              TEEEA~TORNEYGENERAL
                      OF TEXAS
                           AUIXVI-IN.TZCKAS         787ll




                                 January    17, 1974


The Honorable Joe D. Carter,                         Opinion No.     H- 214
Chairman
Texas Water Rights Commission                        Re:    Validity and effect of
P. 0. Box 13207. Capitol Station                     allocation of funds appropriated
Austin, Texas   787ll                                to the Water Rights Commission
                                                     to the Neches River Conservation
                                                     District (House Bill 139, Page III-
                                                     156. Item 13)

Dear Mr.   Carter:

    Your opinion request     provides    the following      information:

                  “The Commission     has authorized me to seek
            your opinion on the following appropriation     made:as
            Item 13, page III-156, ~by the 63rd~ Legislature.   Regular
            Session,~ 1973, as a part of the appropriations   for this
            State agency:

            For allocation to the Neches River Conservation                District
            Year ending August 31. 1974. . . $21,740
            Year ending August 31, 1975. . . $21,740

                     “On page III-159   is a rider   which reads      as follows:

                         ‘The Nechis River Conservation   District,
                         for whom appropriations   are made above,
                         &all repay the State of Texas from funds
                         received from sources other thanthe State
                         of Texas in the amount of the appropriation
                         made to the District.  ’”




                                           p. 999
 The Honorable        Joe D.   Carter,   page 2 (H-214)




     Concerning this appropriation   which is made to the Water               Rights Commission
and not to the District, you first inquire, “Is the appropriation             valid as to purpose?”

       It is well settled that ‘I[ elxcept as limited by constitutional   provisions,    the
 legislative    body of the state has absolute control over its finances.     . . and it may
 direct and control the disposition of [ state] funds. ” 81.C. J. S. States $132 (1953).
 The Texas Supreme Court considered          it a “well-recognized   principle of constitu-
 tional law” that the legislature     may make any law not prohibited by the state or
federal constitution.      Shepherd v. San Jacinto Junior College District,       363 S. W.
 2d 742,     743 (Tex. 1963).    Thus unless contravened by a constitutional      provision,
the appropriation     is valid.

      Article   16,   $ 59 of the Texas    Constitution   indicates   that:

                “(a) The conservation      and development     of all of the
                natural resources      of this State, including the control,
                storing,   preservation    and distribution of its storm
                and flood waters,     the waters of its rivers and streams,
                for irrigation,   power and all other useful purposes,
                the reclamation    and irrigation of its arid, semi-arid
                and other lands needing irrigation,        the reclamation
                and drainage of its overflowed       lands, and other lands
                needing,drainage,     the conservation     and development
                of its forests,   water and hydro-electric      power, the
                navigation of its inland and coastal waters,         and the
                preservation    and conservation     of all such natural
                resources    of the State are each and all hereby declared
                public rights and duties; and the Legislature         shall pass
                all such laws as may be appropriate         thereto. ”

       The Neches River Conservation      District was created by and functions accord-
 ing to Article 8280-108,    V. T. C. S. It is “. . . a governmental agency, body
politic and corporate,   vested with all the authority as such under the Constitution
 and Laws of the State. . . . I’ It is authorized:

                II. . . to construct, maintain and operate, in the valleys
                of the Sabine and Neches Rivers and their tributaries,




                                            p.   1000
             The Honorable    Joe D.   Carter,   page 3   (H-214)




                           within or without the boundaries of such district,
                           any and all works deemed essential to the operation
                           of the district and for its administration     in the control,
                           storing, preservation     and distribution to all useful
                           purposes of the waters of the Sabine and Neches Rivers
                           and their tributary streams,      including the storm and
                           flood waters thereof; and such district shall have and
                           be recognized    to exercise  such authority and power
                           of control and regulation over such waters of the Sabine
                           and Neches Rivers and their tributaries        as may be
                           exercised by the State of Texas,       subject to the provisions
                           of the .ConstiMion and the Acts of the Legislature.      I’
                      .~.. (Sec. 1, Art. 8280-108 V. T. C.S. )

                 Furthermore,   the District is subject to the continuing supervision of the
             Texas Water Rights Commission.      Vernon18 Texas Water Code, 5 6.074;
             Vernon’s  Texas Civil Statutes, Art. 8280-108,   $15.

                   We’assume    that the funds in question     will be used to advance the statutory
              purpose of the District.    As the statutory     purpose of the District is declar~ed
             .by the Constitution to be a public duty and      as the District is subject to the
              supervision  of the State through the Texas       Water Rights Commission,     we cannot
              say as a matter of law that the expenditure        is not for a proper state purpose.

                  Article 16. Section 59 of the Texas Constitution prevents the Legislature
             from It. . . [providing]   for any indebtedness     against any reclamation      district
             unless such proposition     shall first be submitted to .the qualified property tax-
             paying voters of such district and the proposftion       adopted. ” This provision
             applies only to indebtedness     which is to be paid from taxes rather than revenue.
             Austin Mill & Grain Co. v. Brown County Water Improvement                District No. 1,
             128 S. W. 2d 829 (Tex. Civ. App. Austin 1939). -138             S. W. 2d 523 (Teat. 1940).
             As the Neches River Conservation        District has no taxing authority,       Vernon’s
             Texas Civil Statutes,    Art. 8280-108,    5 1, the Legislature    is not providing for
             indebtedness against the district in an unconstitutional        manner.

     1             We find no constitutional  prohibition against the appropriation  of these
     >       funds or the requirement    that they be repaid to the State and thus your first
         r    question is answered in the affirmative.




\                                                  p.   1001
    0;
The Honorable   Joe D.   Carter,    page 4     (H-214)




     Your second question is, “Can the Texas             Water   Rights   Commission      pay
the money in a lump sum to the District? ‘I

      Appropriations    of this nature are often paid in a lump sum.     In Attorney
General Opinion MS-88 (1953), the Comptroller          was allowed to pay a $30, 000
appropriation    to the Sabine River Authority in a lump sum.       This appropriation
was a loan of the same nature as the one in question here.         Similarly,    Attorney
General Opinion M-1044 (1972) considered         an appropriation providing,    “There
is hereby appropriated      $5, 000 out of the General Revenue Fund for the biennium
beginning September 1, 1971, for all necessary        operating expenses in conjunction
with the operation of Elm Creek Water Control District. ‘I The opinion concluded,
I,. . * that the Legislature    intended that the District might receive the full lump
sum at any time during the biennium for which it was appropriated.          ‘I’ A $50, 000
appropriation    to the Red River Authority was authorized as a lump sum by Attorney
General Opinion WW-1188 (1961).

     There is no language in the appropriations indicating payment in other than
a lump sum and, therefore,   you are advised that lump sum payments are autho-
rized on an annual basis.

    Your third question is, “What administrative documents                 are needed to
accomplish the loan and repayment thereof to the State? ”

     In the body of your letter    you pose    several    related   questions   as follows:

             “Since this has been referred to as a ‘loan’ from the
             State, what security is to be required,  what papers
             must be processed   and what duties, if any, does this
             Commission   have to supervise  and service the loan?
             On repayment of the money, under what appropriation
             number will it be deposited into the~State Treasury?”

     You have correctly described the appropriation  as “somewhat                vague”    and we
have found no specific guides to answer your inquiries.

      The legislature has not provided for a repayment schedule or required secu-
rity.   As there are no specific legislative guidelines for repayment, we believe




                                       p.     1002
The Honorable    Joe D.   Carter,   page 5 (H-214)




the procedure for repayment should be determined by the District and the
Commission     in consultation with the Treasurer,    the Comptroller   and the State
Auditor.   Any payment schedule or other arrangement         agreed to between you
and the district should be reduced to writing,     but no formal documents are
required.    We do not see any provision    requiring the district to put up security
for the loan.    The repayments,   although it is likely they will be administered
by the Water Rights Commission,       will be to the credit of the State as a whole
rather than the Commission.

                                          SUMMARY

              The appropriation    to the Texas Water Rights Commission
     for allocation   to the Neches River Conservation       District .is valid.
     Said appropriations     may be paid annually in a lump sum.         Repayment
     by the District,    as called for in the appropriation,     shall be made under
     arrangements      to be made between the Commis,sion        and. the District
     in consultation with the Treasurer,      the Comptroller      and the State
     Auditor and the money should be deposited inthe Treasury             to the credit
     of the State.




                                                     Attdrney   General   of Texas




DAVID M. KENDALL,          Chairman
Opinion Committee




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