Untitled Texas Attorney General Opinion ( 1951 )

.
Hon. C. H. Cavness Opinion No. V-1365
State Auditor
Austin, Texas Re: Several questions pertaining
to the use of soil conserva-
Dear Sir: tion district funds.,
You have submitted for our consideration several
questions pertaining to the expenditure of funds by soil consexva-
tion districts. The first question is the following:
“1. Of the following types of revenue normally
received by soil conservation districts from their op-
erations, which, if any, should be deposited to State
appropriated funds . . .?:
‘A. Rental from equipment purchased from
State appropriated funds.
“B. Sale of seed, fertilizer or chemicals pur-
chased from State appropriated funds.
“C, Refunds on other expenditures made from
State appropriated funds,
“D, Sale of obsolete equipment purchased from
State appropriated funds.”
House Bill 97, Acts 51st Leg,, R.S. 1949, ch. 5401 p.
1000 (Art. l65a-8, V.C.S.), appropriated to the several soil con-
servation districts of Texas two and a half million dollars for
each of the fiscal years of 1950 and 1951. Section 5 of HouseBill
97 provided that “any funds granted hereunder to atiy soil constir-
vation districts which shall remain unexpended at the end of the
biennium shall revert to the General Fund,” In Opinion V-999
(1950) we advised you that the use of granted funds to purchase
seed to be resold would ‘not constitute an expenditure of the funds
so as to prevent the moneys received upon the resale from being
a part of the granted funds.
The fact that fertilizer or chemicals were the subject
matter of the sale would, of course, make no difference in this
conclusion. By analogy, we think moneys received from refunds
on expenditures made from State appropriated funds have not been
.
Hon. C. H. Cavness, Page 2 (V-1365)
“expended” and remain a part ,of the, granted funds. so, too,
moneys obtained from the sale of obsolete equipment purchased
with State appropriated funds have not been “expended” in the
sense that would prevent their classification as State appropri-
ated funds. You are therefore advised that revenue received by
a soil conservation district from the sale of seed, fertilizer, or
chemicals purchased from State appropriated funds, refunds on
other expenditures made from State appropriated funds, and the
revenue received from the sale of obsolete equipment purchased
from State appropriated funds should be deposited to ““State ap-
propriated funds.”
In our Opinion V-999, supra, in stating that the use of
State appropriated funds to purchase seed to be resold would not
constitute an expenditure of the funds so’ as to prevent the moneys
received upon the resale from being a part of the granted funds,
we assumed that the districts did not resell the seed at a profit.
It is our opinion that the amount realized upon the resale over and
above the amount expended for the seed would be in the nature of
earnings of the district and uiould not constitute a part of “State
appropriated funds” and should be deposited by the district in its
I
local fund account.
c It is our opinion that rentals received by a soil con-
servation district from equipment purchased from State appropri-
ated funds would be in the nature of earnings of the soil conserva-
tion district and would not constitute State appropriated funds and
should be deposited by the district in its local fund account.
Your second question is the following:
“2. Most districts which we have examined to
date have local funds which have been accumulated
principally through donations, the purchase and sale
of seed and/or fertilizer at a profit, and the rental of
equipment purchased by the district or granted or
loaned to the district. Are the expenditures from
these local funds subject to the statutory regulations
imposed upon the expenditures from State appropri-
ated funds provided in House Bill 97, 51st Legislature,
Regular Session as amended by House Bill 190, 52nd
Legislature, Regular Session? ”
To the extent that soil conservation districts may ex-
ercise only such powers as have been conferred upon them by law
and must operate pursuant to the statutes creating them and‘regu-
lating their operation, all funds of such districts, must be expended
consistently with the prov,isions of House’Bill 97,, supra, and House
WH 190, Acts 52nd Leg., R.S. 1951, ch. 497, po 12-t. 165a:9,
.
Hon. C. H. Cavness, Page 3 (V-1365)
V.C.S.). Thus, Section 3 of House Bill 190, re-enacting Section 6
of House Bill 97, providing:foT and regulating the deposit:and with-
drawal of all grants of assistance and funds received by a district,
applies equally to State appropriated funds and to funds received
from other sources. Likewise, the restrictions on purcha,sfng or
repairing machinery (Sec. 2a, H.B. 97;‘Sec. 2, H.B. 190), the pro-
visions regulating surety bonds (Sec. 4, H.B. 97: Sec. 4; H.B. 190),
audits (Sec. 4, H.B. 190). sale of equipment, seed; and fertilizer
(Sets. 7. 8, H.B. 190) are protective provisions which would apply
regardless of the original source of the funds involved. Your sec-
ond question is therefore answered in the affirmative.
Your next question reads as follows:
“3. Can the followfng types of expenditure,s be
legally made from either State appropriated funds or
local funds or both:
“A. Awards for essay c&tests on vaiious sOi
conservation subjects.
,..
*B. Contributions to the Texas Association of
Soil Conservation District Supervisors.
“C. Awards for various soil conservation proj-
ects.
‘D. Purchased entertainment for the promotion
of soil conservation. One District sponsored a ‘Bank-
ers Relation Banquet,’ and invited all of the bankers
and heads of other loan agencies in the District0 The
purpose of the banquet was to acquaint the bankers and
other guests with the soil conservation program and
needs of the District. The costs of the banquet were
paid from the State appropriated funds,”
The very broad purposes and over-all policies of our
State soil conservation laws are set forth in Section 2 of Article
IbSa-4, V.C.S. It is difficult to conceive of a greater, and at the
same time valid, grant of powers or d one more general in terms
than that bestowed upon the State Soil Conservation Board by Scc-
tion 4 of Article 165a-4, V.C.S., and upon the supervisors of soil
conservation districts by Section 7, Article 1658-4, substantially
re-enacted in Section 4E. Article 165a-8, V.C.S. (w.B.‘.97)~, and
Section 13 of House.Bill 196. Nevertheless, WE do~not believe
tit the Legislature intended to authorize the expenditure of either
SW&e appropriated or local funds for the giving of awards for es-
say contests on vafious soil conservation subjects, or for the giv-
ing of awards for var”lous soil conservation projects,‘or for the
Hon. C. H. Cavness, Page 4 (V-1365)
purchase of entertainment for the promotion of soil conservation.
A presumption will be indulged that the Legislature desired and
intended to enact a valid law, Pickle v. Finley, 91 Tex. 484, 44 S,W.
480 (1898); Maud V, Terrell, 109 Tex. 97, 200 S.W. 375 (1918); 9
Tex. Jur. 481, Constitutional Law, Sec. 61. Since a statutory au-
thorization for expenditures for the purposes enumerated in sub-
divisions A, C and D of your third question would be unconstitu-
tional, as we will hereinafter show, we are of the opinion that such
expenditures were not contemplated or authorized by the Legisla-
ture, Section 52 of Article III of the Constitution of Texas provides:
“The Legislature shall have no power to author-
ize any county, city, town or other political corpora-
tion or subdivision of the State to lend its credit or to
grant public money or thing of value in aid of, or to
any. individual, association, or corporation whatsoever,
*.
e. .
This provision is broad enough to embrace not only State appro- .:
priated funds but funds or things of value donated to the political
subdivision by others.
If, as we have been advised occurred in one instance,
the Chamber of Commerce of a certain city saw fit to donate funds
for the purpose of providing entertainment designed to promote
soil conservation, the organization could accomplish this result
only by paying for the entertainment itself because once the funds
are donated to the political subdivision of the State, they become
public money and the property of the political subdivision.
In subdivision B of your third question you request our
opinion as to whether expenditures may be made by a soil conser-
vation district from kither State appropriated funds or local funds
or both as “contributions to the Texas Association of Soil Conser-
vation District Supervisors.” We were unable to determine the
nature of the organization referred to as the “Texas Association
of Soil Conservation District Supervisors” iti that nowhere in our
soil conservation law could we find that such an association was
provided for. However, you have advised us orally that the district
supervisors of all the soil conservation districts in Texas have ’
organized themselves into an association for the purpose of carry-
ing out the over-all purposes of the soil conservation program. We
believe that the supervisors had the authority to associate them-
selves together by virtue of Section 11 of Article 165a-4, which
reads as follows:
,-The supervisors of any two (2) or more districts
organized under the provisions of this Act may cooper-
ate with one another in the exercise of any or all powers
conferred in this Act.”
. .
Hon. C. H. Cavness, Page 5 (V-1365)
The legislative determinations land declaratiotis of
policy contained in Section 2 of Article 165a-4. V.C.S.,,the State
Soil Conservation Law, set forth in general terms the.brbad pur-
poses Andyover-all policies of our State soil conservatibn laws. 1
Soil conservation districts created under theauthor-
ization of Section 5~of Article 165a-4 are governmentalxubdivi-
sions of the State, public bodies corporate and politic. See Sets.
5F, 7, Art. Ma-4, and Opinion V-999.
The supervisors of such districts,,under~ Section 6 of
Article 165a-4, have express rights, powers,and dutiesconferred
upon them. We quote the following excerpt from Section 6:
I“Sec. 2. (c) The Appropriate Corrective Methods, ,That to
conserve ~soil resources hnd control and prevent soil erosion, Lt :
is necessary that land-use practices contributing to sol1 waNage
and s,oil erosion may be discouraged and discontinued, and appro-
priate soil-conseruing land-use practices be adopted and carried
out; tM among the procedures necessary fog aldespread’rdop-
tion, ar~e the’ carrying on of engineering operatfyrPs such as the
cmftruction d terraces, terrace outlets, check dams, dikes, ponds,
ditches. and t&e l*e; the utilization of strip cropping, lister fur-
rowing, cm cultivating, and contour furrowing; land iwigatfoa,
seeding and pknCdmfi of waste, sloping, abandoned, or eroded land@
to arrter-conserving and erosti-preventing plants, trees, and
prarrsen; tiestation and re&restation; rotation of crops, soil sta-
Mlizatioa with trees, grasses, legumes, and other thick-growing,
sdl-hold&g crops, retardation of runoff by increasing absorption
ef rahhl’t; and retirement from cultivation of steep, highly ero-
sive areas and areas now badly Bullied or otherwise eroded,
“(d) Declarstfon of Policy. ft,is hereby declared to be the
policy of the Legislature to provide for the cotiservation of soil
and soil resources of this State, and for the control and prevention
# soil erosion, and thereby to preserve natural resources, con-
troi fkmds. prevent impairment of dams and reservoirs, assist in
maintitiing the navigability of rivers and harbors, preserve wild-
life. protect the tax base, protect public lands, and protedt and
pomote the health, safety, and general welfare of the people of
this State, ind thus to carry out the mandate expressed in Article
XVI, Section 59a, of the Constitution of Texas. It is further de-
clared as a matter of Legislative intent and determination of pol-
icy that the agencies created, powers conferred and the activities
contemplated in this Act for the conservatton of soil and water
resources and for the reduction of public damage resulting from
failure to conserve such natural resources, shall be supplemen-
tary and complementary to the work of various river and other
authorities now established in the State and to other State officers,
agencies, and distaicts engaged in closely related projects. and
shall not be duplicative thereof nor conflicting therewith.”
Hon. C. H. Cavness, Page 6 (V-1365)
“The supervisors may employ such officers.
agents, and employees, permanent and temporary, as
they may require, and shall determine their qualifi-
cations, duties, and compensation. The supervisors
may delegate to their chairman, to one or more su-
pervisors, or to one or more agents or employees,
such powers and duties as they may deem proper.
The supervisors shall furnish to the State Soil Con-
servation Board, upon request, copies of such ordi-
nances, rules, regulations, orders, contracts forms,
and other,documents as they shall adopt or e A-lploy,
and such other information concerning their activities
as it may require in the performance of its duties un-
der this Act.”
Section 7 of Article 165a-4 likewise confers powers
upon districts and supervisors, the pertinent powers being sum-
marized below:
“( 1) To carry out preventive and control meas-
ures within the district including, but not limited to,
engineering operations, methods of cultivation, . , .
and the measures listed in Subsection 0, of Section 2
of this Act, on lands owned or controlled by this State
or any of its agencies, with the cooperation of the a-
gency . . . having jurisdiction thereof,, and on any oth-
er ,lands within the district upon obtaining the consent
of the occupiers . . .
“(2) To cooperate . . . with, and, within the lim-
its of appropriations duly made available to it by law,
to furnish financial or other aid to, any agency . . . or
any occupier of lands within the district, in the carry-
ing on of erosion control and prevention operations
within the district I . . .
“(3) To obtain options upon and to acquire, by
purchase, exchange, lease, gift, grant, bequest, devise,
or otherwise, any property, real or personal, or rights
or interests therein; to maintain, administer, and im-
prove any properties acquired, to receive income from
such properties, and to expend such income in carry-
ing out the purposes and provisions of this Act; and to
sell, lease. or otherwise dispose of any of its property
or interests therein in furtherance of the purposes and
the provisions of this Act; s . .
“(6) To develop comprehensive plans for the con-
servation of soil resources and for the control and pre-
ventlcm of soil erosion within the district, which,plans
Hon. C. H. Cavness, Page 7 (V-1365)
shall specify in such detail as may be possible, the
acts, procedures, performances., and avdidanc,es
which are necessary or desirable for the effectuation ‘,
.
of such plans, including the specification~of engmeer-
ing operations, methods of cultivation, the growing of
vegatation, cropping programs, tillage practices,~and ‘j
changes in use of land; and to publish such plans and ”
information and bring them to the attention of occu-
piers of lands within the district; . . .”
The Texas Association of Soil Conservation District
Supervisors elected a president and five vice-presidents. The
Association authorized and directed the president and five vice-
presidents to form a corporation under the name of “Soil and
Water Conservation, Inc.” In August, 1951, the corporation was
granted,,a charter under Subdivision 2 of Article 1302 of the Tex-
as Revised Civil Statutes of 1925. The purpose clause as incor-
porated in its charter provides:
“(1) To promote to the utmost the conservation
of soil and water resources for the security of our
country and its people.
“(2) To bring about exchange of information that,
will secure a constructive conservation program.
“(3) To disseminate scientific data and factual
information concerning soil erosion control and flood
prevention.
“(4) TO encourage uniformity of basic policies
and objectives in ,soil and water conservation work.
“(5) To foster and develop active farmer partic-
ipation and leadership in conservation and in the affairs
of soil conservation districts.
“(6) To encourage the closest co-operation pos-
sible between soil conservation districts and a coordi-
nated effort on their part.
‘(7) To publish a periodical and any other’publi-
cations which would further the purposes of this corpo-
ration.
“(8) To make gifts of money or of real or: per-
sonal property or of other things of value to non-profit
chaeitable, benevolent, literary, religious, agx%xdtural
or educational organizations in the furtherance of the
purposes of this corporation.”
Hon. C. H. Cavness, Page 8 (V-1365)
The charter further provides that the president and
five vice-presidents of the T,exas Association of Soil Conserva-
tion District Supervisors elected for each year shall comprise
the board of directors of the corporation. We were furnished
with a copy of the by-laws of Soil and Water Conservation, Inc.,
and find nothing contained therein that is inconsistent with our
soil conservation laws, We are of the opinion that the means or
instrumentalities to be used by the soil conservation districts in
effectuating the powers and duties conferred on such districts
were left to the sound discretion of the districts, and that the
means employed as outlined above in cooperating with one anoth-
er in the exercise of the powers conferred in the soil conserva-
tion laws is a legitimate exercise of the discretion reposed in
the soil conservation districts.
The State Soil Conservation Board informed us that
the main purpose of the cooperative program is to publish joint-
ly a monthly magazine, in order to publish plans and information
as to water and soil conservation and to bring them to the atten-
tion of the various soil conservation districts and to the occupiers
of land within the various soil conservation districts. The corpo-
ration, as agent for the various districts, will publish and circu-
late the magazine. It is our opinion that the soil conservation
districts may use either State appropriated funds or local funds
in making “contributions” or payments to the Texas Association
of Soil Conservation District Supervisors to be used by it or its
agent, Soil and Water Conservation, Inc., in carrying out the “com-
prehensive plans for , . . conservation of soil resources” and in
disseminating “information throughout the State concerning the ac-
tivities and programs of . . . Soil Conservation Districts” (Art.
165a-4, Sec. 4G(4) and in bringing them to the attention of the
various districts and “occupiers of lands within the districts; . . .”
Your next question reads as follows:
“4. Do such funds represented by inventories
of, or accounts receivable resulting from the sale of,
seeds, fertilizers and chemicals bought to be resold
but on hand on August 31st, 1951, that were originally
paid for out of proceeds of the State Appropriation pro-
vided in House Bill 97 of the 51st Legislature consti-
tute a part of the unexpended State Appropriation that
is reappropriated by the provisions of House Bill 190
of the 52nd Legislature? (Since your answer to Ques-
tion 4 in your Opinion No. V-999 (p. 20 thereof) holds
such stocks are a part of unexpended State funds, the
proceeds will now go to General Revenue unless reap-
propriated by House Bill 190.)”
Hod. C. H. Cavness, Page 9 (V-1365)
Opinion V-999 does hold, in effett, that stocks of
seed purchased to be resold constitute a part of any unexpended
State appropriated funds. The opinion further points out that
“if at the end of the biennium a soil conservation district has
purchased seed on hand that is later resold, the amount received
from the resale should then be paid into the General Fund of the
State Treasury.” However, since House Bill !90 appropriates ~
the unexpended balances of all the sums appropriated and,gra,nt-
ed to the several soil conservation districta foe the fiscal year
ending August 31, 1950, and for the fiscal year endlng Auggst 31,
1951, it follows that the amount received from the resale of seed
after the biennium would not be ,paid to the General Fund byt
8&aiid be retained by U&i- soil e6e8crvstion dirtricte.
Preceeda from resale of fertilizers ad &cmicslr rcceivid af-
ter the close of the fiscal rear ending Augur,t 31, 1951, khould
likewisa be retained by the individual districts. Alset it makes
aa difference ihether the proceeds were received by ‘reason of
an recount receivable resulting frox% ulc d t&e srads, fertflirer,
er chemicala ptior to’the tnd d the Fiscal year OP whether the
sale itself took place after the et@ of the fiscal yabr.
Question No. 6 reada &s ‘follows:
“6. In our ruditr we have found where one Dis-
trict purchased 1 New Headberg ‘Uni-Grader’ with 9’
C``cyor Elevator, Serial Noi 548, Model 12, Ford En-
+e #1172-AlbAT D 162 S Super V Belt - $2,,695.00.
Other ,Districts have entered into rental purchase a-c
grecments which have resulted in eqaipment being ”
boa*t for amounts in exceso of $l,OOO.OO. One Dis- ”
trict entered into a rental purchase agreement and
paid t&z ialtial monthly installments from the District’s
locally earned furdr. However, four monthly install-
ment! at $350.00 each, totrlling $1,400.00, were paid
from tkc StaLc A*proprhtad funds durin&,the purchase
.~..,.agr’eame~t,peribd’. In~tittker~of thr8c instances did
the Districts.plaee their elders through the Board of
Control.
lSee, 2a of Htmse Bill No, 97 d the 51rt Legis-
lature reads as follows:
” ‘Any item of machhery or eqtripmcat, the pur-
thee price of which excoode One Thousad Dollars
#&),OMj, dull be purchased through the Bwrd of Con-
ttel u&r sack regtiatioms ad tcrme .WS is requirsd
Hon. C. H. Cavness, Page 10 (V- 1365)
by State Law governing purchases for the State or any
of its political subdivisions which make purchases
through the Board of Control.’
“Do these acts on the part of the Board of Dis-
trict Supervisors of the Soil Conservation Districts
constitute illegal expenditure of State Appropriated
funds, and if so to whom and to what extent are they
liable 7”
The provisions of Section 2a above quoted are clearly
mandatory. Both the State appropriated funds hnd the local funds
used for these purposes were illegally expended. The Board of
District Supervisors of the Soil Conservation Districts are offi-
cers of the districts (so referred to in Article 165a-4, Sec. 5,
par. F) and the length of their employment is described as their
*term of office” (165a:4, Sec. 6). We quote the following summa-
tion of the rules governing the responsibility of officers for pub-
lic funds from 34 Tex. Jur. 473-474, Public Officers, Sec. 86:
“Officers are personally responsible for any .;
unauthorized or improper disbursement or misappli-
cation of public funds. This liability extends to mem-
bers of a board who participate in the misapproprfa-
lion or diversion and to a married woman who is a
member of such a board. But of course an officer not
shown to have participated in the diversion or misap-
propriation is not responsible therefor.”
Under this rule district supervisors who were respon-
sible for the illegal expenditure of the State and local funds are
liable to their respective districts to the extent of damage, if any,
suffered by the particular district.
SUMMARY
Revenues of a soil conservation district derived
from the sale of seed, fertilizer, or chemicals origi-
nally purchased with State appropriated funds for re-
sale, with the exception of profits realized therefrom;
money received from refunds on expenditures made
from State appropriated funds; and revenue received
from the sale of obsolete equipment purchased with
State appropriated funds should be deposited to “State
appropriated funds.”
Rentals received by a soil conservation district
for the use of equipment are, in the nature of earnings
Hon. C. H. Cavness, Page 11 (V- 1365)
of the soil conservattnn district and should be depos-
ited by the district in its local fund account.
Expenditures from local funds are subject to the
statutory regulations imposed upon expenditures from
State appropriated funds by Arts. 165a-8 and 165a-9,
V.C.S. The following types of expenditures cannot be
made from either State appropriated funds or local
funds: (I) awards for essay contests on various soil
conservation subjects; (2) awards for various soil
conservation projects; (3) costs of a banquet at which
bankers and heads of other loan agencies were guests
of the district for the purpose of acquainting them
with the district soil conservation program. Soil con-
servation districts may use either State appropriated
funds or local funds in making contributions to the
Texas Association of Soil Conservation District Super-
visors to be used by it or its agent, Soil and Water
Conservation, Inc., in carrying out the objects and
purposes of the soil conservation laws.
State appropriated funds represented by accounts
receivable and by inventories of seeds, fertilizers, and
chemicals bought to be resold but on hand on August 31,
1951, are covered by the appropriation made by Art.
165a-9.
Section 2a of Art. 165a-8 requires that any item
of machinery or equipment which costs more than $1,000
must be purchased through the Board of Control. This
provision is mandatory, and State appropriated funds
and local funds used to pay in whole or in part for ma-
chinery or equipment costing in excess of $1,000 and
not purchased through the Board of Control were illegal-
ly expended.
Yours very truly,
PRICE DANIEL
Attorney General
‘KFYfEIPBVED:
Ewes&t Wchinson W. V. Geppert
Exe,&ve Assistant
Charles D. Mathews
First Assistant Mrs. Marietta MC
Assistants
WVG/&fMC/mwb