                  OFFICE     OF THE    ATTORNEY      GENERAL      OF TEXAS
                                           AUSTIN
GROVERSULLERS
AT~ORNEV
       GENERAL




Honorable         E. H. fonwf,     President
~0-8       c0ilege      or   a ta ld   muatrier
Kin    *@Vi1lo,      Teur

                                             opinion     HO.   0-6993
Dear Sltz                                    If*: Authority       or
                                                    rnm0t0r8      0r




a propo8*4.Vetemn*
meet the lxl8tin6             8


Attornel @enerr
mm 0r money rr                                                         The benk 18 oon-
                                                          to emume thla oharaoter
                                                     etion of whethecthe      Boar4 om
                                                     loeel or inrtitutlonal     rw8
                                                    l houring‘proojeot    rn inadequate.
                                         tutea    are pertinent        to the question



                           the Boar4 or Mreotora  of the Colleuo
          or Arte ani &wIustrier are hereby aererally     author-
          ised and uapowere4 jg oan truat or oauira thra\g4
          t-Us   or Lowe to be obtaLed     from the 0oternmont
          or the Unlteb Steter,    or eny agenoy or agenoieo
          ther eoi , ctreated under the National Rmoovery Aot,
Hon. E. I?. Jones,     page 2




     or otherwise   oreeted by the Federal Qovsrnment
     or iron any other aouroe mlvate     OP ~ubllo,
     without ooat to the Stete of Texas. and 8OOeDt
     title,  aubjeot to auoh conditions   6nd limits-
     tiona as may be preaorlbed by eeoh of as14
     ~~~~~~lQ~mi~@r~~a, kltohena and dining hells,
                     rem es, student eotlvlty   bulldln4a.
                                                         -
     gymiealr ,-•thLetlo   bulldinsa an4 atadia, end auoh
     other bui3dlnga ,ea say be needed for the good of

     ZZ%l$W~*~,“,e~~;“,t          Z%oiXZt~~o~E%~n
     the total ooat, tme or oonatruotlon.           oemoitlr
      of auoh bulldlz&a;- as well es ‘the other plans- en4
     apeoltloationa    have been approved by the reapea-
     tlve Cbovernlng Roerda~ prwlded,        however, t&t
     the Legislature    ahall. never meke an appropriation
     out or the general rund or this State,          either in
     the r e g u lalpproprletlon
                     r              bill or In a aupple-
     mental or emergeno appropriation         bill,   for the
     purpoae 0r equipping or r0r the purpooe 0r pur-
     ohaeing and lnatalllng      any utility   oonneotlona
     in en9 oi the bulldlnga ereoted under and bg~
     virtue   or the provlalona or this A0t.w
           Sea.   2.
           II. . . .

            That said Boards ere rurther euthorlzed to
     make eny oontreot with retersnae to the oollea-
     tlon and dlapoalti.on     of the revenuea derived from
     any building 80 oonstruoted        ln the loqulmltion or
     oonatruotion ,menagement, and malntensnoe 0r any
     building or buildinga acquired hereunder. In refer-
     enoe to the aequlaltion       of atudent aotlvlty      bulld-
     inga, steale,     gymnasie,~nd all ohareoter or athletie
     buildings,    said Boarde 81‘8 authorized elao to m&e
     oontraota with reference        to the aolleotlon    and aa-
     position    of revenues to soorue to euoh rsapeotlve
     lnatltutiona     from aotloltlea,    ethletlo    eventa, en4
     gamee. in which naid reepeotlve       institutions     per-
     tiolpate   swag rroin e8Id Institutiona,        a8 well ma
                                                            93.9




et said lnstltutlona;      and in antlolpetlon    or the
oolleotion   of suoh revanuea,      and ror the purpoaa
of paying the ooat of the oonatruotlon         or ao-
qulaltlon   or said bulldlng or bull4ln~a and
grounds, said Boards are reverally         empowered by
resolution   to authorize,    sell,   en4 deliver  its
iiegotleble  bonds or notes ttom time to time end
  A auoh amount or lmfmna 8

be oolleoted  after pnJaent In rull ahell have
been oompleted for the bulldi~    or bullalnga  ror
whloh said fees shall be pledged.    Thereefter  the
right  or sold rrapeotlve Boab48 ‘to fix oharms
end reea shell depend on laws other than thli Aat
as hereby amended. Any bonds or iiotra insue
hereunder ahall beer
six ( 5%)per ~o ent9ef
meture not more t&n rmty       se**   rrom   dete.
(Bmphaala supplied. )

      Sea. 3. Subject to the above restriotlona,
eeoh of said Boer&a 1s given crcmplete dlaoretlon
in rixiugthe    r0m,    oond.ltlona and details  or auoh
bonds or notes.      Any bOnda or notes lesuea here-
under rhall not be en lndebte4neaa of the State or
Tams, but shall be peyable solely rmn the revenuea
to ba derived fro&u the operation     ,ot sold buildings;
provlaod that euoh bonds may be reilnsnoed       by the
raid Boards whenever auoh eotlon IS round by the
Board to be naoeaa8ry.
      “*   . . .

      Seo.   4.

      Vsoh or said BosrdS la authorized end earpowered
to pledge all or a part of such revenuae to the pay-
ment of suoh bonds or notes, end to enter euoh rgree-
ments regarding the lapoaltlon  oi eutilolent   ahergea
end the oolleGtiOn, pledge and diSpOaitiOn    Or suoh
revenues a~ it may deem proper.  In all oaaeB where
Zion. E. 8. Jones,     gage 4




     existing   bulldiwa    or atruoturea   ere repaired   or
     snlerged or to whioh additions       are aonatruoted,
     the board shall also have the power end are hero-
     by authorized to pledge,      inoumbeti end/or dlapoae
     0r the net revenue,* 0r tauoh exlatihg buildings or
     struoturee   as well aa to pledge, lhoumber ax&d/or
     dispose 0r the revanuo derived rrax the eaaitiona
     or hprwomenta       to au&h 8truotwea.
           (1. . . .

            vEeoh oi acid boar&r la hereby luthorlzed en4
     empowered to pled-      the unused pert oi,any revenuea
     rrom salt-llquldetln4     bullainga ror the ecmatruotlon
     of lnp other bulldln&w auoh board mar deem neoeaaery.
     Eeoh OS mid boerds is authmlted         cad empisuered to
     pledge   the rantala oi dormitO~le8,     oottegea,   or other
     lnoome beering praparty ror the repelr,         enlargament,
     or oonatruotlon     or any other bulldlngr     auoh boar4
     mar deem neOeaaer~.w
           Artlole     2909~.
           Reotlon     1.

           I). . . . . . the Boar4 of DZreatore of the Colle(te
     or Arts end Induatrlea    ore hereby authorlred     an4 em-
     powered to ereot and equip, end to omtraot         with an)r
     peraon,flrm   or oorpomtlon,for     the ereotlon,oampletlon
     and equipping or dwmltoriea,       oottema,or    etaaiuma,to
     ba erected either on the omapua or reel estate then
     owned by aeld aollegea,    av on other reel eatete pur-
     oheaed or leased for the purpose, and the Sal4 Board8
     oi Mreotors    are hereby l  xpreasly euthorlaed     to pur-
     ahaae, or leeae, additional     real entats, Sor auoh
     purposes, provided said Institutions       hove auffiolent
     surplus rrom local funds, but not eroeedlng twenty-
     rlvr (25s) per cent or the total for a81 tlsoal         year,
     to pay oeah for any purohese Ot land; or the purohaae
     of land is made rrum runda derived imai the aale of
     ravenue bonds or notes. The bomla or notes authorized
     herein are to be paid solely front the revenuea of the
     dormitorlss,   oottagea and stadium, and shall never be
     oherged against the State nor any 6pprupriatIon         made
Hon. E. N. Jonea,     page 5




     by the “tate nor shall any portion of &aid approprla-
     tfon ever be used for the psyment of mid notes or
     bonda; nor ehall any looal or institutional     funde in
     ax0888 or twenty-rive    (25%) per cent 0r the tats1 r0r
     any oalendor yeer ever be used for the payment of said
     notes or bonds.    It being the intention   of the Legla-
     Zature to authorize the payment or said notee and bonda
     solely rra revenuea derived from the lmprovemonts
     authorized herein end an emergency to be au plemented
     rrom looel funds not lxoseding twenty-five     7 25%) per
     oent ror any rlaoal year.
          sea.   3.

             *In payment for the ereotlon,    oompletlon and
     equipping or suoh dormltorlea,      oottagea and 8tadiuma,
     and the purchase of the neoesssry sites thereto,        the
     Boarda aroreeald    are further authorized and l    mpoWared
     to issue their obllgatlona     in such 8u.m or suma and upon
     auoh term8 and oondltlona as to raid dlreotora        may 8eem
     advisable,    snd aa aeaurlty  for the payment thereof to.
     Dledae the net rents. roes. revenue8       end lnoomea iron
     ihe hprovementa to 60 erehted hereunder.          &vi bonda or
     note8 Issued hereunder shall beer intereat        at the rate
     not to exoeed six (6%) wr oent uer annum and ahal.
     finally    mture  not more then twenty ytara rrau da=
     Tmpha ala auppli ed. )

          NO.    4.

            *The atoreaald Bosrds are heroby euthorised   and
     empowered to pledge the unuaed part of sny revenue8
     from 8elr-liquidating   bulldlnga ror the oonatruotlon      or
     additiona to said buildinga or the oonstruetlon     of any
     other building8 and the purohaae oi the neoemary      8ites
     thereto suoh Boards may deem neoeasary,    provided that
     any subsequent issue of revenue bonds or notes shall be
     a aeoond lien on said net revenuea, rents, reea and
     inoomcss and shell be inferior   to any outstsndlng revenue8,
     bonds or notes whioh are seoured by e pledge of said net
     revenuea, rents, ree8 and incomes.
                                                                              .   LL
                                                                   9 22
                                                                   c

HOU. E. N. Jones,      page 6
                                                                                       I




           $00.   5.
            Vhe Boarda afor~esald are hereby authorized
     and dlreoted to eatabliah and malntein such aohedule
     or rates, fees end ohargea ror the uee of the iaoll-
     ltlea arrorded by Its dormitories,    oottagea and
     stadiuma, and the revenue ircm the athletio     iielda
     and stadIuma, v&ioh rates, ream and ahargaa shall
     be in an amount at least auffloient    ta pay the opa-
     atlng and malntenanoa ahargea thorwt      end ta pay tb,
     prlaelpel  and intereat  representing  the ladebtedaw8
     against said revenum,    rents,  feea and inoamer.
           Sea. 7.
           *All re.venue bonds shall be examined and lppravod
     by the Attorney Ganaral oi the State of Texaal adl the
     f3tate Auditor shall apprave auoh revenue boada ar rate-
     ‘me notes otter an examination ai revenue8 whloh ahowa
     a naaon~ble  proapeot of adequate roata, lao~~e, fees
     ar ohargoa to pay prlnolpal   amd lntoroat,   and a11 ap-
     proved bands shall be regiaterrd    In the oi?loa af. %ha
     C~ptroller  or Pub110 Aooounta or the State 0r Tima*.*

             It will be noted that under the prorlalona      oi Artlola
  26030, the Board la outhorlaed to laaua its      revanue nabe for
 tha purposes    met Zarth in your latter,    the statutory   aandlt~lona
  being that the note shall bear lnteroat      at not to uoeed llx
 p eroent (64) p er lrmm, and ahall tlnally matwe not wra than
 40 years from date. Interpreting     this statute,    Opl5lon Ito.@-1694,,
  or this department, held that under the provIalona af Artlole
  26030, the Board oi Regents or the State Teaahara College of
 Texas wan authoriaed to exeoute a #lQ+OOOnote, payable in 18
 ,yeara, ror the oonstruotlon   or a     at ottlae   building on the
 main campus oi Worth Texas State Tlaohera’ College.          The opinion
  rurther held that the Boerd or Regents was not empowered to pledga
  looal runt%8 whleh mey be available    severe1 years In t&e future for
  the payment or this note. The opinion     pointed out that Art. 2909s
  “,:a:;:   apply because of the type of building desired to ba
          .
           Artlolo 29090, however, does e!jply to ‘fdormItorleaW
or woottageaW whioh are the olaes of buildin:;ta your Board de-
sir88 to contract ror and areot.       It 18 noted that this Artiolo
author$xsa your Boerd to issue its revenue note, the oonditlona
being (Sec. 3) that such note ehall beer interest       at a rate not
to exoeed 6s aer annum and shall iinally      mature not mare than
20 years From d&e.     In Opinion No. O-1273, this department held
that Coation 1 0r Artlola 29090 I. . . . expreaaly provides that
la the event the revenues     derived from auoh improvements are la-
auiriolent  to meet the annual debt requirements,      then and la t&t
event the fund8 may be 8upplamenteU from 10081 iunda not exoeedirg
25% ror any ilao     year. ..?*    Qplalon No. 04836 advlaed the Board
of Regents of the State Teaohera’ Colleges       thet North Taxer Stat.
Teacher8 College we8 authorized to retire      rovbnue bondlr inaued
ror the oonatzuotlon   oi oartaln oollage buildings     by using a aur-
plum in its loos1 fund.
            Ln pa8stng, we call your attention      al83 to Artlele
2654d which provides that your Boar4 oi’Dlrector8        may retain eon-
trol of all loeel fun48 and plaoe the Iame In a lpoal depository.
By Se&Ion 88 of this Statute , auoh oontral       la made aubaenlent
to the will ,of the Leglrlaturr,     .a l
                                        8xpreaaed in its biennial    ap-
proprlation  bill.   In thla oonnaotlon,    we point out that the pro-
vlalon8 or the epproprlatlon     bill ror the eduoetloncll lnatltutlonr
oi the Stata,as enacted by the 49th Legislature,        appreprletea   auoh
looal ruada ror wimprovem*nta” alit other pur>oaea.        Sac Chrpter 377,
Aota of the Regular Beamion of the 49th ~glalature,         p. 804.
            You are therefore reapeettullp advised that, in the
oplnlen or thlr d8partmant, your Board may prooaed under either
ArtIola:: 2909e or 26030 to erreot the loan In question. Provlalona
ror its payment may be nada as provlQod in either of 88ti Artlolea.




JDS:rt                                                     Aaaletati.
