JIM MATTOX 

Attorney General 

Supreme Court Building 

P. 0. Box 12548 

Austin, TX. 76711. 2548 

5121475~2501 

Telex 9101674.1367 

Telecopier 5121475.0266 

1607 Main St., Suite 1400 

Dallas. TX. 752014709 

2141742-6944 

4624 Alberta Ave., Suite 160 

El Paso. TX. 79905-2793 

9151533-3464 

r 

220 Dallas Ave., Suite 202 

Houston, TX. 770026966 

7131650-0666 

606 Broadway. Suite 312 

Lubbock, TX. 79401-3479 

6061747.5236 

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McAllen, TX. 76501-1685 

5121662-4547 

200 Main Plaza. Suite 400 

San Antonio, TX. 782052797 

5121225-4191 

An Equal Opportunity/ 

Affirmative Action Employer 

The Attorney General of Texas 

June 28, 1983 

Mr. John P. Parsons 

commissioner 

Credit Union Department 

914 East Anderson Lane 

Austin, Texas 78752 

Dear Mr. Parsons: 

Opinion No. JM-42 

Re: Whether certain school 

funds may be deposited in 

credit unions 

You have asked whether an independent school district may deposit 

"activity funds" in a credit union in Texas. In a letter to this 

office, you characterized "activity funds" as: 

[Tlhose monies belonging to various organizations 

such as the PTA (Parent-Teachers Association), 

school bands, drill team clubs, and athletic 

booster clubs which are held by a school district 

for safekeeping and accounting. The monies are 

not derived from taxes but are generally obtained 

by an organization through solicitation of 

contributions, promotions and similar functions 

for the sole benefit of the organization, with 

such monies being the property of the organization 

and not the school districts. The school district 

merely acts as custodian of the monies. 

In Attorney General Opinion Mw-272 (19801, this office concluded 

that the School Depository Act, Education Code sections 23.71 et seq., 

to which independent school districts are subject, requires that a 

"school depository" shall be a bank located in Texas. Sec. 23.74. 

The opinion held that a savings and loan association does not qualify 

as a "bank" within the meaning of this provision. See 923.73 

(definition of "bank"). In Attorney General Opinion MW-534 (1982). 

this office held that a credit union is not a "banking corporation, 

association or individual banker." It follows, in our opinion, that 

credit unions are not "banks" within the meaning of the School 

Depository Act, and therefore may not serve as school district 

depositories. 

If an independent school district may not use a credit union as 

its depository, it necessarily follows that any funds that must be 

placed in the depository by the school district may not be deposited 

p. 181 
Mr. John P. Parsons - Page 2 (JM-42) 

in a credit union. Thus, the next step 1s our analysis is to 

determine whether any statute requires an independent school district 

to deposit in the school depository the “activity funds” that you have 

described. Although the School Depository Act contains elaborate 

procedures to be followed by school districts in selecting their 

depository, it offers no clue as to what school funds must be 

deposited therein. There are statutes requiring that certain funds be 

placed in the school depository, see, e.g., Educ. Code 6923.94(d); 

23.95(f) (tax revenues); 16.254(c) (foundation school funds); 15.10(d) 

(state available school funds), but we have found no statute that 

touches upon the funds about which you are concerned, and our 

attention has been directed to no such statute. 

In a letter which was submitted to this office, the Texas 

Education Agency urges that “co-curricular activity” funds, as that 

term is defined in Texas Education Agency Bulletin 679, must be placed 

in the school depository. The agency asserts: 

Briefly stated, it is the position of the Texas 

Education Agency that funds deriving from 

co-curricular, school-related activities and held 

in trust by Texas public school districts for a 

dedicated purpose are under the control of each 

district’s Board of Trustees for the purpose of 

the trust. Accordingly, such co-curricular funds 

must be both fully accounted for and accorded the 

same measures of care, collateral protection and 

safekeeping as are public funds derived from state 

appropriations, local taxes and federal grants. 

To assure this the State Board of,Education and 

the Commissioner of Education promulgated, 

effective April 9, 1982, significant changes in 

Texas Education Agency Bulletin 679. adopted by 

reference at 7 Tex. Reg. 1300, March 26, 1982. 

These changes, effective September 1, 1982, 

require all school districts to treat and account 

for co-curricular funds as a part of the General 

Fund under the direct control of each school 

district’s Board of Trustees. . . 

. . . . 

Because co-curricular funds have been, since 

September 1, 1982, unarguably under the control of 

the Board of Trustees of each Texas public school 

district, it is our opinion that these funds must 

be deposited by each public school district only 

as prescribed by the School Depository Act. . . 

-, 

T, 

? 

p. 182 
Mr. John P. Parsons - Page 3 (JM-42) 

and may not be separately deposited with any 

financial entity other than the district's school 

depository bank or banks. 

We understand that "co-curricular activity" funds are funds 

deriving from "school sponsored events or activities that are financed 

or subsidized from public school funds." TEA Bulletin 679, Procedure 

CDE-402. It is true that Bulletin 679 places these funds in the 

category of "general funds" which are under the control of the boards 

of trustees in the school districts. It is, also true that school 

districts are required to account for general funds. See, e.g., TEA 

Bulletin 679, Procedures CDE-402; CDE-406; APP-B-2; see also Educ. 

Code §21.256 (annual audit of school district fiscal accounts). It 

does not follow, however, that these funds "may not be separately 

deposited with any financial entity other than the district's school 

depository bank or banks." As we have noted, we have found no statute 

that requires that these funds be deposited in the school depository. 

We have not, moreover, found any provision in Bulletin 679 that 

imposes such a requirement. To require districts to account for a 

certain class of funds is not, in our opinion, to require them to 

deposit those funds in a particular place. It may be (although we do 

not decide this issue) that the Texas Education Agency possesses the 

requisite statutory authority to promulgate an administrative 

regulation requiring independent school districts to deposit 

"co-curricular activity" funds in their depository. It has not done 

so, however. 

Because no statute or administrative regulation to which our 

attention has been directed requires independent school districts to 

deposit in their depositories the "activity funds" that you have 

described, we conclude that districts may place these funds in credit 

unions. 

SUMMARY 

Independent school districts may deposit 

"activity funds," as herein defined, in credit 

JIM MATTOX 

Attorney General of Texas 

TOM GREEN 

First Assistant Attorney General 

P. 183 
t 

Mr. John P. Parsons - Page 4 (JM-42) 

DAVID R. RICHARDS 

Executive Assistant Attorney General 

Prepared by Jon Bible 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Susan L. Garrison, Chairman 

Jon Bible 

Rick Gilpin 

Yolanda McKeeman 

Jim Moellinger 

Nancy Sutton 

p. 184