Untitled Texas Attorney General Opinion ( 1979 )

The Attorney General of Texas
October 18, 1979
MARK WHITE
Attorney General
Honorable Charles M. Cobb Opinion No. MW-7 2
Titus County District Attorney
Courthouse Re: Selection of a hospital dis-
Mt. Pleasant, Texas 75455 trict depository.
Dear Mr. Cobb:
You have requested our opinion concerning the deposit of funds for the
Titus County Hospital District. You first inquire as to the selection of the
depository to be used by the district, The district was created by the 58th
Legislature. Acts 1983, 58th Leg., ch. 298, at 771. Section II thereof
provides:
Sec. Il. Within thirty (30) days after the appoint-
ment of the Board of Hospital Managers of the
District and each two (2) years thereafter the said
Board shall select 5 depository for such District
which shall be one or the same depository theretofore
selected by the County, such depository shall secure
all funds of the District in the manner now provided
for the security of county funds.
(Emphasis added). This provision limits the district’s choice to the
institution or institutions designated as the county’s depository.
You next ask whether money deposited to the Interest and Sinking
Fund Account for the payment of bonds may be invested to draw interest
from .the time it is placed in the fund until needed for making interest
payments or principal payments on outstanding bonds. Section 3 of the 1963
act creating the hospital district provides that:
The Commissioners Court of the County shall have
the power and authority, and it shall be its duty, to
levy . . . a tax . . . for the purpose of (1) paying the
interest on and creating a sinking fund for bonds
which may have been amumed or which may be issued
by the Hospital District.. . .
p. 220
Honorable Charles M. Cobb - Page Two (NW-72)
E at 772. Section 4 provides similarly that a tax be levied to create a fund sufficient to
pay the interest and principal on the bonds as they mature. Appropriate investment of
money held in an Interest and Sinking Fund is permissible so long as sufficient sums are
available to meet oromotlv any nrincioal and interest reuuirements of outstanding
obligations. See El&r V.-C& of Forth Worth, 27 S.W. 739 (Tex. Civ. App. - 1894, wr6
ref’d); Bexar County Hospital District v. Crosby, 327 S.W.2d 445, 448 (Tex. 1959)(interest
from investment must be applied to sinking fund itself). We note that the district funds
are secured by the depository in the same manner as are county funds. See generally
Attorney General Opinions H-1254 (l9781(consolidation of funds); H-R74 (197m(proper use
of bonds proceeds); C-537 (1965)(interest earned on bond proceeds placed in sinking fund);
WW-1083Q96U;V-B82 0950; Letter Advisory No. 147(19771(investment of county sinking
funds); art. 836, V.T.C.S. -Cf. art. 779, V.T.C.S.
The Interest and Sinking Fund account should be deposited in the depository selected
under section 11which is explicitly made the depository for g district funds.
SUMMARY
The Titus County Hospital District may select its depository from
among those used by Titus County. The Interest and Sinking Fund
should be deposited in the depository and may be invested to draw
interest.
*-I;g
Attorney General of Texas
JOHN W. FAINTER, JR.
First Assistant Attorney General
TED L. HARTLEY
Executive Assistant Attorney General
Prepared by David B. Brooks
Assistant Attorney General
APPROVED:
OPINIONCOMMITTEE
C. Robert Heath, Chairman
Jim Allison
David B. Brooks
Walter Davis
SusanGarrison
Rick GiIpin
William G Reid
Bruce Youngblood
P. 221