**OFFICE OF**  **THE ATTORNEY**  **GENERAL OF**  **TEXAS AUSTIN** 

Honorable Pat R. Hobo County Attorney :Sailey County Euleshoe, Texas

Dear Sir: Opinion X0. 3-7343 Re: Deposit of bend proceeds in County deposWo,ry.

/ ~Lie have 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, %..., 1946. said bonds beincdated October l>, These bonds were of, ,_< constructing " said District. The bonds ha&been sdd and the Road District now,h'aX,the moheyfromthe sale of the bonds in hand. MuS,eshoe'State Bank, the County
he bond or seare unable at

f the fact that labor and materials secure at this time the Commisseems&j"limit such investments to bonds sold prior to April 12, 1943. Please advise us whether or not we can invest the proceeds from the sale of Road States obligations, in lieu of depositing the funds with a bank without lal>rful bonds or security deposits.". .

Nonorable Pat R. Bobo - Pace 2

Article 7523, Vernon's Annotated Texas Statutes, pravides 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 subdivisionor 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., et seq., V.A.C.S.). county depository under Articles 25&l+.,

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 providds.for writtendemand by the Commissioners' Court upon the depository, and further, that: "Upon the failure of such depository 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 depoeited 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 expended 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 Commissionerc' 'Jourt."Bonorable Pat R. Bobo - Page 3

It would first seem that Article 2548 would answer all questionsin whlah you are interested,for it makes provision for an additionalbond, for the deposit of the speoial **funds** in otherbanks if the depositoryfalls to furnish the additlonalbond, **and** furtherprovldesthat the requirementof an additionalbond ia optlonalwith 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 ,,3he:ca$sndment

provldesr

... **said** bond or bonds to be in an 'enOk& equal to the estimatedhighestdally balance of nuah oounty as determinedby the Commis8ioners' Court, suoh estUsa- ,ted'daily

balsnoe to be In no event leas than seventy-five per c+int~of

the highestdally balanae of said oounty for the next preaedlngyear, less the amount of bond funds reoeived and exIt must have been the Intent of the Legislaturethat the underscored

psrt of Article 2547, as anmnded,would have a mend&toryeffeot. This Is evidentbecauseunderArticle 2548 the Commissioners' Court alreadyhad the authorityto requti an additionalbond, but the exerciseof the authoritywas expressly optional, The underscored part would, therefore,be pointless
nnless it is given a mandatoryeffect. Moreover,it is our opinion that the languageused clearly shows that this effeot was the one intendedby the Legislature.

Artiole 2548, insofaras it provldea that the requiring of an additionalbond Is optdt~nal, confliotswith the later eat; therefore,that part of Artlole2548 was repealed.

It follows that your first question shouldbe answered as follows; The bond proueedsshould be plaaed in the oounty de ositoryto the credit of the road district. Under Artiale 25 8, fs as modifiedby Article 2547, as amended,the Commlssloners* Court, at its first meetlng after such funds are deposited,or as soon thereafteras prautlcable, muat make writtendemandfor ad additionalbond (or pledge)to oover the amount of such bond proceeds. If the bank falls to furnish the additionalbond within thirtydays of the demand, the funds may be withdrawn and deposItedin a liatlonsl OP State bank as outlinedin ArtialeHonorable **Pat** R. Bobo - Page 4

2548. Ii the of the thirty - - .. depositorym&es it known prior to the expiration

days that it will not furnish the bond, then the rundsm8y tnereuponbe withdrawnand deposited8s IndicatedIn the prooedingsentence. In other words, the countydoes not have to wait the thirtydays If it Is alear that the depositorywill not furnish the bond.

enal.
l3WS-al-mrJ

We have said above that it is our opinionthat the optional part of Article 2548 wes repealed by the 1933 amsndment;therefore, lf.the oountydepositoryfails to furnish the additional bond, then it is our further opinionthat the Commlsalonera~ Court must aeleotanotherdepository (SeeArtioles 2947 and 2556). If no appliaations8re subtitted,then the Commissioners' Court shouldproceedunderArtiole 2550. The bond proceedsshould thereuponbe depositedin the depositoryso selected.

As to your secondquestlon.we have held In severaloplnions that underArtlole 708b, Vernon'sAnnotatedTexas Statutes,the proceedsof munloipaIbonds Issued or sold after April 12, 1943, m8y not be invetsedincbllgatlons of the United States. In OplnIon Ro. O-7393we held that the proceedsof county rosd bonds issued In,1946couldwt be so invested. That opinion Is appllcable to the questlonunder consideration, 1s enclosedfoqr$our consideration. and 8 copy of the opinion

Based upon this opinion,you are advised that your question is answeredin the negative.

. Very tn%y yours
ATTORREYCD?.RERAL

OF TRXAS

**APPROVEQ) xwv**  **1,** 1946 /a/ Orover Sellers ATTORNEYGEI03RAL

OF TEXAS
APPROVD OPIIiION

COmT!ll?.E

BY /a/ B. W. B, CRAIRMAN