Untitled Texas Attorney General Opinion ( 1946 )

THE A OIKNEY GENE-
OFI'EXAS
AUSTIN aa. TEXAS
GROVER SRLLRRS
Honorable C. G. Mendenhall
Coimtg Auditor
Xhambers County
Anahuac, Texas
Dear Sir: Opinion No. O-7393
Re: Investment of county bond proceeds
in short-term U.S. Treasury Cer-
tiflcates.
We have received your letter of recent date which we
quote, In part, as follows:
"This county has just sold a 3 million dollar
bond issue, and in as much as it is going to be
impossible for us to use these funds for some time,
except a small portion, we are anxious to know if
the county has authority to invest these funds or
a portion of them in short term U.S. Treasury Cer-
tificates.
"Will you give us your attention on this at your
earliest convenience."
Article 708b, Vernon's Statutes, provides as fol-
lows:
"That any political subdivision of the State
of Texas which heretofore has Issued and sold bonds
Andyis unable to obtain labor and materials to car-
ry out the purpose for which the bonds were issued
may invest the proceeds of such bonds now on hand
in defense bonds or other obligations of the Unlted
States of America; provided, however, that whenever
war time or any other regulations shall permit such
political subdivlsions to acquire the necessary la-
bor and materials,,the obligations of the United
States In which said proceeds are Invested shall be
sold or redeemed and the proceeds of said obligations
shall be used for the purpose for which the bonds of
any such political subdivision were authorized~. Acts
1943, 48th Leg., p. 211, ch. 131, II2." (Emphasis
added)
Honorable G. C. Mendanhall, page 2 o-7393
It Is seen that the words "heretofore" and "now on
hand" are used. An examination of.the
. original
__ act .reveals that
the same words are used in the caption. moreover, tne emergency
clause provides In part: "The fact that many political subdi-
visions of the state have issued --
and sold bonds. . . '
(Emphasis added). -
It Is obvious, therefore, that the act applies only to
the proceeds of bonds which were issued and sold prior to the
effective date of the act (April 12, 1943). As the.bonds under
consideratFon were issued and sold in 1946, it Is evldent that
the provisions of Article 708b are not applicable.
You are advised that we find no provision in law au-
thorizing the investment of the proceeds of these bonds in
United States Government Treasury Certificates. We quote the
following from our Opinion No. O-4746:
"It is a fundamental principle of law that the
proceeds derfved from the sale of bonds mst be de-
voted to the purpose for which the bonds were Issued
and not otherwise. Beaumont v. Matthew Cartwright
Land Co., 224 S.W. 539 (Error refused); Simpson v.
City of Nacogdoches, 152 S.W. 858; Aransas County
v. Coleman-Fulton Pasture Company, 191 S.W. 554;
Lewis v. City of Fort Worth, Texas, 89 S.W. (2d)
975. "
You are, therefore, advised that the Commissioners'
Court of Chambers County is without authority to invest proceeds
derived from the sale of bonds issued or sold after the``effec-
tive date of Article 708b (April 12, 1943) in United States
Government Treasury Certificates.
Very truly yours
ATTORNEY GENERAL OF TEXAS
By s/George W. Sparks
George W. Sparks
Assistant
GWS/LH/wc
APPROVED SEP 20, 1946
s/Carlos C. Ashley
FIRST'ASSISTANT
ATTORNEY GENERAL
Approved Opinion Committee By s/BWB Chairman