Untitled Texas Attorney General Opinion ( 1944 )

Honorable Qilbert Donmm St&e lktardfor Vooaficmal Emsartlon c88;~lSt8t&am . Oplnlon lo. Q-5853 Ret DQU the State Board of mucation have the mAthor- ity to ulvo r tie* a w lrll the Army0 c01oradctiwlga- tlon M8trlat Refunding Rondo 00 the hl&ut b1dd.r atlwtlws than par a#@ la o r ued lnterarta ndth U8 obtalnurypmalumthat ml&M be pat& ror lp ea ula - tlve bond6 under preoent f'avwabltmnrk+t oondltione? And relate&guestioas. lie are in receiptoi your letter of recent date reacf~ aa to11ow8: Yhest8te mlwanentShoo1?uwI ow?m $Ul3,W.O0 Color&dolmfigrtion DloteiatRef. Bond8 &tad zc uhleh mtun over a prriod of about 24 years irola the ~eaent tam, %he werag matuHty being 14.35 5+ 9or sent intwe6t per annua %?kk!.m:~*-bo -f kforewturlty. "The Dimtriotham r& lppllratlonto the State Board of &duortlonfor pormlm~ionto pay the Bond6 b>. paylng pInalgal ti 800rued lntereetto date of &sty- In the qplleatlon tho M&riot rtatw that the r&oc VerImMt haa deoidedto deepen the Arroyo from H6rllngentotheBayat Fedaml expense00 that ttm Aa-- royo till be mvlgirblr,but the Oopawment requires the MatPlet to l’urr&ah me88~ rlghteof-uay amd otha hofllt%ea, requlr%ngth M8trlot to rlase an Udltloml three hundred thoumnd doll@rr. It lm mmeaented to the Board that the Di8triotoanborrouurou& nwny to py oif the Ron& held br the Sahool Rardandto w for thoad- ditlobl axpen o? right8-of-way, eta at ;. lm%xlaakly BonorabloOIlbertDenmum, Page 2 34 per cent, perhapsa lower rate on early mturltlu. The 9rennli Bon& Mve been In good slimdIng einim they uere lmauml. Bamver, the orIgInrlBond6uereindefault ?or severalyears. lA8a mlng topUrpcewr th* of the follwi~qu48- tlona that after mx lnve8tIgatlonand due oorwIdemtIon the St&e Board of Educationreaohw tha ooncluaIonthat the Arroyo ColoradoRavigatlonDlatrlctBonds am too rpeculatlveto W safelyowned by the School Fund, but that,neverthele8a,theyprobablyhavra preaonttmrket value oon8Idemblp In exaa*a of par and learued Interest, In vlar of the very favorablemrlat existingat this tlaa, th4nr . 3. Doss the Board have ruthorltyto advtwt4.m and sell these nonds to the highestblddar at not leas than par and aoorwd intauet and thus obtainany psaairathatlightbe prld ior apaculatlveBomls under &wend fWtvorsbleam-k& candItions? 2. Dow the Board have authorityto aaoept pay- ment ot these Bonda before rPturlty? 3+ Doe8 the Baud have authorityto aoaopt pay- !iqmt of the Bonda and reoelvoa voluntu--J payment 0r a promlumor penalty for the pelti- i0ge 0r gmpamt, th u80unt 0r the plvriur to be agree4 ta by the Borrd and t& DIetrIot? "we uould &redly lppxwdate aaauerato the foaugoing qwstlonr In two ror our next Board meetinguhloh U Ja 3a I am enclosine;a aopy of the lpplIa8tlonmd8 by the DIrtrIatto the Board l l 9, Theonly authoritygranted to the StateBorrdof Sdu- eation to releasemmatured bonds Ia found In &tIole 2787a, Vm*a Amokted Civil Statute8,uhlah artlalomda um follow: ~3kkBoal-d0f Fiduoat1onry -1H the truatteor of any aomon r&tool dintriotor of any lade- -f l0hO01 dl8tWt Of t&U Std.0 t0 IMY Off Uhd diB- LlonorabloOllba'thmn,PPge3 Sta te?erm.nmt School Fund, outatandlngagaln8t any a oa al mahOo1 dl8*lot, 0r any independent school dI8- triot In tam St&e. gIt8h&llbe the duty of the lchooltureteea of any a- aohoold1strIat,oc ury indermndent echool dletrlctof thX8 State deatiingto pilgoff and d%aahm& any bmsded Indeb- now ourwd or here~%fter to b8 owned by the PermanentS&o01 Fund of thlr State, outstanding again& such didriot oc distrlotct, before uaturltythereof,to rake diruct apPl:catlonIn wrltlng to the State Beam2 of ESduwtIonat laaat thirtydays before lnj interest paying date on o&Id bon@, mnklly knWn to 8a:d State ibax'dof Educationthe dealre Of' 8aid tmBtw8 to 9ay off ti dir- said bonded In- debtedness,or any part thereof,de8eriblnf: a&Id bon48 or the part tbreof that the trusteea deeire to pay off 8nd dlaoharge;and it ah&l1 be the duty of the State Eoard of gdwatlon upon receiptof such applloatlonto act thereonIn such muuker a5 they deebn boat and notify the applicantor aPplIcantawhetherapyllcetioais ce- fu8ed or granted In whole or In part) provldml,that only suoh t&x mtmay ea has been oollectsdby vlrtutf of tU levIe8 lade for the l~ifio pwpotie of p~~ltllnga lInklngfuadmd9a interest o nth ap t a r tlo ula b o nda r to be mdeemad ahalI- be ex)#nd+din the redemption,taking Up oi~PayIngOffOf8~~hbonda8a i%~Vi&dtiehi AOti m&88 uid bonds are being ndwmed SOS the plrrp0M0r being nfunded;endtheap911eat1on or the board or tru8- tees of my oomw or Ucdopendentschool dirtriet daSir-- ingtoretln bonda a8 hemIn 9wvIdled shall Includean 8ffidwit to that 8rred in their appliarrtlon; an4 pro- vided further,th8tIt8hllb8 wAlawfwlfaranyperlmn upan uhou any duty mat8 In emrylng out the provIalona Of #i8 18~ to give m rooelvsany commlasion,prealm, Or any ccmpenaatIon+hrtewx fortht persozwnoe of such duty or dut1.8. Plln 9IWiSia or this Aat 8ha11 epply also to the governingboard of all altie8,countleaend politlti 8ub- dI+I8IonaInthIaSkteuho8e bond@@reownedmdmwbme- lrt8rbeommlbythe Iwrmnebt school rlmd or the strte.* Itulll be obwrvdthat the applioation far pwml8aIonto m7 wamtured bonda mmtaoma frontho B b o a rodr th epolitiaal lubdivlalon leeklng to 9s~ 88Ld bon&. x0 8uthor:ty 28 mod to the l3fwd or Eduo8tion to ldvortlae tar bide, nor to 8eU bond8 In onj oth8r mUn3.r #&n th8t 8Ot out In hrtlala 2787,a, auora. won rweipt of the applloetlon rraathe gwerningboard to p8y 0rfbd d.%aoharga b~ncla, ‘it 8ha11 k tb duty Of the Stata B0U-d Of EdUO&lNI l * l t0 EOt thereonIn auoh mnnrmr ee they de- beot and notie the appll- cants whether the lppllaatlonIs nfu8ed or ganted in whole or In part." Tour Ttlon No, 1 la anamwed In tha negative. Inarurcrr~kn- queetionNo.2, youare8dvieedthet the State Board 0s Edwatltm may wmiilt the pmmayxtent 0s the bands In question at auoh times and upon auoh condItIone 81)are authorizedby the provIaIoneof Article2787s, above quoted. x.nanmm )o your qumtion x0. 3, the court 0s Civil A~pwla held In the case or Stats v. Hatcher,g S.Y. (2d 4, (Rwer6ed by the SuprmacCourt on other grourxlc, i31S.W. m2d 499) that the State Board ol EduoatlonOOUld ~equLra a bonlu of sixty dayc* lntercct. The court In oonst'p\Ltly; the law aaid: "UC are unable to aonatrueit tw inhibitingthe requlreamt of a bonus to be paid to the pcrtmxnt achsol fund for a p.rIVIltge which the board of educationvatigiven the dlaaratlonto allow or aeny. Suah dlaaretlon,we think,shouldadnit of reaaonrble oondltloneIapoaedby the board of edwatlon @a a mama OS prr- ventinglees to the permanent aohool fund by rowon of delay In reinvestinglto mm. A bonus of lIxty deya IntePeat eertalqlyoould not beheld unreaaonabla." ‘lo uer th a e r efo ldvl8edthatth8 re StateBo&rd OS Eduoatlon may ooncLttio?a the prwmynnt of the bon& m queatlon under Article2787a upon prepayuentby the dXetrIct &f;Ahn mount of intereat, ea a bonu8,aa It -7 fi% and . Youm very truly By /r/ c. I. GIBsca C, ?. Qlbaon AwIBtaat