Honorable J. W. Edgar 

Commissioner of Education 

201 East 11th Street 

Austin, Texas 78711 

Opinion No. M-455 

Re: Whether certain securities 

are acceptable securities 

for school depositories 

under'Article 2832 or 

Dear Mr. Edgar: 

Article 2832c, Vernon's 

Civil Statutes, and related question. 

By recent letter you have asked this office for an opinion 

on the following questions: 

1. Whether the following securities are acceptable as securities for school funds deposited 

pursuant to the provisions of Article 2832 or Article 

2832c, Vernon's Civil Statutes. 

A. Federal Intermediate Credit Bank Debentures 

B. Federal Home Loan Bank Notes 

C. Federal National Mortgage Association Notes 

and Debentures 

D. Federal Land Bank Bonds 

E. Banks for Cooperatives' Debentures 

F. Export-Import Bank of the United States 

Participation Certificates 

G. Export-Import Bank of the United States Debentures 

2. Whether Article 842a, Vernon's Civil Statutes, or 

any other statute, operates to make the above listed 

securities acceptable securities for school depositiory 

purposes. 

- 2255 - 
Honorable J. W. Edgar, page 2 (M-455) 

Article 2832, Vernon's Civil Statutes, is quoted, in part, 

as follows: 

"In any independent district of more than one 

hundred and fifty (150) scholastics, . . . the treasurer 

of the school fund shall be that person or corporation 

who offers satisfactory bond and the best bid of interest 

on the average daily balances or time deposits for the 

privilege of acting as such treasurer. . . . provided, 

further that such governing body may, in lieu of the bond 

herein authorized, accept a deposit of approved securities, 

which securities may include bonds of the United States, 

or of this State, or of any county, city, town or independent school district in the State, or Anticipation Tax 

Warrants and/or Anticipation Tax Notes legally issued 

by the governing body of such school district, which shall 

be deposited as such governing body may direct, in an 

amount sufficient to adequately protect the funds of such 

school district in the hands of the selected treasurer." 

Subsection d of Section 3 of Article 2832~ is quoted as 

follows: 

"d. Approved Securities: shall mean bonds of the 

United States, bonds of the State of Texas, bonds of 

the counties of the State of Texas, bonds of school 

districts of the State of Texas, bonds of any town or 

city of the State of Texas, and bonds of any other district or political subdivision of the State of Texas." 

Article 2832, originally enacted in 1925, is authority for 

independent school districts, of over 150 scholastics, to 

select a depository for school funds. Article 2832c, enacted 

by the Legislature in 1967, represents an alternative method for 

independent school districts of over 150 scholastics to select 

a depository for school funds. 

Both articles refer to specific securities as being approved 

for the purpose of securing the deposits. However, one difference in the two statutes should be noted in passing. Article 

2832~ states that the approved securities shall mean bonds of the 

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Honorable J. W. Edgar, page 3 (M-455) 

United States, etc., and Article 2832 states that the approved as 

securities may include bonds of the United States, etc. Arguably, 

Article 2832 is broader in scope regarding what may be approved 

securities. However, it is our opinion that the Legislature 

intended to limit the approved securities in Article 2832 to 

those approved in said statute or some other security authorized 

by specific legislation, because there are no guidelines in 

Article 2832 as to what would be approved securities, other than 

those listed. 

It is further our opinion that question number one must be 

answered in the negative, unless the above listed securities can 

be considered "bonds of the United States". We think not. According to the Handbook of Securities of the United States 

Government and Federal Aqencies, published by the First Boston 

Corporation, 22nd Edition, 1966, pages 89-113, the securities 

listed above are not bonds of the United States Government, 

but rather are obligations of the various Government chartered 

agencies. You are referred to the discussion of the various 

securities in said Handbook. 

Your second question requires an analysis of Article 842a, 

Vernon's Civil Statutes. We quote from Article 842a as follows: 

"Hereafter, all mortgages, bonds, debentures 

notes, collateral trust certificates, and other such evidences of indebtedness, issued or that hereafter may be 

issued under the terms and provisions of the National ' 

Housing Act, approved by the President of the United 

States on June 27, 1934, as amended and as may hereafter be amended, and all 'insured accounts' issued 

or that may hereafter be issued by any institution 

insured under the provisions of Title IV of the National 

Housing Act, approved June 27, 1934, as amended and as 

may hereafter be amended, or any evidences of indebtedness or accounts that may be issued or insured by any lawful 

agency created thereunder, all mortgages, bonds, debentures, notes, collateral trust certificates, or other such 

evidences of indebtedness, which have been or which may 

hereafter be issued by the Federal Home Loan Bank Board, 

or any Federal Home Loan Bank, or the Home Coiners' Loan 

Corporation, or by the Federal Savings and Loan Insurance 

Corporation, or by the Federal Farm Loan Board, or by any 

- 2257 - 
Honorable J. W. Edgar, page 4 (M-455) 

Federal Land Bank, the Federal Intermediate Credit Banks, 

or Banks for Cooperatives, or by any National Mortgage 

Association, or by any entity, corporation or agency, which 

has been or which may be created by or authorized by any 

Act, which has been enacted or which may hereafter be 

enacted by the Congress of the United States, or by any 

amendment thereto, which has for its purpose the relief 

of, refinancing of or assistance to owners of mortgaged 

or incumbered homes, farms, and other real estate, and the 

improvement or financing or the making of loans on any real 

property, shall hereafter be lawful investments for all 

fiduciary and trust funds in this State, and may be accepted 

as security for all public deposits where deposits of 

bonds or mortgages are authorized by law to be accepted." 

It seems clear that the Legislature intended to authorize 

that securities of certain federal agencies would be valid 

investments and security for all public deposits, and would 

include deposits made by public schools. 

It is our opinion that Article 842a would be applicable to 

deposits made by public schools under the rather broad definition 

of approved security in Article 2832. Therefore, all mortgages, 

bonds, debentures, etc. of the specific covered federal agencies 

would be approved securities for deposit of school funds pur-, 

suant to Article 2832. 

Article 2832~ presents a different question because, as 

pointed out on page 3 (above) that Article in Subsection d of 

Section 3 defines "approved securities" to mean certain specific 

securities, and these specific securities do not include any of 

the securities listed in your request. 

Article 2832c, as passed by the Legislature in 1967, is a 

much later expression of legislative intent than is Article 842a, 

which was last amended in 1961. In addition, Article 2832~ is 

a specific statute, whereas Article 842a is a general statute: 

and it is a well settled rule of judicial construction that a 

specific statute evidences legislative intent more clearly and 

will control over a general statute in the event of any conflict. 

53 Tex. Jur. 2d 160, Statutes, Sec. 110: Townsend v. Terrell, 

118 Tex. 463, 16 S.W. 2d 1063 (1929). 

- 2258 - 
Honorable J. W. Edgar, page 5 (M-455) 

Therefore, it is our opinion that Article 842a is not 

applicable to deposits made pursuant to Article 2832~. Only 

those approved securities listed in Article 2832~ will satisfy 

deposits made pursuant to that statute. 

All of the above listed securities are specifically covered 

by Article 842a. except the Export-Import Bank of the United 

States. 

Since the Export-Import Bank securities not being specifically covered, in order to qualify they would have to be covered 

by the general language of Article 842a, to wit: 

"Or by an entity, corporation or agency, which 

has been or which may be created by or authorized by 

any Act, which has been enacted or which may hereafter 

be enacted by the Congress of the United States, or by 

any amendment thereto, which has for its purpose the 

relief of, refinancing of or assistance to owners of 

mortqaqed or incumbered homes, farms or other real 

estate and the improvement or financing or the makinq 

of loans on any real property . ..I’ (Emphasis added.) 

We are unable to say, as a matter of law, that ExportImport Bank securities are not covered by Article 842a. Each 

such security must be separately examined to determine the 

nature of its collateral, as real estate collateral, as required, 

is not necessarily present in each instance. The Handbook of 

Securities of The United States Government and Federal Agencies, 

supra, pages 112-113, indicates the Export-Import Bank has 

broad investment powers and therefore any security of such bank 

which is specifically secured by a loan on real estate would 

satisfy Article 842a. 

SUMMARY 

The provisions of Articles 2832 and 2832~. 

Vernon's Civil Statutes, do not authorize as 

approved securities for purposes of securing 

- 2259 - 
Honorable J. W. Edgar, page 6 (M-455) 

school funds the following listed securities: 

A. Federal Intermediate Credit Bank Debentures 

B. Federal Home Loan Bank Notes 

C. Federal National Mortgage Association Notes 

and Debentures 

D. Federal Land Bank Bonds 

E. Banks for Cooperatives' Debentures 

F. Export-Import Bank of the United States 

Participation Certificates 

G. Export-Import Bank of the United States Debentures 

On the other hand, all of the above listed 

securities including F and G, as qualified, would 

be approved securities for the purpose of securing 

school depository funds due to application of 

Article 842a to Article 2832. 

The provisions of Article 842a do not apply to 

deposits made pursuant to Article 2832~. 

Yourp/ Y ery truly, 

C. MARTIN 

General of Texas 

Prepared by James C. McCoy 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Kerns Taylor, Chairman 

George Kelton, Co-Chairman 

Joseph H. Sharpley 

Charles Rose 

Fielding Early 

Jack Sparks 

W. V. GEPPERT 

Staff Legal Assistant 

HAWTHORNE PHILLIPS 

Executive Assistant 

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