Untitled Texas Attorney General Opinion ( 1992 )

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DAN MORALES
ATTORSEY
GESERAL March 13,1992
Honorable James F. Hury, Jr. Opinion No. DM-96
Chairman
Ways and Means Committee Re: Authority of a commissioners court
Texas House of Representatives to designate an agent to invest county
P. 0. I3ox 2910 funds (RQ-227)
Austin, Texas 78768-2910
Dear Representative Hury:
You have requested our opinion on a number of questions involving the
investment of county funds. You first ask whether the commissioners court may
remove the county treasurer from the investment process.
Section 116.112 of the Local Government Code provides:
(a) The commissioners court may direct the county
treasurer to withdraw any county funds deposited in a county
depository that are not immediately required to pay obligations
of the county and invest those funds as provided by this section
unless such an investment or withdrawal is prohibited by law or
the withdrawal is contrary to the terms of the depository
contract.
(b) The funds may be invested in accordance with the
Public Funds Investment Act of 1987 (Article 842a-2, Vernon’s
Texas Civil Statutes). In addition to the obligations, certificates,
and agreements described by that Act, the funds may be
invested in certificates of deposit issued by a state or federal
savings and loan association domiciled in this state, the payment
of which is insured in full by the Federal Savings and Loan
Insurance Corporation or its successor.
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Honorable James F. Hury, Jr. - Page 2 (DM-96)
Section 116.112 contemplates the involvement of two entities in the investment
process: the commissioners court and the county treasurer.* The role of the
commissioners court is discretionary: the court determines the amount of funds
which shall be invested and the type of investment. This role is consistent with the
court’s general authority over county funds. The commissioners court is charged, for
example, with the duty of designating which county funds shall be demand deposits
and which shall be time deposits, and it is empowered to “contract with a depository
for interest on time deposits.” local Gov’t Code 6 116.111.
By contrast, the treasurer’s role under section 116.112 is ministerial in
character: the treasurer carries out the directives of the commissioners court. This
function is also consistent with the treasurer’s other duties. Section 113.001 of the
Local Government Code declares that “[t]he county treasurer, as chief custodian of
county funds, shall keep in a designated depository and shall account for all money
belonging to the county.” Section 113.003 provides that “[t]he county treasurer shall
receive all money belonging to the county from whatever source it may be derived.”
The treasurer is required to disburse money belonging to the county, which he must
pay and apply as required by law and as the commissioners court may direct. Id.
3 113.041(a). The treasurer is also directed to endorse checks or warrants drawn on
the county treasury by a proper authority. Id. 3 113.042(a). The treasurer may not,
however, make a payment if he “doubts the legality or propriety of an order, decree,
certificate, or warrant presented to the treasurer for payment.” Id. $113.041(d). In
such cases, the treasurer must report the matter to the commissioners court for
further direction. Each of these responsibilities in essentially ministerial in
character.
Section 116.112 does not define the term “invest.” It is clear, however, that,
when read together with the other provisions of chapters 113 and 116, the statute
envisions an investment process comprising a mix of discretionary and ministerial
acts. Section 116.112(a) authorizes a commissioners court to “direct the county
treasurer” to “invest” county funds. No reference is made to any other officer or
employee, Furthermore, under the terms of chapter 113, the treasurer is the “chief
custodian” of county funds, and has the responsibility of disbursing and accounting
‘The office of county treasurer has been abolished in a number of counties, specifically
Tarrant, Bee, Bexar, Collin, Andrew, Greg, El Paso, Fayette, and Nueccs. See Tex Con% art. XVI,
9 44. Since it is a constitutional office, it may not be abolished by statute. Moncrie~ K Cur&. 609
S.W.Zd 863,865 (Tex. Civ. App.--Fort. Worth 1980, writ rePd n.r.e.).
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Honorable James F. Hury. Jr. - Page 3 (DM-96)
for them. We believe that the cited provisions of the Local Government Code
confer on the county treasurer the minirrerkzf functions associated with the
investment of county funds, and on the commissioners court the discretionary
authorky to direct the investment process.
Another statute, article 4413(34c), V.T.C.S., enacted in 1979, is applicable to
a variety of state agencies and political subdivisions. It addresses, inter aka, the
investment, deposit, withdrawal, transfer, and management of county funds. “Local
funds” is defined in that statute as
public funds in the custody of a state agency or political
subdivision that are not required by law to be deposited in the
state treasury and that the agency or subdivision has legal
authority to invest.
V.T.C.S. art. 4413(34c), 3: l(1). “Political subdivision” is defined as “a county,
incorporated city or town, or special purpose district.” Id. $ l(3): The statute
further provides, in pertinent part:
Sec. 2.(a) Each state agency or political subdivision shall
adopt rules governing the investment of local funds of the
agency or subdivision. The rules shall clearly specify the scope
of authority of officers and employees of the agency or
subdivision that are designated to invest the local funds.
(b) A political subdivision may designate an officer or
employee of a public funds investment pool created under The
Interlocal Cooperation Act (Article 4413(32c), Vernon’s Texas
Civil Statutes) as the investment officer with responsibility for
local funds investment. An officer or employee of a commission
created pursuant to Chapter 391, Local Government Code
[Regional Planning Commission], is not eligible to be designated
under this section.
Sec. 3.(a) If an officer is not assigned the function by law, a
state agency or political subdivision by rule, order, ordinance, or
resolution shall designate one or more officers or employees of
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Honorable James F. Hury, Jr. - Page 4 (DM-96)
the agency, subdivision, or public funds investment pool to be
responsible for the investment of local funds.
(b) No person may deposit, withdraw, invest, transfer; or
otherwise manage local funds of a state agency or political
subdivision that are eligible for investment without express
written authority of the governing body or chief executive officer
of the agency or subdivision.
Since chapters 113 and 116 of the Local Government Code deal only with
county investments, while article 4413(34c), V.T.C.S., addresses the subject of
investment by a variety of state agencies and political subdivisions, the provisions of
the Local Government Code constitute the more specific statutes. Although, in a
direct conflict, a specific statute controls over one which is more general, it is also
the case that statutes dealing with the same subject matter should be construed
together and, if possible, harmonized. Trimmier v. Carbon, 296 SW. 1070 (Tex.
1927). We believe that article 4413(34c) may be read in harmony with chapters 113
and 116 of the Local Government Code. Nothing in article 4413(34c) would permit
the commissioners court to entirely remove the county treasurer from the
investment process. While the ultimate responsibility for designating the type and
amount of investment, under the terms of section 116.112(a), lies with the
commissioners court, the court, in effecting the investment, may act only through the
agency of the treasurer.
Article 4413(34c) does, however, appear to allow the commissioners court to
delegate its own role in the investment process. The general rule is that absent an
enabling statute, a commissioners court may not delegate powers that involve the
exercise of judgment or discretion. Guerra v. Rodriguez, 239 S.W.2d 915 (Tex. Civ.
App.--San Antonio 1951, no writ). The.court may, however, appoint an agent to
make a contract on behalf of the county for, inrer alia, “any . . . purpose authorized
by law.” Local Gov’t Code $262.001(a)(3). Under section 3(a) of article 4413(34c),
the commissioners court may “designate one or more officers or employees. . . [as]
responsible for the investment of local funds.” The court is required to “adopt rules”
which “shall clearly specify the scope of authority” of those persons “that are
designated to invest the local funds.” V.T.C.S. art. 4413(34c), 5 2(a). Furthermore,
no individual may direct such investment “without express written authority” of the
commissioners court. Id. 5 3(b). Thus, so long as it conforms to the guidelines set
forth in article 4413(34c), a commissioners court may appoint an investment officer
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Honorable James F. Huty, Jr. - Page 5 (DM-96)
or employee to perform its function of directing the county treasurer to make
investments.* Since commissioners are also “officers” of the county, the court may
delegate to one, two or three of its members sole discretion in making daily
investment decisions and issuing directives to the county treasurer.
SUMMARY
A commissioners court may not remove a county treasurer
entirely from the process of investing county funds, but it may
designate which funds are to be invested and direct the treasurer
to invest those funds in accordance with the Public Funds
Investment Act, article 842a-2, V.T.C.S. A commissioners court
may, by express written authority, delegate its designative and
directive functions to another county officer or employee,
including one or more individual commissioners.
Very truly yours,
DAN MORALES
Attorney General of Texas
*Article 4413(34c) would seem to permit the commissioners court to delegate its investment
functions to the county treasurer, since that individual is a “county officer.”
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Honorable James F. Hury, Jr. - Page 6 (DM-96)
WILL PRYOR
First Assistant Attorney General
MARY KELLER
Deputy Assistant Attorney General
JUDGE ZOLLIE STEAKLEY (Ret)
Special Assistant Attorney General
RENEA HICKS
Special Assistant Attorney General
MADELEINE B. JOHNSON
Chair, Opinion Committee
Prepared by Rick Gilpin
Assistant Attorney General
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