Untitled Texas Attorney General Opinion ( 1947 )

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THE ATTOILZNEY GENERAL
AUSTIN, TEXAB
PRXCE DANIEL
A,,ORWEY GENERAL Mar. 31, 1947
Hon. G. Earl Hutchins Opinion No. V-119
County Auditor
Young county Re: Purchase of county road ma-
Graham, Texas chinery and payment therefor.
Dear Sir:
We have received your letter of March 15, 1947, which
we quote in part as follows:
“Young County is contemplating on the purchase
of a mahtaincr for the use of Young County. The
price will be about $9,,000.00. We had expected to
pay cash for about $4,000.00 and remainder we would
expect to issue a warrant or .script on the enclosed
form. The Date of warrant would 5 April 1 1947 due
April 15, 1948, with 4% interest.
The question that has been raised is:
1. Will we have to invite bids by advertising for
14 days. Reference Art. 2368A. 196 S.W. 2nd
833.
2. Will we have to set up a tax, or set aside tax
money to take care of this indebtedness. Or
can we pay this indebtedness as of April 15
1948 from money in the current account.
3. Would this warrant be legal to date its pay-
ments April 15 1949.”
Article 1659, Vernon’s Civil Statutes, provides in part
as follows:
“Supplies of every kind. road&d bridge material,
or any other material, for the”Qse of said county, or
any of its officers, departments, or institutions must
be purchased on competitive bids, the contract to be
awarded to the party who, in the judgment of the com-
missioners court, has submitted the lowest and best
bid . . .”
Hon. G. Earl Hutchins - Page 2 Opinion No. V-119
Section 2 of the Bond and Warrant Law (Article 2368a,
Vernon’s Civil Statutes) provides in part as follows:
“Sec. 2. No county acting through its Commissioners’
Court and no city in this State, shall hereafter make
or enter into any contract or agreement for the con-
struction of any public building, or the prosecution and
completion of any public work requiring or authorizing
any expenditure in excess of Two Thousand Dollars
($Z,OOO.OO), creating or imposing an obligation or lia-
bility of any nature or character upon such county, or
any subdivision of such county, or upon such city, with-
out first submitting such proposed contract or agree-
ment to competitive bids . . . n
In the recent case of Patten v. Conch0 County (Civ. App.),
196 S. W. (2d) 833, the question before the court was whether the
advertisement for competitive bids was necessary in the purchase
of certain dump trucks. We quote the following from the opinion of
the court:
“The county relies, on the issue of competitive bids,
on Art. 1659, R.C.S., and on the cases of Wyatt Metal
& Boiler Works v. Fannin County, Tex. Civ. App., 11
S. W, 2d 787; Oakley v. Kent, Tex. Civ. App., 181 S.W.
2d 919; and Stephens County v. H. C. Burt & Co., Tex.
Civ. App., 19 S.W.2d 951, to sustain venue in Conch0
County, These authorities do not support its conten-
tion. Art. 1659 requires bids for ‘suppliss of every
kind, road and bridge material, or any other material,
for the use of said county,’ etc. However, road ma-
chinery purchased by the county for its own use does
not fall within the terms ‘supplies and material’ as
used in such statute. A review of numerous authori-
ties on this question is found in Century lnd. Co. of
Chicago, Ill. v. Shunk Mfg. Co., 253 Ky. 50, 68 S.W.
2d 772. See also 26 Words 8 Phrases, Perm. Ed., p.
709.
“Art. 6741 authorizes the purchase or hire by the
commissioners court of ‘all necessary road machin-
ery, tools, or teams, * * * to build or repair the
roads,” but places no restrictions on such purchases,
other than that they be necessary for the purpose
stated. Prior to its repeal in 1931 of Art. 2368, R.C.
S. 1925, that article required advertisement for bids
on all contracts on behalf of a county requiring ex-
penditure of $2,000 or more of county funds; and
competitive bids on all expenditures between $500
and $2,000, with certain exceptions not pertinent
here. That statute made no exceptions other than in
Hon. G. Earl Hutchins - Page 3 Opinion NO. V-119 f!;‘i
cases of public calamity. The decision in Stephens
County v. H. C. Burt & Co., Tex. Civ. App., 19 S.W.
2d 951, was based upon that statute. However, in 1931,
the Legislature repealed Art. 2368 of R.C.S. 1925, and
enacted what is now V.A.C.S., Art. 2368a, which re-
quired both cities and counties, where more than $2,-
000 of public funds were to be expended, to submit all
such contracts to competitive bids but limited such
requirement to ‘any contract or agreement for the
construction of any public building, or the prosecu-
tion and completion of any public.works * * 4.’ Ob-
viously the purchase of road machinery for the use of
the county does not come within the terms of this stat-
ute. We find no statute, and none has been cited to us,
expressly requiring competitive bids in the purchase
by the county of road machinery for its own use. Wheth-
er good business management by the commissioners of
the county’s affairs requires such advertisement is,
under existing law, a matter within the discretion of the
commissioners court. And whether they should be re-
quired by law to do so, is for the Legislature to deter- I
.j:
mine. The fact that the Legislature in 1931 repealed : !’
Art. 2368, R.C.S. 1925, which did require such competi- ;,$
tive bids for all contracts, and enacted V.A.C.S., Art. 3/
2368a, which limited such requirements only to public
buildings and public works, rather indicates a legisla-
tive intent to leave the matter to the sound discretion
of the commissioners court.”
In view of the above-quoted court decision, we are com-
pelled to the conclusion that the advertisement for competitive bids
is not necessary in order to enable a county to purchase road ma-
chinery such as a maintainer. We wish to state, however, that it IS
our understanding that a bill has been introduced in the Legislature
which, in effect, would require competitive bids on any and all con-
tracts on behalf of a county requiring an expenditure of $2,000 or
more and on all expenditures between $500 and $2,000, with certain
limited exceptions. If this bill is enacted and is effective prior to
the date of the purchase of road machinery coming within its terms,
then, of course, the terms of the statute must be met.
You enclosed with your letter of request a printed form
entitled “COUNTY WARRANT.” There are certain blanks with re-
spect to amount, dates, signatures, etc., which are to be completed
on the execution of the so-called warrant. It amounts to a promise
to pay on a certain date *from the moneys belonging to the current
expense fund of said County, or out of any other money in the County
Treasury not otherwise appropriated.”
?I;;
1 Hon. G. Earl Hutchins - Page 4 Opinion No. V-119
We are at a loss to know just what is meant by “current
expense fund.” If the General Fund of the county is meant, then’a
contract which would cover the payment for road machinery would
be void, for a county may not expend for one purpose (road and
bridge) the tax money which was raised for another purpose (coun-
ty purposes or General Fund), and the commissioners’ court has
no power to transfer money from one fund (General Fund) to an-
other fund (Road and Bridge Fund). It follows that in the purchase
of road machinery, if the language in the submitted form “current
expense fund’ and “money in the County Treasury not otherwise
appropriated,” means any Constitutional fund other than the Road
and Bridge Fund, the so-called warrant would be void for the rea-
sons announced above. Art. VIII, Sec. 9, Constitution of Texas; -
Carroll v. Williams, 109 Tex. 155, 202 S.W. 504; 11 Tex. Jur. 609.
Moreover, it is our opinion that even if the Road and
Bridge Fund is the one referred to in the submitted form, still on
other grounds the “warrant’ would be unconstitutional and void
whether it is made payable on April 15, 1948, or on April 15, 1949.
The form provides that it is payable out of the ‘current expense
fund.. ,However, it is proposed to pay the ‘warrant’ out of the
“current expense fund’ of 1948 or 1949. The Constitution of Tex-
as in Section 7 of Article XI provides as follows:
II
. . . But no debt for any purpose shall ever be
incurred in any manner by any city or county unless
provision is made at the time of creating the same,
for levying and collecting a sufficient tax to pay the
interest thereon and provide at least two per cent as
a sinking fund; . . .”
“Debt,” as used in the above constitutional provision
means any obligation which is not to be satisfied out of~the lawful
current revenues or out of some fund then within the immediate
control of the Commissioners* Court. Foard County v. Sandifer,
105 Tex. 420, 151 S.W. 523; Brazeale v. Strength (Civ. App.), 196
S.W. 247; 11 Tex. Jur. 670. Under the Constitution, therefore, the
debt is payable out of the tax levied for that purpose and not out of
current funds as such.
You ask whether a tax must be levied to take care of the
debt which will become due on April 15, 1948. Our answer is that
the Constitution requires the levy of a tax as therein specified: 0th’
erwise the debt is void. As we have heretofore shown, the submit-
ted form is not appropriate, for it provides for payment out of the
“current expense fund.” If the county desires to pay part of the
purchase price of the maintainer by warrant which is payable in a
year other than the current year, then it must authorize the iSSU-
ante of a “time warrant” or “time warrantam and simultaneously
Hon. G. Earl Hutchins - Page 5 Opinion No. V-119
therewith levy a tax out of the Road and Bridge Fund in payment
thereof which would be sufficient “to pay the interest thereon and
provide at least two per cent as a sinking fund.* Of course, if the
maturity for the next year is an amount greater than two per cent
of the warrant indebtedness, then the tax must be sufficient to pro-
vide for the interest and the principal which will mature.
You state that the maintainer will cost approximately
$9,000.00, and that the county expects to pay $4,000.00 in cash and
$5,000.00 in 1948 or 1949. We have been furnished no facts with
respect to the $4,000.00 cash payment, and we, therefore, express
no opinion as to whether such money is legally available and au-
thorized by the budget of the county.
SUMMARY
1. Under the law as it exists today (March 31,1947)
and as interpreted by the Court of Civil Appeals in the
case of Patten v. Concho County, 196 S. W. (2d) 833, a
county may purchase road machinery without the neces-
sity of advertising for competitive bids therefor.
2. The Commissioners” Court has no power to
transfer money from one constitutional fund to another,
or to expend for one purpose tax money raised for an-
other purpose.
3. At the time a debt is created by a county, which
debt is payable in a year subsequent to the current year,
a tax must be levied in payment thereof or the debt will
be unconstitutional and void. Art. XI, Sec. 7, Constitu-
tion of Texas. A debt may not be created by-a county
which is pdyable out of current funds of a subsequent
yea*.
Very truly yours,
ATTORNEYGENERALOFTEXAS
BY Lo*
George W. Sparks
Assistant
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