Untitled Texas Attorney General Opinion ( 1950 )

"I'~XEATTOWNEY GENERAL
OFTEXAS
PRICE DANIEL
ATTORNEY
OENERAL
Augart18, 1950.
Bon. A. 0. Huellrs oQanion Ho. v-loag.
Oounty Attorney
$"6: c;w& Rer The author%tJ of the
9 coplrpisetonerr ’ oourt
to cash Ooverrrasnt
bond whoa1 fund In-
oestaents befor. sa-
turlty an6 Ire&avert
&ggpg; &$g
a lower Interest rate.
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Hoa. A. 0. llu8ller, PIge 2 (v-lm9)
settlera. Said lands, ana the p00esas
theroof, vhea 80la, shall. b8 held by eaid
oouaties alonr 88 a trwt for tha braat
of public sahoolr th8reia; sala proowdl to
be lntwtrd la bonds of thb Uaitad 8trt.r;
the Stats of Zuu8, or oouaticu in 88id
State, or la such othrs 88cur;tiea,and un-
der suoh restrlotione a8 my be p88awlb~d
lawj and the oouatles oh11 be rerpoari-
7 e for all iavrstmeatb;
b the iatemrt Wwo-
o``~$uldo~m~e~mnn~ gxoopt the pirroipal
0
Artiole 2624, V.O.S., pmvlbers
%8ch oounty may 8811 or alepose of the
land8 gmnted to It for eduoatlon81 porpo808
la such a8nner a8 may be p8ovlQod by the oomt-
mlrsioners court of such aowty, and th8 pro-
oordr OS any ruoh sale 8h8U be invortad in
babde of the United States UI Sbrtie of Vu-
a8, the beads 0r the oouldes 0r th8 statr,
rDdth8 laQ.p8naent or oomon8ohoolal8-
tplete, road preoinot, dmimge, irrigrtion,
n8vi ation and lrvso dirtrIot lo tU Ilkto,
and &he bond8 of Incorporate& citira an6
towne, and held by suoh oounty alone a8 a
trust for the benefit of ublla free school8
therein, only the interee e thereon to be
used and expended 8rW811y.Y
By virtue OS the foregoing constitutional and
statutmt provirionr latorort p8id oa lavestments of
moneys belonging to ihe per*anent school fund of a ooun-
ty ia doposltrd In the available eohool fund OP the coun-
ty rather than the prrm8n8nt 8ohool fund. Furthermom,
roneye belonging to the paruarat rahool fund oanaot be
upeaaod or used by the aountyo
Under the fads submittrd, the Ccmlaeloners~
Cowt would roll Unit84 Stat08 Oovrraaeat bonds belong-
iag to the permanent school fund of the oountp at a die-
count, thereby diminishing the permanent achool fund. It
L8 our on that 8wh a proo@durs would br io vlol~-
tioa 0r lot1on 6 or Artio1, VII of the Con8tittltion or
spL"I
Tax08 *
If, on tar other hand, thr gov8mamrat bonds IA
quor~lm era sold at not 1888 than par,.ths Coam%881oa8xw~
lion. A. 0. Mueller, Page 3 (V-1089)
Court would have authority under Article 2824 to invest
the prooeede in bonds OS Independent eohool dlstrlcte.
Slnoe Section 6 of Article VII of the Constitu-
tlon of Texas makes the Comlasloners ( Oourts trustees of
a permanent school fund of a county for the benefit of
public 8ohoo18, It was held in Y v. Blackburq,
100 Tex. 51, 93 Sew. 419 (1906 I i I
Court could not reduce the lnt x?f~L
ISeVOn per oellt to thr80 per curt.
In view of the foregoing, it ie our opinion
that lt Is within the dlaoretlon of the Comi,esionersl
Oourt to aetsmninb In vhat securlt;ies it ~111 Invest
aoaeys be1 ing to the permanent sohool fund of the
county. If“e; he facts should show, however, (tonslder-
lng the interest rate and maturity date of the bonds)
that the Commlaeioners I Court abused its discretion In
Investing the moneya belong to the permwmnt echo01
fund of the county and did no “& &llVBSttlrfs ~Monegfor the
benefit of the permanent school fund of the county and
the county available school fund, it 18 our opinion that
the CQllPaisslonerst Court ‘8 order would not be valid.
You also ask if the Commissioners t Court would
have the authority to sell United States Government bond8
at a discount and purohase the Llano Independent School
DietriOtS’ bond8 if the Llano Independent School Dietriot
would gay the amount of the dlaaount neoessary to obtain
the nomy on the government bonds. In answer to this
qu8stion, we 0811 your attention to the provirrions of
Artiak 2786 whloh would prohibit the Ll.ano Independent
8choel Metriot from pagan& the dltaaount, einoe Artlols
2786 pm&ibltr the who01 dietrlat f~oi selling its bond8
at 1088 thaa par.
The Cimmirebone;re t Court aannot eel1
Uaftod States Oovsment bonds beloqjkng
to ma prmenent rohool runa of the oouat
at a diraouat. T*x.benst., Art.VII, Sea.z .
It 18 within tke d&6@‘etlon of the Oom*
8i88i 8’ Oort to deoi40 in what aee l-
ti88 9” T hstred
au by Arti,sle 28~4, V.C.S. 7 it
ma’$v~oaeym bsWn&l~ ta the permanent
e The U~8e~oll*lra’ 00~4 hold8
c .
Hon. A. Q. Mueller, page 4 (V-1089)
moneys belonging to the permanent who01
fund in trust for public schools, and can-
not abuse this diBcretion. Delta Coun
m 100 Tex. 51, 93 S.W. 419 (1
APPROVED1 Yours very truly,
J. C. Davie, Jr. PRICE DANIEL
County Affairs Division Attorney General
Sverstt Hutchlason
Executive Assistant a>, , /-?Z?
Char108 D. Mathews John Reevee
FirBt ABslst~at Assistant
JR%mw
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