Untitled Texas Attorney General Opinion ( 1939 )

THE ATTORNEY GENERAL
OFTEXAS
Gerald C. Harm Awmrx~. -
-0-
Hr.~0, A. Eight
Chief A.ocountant
Board of County and Dfrtrlct Road Indebtedness
Austin, Texas
Dear Sir:
Open lumberO-1293
: Constrnotlon ef cortaln
protirions of Howe Bill j&M,
ssed by the Fortr-sixth Le i
r rlaturo, Bogular gerrion,``l Fi
39
Uo kare your letter of Augupt 16, 1939, in rrhlsh you
ask our oplnlon of soteral questions vdxlch have arisen oat
of the above captioned bill which outlines the proordure of
the bard in the administration of that Act.
Under dato ef.Juue 9, ~1939, in our 0 Inion lo. O-908
we deterrlned the constitutionalit efthlr bi E1. It uas our
opinion that.the purpose d this bI 11 as not violative of
Art&lo 8, Section 7, or Article 3, Section 51 of our Cod-
.titution, but insofara. thd bill before u8 at that time
the hill payment of all obligations al-
attempted, g rlor to E"
ready eligi le for rticipat on, to devote the swplus
accumulated in the ounty and Road District Highwaytund
to the aymqnt of Obligation. made ell lblr for such par
ticipet 9 en for the fir8t tim by' such %ill and to other
purposes,was unconstitutlonel and would constitute a direr-
sion of a 8 ecial fund in violation of the Constitution.
House Bill #b8 as finally pasrod by the Legislature and
signed by the dovernor in our opinion has satisfactorily
removed the provision &o which we sxce~ted.
We shall take u your question8 in the order in tiich
they are presented, your Plrst question being --
Mr. G. AL. Hight, page #2
wSection 5 of the bill, after allocating
one-fourth of the occupation or exaire tax on
gasoll8r to the oredit of the available free
school fund, provides that one-fourth shall
go to and be placed to the credit of the fund
to be known as *County and goad Mstrlct High-
way Fund’ 8ubject to the visions 8nd llml-
tations of Section 3 of t $”is Act. Will you
please advise u8 what the limitations referred
to are and what effect such limitations 'if
any, would be upon the use to be made 08 the
County and goad Distriat Hi hway Fund and the
operations of the Board of Eounty and Dlstriat
Road Indek&ednessPm
By reference to Section 3 we find that It expres$ly
dealswith the duties df the Highway Department and directs
developent of highways and the maintenance thereof “from.
funds available to the State Highway Department.” Section
5 divides the proaeeds of the occupation tax on the business
of selling gasoline as follows: One-fourth to the Available
School F’und, one-fourth to the County and Road District kilgh-
way Fund subject to the revisions and limitations of See-
tion 3 08 this Act, and t g e remainder to the State Highway
Department. A careful reading of Section 3 of the Act re-
reals no limitations, whatever upon the one-fourth allo-
aated to the County 8nd Road Dkriot Highway Fund. Under
the rules of etatutory constrB?tlon it has been decided.
that a statute or a provision::thereof should not be given
a construction rendering it meaningless, if the langtmge aan
otherwise be construed. See City of Hopston Y.’ Allred 71'
S. W. (261 2510 Galveston H & Ii. Bi 00; t.Anderson, 249
S.W. 998; Stoipe v. Karren, 191 S.W. 600; Texas k Pacific
Ry. Co. v. Taplo+, 118 S.W. 1097. It is. obvious from the
reading of Section 3 that there are no limitations at all
relative to the one-fourth of the oocupation or excise tax
that is ‘allocated to the Board of County and District goad
Indebtedness under Section 5 of the Act, and it is there-
fore our conclusion that the llmitatlon imposed in Section
5 u n the funds allocated to the County end Road Metrict
Higr way Fund Is meaningless. To 8o hold does not in anywise
Impair the provision of the Act.
Mr. G. A. Right, page #3
Tour second question is as follows:
“Should this Board now include In the credit
allowed to each oouuty the total amount aid by
such county for the years 1933 to 1937 !&clualve
on their debt service, or should this bard limit
the oredit to amounts paid by each county on
issuer now outstanding and pay such credits to
the counties over the life period of the out-
standing bonds? In this oonnection you arc re-
.ferredto Conference Opinion No. 3021 rendered
by Honorable William IcCraw, Attorney General, on
Au@& 11, 1938.”
In re ly to your second question we direct your at-
tention to the x lclaration of policy contained in House Bill
6&3, Section 1, wherein It providear
“By reason of the foregoing, a heavy and undue
burden vms placed and still re8te upon the aounties
and defined road district and their inhabitants,
and both a legal and moral obligation rest upon
the State to compensate and reimburse such counties
and defined road distrfcts, which, as aforesaid,
shave performed functions resting upon the State and
have paid ex enses which were and are properly State
expenses, al E for the use and benefft of the State,
and to the extent provided herein that the State
provide funds for the .further construction of roads
;;;.esignated as a part of the State Highway Sys-
Thi. ovision Is preceded by others which call at-
tention to the Fact that the State recognires and declares
that all highways now or heretofore constitutlag a part of
the system of State highways and that all roads not conatl-
tuting a rt of such system which have been constructed in
whole or p”n part from the proceeds of bonds,,warrants or
other evidence of indebtedness issued by counties and de-
fined road district8 of the State of Texas under the la-
authorislng the same, have been and are anh will continue
to be beneficial to the State of Texas at large and have
Mr. 0. A. Eight, page #4
contributed to the general welfare, settlement and develop-
ment of the entire State. hanifestly It was Intended that
the counties or defined road dlstriatr should be corn ensated
for money expended in the construction of roads whit % by the
declaration of policy have oontrlbuted to the general welfare,
settloment and development of the entire State. We, there-
fore, answer your question as follows:
In our opinion this Board should Include in the aredit
allowed to each county the total 8mount paid by such county
for the years 1933 to 1937, Inclusive, on their debt service
on issues now outstanding or issues which may have been out-
standing at the time of the enactment of Chapter 13, Acts of
the Third Called Session of the Forty-second Legislature of
1932. Ye think that from the language of the bill ltsel!
that Is, House Bill 688, as found In paragraph 2, subsection
(h)< Section 6, which reads as follows:
WASsoon as practicable after the passage of
this Act and before the Lateral Read Account is
allocated to the counties, the Board 8hall de-
termine the amount each aount and each defined
``````r~v~:o~i~is``he
Third Called Session of the Forty-Second Legis-
lature, as amended, toward its debt serviae u n
bonds which at the time of payment were lligi go
la
to participate in the County and Road Mstrict
gighway F’und.”
it Is plain that the Intention of the Legislature is that the
counties and defined road districts be full reimbursed for
all aoney8expended on eligible issue8 for J ebt service durd
ing the years 1933 to 1937, irrespective of whether or not
there are issues now outstanding. We think the declaration
of policy is clear on this point.
The third question you have submitted reads as fol-
low. :
?In connection with the deductions of advance-
ments~made by the State from the amount credited
to the counties as provided, is it intended by
Mr. G. A. Ught, page #S
the Act that such deduction be made where possible
overthe life perled of the bonds of each county
affected, as we are now doing under authority of
the above quoted lpinlon?a
It mast be borne in mind that the express basic pur-
of this law is to lift the burden of ad valorem taxes,
the eit$9eps of the vprlous counties-
- - and defined-read _
districts which may have Often uaed for the con8truCtlon of
State higl&ys or fer the retirement of obligations incurred
in the construction of highways. In our opinion there Is
uple authorit under this law for the Board of County and
Dldrlct Road L debtedna. to make .uch deduction over the
life period of the bonds. And insofar as Opinion No. 3021,
above mentioned, luthorises and directs the payment of sums.
due the various counties * the form of increased percentages.
of rtieipation, ue readopt same and further state that any
ret gaod thus designed to accomplish the pur ose for which this
law was passed would in our opinion be wit iiin the authority.
ef the Board. Under the Attorne General’s opinion above
aited, your Board undertook to aI locate the .o-call~ed .ur lua
by my of Increased percentage. of participation o nlligi 1le
issue. and this, we think, was a proper a plicatloo and will
effectively accomplish the pur ose of the LW. You are there-
fore, advised that in our opln Eon the Board should continue the
method adopted pursuant to the authorization canferred by law
and as interpreted by Section 5 of 0 inion No. 3021, rendered
by the Attorney General, August 11, E938.
The fourth question you submit is as follows:
“1s it the duty of the Board to audit or other-
wise verify the records of expenditures er obll-
gations of each county to determine the amount of
bonds, warrants or other legal obligations issued
prior to January 2, 1939, the proceeds of which
were actually expended in acquiring rights-of-way
for State designated highways?”
To answer this question we rrfer to paragraph 2 under
subsection (h) , Section 4 of the let, whiah reads, in part, as
follow. :
Mr. 0. A. Sight, page #6
‘The moneys allocated to each county from the
Lateral Road Account ebhell be used by aid county,
r paying the~ar``atere8t and rink-
apart sufficient money to pay off and dlecharge
8aid outstandin obligations incurred for right-
of-way acqulsit f on.”
In this we find a doclaratlon of legislatlto Intent
and to properly effectuate this Intention we arc of the
opinion that It till be necessary for the Board to adopt the
same method followed in the matter of recording itors of in-
debtedness incurred in the construatlon of highways which
have been desi ated as a part of the State Highway Sydea,
that zir, the r k?ght-ef-way obligation should be handlod In
like manner as the presently “eli lble obllgatlona~. There-
fore, it is .our opinion that it w‘I11 be the duty of tho
Board to audit or otherwise verify the record of expendi-
tures or obligations of each county to determine the amount
of money aotually expended in acquiring rights-of-way ,fw
State designated highway8 in order to carry out the mandate
of this provision of the Act.
Ye quote here your fifth question, which reads as
follows:
mt are the Board’s dutloa as tho refund-
ing egentof each county.as provided in the
second paragraph of subsection (I) of Section
6 and *hat are the limitations on refunding
lhgible and ineligible Indebtedness under this
subeectiont~
We think that in order to properly interpret the
meaning of this provlaion of the bw wherein the object or
Mr. G. A. Hi&t, page #7
urpoae of the provision of the statute is not lain, it
1 ecomes necessary to read the entire section. t nder thd
rule of &atutory conetruction, all of the language used
rrhould be taken Into consideration when lndoavoring to.
ascertain the object or urpose, and in this connection
it must be noted that su1 section(i) of Section 6 begins
as follows:
*The county ~ommi88ioner8~ court ef any county
may exercise the authority now.conferred by law
to issue refunding obligations for the purpose of'
refunding an lli ible debt of the count
any defi.nea-%````i``%
ligation. when.validly issued shall be eligible
obligations within the meaning of this Act, if
mid Board of County and District I&ad Indebted-
ness shall approve the maturities of said refund-
ing obligations and the rate of interest borne by
them.,’
Then pas&g over to the last sentence of the seconds parae
graph of the same section, we find:
'All actual expenses inourred in the refund-
ing of an elinible indebtedness including the
cost of proceedings, printing fegal approval
and interest adjustment, shali be chargeable
against the moneys theretofore or thereafter
collected from ad valorem taxes, or at the op
tion of the commisslonerr~ conrt conduating such
refunding, may be paid from\any other wne under
its control and available for the purpose. z
We have underscored the term neligible lndebtednossw
for the purpose of strengthening our aonclueion,that this
section refers to pnd contemplates only that mch items of
Indebtedness shall be submitted to the Board for ap roval
rior to a refunding thereof. We refer you toSect Eon 2 of
Rouse Bill 688, which contains the definition of term8 and
expressionsused throughout the Act, and find there -- "the
expression teligible obligation' as used in this Act shall
mean obligations the proceeds of which were actually ex-
ended on State highways." We think the expression "eli i-
Ele indebtedness" synonymous with the expression "ellgib f e
Hr. 0. A. Eight, page #8
obligationw and therefore comes within this definition.
We are of the opinion that the Board’s dutioa’asto the
refunding assignment rovided in the.second paragraph of
subsection (I) of Soae Ion 6 are limltod to the refunding
of eligible obligations as defined .b this Act, and that
such duties do not extend to and lnc 1ude any 8o-called
ineligible indebtedness .whioh may or may not rticipate
in the excess funds provided herein to be are %ited to the
account to be known as the Lateral Road’Account.
Yhe last ragnph of subsection (L) makes the Board
of County and Mstr r ct Road Indebtedness the refunding agent
,of each count md as such agent is directed to cooperate
with the come1rsloners’ court of each county in effecting the
neaossary refunding of.each issue of bonds, and that the
Board shall prepare the necessary refunding order for the
commlrsion~rs~ court, prepare the proceedings and act In an
advisory and su rvisory capacit to the sad that the u-,
pense of refund f& any lssuo of i ends may be reduced to a
iinirun. gaving determined in the preaedin paragra h that
the duties of the Board in the matter of m f unding o f bonds
extend only to weligible i88uesw, it necessarily follows
that the duties 8Ileaated In this paragra h of 8ubsection
(I) oxtend to only the l liglble issues. Et Is our conclusion
that the language of this seation Is merely directory and.
that the Board shall bo required to act in that capacity only
as a means of reducing the expense of refunding any Issue of
such bonds to a mlnimum. Inasmuch as this same paragraph
requires that any item af expense incurred in connection with
a refunding must have the affirmative approval of the Board
before being Incurred, we think that in their advieory and -
supervisory capacity, they could under this law, if deemed
expedient, prepare the necessary refunding orders, roceed-
lngs and perform other duties incident to the campPetion of
a re i undiag of any issue of such bonds.
You are therefore, advised that in our opinion your
duties as euch re!unding agent with respect to the pre
tion of proceeding8 and refunding order,‘would rest wit %“in“-
the discretion of the Board and would not become mandatory
except in the event the prospective aosts of such proceedings
by other agencies appear excessive.
Ur. 8, A. Hight, page #9
Your sixth question reads as foollowe:
‘1yill you lease further advise the Board
to thorn or to w! at agency the expense of the
Board for performing the rrervices to the coun-
ties in the refundi of the county issues as
directed b the rov sions of this subsration
shall be egargod!w ’
In o u r o inio n, any l ense lnuorrod in the refund-
ing of any subh ob Elgation Is pr% arily an &nse of the
county, dofined road dirtriot or political su division ro-
posing such refundi 8nd should, therefore, be charge 8 to
such agencies.. The% et paragraph of sobsection, (i) pro-
vides, in pa&., that :
“All actual ex enses incurred In the refund-
ing of an eligible Endebtedaess including the
cost of proceedings, printing, Algal a proval and
Interest adjuetment, shall be chargeab Ee against
the monoys theretofore or thereafter collected
frem ad valorem taxes, or at the option of tho
commlrsloners~ court conducting 8ueh refunding,
may be paid from 8ny other money nnder its con-
trol and available for the purpose.”
We think this alearly indicates the Legislature’s
intention that the county, defined road dletrict or political
subdivision 8hall bear the upenee of any such refunding, and
ou muld properly char e any such expense accruing to the
!ioard in aonnectlon wit t .uch refunding to the county de-
fined road district or political rubdivision instlga& such
refunding progr8&
We quote hero your seventh question:
swan the several oounty commissloners~ courts
employ on a salary or contract basis, subject to
the oiflrmatlve approval of this Board, one or
more persons to assist in the refunding of such
indebtedness and pay for .uch service``~,t$
manner provided in the Act for the
re;st expenses of refunding eligib r l indebted-
‘.
Mr. 0. A. Bight, page #lO
It mwt be borne in mind that this law requires that
all actual cobts of refunding eligible indebtedness be mb-
Bitted to the Board for lp roval before such cost8 are in-
curred. It then follows t L t the Board must pa88 upon all
suoh items of expense and if In its opinion certain items *
of expense sought to 6e incurred are considered unnecessary,
it should disapprove. thei. The law states that only the
actual lxpense of refunding, which includes cost of pro-
ceedi 8, printing, le al approval and Interest adjustnenta,
8hall Y e approved. Thfs itemiaation of expense is not a’
llmitatlon thereon but Is suggestive of that which under
ordinary conditions should constitute actual expenses. The
Legislature, of aourse, contemplated that certain othor
costs right arise in connection with a refunding and could,
be reasonably classified as necessary or actual refunding
ense. Consequently, it delegated to the Board the duty
3 power of determlniag the necessity for such costs by
re uirlng that a11antlalpated expense of refunding ellglble
ln%ebtednerr be submitted to the Board for approval in ad-’
vunce of incurring same. ho appeal has been protided in
the event the Board disapproves an item of expense; hence
``~8t conclude that the Board’s ruling thereon *ould be
The Board is vested with the fnrther power to re-
fund &h debt itself md charge the expense thereof to the
oounty defined rpad dirtriot or political subdivl8lon in-
stigatlng such refunding. ‘fhy+gg;~ :~d``````~Qefv
to hold the cost of refunding
midmum.
Consistent with the foregoing conclusion the Board
would be tequired to detsmine whether or not then anploy-
ment of a person or persons to “asside in a refunding
would be a necessary or actual expense Incident thereto,
asp contemplated by the Legislature. The word uassi8tw,
appearing in your questions, has a very broad and inde-
terminate meaning, but as llsecj here it must 8ean “in ald
of”, ‘being of service” or “he1 ing”. Such terms are llke-
wise indefinites hence it must Pie with the Board to de-
termine the necessity for such em loyment and whether or
not it is indispensable in accompPishing a refunding. The
fasts of each 8uch refunding must ultimately define the
course the hoard is to follow in approving or disapproving
r
nr. G. A. Uht, page Pl
the costs of employing a person or rsons to assist a
county defined road distrlot or poE"
itical subdivision in
refunding Its eligible indebtedness.
We are unabli to flnd in the Ac t ln.y mention of the
employment .of rsons on a salary or contract basis for the
purpose of ass r rtlng in the refUnding of such indebtedness
as may bo sought to be refunded, and we think that under the
law a commissioners' court has the power and authority to
contract for the servicer of export8 on questions of finan-
clng and refinancing in the r8me manner as they now have au-
thority to retain architects attorneys, auditor8 or en-
lnoers but we think that the compensation for such serviceo::
& this'eonnoctlon must, under the law, be submitted to the
Board for aEproval rior to incurring came. If then, In
the dimeret on of t e Board it Is detewined .that such cost
is not a neaersary or actuai aoet as contemplated by this
law, we think the Board should properly disapprove such Item
of expense*
Very truly yours
ATTORHEiYGW3RkLOF
TEXAS
By /s Clarence B. Crowe
C rence E. Crowe
Assistant
APFBOVED
OCT. 7, 1939
/sf V. ?. 'Moore
FIBST A&ISTAllT
ATTOFNEYGElsERAL
CRC-.