Untitled Texas Attorney General Opinion ( 1967 )

May 16, 1967 Hon. William W. Day Opinion No. M-75 County Attorney Calhoun County Re: Whether Calhoun County Is Port Lavaca, Texas inhibited by law from with- drawing funds from the county depository, upon which the depository refuses to pay interest, for the purpose of purchasing interest- bearing United States Govern- Dear Mr. Day: ment Bonds. Eiy letter, and accompanying brief, you have requested an opinion from our office. We quote from your letter as follows: “The question we are asking is: ‘IS Calhoun County Inhibited by any law from withdrawing surplus funds from the county depository upon which the depository refuses to pay Interest for the purpose of purchasing interest-bearing United States Government Bonds?’ The reason that this request Is Imperative is because our local depository takes the position that, having accepted their bid, we are Inhibited by our advertlse- ment and contract from purchasing United States Government Bonds on a go-day basis because their contract provides that they will only pay us Interest on time deposits In the amount of $10,000 OP over which remains on deposit for a go-day period. . . . “Today, because of the unexpected neces- sity of providing Jury fees In a pending criminal case for some 100 venlremen, our allotted funds have become exhausted and we have had to cash In and lose Interest on one $10,000 certificate owned by the jury find, and the bank, on request, has refused to pay Interest on the unneeded excess In less than - 341 - . .- - Hon. William W. Day, Page 21 (M-75) $10,000 units and there are no other funds available for a go-day period which we could employ for re-Investment in another $10,000 time deposit, We have no recourse other than our former procedure, the purchase of United States Government Bonds If we desire to save the lost interest. It would meet our obllga- tlon to keep our funds Invested for interest.” In addltion to your letter and brief, you have enclosed a copy of the notice to take blds, and the bid by two different banks, and some additional information for our consideration. We have analyzed the information submitted, and conclude that the agreement between Calhoun County and the depositor does not prevent the county from withdrawing “time deposit’ money for any use authorized by law. We note~the agreement Incorporates Article 2547, Vernon’s Civil Statutes, as part of the agreement. Article 2547 is quoted, in part, as follows: “The condition of the personal bond or bonds, or contract for securities pledged, fif the depository ban&7 shall be conditioned e . -for the payment upon presentation of 0 a .a11 checks drawn upon any ‘time deposit’ account, upon presentation, after the explra- tlon of the period of notice reouired in the case of ‘time deposits’. e 0 -” (Emphasis added.) It is clear that “time deposit” money may be wlth- drawn by a county from the depository, If the depository Is given the required notice of the forthcoming withdrawal. The withdrawal can be made for any lawful and authorized purpose 0 Article 12693-3, Vernon’s Civil Statutes, authorizes all political subdivisions of the state to invest year-end balances in U.S. Bonds and Securities. This article applies to counties - Attorney General’s Opinions No. 0-5278 (1943), and No. v-1182 (1951) o Based upon an analysis of the facts as submitted, and the above quoted article, It is our opinion that Calhoun - 342 - Hon. William W. Day, Page 3, (M-75) County may withdraw "time deposit" money after giving the required notice, and Invest such surplus money In United States Government Bonds as provided by Article 126gj-3, Vernon's Civil Statutes. Calhoun County is not prohibited by law from withdrawing surplus funds from the county depository and Investing such withdrawn funds in U.S. Government Bonds and Securities as authorized by Article 126gj-3, Vernon's Civil Statutes. Prepared by James C. McCoy " Assistant Attorney General JCMcC:sck APPROVED: OPINION COMMITTEE Hawthorne Phillips, Chairman W. V. Geppert, Co-Chairman John Reeves Alan Minter Dyer Moore Gordon Cass STAFF LEGAL ASSISTANT A. J. Carubbl, Jr. - 343 -