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Honorable James E. Jeffrey Opinion No. M-107 

County Attorney 

Taylor County Courthouse Re: Whether a Commissioners 

Abilene, Texas Court is authorized to 

designate a bank as 

county depository under 

the fat ts and circumDear Mr. Jeffrey: stances presented 

You have requested the opinion of this office regarding the above question. In this connection you have supplied the following facts: 

“A certain bank desires to be designated 

as a county depository to receive funds which 

will result from a bona issue as a result of 

an election this year. The bank could not file 

an application to qualify as a county depository 

at the February regular term because one of the 

members of the Commissioners Court is a director 

and owns stock in such bank. We understand that 

Legislation was enacted this year removing such 

inhibition in situations where a county official 

owned less than lO$ of the stock in a bank seeking designation as a county depository. The member of the Commissioners’ Court owns less than 

lO$ of the stock in the bank, and he is still a 

director . ” 

In examining the question you have posed, the following statutes, quoted in pertinent part, are applicable: 

“Art. 2544. The Commissioners Court of each 

county is hereby authorized and required at the 

February Regular Term thereof next following each 

general election to enter into a contract with any 

s,. banking corporation, association or individual 

banker in such county for the depositing of the 

public funds of such county in such bank or banks. 

Notice that such contracts will be made by the 

Commissioners Court shall be published by and 

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. . . 

Hon. James E. Jeffrey, page 2, (M-107) 

over the name of the County Judge, once each 

week for at least twenty (20) days before the 

commencement of such term in some newspaper 

published in said county; . . . .” 

“Art. 2545. Any banking corporation, 

association or individual banker in such 

county desiring to be designated as county 

depository shall make and deliver to the 

County Judge an application applying for 

such funds and said application shall state 

the amount of paid up capital stock and permanent surplus of said bank and there shall 

be furnished with said application a statement 

showing the financial condition of said bank 

at the date of said application which shall 

be delivered to the County Judge on or before 

the first day of the term of the Commissioners 

Court at which the selection of the depositories is to be made. . . .I’ 

“Art. 2546. It shall be the duty of the 

Commissioners Court at ten olclock. a. m. on 

the first day of each term at which banks are 

to be selected as county depositories, to consider all applications filed with the County 

Ju%e, cause such applications to be entered 

upon the minutes of the Court and to select 

those applicants that are acceptable and who 

offer the’ most favorable terms and conditions 

for the handling of such funds and having the 

power to reject those whose management or condition, in the opinion of the Court, does not 

warrant placing of county funds in their possession. . . . 

The statutes above quoted grant to the Commissioners 

Court the authority to select a county depository or depositories at a certain time and by following a specified procedure. 

This office has previously declined to approve any variation 

from the established procedure. Attorney General’s Opinion 

O-3832 (1941) expressed the view that a county may properly 

designate one or more banking institutions as County depositories, but only if such depositories are selected from “those 

banking institutions who have regularly made application in 

accordance with the statutes .” Attorney General’s Opinion 

O-4451 (1942) cited Attorney General’s Opinion 0-3832 with approval, and declined to approve a plan,which called for variation of the depository rules established by statute. 
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I 

Hon. James E. Jeffrey, page 3, (M-107) 

The contention has been advanced that an’enactment 

of the 60th Legislature can be construed to make it permissible 

for the particular bank involved in your question to become 

qualified as a county depository immediately. The new statute 

in question is Acts, 60th Legislature, 1967, Chapter 179, Page 

370, codified as Article 2529c, Vernon’s Civil Statutes. This 

Act provides, in essence, that a bank shall not be disqualified from becoming the depository for any political subdivision 

by virtue of the fact that a member of the Board or Commission 

selecting such depository holds ten percent or less of the 

bank’s outstanding capital stock. This Act went into effect 

as an emergency measure on May 12, 1967. The said new statute 

does not purport to amend or repeal any of the statutes controlling the selection of county depositories in this State. 

This Act by its terms overruled the common law rule regarding 

conflicts of interest where the public official concerned with 

selecting the depository holds ten percent or less of the outstanding capital stock in the said depository. It is the view 

of this office that the said statute has the effect of making 

the bank in question immediately eligible for selection as a 

county depository, but such selection may nevertheless be made 

only at such time as a county depository may properly be selected by the county government. 

In answer to your specific question, you are advised that 

it is the opinion of this office that the Commissioners Court 

of a county does not have the authority to designate a bank 

other than the properly established county depository or depositories to receive special funds resulting from a county bona 

issue. 

SUMMARY 

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Under the stated facts, the Commissioners 

Court of a county does not have the authority 

to designate a bank as a county depository in 

addition to other qualified depositories to 

receive funds resulting from a county bona 

issue. 

truly yours, 

Prepared by Malcolm L. Quick 

Assistant Attorney General 

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Hon. James E. Jeffrey, page 4, (M-107) 

APPROVED: 

OPINION COMMITTEE 

Hawthorne Phillips, Chairman 

Kerns Taylor, Co-Chairman 

Jack Sparks 

Scott Garrison 

Marietta Payne 

John Duren 

A. J. Carubbl, Jr. 

Staff Legal Assistant 

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