Untitled Texas Attorney General Opinion ( 1947 )

Autwx.xN H. .lk%Au
PRICE DANIEL
*T?oRWEY GEN?mAL
June 28, 1947
Hon. James F. Houllban, Opinion Bo. V-271
County Auditor,
orange county, ; Rer Atlthoritgof Or-
Orange, Texas ange County to
issue time uar-
,Mlntsagainst tbe
:z .ana bFi-
Bear nr. xoullhanr
Pour request for an opllllonof thls 4fzgErt-
me& is eotnrtuntia~ly
ae follower
lPz%or.to the date of thle request,
it had been~the ctlstcmof the.Cormnlseioners’
court to paI%s.an order, whsch .saiaolder lra8
retarded ln .theMinutes oS sala Co*t, .wbalW-
in the Ommlesioner ,d sanb pertianlarprs-
cinct was ~authorisedto lsbue a eorip .+7-
rant agalnst~his p&m&act irmds payable ln
one ‘oktwo or more gears arter date, tith @
wIthoot SMxmest, whereu$on the .CountyOlerlc.
wtmld issue an ‘ordinaryscrip warrant dlrect-
ed to the County Treatvarer,aad in the lower
left haml oorner 0r saia scrip warrant or
elmwhere in the body of ealclscrip warrant
wtmld tit0 In the worde ‘Payableon or be-
l.lOth, 19189 or similar &tee, fob
rzzlA c the words With Interest e> per
-‘. aamm.mes these irarrantawere pay-
abfr to a bank an4 the Ooumdsaloner would
a40 fbsl t0 the bank, discbunt them, and .~
bmm the pmoeeas deposited to hle preaiact
amount, aad thereafter carrent warrante
wmld be dram against these funda to pay
atrJw allared for the arMnary ana necef3-
w expemea incurma in the construction
gmm~tot+nc~ ,or roads and bridges in tbat
.
.%metWea these scrip wamanta were
&nwn to tbr order of t3omeparticular f%rnI
ah MivLaual ana given in payment f.or shell,
iron. James F. Koullhan - Page 2 (V-271)
lumber, machinery, or other equipment and
supplies. This t e of scrip warrant while
payable In one (1c two (2), or mope years.
from date of Issue dia not always bear Ia-
terest. . .
a. . .
"1. Must all warrants Issued'against
the roadand bridge funds of a county and
payable out of revenue anticipatedIn some
future year, sala warrants being carried as
outstandingby the Treasurer,while other
warrants were being paid out of current
fuule, be classed as time warrants7
a2. Must the CommIseIonersCourt pub-
lish their intention to Issue l!ImeWarrants
as out?.Iaeaand provided for In Article
2s (NT
‘3. Can Orange County with a valua-
tion of alight1 over elgbteen mIllIon and
Ho/l00 dollars 9$``,OOO,,OOO.OO) lame arinety-
fire Hun&red and l'?o/lOODollars ($9,500.00)
la Time Warrants In'any one year against Its
Read and Bridge funds without advertis
publia~ or giving notice of the intea
T! Ion
Or
of thoCfnmi~8lqaert3~ Court to do sq?.
.4. If the Ccumnlaaloners~ Court should
x!&ias an'oraer authorizing any partloular aan-
. ml8sloner to issue a warrant, ecrlp 6r other-
idme agamt his particular precinct fUula,
mile ln any year other than the current
yap with or without~lnterest,aaId warrant
tobe psed by said commlSslonerto purchase
~;cI, shell, or road building matbrlal,
'orto be ticounted by said oommlaslonerand
tsr,pooeeds used to finance current work In
Ua pzeolnot and to pay other warrants issued
wt his preclaot funds to pay alaIms Ia-
m Uto these wappaats are authorleed, Is
* Ooamty Clerk requiped to Iesue said war-
xmts am mwh a court orderana ia the County
ztgzaq to approve ana countersign
- tnlml the Legislature paeeea what I8 ae-
i a- a# the %ond and Warrant.Law* (Art. 2368a,
Hon. James F. Houllhan - Page 3 (V-271)
V.C.S.). The Bond,and Warrant Law, while it recognizes
.Mme wrrad.6, and regulates ana lImIta their lseuance;
do&t!not purport to.authorlzetheir Issuance; it does
expressly authorize the funding OS euch warrants as tire
validly Issued Into negotiable bonds’. The.manner ana
mode OS such reSuaalag is careSully and minutely ipecl-
riea. In the cases of the erectionof court houses,
jails, aad the coastmotion of pub110 ma&s, it has been
oitea heltYthat the county hae the Implied power to ls-
. me time warrants~to pay therefor (A&IUEJ VB. McOi.11,
146 S. W. (26) 332; San Patrlclo Couaty vs..McClane,58
Tex.243; Oavls vs. Bumey, 58 Tex.~364; Stratton ~8.
CamIssloners~ Court, 137 S.W. 1170; Leeater vs. Lopez,
217 S. w. 373).
Section 7, Article Xl of he Constitution of
Tern8 provides In partr
a lUodebt for any purpose shall
ever bi $krred in any manner by any city
or oouaty lmlesa provision ia made at.the
time of creatingthe .eame,for leVylag aqd
oolleoting a suSSluI~nt tax to pay .thefin-
teremt thereon and provide at kmst- two per
centattaslnklngSunQ,. .*.
TM8 department, Ia disoueslag’ the above con-
etitutlaml p~ooialon, la Opinion Bo.- O-6433, dated
July 24, 1945, state&a .
: %a foregoing provIsIoa Is a restrlc-
. . tiara and lImItatioa,and it .Ms been held
:<.; that when no authority exists to levy a tax
*.:.. to PJ a debt, no power can exist to Incur
‘.. tba &bt. (&mater v. Lopez, (Clv.App.)
. 202d. W. 1039, affirmed 130 Tex..179, 217
S. Y. 373.) We point out that the term
’ ‘bci#’ab usea In the above oonstitutianal
adsion is to be distinguishedrrom ob-
b OM payable Sran aurmnt revenues.
The tern ‘tibt’, above referred to has been
aeflmd *a8 ocunprehendIn& any pecuniary ob-
llgaWosrimposed by ooatract, exoept such
as is at the date oS the agreement within
ths la~Sul ti ,reasonablecontemplationOS
t& mrtie8, to be eatiatled out of the our-
mat revenuea for the year, or out OS some
fuea then vUhU the immediate coxitrolof
thm ~a.rloaors ' oourt
Sdo.l21, p* 670). If ai'th!%iFi %*'- - .
tractis made, it is contemplatedthat any
&n. J-8 F. Houllban - Page 4 (V-271)
I
part 0s the purohaee price.18 to be *ia
Srcm taxes levied and collected for ruttire
years, the obligation aonatltutesa ‘debt’
wl$Un the meaning 0s the corurtitutional
prohIbItion.
*The legislaturehas authorized ooun-
ties to create ‘debts’within the meaning
0s the oonstitutionby authorlslngthe is-
mumoe of bonds and time warrants; and we
are unablenna am lenal meane by which
a cam&esIonera’ court ma6 obll ate )rhetax
revenue8of the county for a Su&ure year
other than by complyingwith the statutory
provIslom aa to the issuance oS bonds
a&or time warranta.”
The term “time warrant’ has beea.aeSIaeaas
includingany warrant iaeuea by a city or .couutynot pay
able out of current funds ana those warrants.lssuedand
payable out of aurreat Sunus aresImown as yecrlp warrints”.
Therefore,your SIrst question should be aamrered in .the
affirmnrtive%Mi8Inuchas warranta issued and payable,out
oS antlaipatedrevenue8 i,nsuture years should be ‘c~Eu~sI-
sled aa time rarraat;s.
Seotion 2 of Article g3688, V. C. S., &ovSdes
in part as r0~w8~
a
. . . liotice0s the ti.mi3
and plaoe
wha aad where mah coatraot shall be let
s&l1 .be published in euoh oouity (i.S’
cons
eardsg a aormty oontraot, or ooatract for
mnh mbatvi~i0n 0s suoh county) ana In
m@t oi* (ff oonoeming a aity ooatract),
ww a week $or two oonsecutiveweeks prior
to the time set for lettiag suoh oontract,
m date OS the first publicationto be at
lowt rowtesa aaya prior to the date set
fw lot Mid aontract, axidaaia oon-
twat rlml
9 be let to the lowest respoatti-
Wlo Mwr, oa the respeotlVe type oS oon-
&met+ aelected. .. .
a prbritia, that la aaae of publia
sty, whwe it.beoaneeaeaessary to
aat at on00 to a ropMate money to re-
llwi the neoesal T y of the oitltene, or
to~nezWe the property of such oouuty or
*, or vb8a St Is neaeesarg to preeerve
Eon. James F. Houlihan - Page 5 (V-271)
or protedt the public health of the clti-
Zen8 of such county or city, or In caee of
uaforeseen damage to public property, ma-
chinery or equipment, t&Is provision ahall
not apply; and provided further, that it
shall not be applied to contracts for per-
sonal or for professional services, nor to
work done by such county or city and paid
for by the day, as’such work progresses.”
Section 3 of Article 2368a, ,V.C.S.,Is a8 Sol-
1Owet
?fhen It shall be the Intention of
the CommI~sIoners~Court, or of the gov-
erning body, to lasue time warrants for
the,payment of all or any part of the pro-
posed aontract, the notlae to.bldaers re-
qu5lW under Section 2’of thIe Aot shall
recite that fact, setting out the maximum
amount of the proposed time warrant Inaebt-
edmee, the rate of Interest.such time
Wmaats are to bear, and the xa&ci.mWn ma-
tur?lty&ate thereof.
Section 5 o* Article 2368a, V.C.S., Is sub-
stantifilly a8 r0ii0w8:
“The notice tibqulreaIn Sectlom 2 and
3, aad the right to referendum election de-
Simd in Section 4, shall not be applicable
to expenditurespayable out of Our&eat funds
or bond rum, a6 above aeacribea, aor to ad-
tlltbaal expenditure8by counties unless In
exaeee OS Five Hundred Dollar6 ($500.00 for
eaccbdw Wllion Dollars ($l,OOO,OO,O.OO 1, w
a oart thereof, of taxable property in’sala
oaaw, according to the last approved tax
rollai . . . andprovided further that no
sti warraats shall ever be issued by a coun-
la exoeee~of One Hundred Thousand Dollars
(
%o ,OOO.OO) for any one year, without the
ve notice and the’right to referen-
:z?pz & ti in Section 3. Is in.exces8 of
Uw W .the expenc¶lturecannot be au-
#arUed uaiil the expiration of the time for
aatha petition for referendum vote has
. . .
In the oaee of Foreman vs. Gooch, et al, 184
S. W. (a) 481, the court stated as follows:
_
eon. James F. Houllhan - Page 6 (V-271)
aAppellant,in hi.8briefs, concedes
that the &xmnlssioaers~Court.has authority
to Issue what Is commonly called 'Interest
bearing time war.rants,'contendingthat
such warrants are authorIz.ed by the pro-
visions of Article 2368a, Vertion'sAnn.
Clv. St ., which statute Is known as the
*Baod andwerrant Law.' With this contea-
tlm we are unable to agree. As we under-
stand the decisions, the authority for a
Camlssloners" Court to Issue Interest bear-
ing time warrants is derived from what now
is Article 2351, Vernon's Ann. Tex. CIv.St.
San Patrlclo County v. Jno. McClane, 58 Tex.
243; Lasater v. Lopez, 110 Tex. 179, 217 S.W.
2;3. While Article 2368a, Vernon's Ann.CIv.
., is a restrlotlon or llmItatloa upon the
authority 0s the CcnmnIssloaers``Court Inis-
suisg suih warrants Section 5 oS said Artl-
cle urovldes that suoh Act does not apply to
exmndltures DaYable out of aurreat funds."
Therefore, In answer to your second question,
It I? ths opinion of this department that notice must be.
given of the:intention of the C~seloaers 1 Court to 18~
sue tlWwaraWLtf3 is the expendituresare ia.excees 0s
$5dO.OOfor tiaoh$~,OOO,OOO.OOoS tax,valtitlonor your
county,ud the notices required by Article 2368a, supra,
mwtbe&tvela before the Commisslonera~Court could le-
gallyiwue time warrant.8for such purposes. Your sekoad
questionshould be answered In the aSSlrmatIve.
Xa uestlon 100..3you askwhether O&nge Coun-
ty WlMue 19,500.00 "In time warrants ln any one year
agalnstlts road -'bridge funds without advertising or
publleb4 m giving notice of the Intention of the Can-
IIISSS~-’ court t0.‘a0 a?,* aqd it is assumed by this de-
partmeatthatthe expeI&dIture is to bemade fromandthe
wwraabS~wd against current funds. IS such be the
aa8e. Y obvlarrslyyour question relates to s~crlpwar-
raata Llbad OS time warrants as stated In your question,
and lte be mma from the foregoing oaae oS~Foremam vs.
(loodr, da, rw, that .theprovlslons 0s Section 5 of
'Artl8leZ366ado not apply to those expendIt~es.S~cnncur-
reatB,.but li the IndebtednessIs-to be evldeaoed by
a tiwmt that is, oae r0r.a future year, then the
'@ovi&a~ oS &ofion 5 would be applloable. Therefore,
ltirfLopinSonoSthIs department that Orange County,
wboea et&an lo alightly over $``,ooo,ooo.o~,may Is-
stu$g~.OOirrro~pti~ants from the current funds of
its iarlrnd b&%dga funds without advertising,pt?blIshing
..
Ilou.JrupsaF. Eoullhan - Page 7 (V-271)
or glvlag notice of Its Intention to do so. Your third
questian should be answered in the afSIrmatIve. .;
Any warrant ordered issued by the Commlssloa- ;
era1 Court; payable out of the reasonably anticipated
revenues for the current year Is a vaild warrant and
should be Issued by the County Clerk ad approved by
the CountyAuditor. But, if a warrant be atiered Issued
agalhst future revenues of the.countyand not payable
wlthla the year from current funds, the seme would be
classed as a time warrant. .ThereSore,a prerequisite
to the lsswiace of'time warrants would be the required
notlce, a tax levy, and.the estabilsbmeatof a sinking
Sun6 to care for the same. The County Clerk would be
bound by the order of the CommIssI~ers~ Court to per-
Sms a sdalsterlalduty, but If the time warrants are
not In doaSormItywith law the County Auditor Is'aot
legallyauthorlsea~toapprove the same. .
-SUMMARY
:
1. A ttie.'warra&inaludeasay tirraat
lssueaby a city or countynot .payabl? Sroq
0-t Sunds and notice, a tax levy, ana the
ore&lea .0ra sinklug fund are.prerequlsltes.
i . for the ldsuarke 0s the same by a Comlssion- .
ers' Cotirt.
2. The Cwml.ssIonerslCourt of Orange
County,vhose valustloais sllghtlyover
EighteeaiUlUoa Dollars,may Issue N%ae :~
Thweand Five madred wllsrs la scrip war-
&6 colifs "c-at Suads"~wlthoutadVeT-
2' %~-$j8i?ivc: ,"*l::~:a%aG::oh
lt il, 185 S.W. (2i) I;Si;'&dAdams vs. McGIli,
146 S.Y. (2a) 332. : .
*Yours very. truli,
. lHtlm,~*mw Assistant
'.
..