the& cwmt
         school prognrm and that some of these districts will be forced to
         close after seven or eight months of school unless their boards of
         trustees can pledge delinquent taxes for loans to permit the
         completion of a nine months school term, creates an
         emergency. . . .
Acts 1953,53d Leg., ch. 132,O 2, at 446 (emphasis added).

       The emergency clause indicates that the legislature wished to provide a
funding source for the day-today operation of schools and not for long-term capital
projects such as constructing or rehabilitating buildings. Moreover, since the
problem addressed by the legislature in article 20.45 resulted from outstanding
delinquent taxes “levied for local maintenance purposes,” it reasonably follows that




                                   p. 934
Mr. Kenneth H. A&worth - Page 6         W-178)




the legislature would require loan funds secured under the statute to be used for the
same purpose as the missing taxes. We conclude that the proceeds of a loan secured
under article m45 of the Education Code may be used only for maintenance
purposesofaschooldktrkt.

        We have no information about the extent of the repairs necessary to
rehabilitate the historic buildings on the campus of St. Philip’s College; however,
your brief suggests that funds subject to the traditional limits on maintenance funds
could not be used for the proposed projezt. If the implication of your brief is
amect, then the proceeds of a loan secured under article m.45 of the Education
Code may not be used to rehabilitate historic buildings on the campus of St. Philip’s
College.




               The governing body of a junior college has the authority of
          an independent school district under section m.45 of the
          Education Code to pledge its delinquent local maintenance
          taxes as sea&y for a loan. Loan proceeds secured under
          section m.45 may be used only for maintenance purposes of a
          school district or junior college district. Accordingly, the Alamo
          community College District may use funds secured through a
          loan under section 20.45 of the Education Code only for
          maintenance purposes of the junior college district.




                                                  DAN      MORALES
                                                  Attorney General of Texas




                                    p. 935
Mr.KcnnethH.Ashwortb       - Page 7    W-178)




WIIL PRYOR
First Assistant Attorney General

MARYKELLER
Deputy Assistant Attorney General

RENEAHlQ<s
Special Assistant Attorney General

MADEUSNE B. JOHNSON
Chair, Opinion Committee

Prepared by Susan L Garrison
Assistant Attorney General




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