     OFFICE     OF THE ATTORNEY      GENERAL   OF TEXAS
                            AUSTIN




Honorable W. J. UoConnell, Preeldmt
North Texarr State Teaoherrs Collage
Denton, Texan

Dear Sir:
                        Opinion Number 04eO;‘~       \
                        Re: Doe6 $hho‘.?Oaxd or Re+&nttr j
                            of Ncirth Texas State Teds&-




November 7th.




                      asp followa;
           Veo. 1. * * * and the Board or R6genta or
      the State Teaohere College * * l are hereby aev-
      orally authorized and empowered to oonetruot or
      aoquire through runas or loans to be obtalnsd
      from the Government 0r the United States, or any
      agenoy or agenolea .thereor, oreated under the
      National Reoovery Aot, or oth%rwlse oreated by
     .the Federal Government or from any other aouroe
Honorable   W. J. EoConnell,     page $8




     private   or publlo, without oost to the State
     or Texas, and aooept title,      subjaot to suoh
     oondltlona and 1lmLtations aa may be presorlb-
     ad by eaoh of said Boards, dormitories,          kltoh-
     ens and dining hells,     hospitals,   libraries,
     student aotlvity    buildings,   -ala,        athletlo
     buildings and stadla, and auoh other buildinga
     as may be needed ror the good of the lnatltu-
     tlon and the moral welfare and social oonduot
     0r the 5tUa5nt5    or such inetltutlona     when the
     total ooat, type or oonstruotlon,        oapaolty or
     suoh buildings,    ee well as the other plans and
     apeolrloatlons    hsve been approved by the re-
     spectlva Governing Boards; provided,        hOwever,
     that the Leglalature     shall never make an ap-
     propriation    out or the general rpnd or thla
     State, either in the regular approprletlon           bill
     or in a supplemental or emergenoy approprletlon
     bill,  ror the purpose or’ equipping or ror the
     purpose or purohasing and installing        any utility
     oonneotlona.in    any of the buildings     ereoted under
     and by virtue Or the provlalons       or thla Aot.*

          "QBO. i?. * * * That said Boords are further
     authorized to make any oontrsot with reference
     to the collectlon        ead dispodltion       of the revenuee
     &rived      rmn   anr builainix a0 oonstruoted         in the
     5OWi.5itiOn      OT OOI35trUOtiOn.     loeMK5ment.     and main-
     t5nanOe of any buildlnR or buildinna’aoauired
     hereunder.       In reference      to the aoquisitlon      or
     student activity        bulldlngs,    stadla,    gymnasia, and
     all oharaoter or athletlo           buildings,    sald,Boarda
     are authorized       also to make oontraote with refer-
     ence to the oolleotlon         6na disposition       or rqvenuea
     to aoorue to suoh respeotlve            lnatltutlone     rrom
     sctlvltlea,      athletlo    events, and games in which
      said reopeotlve      institutiona      psrtlolpate    away
     from said Institutions,          a6 well as at said inetl-
     tutlons;      and in antlolpatlon       oi the colleotlon     oi
      such revenuea, and for the purpose of paring the
      cost or the oonetruotlon          or aoqulsltion     0r eald
Honoreblb V. J. YoOonnell,       page $3




    ‘building or buildings and grcunda, said Boards
     are severally   ampolosred by resolution  to euthor-
     ize, sell,   and~dellver lta negotiable   bonds or
     notea mm tima to tlaas OBd in suoh emount or
     amounts as It msy oonalder naoeasary.       The reea
     and otmrgea so rlxad ror the use or any such
     bulldlng.or   buildings  shell not be collected
     arter payment In full shell have been oonpleted
     ror the bullding or bulldlnge     Sor which said
     rees shall be pledged.     Theraatter the right
     of said respaotlve    Boarde to fix oharges en$
     fees shell depend on laws other than this Act
     ae hereby- emended. Any bonds or notes Issued
     hereunder shall beer lntereat at not to exoeed
      air (6% ~per oent per annum, and shall-rlnally
     meture not more. than forty years from data.”
          Wee. 3. Sub&at to the above reatriotlona,
     each of said Boardd Is given complete dlsoretion
     In riring t?ie r0m,. oonaltlona    end betalla  or
     suoh bonds or notesb’ Any bonds or notes issued
     hereunder shell not be an indebtedness’b~      the
     State of TemS,‘but     ahall be -payable solely ‘rrom
     the revanuaa to be derived rrom the operetion~ or
     seld buildingsi   provided that euoh bonda msy be
     retlnanoed  by.the aaLa Boarda whenever auoh aotlon
     is round by the Board to be neoetmaryi

          WProvlded,~ however, that tbe~ provIalona or this     I
     Aot shell not epply,.~to, any proceadlnga,  levlae,  or
     to any bonde or warrenta issued thareunder,      the
     valIalty  or which baa’been Oont56tQd or attachsd
     in suit or lltlgatlon.whIoh     la pandI!q at the-time
     this Act becomes e law, or which may be riled with-
     in thirty   (30) dsya.qrter  this Aot:beoonee a law.”
                           .~~.
                            ‘+ ‘*~~ *   a   Y   /


          “See.   9.         further
                       movlaea              that each or said
      Boards meg meke such oontreota        aa rzay be neces-

     -
Honorable   X. J. UoConnell,    page $4




            Under thIa artlolc    the Legislature   has author-
lzad the Boer8 of Ragents of North Texas Ststa Teaoher6
College to aoqulre oertaln revenue-bearing         property and
to make any oontreot with re~erenoa to the oolleotlon           and
dlsposftlon    or the revenuea derived rrom any bulldlng so
oonstruoted    in the aoqu.lsltfon   or oonatruotlon,    msnega-
ment ana z3alntenenoe of any beilalng       or buildinga aoqulr-
ad thereunder.
          Thererore,   it ii3 the oplnIo~ or this department
that the Board ot Regents has the authority      to enter into
a contreot with reference. to insuring said property and to
pledge a portion or the lnooloe from revenue-bearing     proper-
ties .for lnsuranoe purpoaes;when said property has been ao-
quired under the euthority,, of Artlole   26030, Vernon’s Anno-
tated Civil  Statutes.       :i

          Ii bonds are Issued in Fayment or the ‘oonstruotlon
or buildinga euthorlzcd under- thla article,    it la our opin-
ion that the Board hns the authority   to oontraot in the
bond order that a ~oertaln portlcn of the rev8nuea be set
as186 to pay for the lnauranoe on said bulldln&3.r,; The bond
order in suoh ceaea usually   oontalna a olausa   ei3ltlar .f,o
the following t

           93uoh portion Gr the grosa revenues CO be
      received   rrom the operation  or said ~dormitory
      as ~%y be required   to oreate and melntein the
      runae   hereinatter provided tar shall be set
      eslae monthly into two separate end spcolal
      funda, which are hereby provided tor,and oreat-
      ed, the first   of which funds ahall be known as
      CFER~ITICN AXD h%I?iENA?:CE Z’CXD, and the seoond
      Or which shall be known ae BONDFrm,       There
      shell be kept within the BGSD FED a sreolal
      aocount hereby provided for and cr%attd,,, known
      as the RESXRVXACCOUNT. The OPERATIGN      A?JD UAIN-
      TmxcE    FUNDshall be at all times eutrioient
      to provide   for tho reasonable cost or maintain-
      ~~~~~~~~~~~~~':~~~~~l~~~u~~~~~                :Ei%&+F-
                          shall be :n the amounts and
      aoomuleted    In ihe manner~proviaea ror * * **
      (~ndersooring   ours).
                                                                     31


Honorable W. S., bWonnel1,         page #S




         However, we aall your attention     to the fact tbst
this depesrtaent kas repeatedly    held that no insurenoe
polioy ahull be takeri out upon any of the publlo building8
OS thin State, nor upon the oontentr thereof,       in the ab-
senoe of 8 speoltio  appropriation     for that pwrpoee.   The
reason for thle holding la atstsd in our opinions xwtibers
o-3000, O-104 and o-201, oopler of which are enclosed ror
your informtion.
          Theretore,    fire lnsuranoe Fremiwne cannot be paid
out   of the loos1 oolleqe funan     or coy otber rued or the
college,   In the absence of express le&ilstive       authority.
However, Artiole      2CkO3ogives to the Board of Regenta power
tq oontraot to keep buildings       erected under the authority
or that artlole      insured ror the protection   of bondholdera.
Such insuranos      remltms my be aid only out ot the reve-
nues collected    Bron the partlcu Par building or build3qa
covered by the bond iaaue.
           Trusting   thet- thle   answera your questIon,   we are




P.ICW?ASSISTANT
ATTCI~XYGENERAL


COB-s
%lols.
