### THE 

## A OIKNEY GENEOFI'EXAS
GROVER SRLLRRS AUSTIN aa.TEXAS

Honorable C. G. Mendenhall CoimtgAuditor Xhambers County Anahuac, Texas Dear Sir: OpinionNo. O-7393 Re: Investmentof countybond proceeds in short-termU.S. Treasury Certiflcates. We have received your letter of recent date which we quote, In part, as follows:

"This county has just sold a 3 million dollar bond issue, and in as much as it is going to be impossible for us to use these funds for some time, except a smallportion,we are anxious to know if the county has authority to invest these funds or a portion of them in short term U.S. Treasury Certificates. "Willyou give us your attention on this at your earliest convenience." Article 708b,Vernon's Statutes, provides as follows: "Thatany political subdivisionof the State of Texas which heretoforehas Issued and sold bonds Andyis unable to obtain labor and materials to carry out the purpose for which the bonds were issued may invest the proceeds of such bonds now on hand in defense bonds or other obligations of theUnlted States of America; provided, however, thatwhenever war time or any other regulations shall permit such political subdivlsionsto acquire the necessary labor and materials,, the obligations of the United States In which said proceeds are Invested shallbe sold or redeemed and the proceeds of said obligations shallbe used for the purpose for which the bonds of any such political subdivisionwere authorized~.Acts 1943, 48th Leg., p. 211, ch. 131, II2." (Emphasis added)Honorable G. C. Mendanhall,page 2

It Is seen that the words hand" are used. An examinationof 

### o-7393

"heretofore"and "now on the original act reveals that

.. __ . the samewords are used in the caption. moreover, tne emergency clause provides In part: "Thefact thatmany political subdivisions of the state have issued and soldbonds.
. . ' (Emphasisadded). - --

It Is obvious, therefore, that the act applies only to the proceeds of bonds which were issued and sold prior to the effectivedate of the act (April 12, 1943). As the.bondsunder consideratFonwere issued and sold in 1946, it Is evldent that the provisions of Article 708b are not applicable.

You are advised thatwe find no provision in law authorizing the investment of the proceeds of these bonds in United States Government Treasury Certificates. We quote the following from our OpinionNo. O-4746:

"It is a fundamentalprinciple of law that the proceeds derfved from the sale of bonds mst be devoted to the purpose for which the bonds were Issued and not otherwise. Beaumont v. Matthew Cartwright Land Co., 224 S.W. 539 (Errorrefused); Simpson v. City of Nacogdoches, 152 S.W. 858;Aransas County v. Coleman-FultonPasture Company, 191 S.W. 554; Lewis v. City of FortWorth, Texas, 89 S.W. 975." (2d)

You are, therefore,advised that the Court of Chambers County iswithout authority derived from the sale ofbonds issued or sold tive date of Article 708b (April 12, 1943) in Government Treasury Certificates. Commissioners' to invest proceeds after the~~effecUnited States
Very truly yours ATTORNEY GENERAL OF TEXAS

GWS/LH/wc By s/GeorgeW. Sparks George W. Sparks Assistant

APPROVED SEP 20, 1946 s/Carlos C. Ashley FIRST'ASSISTANT ATTORNEY GENERAL Approved Opinion CommitteeBy s/BWB Chairman