Are county indigent-health-care bills over budget an unconstitutional debt the county can't pay?

TX AG Opinion GA-0652: Are over-budget indigent-health bills an unconstitutional debt?

Plain-English summary

The Cameron County Auditor's office asked about invoices health care providers submitted for fiscal year 2006-2007 for indigent care that exceeded the amount the county had budgeted. The questions were whether that excess is a "debt" under Texas Constitution article XI, section 7; whether it is an unconstitutional debt; whether the commissioners court could ratify or pay it; and whether the county auditor is barred from approving the claims under Local Government Code section 113.065.

The opinion explained the constitutional rule. Article XI, section 7 bars a county or city from incurring a "debt" unless, at the time, it provides for a tax to pay the interest and at least two percent of the principal as a sinking fund. A "debt" means any pecuniary obligation imposed by contract, but a contract is not a debt if the parties lawfully and reasonably contemplate, when they sign, that the obligation will be paid out of that year's current revenues or funds already within the government's control. Every pecuniary obligation is presumed a debt, and the party seeking payment bears the burden of showing the obligation falls within the current-revenue exception. A multi-year contract is only a commitment of current revenues, and so not a debt, if it lets the governing body terminate at the end of each budget period.

Applying this, the opinion said the key issue, whether the county contemplated paying the contracts from current 2006-2007 revenues or funds on hand, is a fundamental question of material fact that the Attorney General cannot resolve in an opinion. The opinion lacked the contract dates and terms (including whether they could be terminated at year-end), so it could not decide as a matter of law whether the contracts created debt. But it walked through the conclusion that follows from the auditor's factual assertions: the county said it did not anticipate paying more than the budgeted amount in 2006-2007 and, following its routine practice, expected to pay any excess out of the next year's general tax revenues. If those assertions are correct, the contracts created "debt" under article XI, section 7, and unless the county levied the required tax and sinking fund, that debt is prohibited and void, so the excess invoices would be prohibited debt.

On ratification and payment, the opinion explained that void contracts generally cannot be ratified, so if the excess invoices are prohibited debt the commissioners court cannot ratify them. A commissioners court must audit and settle claims and may order paid only just and legal demands, and it cannot direct payment of a claim until the county auditor has examined and approved it. The county auditor may not approve a claim unless it was incurred as provided by law, a mandatory duty. So if the excess invoices are prohibited debt, the county auditor is barred from approving them and the commissioners court is not authorized to direct their payment, because they are not legal claims. The opinion limited its conclusion to the excess amount asked about and did not decide whether any individual contract was void in full.

Currency note

This opinion was issued in 2008. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Indigent Health Care and Treatment Act and the Local Government Code claim-approval provisions may have been amended since 2008. Confirm current law before relying on this analysis.

Who this opinion affected (as of 2008)

County auditors: The opinion told them that if over-budget claims amount to prohibited debt under article XI, section 7, they are barred by section 113.065 from approving the claims, because they were not incurred as provided by law.

County commissioners courts: The opinion meant they could neither ratify nor direct payment of claims that constitute prohibited debt; void obligations generally cannot be ratified.

Counties budgeting indigent health care: The opinion flagged that routinely planning to pay over-budget contract obligations out of the following year's tax revenue can turn those contracts into unconstitutional debt.

Health care providers serving indigent county residents: The opinion meant claims exceeding the budgeted amount could be unpayable if the contracts created prohibited debt, though it did not address other legal theories a provider might pursue.

Common questions

When is a county contract an unconstitutional "debt"?
The opinion explained a contract is a debt under article XI, section 7 unless the county reasonably expected, when it signed, to pay from that year's current revenues or funds on hand; without a tax and sinking fund, such a debt is void.

Did the AG decide Cameron County's invoices were unconstitutional debt?
No. The opinion said whether the county contemplated paying from current revenue is a question of fact it cannot resolve, then explained what would follow if the auditor's factual account is correct.

Can the commissioners court just ratify or pay the over-budget invoices?
If they are prohibited debt, no. The opinion concluded void obligations cannot be ratified, the auditor cannot approve them, and the commissioners court cannot direct payment.

Why can't the auditor approve the claims?
Section 113.065 lets the auditor approve a claim only if it was incurred as provided by law. The opinion called this duty mandatory, so claims that are prohibited debt cannot be approved.

Background and statutory framework

The Indigent Health Care and Treatment Act requires counties to provide a set amount of health care to qualified indigent residents and lets a county provide it by contract with a private provider, subject to liability caps and state-assistance provisions (Tex. Health & Safety Code Ann. §§ 61.001-.066, 61.029(a), 61.035, 61.037(b)(1), 61.039 (Vernon 2001 & Supp. 2007)). Article XI, section 7 of the Texas Constitution bars a county from incurring a debt without levying a tax to pay interest and at least two percent of the principal as a sinking fund, and a contract violating it is void (Tex. Const. art. XI, § 7; McNeill v. City of Waco, 33 S.W. 322, 323-24 (Tex. 1895); Tex. & New Orleans R.R. Co. v. Galveston County, 169 S.W.2d 713, 715 (Tex. 1943); Stevenson v. Blake, 113 S.W.2d 525, 527 (Tex. 1938); City-County Solid Waste Control Bd. v. Capital City Leasing, Inc., 813 S.W.2d 705, 707 (Tex. App.-Austin 1991, writ denied)). A "debt" is any pecuniary obligation imposed by contract, but not if the parties reasonably contemplate payment from current revenues or funds on hand; every obligation is presumed a debt and the party seeking payment bears the burden of showing the exception, and a multi-year contract avoids being a debt only if it can be terminated at the end of each budget period (McNeill, 33 S.W. at 324; City of Bonham v. Sw. Sanitation, Inc., 871 S.W.2d 765, 768-69 (Tex. App.-Texarkana 1994, writ denied); Tex. Loc. Gov't Code Ann. § 271.903(a) (Vernon 2005)). Whether the county contemplated payment from current revenues is a fact question, considering the obligation's purpose, extent, and the county's revenue, that the opinion process cannot resolve (County of Ector v. City of Odessa, 492 S.W.2d 360, 362-63 (Tex. Civ. App.-El Paso 1973, no writ); Clay Bldg. Material Co. v. City of Wink, 141 S.W.2d 1040, 1042 (Tex. Civ. App.-El Paso 1940, no writ)). Void contracts generally cannot be ratified (Richmond Printing v. Port of Houston Auth., 996 S.W.2d 220, 224 (Tex. App.-Houston [14th Dist.] 1999, no pet.); TCA Bldg. Co. v. Nw. Res. Co., 922 S.W.2d 629, 634 (Tex. App.-Waco 1996, writ denied); Jack v. State, 694 S.W.2d 391, 397 (Tex. App.-San Antonio 1985, writ ref'd n.r.e.)). A commissioners court must audit and settle claims and order paid only just and legal demands, and cannot direct payment until the auditor has approved a claim, which the auditor may do only if the claim was incurred as provided by law (Tex. Loc. Gov't Code Ann. §§ 113.064(a), 113.065, 115.021 (Vernon 2008); Padgett v. Young County, 204 S.W. 1046, 1052 (Tex. Civ. App.-Fort Worth 1918, writ dism'd); Navarro County v. Tullos, 237 S.W. 982, 987-98 (Tex. Civ. App.-Dallas 1922, writ ref'd); Crider v. Cox, 960 S.W.2d 703, 706 (Tex. App.-Tyler 1997, writ denied); Smith v. McCoy, 533 S.W.2d 457, 459 (Tex. Civ. App.-Dallas 1976, writ dism'd)).

Citations

Statutes:

• Tex. Const. art. XI, § 7
• Tex. Health & Safety Code Ann. §§ 61.001-.066, 61.029(a), 61.035, 61.037(b)(1), 61.039 (Vernon 2001 & Supp. 2007)
• Tex. Loc. Gov't Code Ann. §§ 113.064(a), 113.065, 115.021, 271.903(a) (Vernon 2005 & 2008)

Cases:

• McNeill v. City of Waco, 33 S.W. 322, 323-24 (Tex. 1895)
• Tex. & New Orleans R.R. Co. v. Galveston County, 169 S.W.2d 713, 715 (Tex. 1943)
• Stevenson v. Blake, 113 S.W.2d 525, 527 (Tex. 1938)
• City-County Solid Waste Control Bd. v. Capital City Leasing, Inc., 813 S.W.2d 705, 707 (Tex. App.-Austin 1991, writ denied)
• City of Bonham v. Sw. Sanitation, Inc., 871 S.W.2d 765, 768-69 (Tex. App.-Texarkana 1994, writ denied)
• County of Ector v. City of Odessa, 492 S.W.2d 360, 362-63 (Tex. Civ. App.-El Paso 1973, no writ)
• Clay Bldg. Material Co. v. City of Wink, 141 S.W.2d 1040, 1042 (Tex. Civ. App.-El Paso 1940, no writ)
• Richmond Printing v. Port of Houston Auth., 996 S.W.2d 220, 224 (Tex. App.-Houston [14th Dist.] 1999, no pet.)
• TCA Bldg. Co. v. Nw. Res. Co., 922 S.W.2d 629, 634 (Tex. App.-Waco 1996, writ denied)
• Jack v. State, 694 S.W.2d 391, 397 (Tex. App.-San Antonio 1985, writ ref'd n.r.e.)
• Padgett v. Young County, 204 S.W. 1046, 1052 (Tex. Civ. App.-Fort Worth 1918, writ dism'd)
• Navarro County v. Tullos, 237 S.W. 982, 987-98 (Tex. Civ. App.-Dallas 1922, writ ref'd)
• Crider v. Cox, 960 S.W.2d 703, 706 (Tex. App.-Tyler 1997, writ denied)
• Smith v. McCoy, 533 S.W.2d 457, 459 (Tex. Civ. App.-Dallas 1976, writ dism'd)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0652
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2008/ga0652.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain - the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

August 1, 2008

Ms. Martha Galarza
Cameron County Auditor
Post Office Box 3846
Brownsville, Texas 78520

Opinion No. GA-0652

Re: Whether a county's alleged underpayment to indigent health care providers is an unconstitutional debt for purposes of article XI, section 7 of the Texas Constitution (RQ-0672-GA)

Dear Ms. Galarza:

Your predecessor in office informed us that health care providers submitted invoices for the fiscal year 2006-2007 for services provided to indigent residents of Cameron County in excess of the amount budgeted by the county for indigent health care in the 2006-2007 fiscal year. Thus, he asked the following four questions about this excess amount:

1. Is this a "debt" within the meaning of Article XI, Section 7 of the Texas Constitution?

2. If it is a "debt" within the meaning of Article XI, Section 7[,] is it an "unconstitutional debt" prohibited by the Texas Constitution?

3. If it is an "unconstitutional debt" can it be ratified or paid by the Cameron County Commissioners Court?

4. If it is an "unconstitutional debt" is the Cameron County Auditor prohibited from approving the claims under ... Local Gov[ernment] Code, [section] 113.065?

Request Letter, supra note 1, at 1.

I. Background

The Indigent Health Care and Treatment Act, chapter 61 of the Health and Safety Code, requires counties to provide a certain amount of health care to qualified indigent residents. See TEX. HEALTH & SAFETY CODE ANN. §§ 61.001-.066 (Vernon 2001 & Supp. 2007). Under chapter 61, the county is the payor of last resort for health care to persons who do not reside in the service area of a public hospital or hospital district. Id. §§ 61.002(2) (defining "eligible county resident"), .022 (specifying county obligation) (Vernon 2001). A county may "provide health care services through a local health department, a publicly owned facility, or a contract with a private [health care] provider." Id. § 61.029(a); see also id. § 61.030 (selection of mandated provider).

We understand that in Cameron County, in the fiscal year 2006-2007, indigent health care services were provided, and the indigent health care expenses at issue were incurred pursuant to several contracts executed under Health and Safety Code section 61.029(a). See Request Letter, supra note 1, at 2-3. It appears that pursuant to these contracts, invoices-including the invoices at issue here-were submitted to the county for payment "when the service was provided." See id. at 2. As we understand it, these invoices in the aggregate exceed the amount budgeted by the county for indigent health care for the 2006-2007 fiscal year. Id. at 1-2. That budgeted amount, as we understand it, was the total amount available for the payment of indigent health care services and included eight percent of the county's general tax revenues and matching state funds for indigent health care to be received for the 2006-2007 fiscal year. Id. at 1-3, 4.

II. Analysis

A. Unconstitutional Debt

The first two questions ask whether the indigent health care services invoices in excess of the budgeted amount constitute "debt" subject to the prohibition in Texas Constitution article XI, section 7. Article XI, section 7 prohibits a county or a city from incurring a "debt" without levying a tax to pay the interest on the obligation and at least two percent of the principal:

[N]o 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 (2%) as a sinking fund[.]

TEX. CONST. art. XI, § 7. Any attempted creation or incurrence of a debt without also making such provision for payment "is contrary to the express prohibition of the constitution, and void." McNeill v. City of Waco, 33 S.W. 322, 323 (Tex. 1895); see also Tex. & New Orleans R.R. Co. v. Galveston County, 169 S.W.2d 713, 715 (Tex. 1943) ("If this provision is not made, the 'debt' is a nullity."). "A contract which violates these constitutional provisions is void, and the governmental unit involved need not pay any related obligation." City-County Solid Waste Control Bd. v. Capital City Leasing, Inc., 813 S.W.2d 705, 707 (Tex. App.-Austin 1991, writ denied). The issue here is whether the indigent health care services invoices in excess of the budgeted amount are obligations related to contracts that violate the constitutional provision.

The term "debt" as used in article XI, section 7 "means any pecuniary obligation imposed by contract." McNeill, 33 S.W. at 324; accord Stevenson v. Blake, 113 S.W.2d 525, 527 (Tex. 1938); Tex. & New Orleans R.R. Co., 169 S.W.2d at 715. However, a contract does not create a "debt" if the parties lawfully and reasonably contemplate when the contract is made that the obligation will be satisfied out of current revenues for the year, or out of some fund then within the immediate control of the governmental unit. McNeill, 33 S.W. at 324. A party seeking recovery on a contract bears the burden of showing that the obligation under the contract is not a "debt":

Prima facie, every pecuniary obligation attempted to be created by contract is a debt, within the meaning of the constitutional provision[] ..., and a party attempting to recover against the [governmental unit] must allege the facts showing a compliance with the constitution ... or must allege such facts as bring the particular claim within the exception ... in the definition of the word 'debt.'

Id.; see also City of Bonham v. Sw. Sanitation, Inc., 871 S.W.2d 765, 769 (Tex. App.-Texarkana 1994, writ denied) (stating that the party seeking recovery on the contract has the burden of alleging and proving that the entire obligation could reasonably be paid from current revenues or funds on hand; "[o]therwise the contract is void and no recovery can be had on it" (citing McNeill, 33 S.W. at 323)). A contract that runs for more than one year is a commitment only of current revenues and thus is not a "debt" if it reserves to the governing body the right to terminate the contract at the end of each budget period. City of Bonham, 871 S.W.2d at 768; City-County Solid Waste Control Bd., 813 S.W.2d at 707; see also TEX. LOC. GOV'T CODE ANN. § 271.903(a) (Vernon 2005) (commitment of current revenues).

Your predecessor asked about the aggregate amount of the invoices submitted pursuant to several contracts in excess of the amount budgeted by the county. See Request Letter, supra note 1, at 1. Based on the facts presented, we understand that under the several indigent health care services contracts, amounts are payable, not on any specified date, but when services are provided. See id. at 2-3. But we have no other information regarding the contract dates and terms, including whether they are one- or multi-year contracts or whether they contain the right to terminate at the end of the budget year. Accordingly, we cannot determine whether they create "debt" as a matter of law. Cf. City of Bonham, 871 S.W.2d at 768 (determining that a multi-year contract with no right of termination at the end of each budget period was a "debt" unless payable from current revenues or funds on hand); City-County Solid Waste Control Bd., 813 S.W.2d at 707 (determining that a contract with an anticipated term exceeding one year is a "debt" unless it reserves to the governing body the right to terminate at the end of each year).

Thus, as your predecessor noted, the relevant test here is whether the county's pecuniary obligations under the various contracts were-when the contracts were executed-lawfully and reasonably contemplated to be made out of current revenues for the fiscal year 2006-2007 or out of funds then within the immediate control of the county. See McNeill, 33 S.W. at 323-24. This is a "fundamental and necessary" question of material fact in determining whether the county obligation undertaken by the various indigent health care services contracts is a debt. See County of Ector v. City of Odessa, 492 S.W.2d 360, 362-63 (Tex. Civ. App.-El Paso 1973, no writ); see also Clay Bldg. Material Co. v. City of Wink, 141 S.W.2d 1040, 1042 (Tex. Civ. App.-El Paso 1940, no writ) (stating that the obligation's purpose, the extent thereof, and the extent of a city's revenue may all have bearing on whether it is contemplated that the obligation be paid from current revenues, but none of them is necessarily conclusive on this question). This office cannot determine questions of fact in an attorney general opinion. But, to provide guidance, we set out your predecessor's assertions as to the facts and discuss the answer to the question should the assertions be correct.

In apparent reliance on statements made by your predecessor's predecessor and past practices of the county, it appears that when the county entered into the indigent health care services contracts, it did not contemplate that the entire pecuniary obligation thereunder would be paid from current general tax revenues for the 2006-2007 fiscal year or other funds within the county's immediate control. Request Letter, supra note 1, at 1-2, 5. First, your predecessor asserted that "[t]he bottom line is [that] in fiscal year 2006-07 the County did not anticipate paying more [than] the amount budgeted for indigent health care." Request Letter, supra note 1, at 5; see also id. at 1 ("Indigent health care service providers, invoiced the County for the fiscal year 2006-07 for $2,220,929.96 more than the County had anticipated to be paid without the use of future tax revenues."). He explained that, "after May 31[], 2007, [when the County had exhausted the amount budgeted or allocated for health care services], the County anticipated paying for 2006-07 indigent health care services, if at all, after all County and State funds set aside for indigent health care in Cameron County for the 2006-07 fiscal year had been spent, with 2007-08 general tax revenues." Id. at 5. Second, your predecessor informed, the same procedure has been followed in each of the past several years: "[A]fter funds set aside for indigent health care were exhausted, indigent health care for eligible county residents provided for the remainder of the fiscal year would be paid out of the general tax revenue from the subsequent fiscal year." Id. at 2.

If, as it appears to be suggested, the county did not contemplate when it entered into the health services contracts that the entire pecuniary obligation thereunder would be paid from its current general tax revenues for the 2006-2007 fiscal year or other funds within the county's immediate control, the indigent health care services contracts created "debt" within the meaning of article XI, section 7. See TEX. CONST. art. XI, § 7; McNeill, 33 S.W. at 324. And unless the county levied a tax to pay interest on the "debt" and provide a sinking fund of at least two percent to pay the principal, the contracts create "debt" that is prohibited by the constitutional provision. See TEX. CONST. art. XI, § 7; McNeill, 33 S.W. at 324; City of Bonham, 871 S.W.2d at 768. Under these circumstances, the indigent health care services invoices submitted in excess of the budgeted amount that is at issue here would constitute "debt" prohibited by article XI, section 7. See Stevenson, 113 S.W.2d at 527 (stating that the entire obligation under a contract made in violation of article XI, section 7 is void); City-County Solid Waste Control Bd., 813 S.W.2d at 707 (stating that a contract violating article XI, section 7 is void, and "the governmental unit involved need not pay any related obligation"). We reiterate that the only amount in question is the aggregate excess amount, and our conclusion, based on the assumption that your predecessor's factual assertions about what the county contemplated are correct, is limited to this excess amount. We were not asked, and we cannot determine whether any of the several contracts to which the invoices specifically relate is unconstitutional and thus void in its entirety.

B. Ratification and Payment of Unconstitutional Debt

If the invoices for indigent health care services in excess of the budgeted amount constitute "debt" prohibited by Texas Constitution article XI, section 7, your predecessor asked whether the Cameron County Commissioners Court may ratify or pay it, and whether the Cameron County Auditor is prohibited from approving such claims under Local Government Code section 113.065. See Request Letter, supra note 1, at 1; see also TEX. LOC. GOV'T CODE ANN. § 113.065 (Vernon 2008) ("The county auditor may not audit or approve a claim unless the claim was incurred as provided by law.").

We first consider ratification by the commissioners court. "As a general rule, void contracts cannot be ratified." Richmond Printing v. Port of Houston Auth., 996 S.W.2d 220, 224 (Tex. App.-Houston [14th Dist.] 1999, no pet.); see TCA Bldg. Co. v. Nw. Res. Co., 922 S.W.2d 629, 634 (Tex. App.-Waco 1996, writ denied); Jack v. State, 694 S.W.2d 391, 397 (Tex. App.-San Antonio 1985, writ ref'd n.r.e.). A contractual obligation incurred in violation of article XI, section 7 is void. See Tex. & New Orleans R.R. Co., 169 S.W.2d at 715 (stating that "debt" incurred in violation of article XI, section 7 "is a nullity"); Stevenson, 113 S.W.2d at 527 (stating that the entire obligation under a contract made in violation of article XI, section 7 is void); City-County Solid Waste Control Bd., 813 S.W.2d at 707 (stating that a contract violating article XI, section 7 is void, and "the governmental unit involved need not pay any related obligation"). Accordingly, if the invoices for indigent health care services submitted in excess of the budgeted amount constitute "debt" prohibited by article XI, section 7, the Cameron County Commissioners Court cannot ratify them. Cf. Jack, 694 S.W.2d at 397 (upholding trial court's conclusion that lease made in violation of statute and thus void could not be ratified by the county).

We next address approval and payment of the "debt" by the commissioners court and the county auditor. Section 115.021 of the Local Government Code specifically requires a commissioners court to "audit and settle all accounts against the county and [to] direct the payment of those accounts." TEX. LOC. GOV'T CODE ANN. § 115.021 (Vernon 2008). Under this provision, a commissioners court has a duty to "audit all claims against the county and to order paid those only which are found to be just and legal demands." Padgett v. Young County, 204 S.W. 1046, 1052 (Tex. Civ. App.-Fort Worth 1918, writ dism'd); accord Navarro County v. Tullos, 237 S.W. 982, 987-98 (Tex. Civ. App.-Dallas 1922, writ ref'd).

Additionally, under chapter 113 of the Local Government Code, a commissioners court may not direct the payment of a claim until it has been examined and approved by the county auditor. TEX. LOC. GOV'T CODE ANN. § 113.064(a) (Vernon 2008); see also Crider v. Cox, 960 S.W.2d 703, 706 (Tex. App.-Tyler 1997, writ denied) (stating that the county auditor's approval of a claim is a prerequisite to the commissioners court's approval; without the county auditor's approval, the commissioners court's approval of a claim is void). And "[t]he county auditor may not audit or approve a claim unless the claim was incurred as provided by law." TEX. LOC. GOV'T CODE ANN. § 113.065 (Vernon 2008). "The language of these statutes is mandatory. They impose on the auditor the responsibility, before approving a claim, to determine whether it strictly complies with the law governing county finances." Smith v. McCoy, 533 S.W.2d 457, 459 (Tex. Civ. App.-Dallas 1976, writ dism'd); see also Crider, 960 S.W.2d at 706 ("A claim against the county may not be approved by the Auditor unless it was incurred in accordance with the law.").

In answer to your predecessor's question, if the indigent health care services invoices submitted in excess of the budgeted amount constitute "debt" prohibited by article XI, section 7, the Cameron County Auditor is prohibited from approving the claims and the Cameron County Commissioners Court is not authorized to direct their payment because they are not legal claims. Again, our conclusion here is limited to the excess invoice amount your predecessor asked about.

SUMMARY

Whether Cameron County contemplated when it entered into indigent health care services contracts that the entire pecuniary obligation thereunder would be paid from current general tax revenues for the 2006-2007 fiscal year or other funds then within the county's immediate control is a question of fact.

If, as suggested here, Cameron County did not contemplate when it entered into indigent health care services contracts that the entire pecuniary obligation thereunder would be paid from current general tax revenues for the 2006-2007 fiscal year or other funds then within the county's immediate control, such contracts created "debt" within the meaning of Texas Constitution article XI, section 7. And unless the county levied a tax to pay interest on the "debt" and provide a sinking fund of at least two percent to pay the principal, the contracts created "debt" prohibited by the constitutional provision. Under these circumstances, indigent health care services invoices submitted pursuant to the contracts in excess of the amount budgeted by the county for such purposes at issue here would constitute "debt" prohibited by article XI, section 7.

If the indigent health services invoices in excess of the amount budgeted by the county for such purposes constitute "debt" prohibited by article XI, section 7, the Cameron County Commissioners Court cannot ratify them; the Cameron County Auditor is prohibited from approving the claims; and the Cameron County Commissioners Court is not authorized to direct their payment.

KENT C. SULLIVAN
First Assistant Attorney General

ANDREW WEBER
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Sheela Rai
Assistant Attorney General, Opinion Committee