Untitled Texas Attorney General Opinion ( 1968 )

Ron. Robert S. Calvert Opinion No.+177
Comptroller of Public
Accounts Re: Construction of Section
Austin, Texas 8(C) of Article 678f,
Vernon's Civil Statutes,
< relating to the certi,ff-
cation by the Comptroller
that a contract awarded
by the State is not in
excess of the amount avail-
.Dear Mr. Calvert: able for such project.
Your request for an opinion reads, in part, as
follows :
"The State Building Commission has awarded
a contract for the 'construction of certain public
works for a total contract price of two million
eight hundred ninety-six thousand and one hundred
dollars ($2,896,100.00), approximately one million
dollars of which is to be paid from funds appro-
priated by the Congress and alloted to the State
of Texas under the Community Health Centers Act
(42 U.S. Code, sees. 2681-2687). Documents have
.been furnished by the Dallas Regional Office, De-
partment of Health, Education and Welfare, U. S.
Government, which reflect that the Federal funds
have been approved and obligated for the public
~works project. However, the funds have not been
transferred to the State, and it is anticipated
that the funds will be furnished to State author-
ities on a quarterly basis after the construction
is started.
“Prior to the award of the contract the pro-
posed contract award was forwarded to the Comp-
troller for certification of available funds. In
those instances in which sufficient State funds
are available 114 Tex. 11, 262 S.W.
of Control, 404 S.W.Zd 810 (Tex.Sup. 1966). In Charles
Scribner's Sons v. Marra, supra, the Court was considering
the validity of a contract for the purchase of certain
books for a period of five years. The obligation of the
contract was not to buy a fixed number or amount of books
but only so many as needed by the schools of the State.
The Court held, therefore, that since the contract did not
make a charge on the future revenues of the State, no debt
was created nor was Section 6 of Article VIII of the Con-
stitution of Texas violated.
In Fort Worth Cavalry Club v. Sheppard, supra, the
Court held a 'lease contract for a period of five years void,
since the adjutant general had the implied power to make a
contract onlv within the amounts of the appropriation, and
for the period of the appropriation.
In City of.Big Spring v. Board of Control, supra,
the Court held that a contract whereby the city agreed to
furnish water to the State at a fixed-rate "as-long as the
State of Texas shall in good faith maintain and operate
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-.
: ,. .
Ron. Robert S. Calvert, page 4, (M-177)
said hospital on said site" did not create a debt.
In Nichols v. State, -32 S.W. 452 (Tex.Civ.App.
1895, error ref.1 the State was held not liable under a
- contract entered into by the State involving an amount
exceeding the amount available for such project, and the
legislature was held to be without power to ratify the
contract to the extent it exceeded the appropriation.
In view of the foregoing, it is our opinion
that the purpose of Section 8(C) of Article 678f, supra,
is to prevent the awarding of a contract which would attempt
to create obligations in violation of Section 49 of Article
III of the Constitution of Texas. Section 8(C) of Article
678f is designed to enable agencies of the State to determine
in advance of the award of a particular contract whether the
obligation to be created by the award is payable out of monies
available for such project. In this respect, the certifica-
tion of the Comptroller with regard to contracts is similar to
the certification of the Comptroller under the provisions of
Section 49a of Article III of the Constitution of Texas re-
lating to appropriations being.within the amount estimated to
be available in the affected funds.
A contract for the construction of certain public
works payable out of State funds, appropriated by the Leg-
islature, and out of Federal funds appropriated by the Con-
qress, and allocated to the State of Texas does not create
a debt in violation of Section 49 of Article III of the Con-
8titution of Texas when the amount of State funds appropriated
by the Legislature, together with the amount of Federal funds
approved and obligated for such project, is equal to or exceed
the amount of the awarded contract. Under such circumstances,
the Comptroller of Public Accounts is authorized to execute
certificates provided in Section 8(C) of Article 678f. Under
the facts stated in your request, in answer to your questions
(a) and (b), it is our opinion that you are authorized to
make the certification provided in Section 8(C) of Article
678f, for the reason that the contract awarded is not in ex-
cess of the amount made available for such project.
.Zn~ answer to your questions .(c) and (a), it is noted
that money can only be drawn from the State Treasury pursuant
to specific appropriations made by the Legislature. Article
VIII, Section 6, Texas Constitution. Therefore, the Comp-
troller does not have authority to pay out funds in the State
Treasury except in pursuance to specific appropriations, and
where obligated Federal funds are to be deposited in the State
Treasury and which have been appropriated by the Legislature,
progress payments payable from these funds may not be made
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Hon. Robert S. Calvert, page 5, (M-177)
until such Federal funds have been received by the State.
State funds appropriated by the Legislature, on the other
hand, may be expended by progress payments until the appro-
priation has been exhausted.
SUMMARY
-------.
A contract for the construction of certain
public works payable out of State funds appro-
priated by the Legislature and out of Federal
funds appropriated by the Congress and allocated
to the State of Texas does not create a debt in
violation of Section 49 of Article III of the
Constitution of Texas when the amount of State
funds,appropriated by the Legislature, together
with the amount of Federal funds approved and
obligated for such project, is equal to or ex-
ceed the amount of the awarded contract. Under
such circumstances. the Corndroller of Public
Accounts is authorized to ekecute certificates
provided in Section 8(C) of Article 678f, Ver-
non's Civil Statutes.
w truly yours,
.C. MARTIN
rney General of Texas
Prepared by John Reeves
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Hawthorne Phillips, Chairman‘
Kerns Taylor, Co-Chairman
W. V. Geppert
Harold Kennedy
w. 0. Shultz
Bill Allen
.A. J. CARUBBI, JR.
Staff Legal Assistant
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