Untitled Texas Attorney General Opinion ( 1946 )

OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN Honorable Pat R. Hobo County Attorney :SaileyCounty Euleshoe, Texas Dear Sir: Opinion X0. 3-7343 Re: Deposit of bend proceeds in County deposWo,ry. / ~Liehave received your letter of October \23,\,1946, which ;\re quote, in part, as follows: _.-.x_ I_ / 'i ‘,'; / "tpecial Road District 1-A of daif*.County,; Texas, consisting of about thre+Kourths ofthe \ total area of Dailey County, ,i-ssued\,~k625,00i3.L;D, ,> in road bonds, said bonds beincdated October l>, %..., 1946. These bonds were of, ,_ rful bonds or security deposits." .. Nonorable Pat R. Bobo - Pace 2 Article 7523, Vernon's Annotated Texas Statutes, pra- vides as follows: "After approval and registration as provided by law relative to other bonds, such bonds shall continue in the custody and control of the Commissioners1 Court of the oounty in which they were iasusd, and shall be by said court sold to the highest and beet bidder for cmsh, either in whole or in parcels, at not less than their par value, and the purchase money therefor shall be placed in the county treasury of such county to the credit of the available road fund of such county, or of such politicai subdivision or road district of such Cc````ip~s2``ac``selb:a~;I:*,Acts 19.6, 39th Leg.,lst This statute, it is seen, provides in positive language for the deposit of the proceeds of the road district bonds in the county treasury (i.e., county depository under Articles 25&l+., et seq., V.A.C.S.). Article 2547 provides for the filing of bonds or the pledge of securities by the county depository, and fixes the amount thereof. Artiale 2543 provides for an additional bond when "aftsr,the creation of a county depository . . . there shall ac- &e‘to the county or any subdivision thereof, an9 funds or moneys from the sale of bonds or otherwise . . ."-The article pro- vidds.for writtendemand by the Commissioners' Court upon the de- pository, and further, that: "Upon the failure of such deposi- tory to furnish such additional bond within thirty'(30) days from the date of such demand, the Commissioners Court may cause suoh special funds to be withdrawn, upon the draft of the county treasurer from such depository, and cause the same to be depoei- ted in soms solvent National bank or State bank whose combined capital stock and surplus is in excess of such special fund, and to leave the same or so much thereof as may not have been expen- ded with such National bank or State bank of last deposit, until such time that such county deoo5itory ray have filed with the Commissioners' Court the requ%re:!additional bond, when such special fund or so much thereof as shall not have been expended shall be forthwith returned to and deposited with such county depository." The article furth,:,provides: "This requ:~rin;.; of such additional or special bond shall be optionai uith such Com- missionerc' 'Jourt." Bonorable Pat R. Bobo - Page 3 It would first seem that Article 2548 would answer all questions in whlah you are interested,for it makes provi- sion for an additionalbond, for the deposit of the speoial funds in other banks if the depository falls to furnish the additlonal bond, and further provldes that the requirement of an additionalbond ia optlonal with the Commlsslonerr~Court. Howover, Artiole 2547 wa8 amended in 1933 (Aotr 1933, 4Srd Leg., ah. 66). In setting the mount of the bond of the depository provldesr ... said bond or bonds to be in an ,,3he:ca$sndment 'enOk& equal to the estimated highest dally balance of nuah oounty as determined by the Commis8ioners'Court, suoh estUsa- ,ted'dailybalsnoe to be In no event leas than seventy-fiveper c+int~ofthe highest dally balanae of said oounty for the next preaedlng year, less the amount of bond funds reoeived and ex- It must have been the Intent of the Legislature that the underscoredpsrt of Article 2547, as anmnded, would have a mend&tory effeot. This Is evident because under Article 2548 the Commissioners'Court already had the authority to requti an additionalbond, but the exercise of the authority was expressly optional, The underscoredpart would, therefore,be pointless nnless it is given a mandatory effect. Moreover, it is our opinion that the language used clearly shows that this effeot was the one intended by the Legislature. Artiole 2548, insofar as it provldea that the requiring of an additional bond Is optdt~nal,confliots with the later eat; therefore,that part of Artlole 2548 was repealed. It follows that your first question should be answered as follows; The bond proueeds should be plaaed in the oounty de ository to the credit of the road district. Under Artiale 8, as modified by Article 2547, as amended, the Commlssloners* 25fs Court, at its first meetlng after such funds are deposited, or as soon thereafter as prautlcable,muat make written demand for ad additionalbond (or pledge) to oover the amount of such bond proceeds. If the bank falls to furnish the additional bond within thirty days of the demand, the funds may be withdrawn and deposIted in a liatlonslOP State bank as outlined in Artiale Honorable Pat R. Bobo - Page 4 2548. Ii the depositorym&es it known prior to the expiration of - - thirty the .. days that it will not furnish the bond, then the runds m8y tnereupon be withdrawn and deposited 8s Indicated In the prooeding sentence. In other words, the county does not have to wait the thirty days If it Is alear that the depository will not furnish the bond. We have said above that it is our opinion that the optional part of Article 2548 wes repealed by the 1933 amsndment;there- fore, lf.the oounty depositoryfails to furnish the additional bond, then it is our further opinion that the Commlsalonera~Court must aeleot another depository (See Artioles 2947 and 2556). If no appliaations8re subtitted,then the Commissioners'Court should proceed under Artiole 2550. The bond proceeds should thereupon be deposited in the depository so selected. As to your second questlon. we have held In several opln- ions that under Artlole 708b, Vernon's Annotated Texas Statutes, the proceeds of munloipaI bonds Issued or sold after April 12, 1943, m8y not be invetsed incbllgatlonsof the United States. In Opln- Ion Ro. O-7393 we held that the proceeds of county rosd bonds issued In,1946 couldwt be so invested. That opinion Is appllca- ble to the questlon under consideration,and 8 copy of the opinion 1s enclosed foqr$ourconsideration. Based upon this opinion, you are advised that your question is answered in the negative. . Very tn%y yours ATTORREY CD?.RERAL OF TRXAS enal. l3WS-al-mrJ APPROVEQ) xwv 1, 1946 /a/ Orover Sellers ATTORNEY GEI03RALOF TEXAS APPROVD OPIIiIONCOmT!ll?.E BY /a/ B. W. B, CRAIRMAN