.’

.

                                                                                  R-249
                                                                                            c:->
                                                                                            .a.,


                                              th?PICE          OF
                           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
GWS-s: sl