Untitled Texas Attorney General Opinion ( 1961 )

.. THEA=• RNEYGENERAL OF TE,XAS May 9, 1961 Honorable Ben Ramsey Opinion No. W-1048 Lieutenant Governor Capitol Station Re: Whether the Legislature Austin 11, Texas may retire outstanding bonds issued by Texas Southern University, and Dear Sir: related questions. You have requested an opinion on the following ques- tions: "1. Would an appropriation by the Legislature from the General Revenue Fund for the retire- ment of outstanding bonds issued by Texas Southern University pursuant to Article 2643g, be a valid and effective means of liquidating such indebtedness? One aspect of this question is whether such outstanding bonds are callable without the consent of the bond-holders. "2 . If the method indicated in the question above is a valid and effective means, would it result in freeing up Texas Southern University's share of the College Building Fund for the con- struction of additional buildings now needed at that institution? "On both questions, the last clause in Section 17. Article 7 of the Constitution appears to be perti- nent. "3 . If, in your consideration of questions 1 and 2, you find the method to be of doubtful validity Honorable Ben Ramsey, Page 2 W-1048) or effectiveness, would the enactment of a new bill containing for Texas Southern University provisions similar to Article 2643g, be a valid and effective way of assuring that University with available moneys for building construction purposes?" Section 17 of Article VII of the Constitution, as amended in 1956, establishe:s a state ad valorem tax for the purpose of creating a special fund for buildings and improve- ments at certain State institutions of higher learning, to be allocated and periodically reallocated by the Comptroller of Public Accounts to the participating institutions. It further provides, in part, as follows: . . . all such designated institutions of higher learning which participate in the allocation or re-allocation of such funds shall not thereafter receive any General ~:'r::,~' Revenue funds for the acquiring or construc- ting of buildings or other permanent improve- ments for which said Five Cent (50) ad valorem tax is herein provided, except in case of fire, flood, storm, or earthquake . . . . Chapter 330, Acts, Regular Session, Fifty-third Legis- lature ,&ticle 2643g. Vernon's Civil Statutes_7 is repealed upon the effective date of this Amendment: but the principal and interest due on any obligations incurred by the governing boards of Lamar State College of Technology at Beaumont and of Texas Southern University at Houston under the provisions of said Chapter 330 prior to its repeal shall be paid from the allocations to Lamar State College of Technology and Texas Southern University from the funds raised by the Five Cent (5c) ad valorem tax levy as pro- vided in this Section, . . .II In reply to your first question, it is our opinion that these provisions prohibit an appropriation from the Gen- eral Revenue Fund for the retirement of outstanding bonds is- sued by Texas Southern University pursuant to Article 2643g. Honorable Ben Ramsey, page 3 (WW-1048) Since your first question is answered in the negative we do not reach the second question. We have reviewed the provisions of Article 2643g, V.C.S., which was repealed upon the effective date of the 1956 amendment of Section 17 of Article VII of the Constitu- tion of Texas, and your third question is answered in the affirmative. Bonds were heretofore authorized and issued by Texas Southern University for building construction pur- poses under Article 2643g, V.C.S., and we see no legal im- pediment to such issuance in the future under a new statute containing similar provisions. SUMMARY The outstanding bonds of Texas Southern University cannot be retired by an appro- priation from the General Revenue Fund as Section 17 of Article VII of the Consti- tution provides that such obligations shall be paid from the Five Cent (Se) ad valorem tax provided therein. There would be no legal bar to issuance of bonds by the University under a new statute sim- ilar to Article 2643g, V,C.S., now re- pealed. Yours very truly, WILL WILSON Attorney General of Texas HWM-s Assistant I Honorable Ben Ramsey, page 4 (W-1048) APPROVH): OPINION COMMITTEE W. V. Geppert, Chairman C. K. Richards J. Arthur Sandlin Larry Hargrove Bill Allen REVIEWED FOR THE ATTORNEY GENERAL By: Morgan Nesbitt