. 

Honorable John M. Turner 

County Attorney 

Bee County 

Beeville, Texas 

Dear Sir: Opinion No. O-3025 

Re: Authority to transfer surplus 

In bond fund of school district 

to another fund. 

We received your letter dated December 21, 1940, 

requesting our opinion on the following questions whioh we 

quote as follows: 

"1. Whether or not the money now in the depository credited to the sinking fund of former 

Common School District MO. 5 can be transferred 

by the depositary to the maintenance fund of Rural 

High School District No. 33, as all of the bonds 

of Common School District No. 5 have been fully 

paid, or 

"2~ Whether or not the amount of money now 

In the depository to the credit of the sinking 

fund of former Common School District No. 5 (which 

ceased to exist on December 14, 1937) can be transferred by the school distriot or depository to the 

sinking fund of the bonded indebtedness of Rural 

Rlgh School District No. 33." 

We quote the following facts from your letter as 

follows: 

"1 . On Deoember 14, 1937, Rural High School 

District No. 33 was established, as is shown by 

a certified copy of the order of the County Board 

of School Trustees of Bee Count 

1' 

Texas, entered 

Nunc Pro Tune, as of December 1 , 1937, herewith 

enclosed and marked 'Exhibit A'. 
Honorable John M. Turner, Page 2, O-3025 

"2 . At the time of the establishment of 

this district there was an outstanding bonded 

Indebtedness owing by Pettus Common School District No. 5, which Common School Distriot No. 5 

is now a part of Rural High School District No. 

33. At the time of the establishment of Rural 

High School Distriot No. 33 there had been levied 

and was being collected a tax of $1.00 upon the 

one hundred dollar valuation of all taxable property within said Common School District No. 33, 

a portion of which to be applied to create a slnking fund to pay the Interest and principal as the 

same became due, and while said bonds or any of 

them were outstanding a tax for each year at a 

rate from year to year as will be ample and sufflcient to provide funds to pay the current Interest 

on said bonds and to provide the necessary sinking fund. A certified copy of the order of the 

commlssioners~ court of Bee County authorlzlng 

the issuance of these bonds is hereto attached 

marked 'Exhibit B'. 

“3 . Since the incorporation of Rural High 

School District No. 33, which included Pettus 

Common School DistrFct No. 5, the school trustees 

of Rural High School District No. 33 have annually 

levied a tax of $1.00 upon the one hundred dollar 

valuation of all taxable property within said 

district for the maintenance of schools therein 

and the payment of interest and principal of 

bonded indebtedness. 

“4 . January 1, 1939, there was levied by 

the sohool trustees, of the Rural High School District a tax of $1.00 upon the $100.00 valuation 

of all taxable property within said district, as 

is shown by the order of the school trustees, a 

certified copy of which is hereto attached and 

marked 'Exhibit Cl. 

“5. March 14, 1939, there being a sufficient 

amount of money in the sinking fund from taxes 

previously collected to retire and pay off the entire prinoipal and interest of the bonds that were 

issued for Common School District No. 5, herelnabove mentioned. 
Honorable John M. Turner, Page 3, O-3025 

“6. The taxes for the year 1939 had, 

prior to the date of the payment of these 

bonds, been levied by the school trustees of 

Rural High School District No. 33, and for the 

year 1939 the taxes so levied and assessed by 

Rural Elgh School District 33 were collected 

by the tax collector of Bee County and approxlmately $6,500.00 thereof was placed In a sinking fund known as Common School District No. 5 

Sinking Fund with the depository, and this amount 

of money now remains with the depository and the 

entire bond issue of Common School District No. 

5 has been paid off, whFoh was paFd March 1939." 

"RxhFblt C", referred to in paragraph No. 4 

letter reads, in Part, as follows: 

"On this the 14 day of October, 1940, there 

was convened a meeting of the Sohool Trustees 

of Pettus, Tuleta, Normanna Rural High Sohool 

District MO. 33, located In Bee County, with the 

following members present: 

"R. 3. Bill - President 

L. W. D1rk.s 

Bob Walton 

Guy Palmer 

H. A. Rabe 

E. E. Green 

"when among other proceedings had the matters 

hereinafter set out came on to be considered by 

the trustees. 

of your 

"On this day came on to be heard and consldered by the Trustees of Rural High School District 

MO. 33, Bee County, the order of this Board heretofore entered Fn 1939, levying the taxes for all 

purposes upon all taxable property within Rural 

High School District No. 33; and I,t appearing to 

the Trustees that the order levying taxes upon all 

taxable property wlthin Rural High School District 

No. 33 does not appear upon the minutes of the 

Board of Trustees, though said taxes were 1evFed 

by this district and assessed and have been collected in part by the Tax Collector of Bee County, 

Texas. 
Honorable John M. Turner, Page 4, O-3025 

"And It further appearing to the Board of 

Trustees that said order levying taxes, as aforesaid, is not, properly entered upon the minutes of 

the Board of Trustees, Rural High School District 

No. 33, Bee County, for the year 1939, and it havFng been conclusively shown to the Board of School 

Trustees, Rural High School District MO. 33, and 

the Board so finds that a proper levy was made on 

the 1st day of January, 1939, ordering the proper 

officials of Bee County, Texas, to assess and collect the same ordering that saFd taxes be a legal 

charge on the property and the owners thereof 

tithin the Rural High School District No. 33, In 

accordance with the following rates: 

'$1.00 upon the $100.00 valuation of all 

taxable property of the said DlstrFct for the 

maintenance of schools therein and such amount 

as may be necessary to retire and pay the unpaid 

balanoe of any bonded indebtedness then existing 

or unpaid for which bonds have been Fssued by any 

former Common School District within said Rural 

High School District No, 33, and a balance remaining out of said $1.00 upon the T 100.00 valuation not used and necessary to pay the bonded lndebtedness of any former existing bonds shall be 

placed in the maintenance fund of said Rural High 

School District No. 33. 

"IT IS THRREPORE ORDRRED by the Trustees of 

Rural HFgh School District MO. 33, all members of 

the board.belmig p&zeenkand:;alP votiag,:;that bald 

taxes of $1.00 upon the $100.00 valuation of all 

taxable property in said Rural High School District 

No. 33 for the year 1939 be, and the same is now, 

levied against the property tithln said Rural High 

School District No. 33 and the owners thereof, as 

are. subject to taxation, and that the same be, and 

is hereby, just and proper rate to be levied to 

raise the revenue sufficient to satisfy the obllgations of said Rural High Sohool District No. 33 

and for the maintenance of schools therein, and 

that said taxes are made a legal charge on said property and against the owners of same; that the 

assessor of Bee County, Texas, is hereby ordered 

to extend the same on the tax rolls and the tax 

collector is ordered to collect said taxes, and 
. . . . 

Honorable John M. Turner, Page 5, O-3025 

the secretary of this board is ordered to prepare and file with the tax assessor-collector 

a certified copy of this order to be entered Nuno 

Pro Tune as of the 1st day of January 1939." 

Authority of the school board to .levy and collect 

the tax is provided for in ArtFcle 2922-1, Vernon's Annotated 

CLvil Statutes, whhioh reads, In part, as follows: 

"The board of a rural high school district 

provided for in this Act shall have the power to 

levy and collect an annual ad valorem tax not to 

exceed One Dollar ($1) on the one hundred dollars 

valuation of taxable property of the district for 

the maintenance of schools therein, and a tax not 

to exceed Fifty (50) Cents on the one hundred dollars valuation of taxable property of the district 

for the purpose of purchasing, constructing, repairing, or equipping public free school buildings 

within the limits of such district, and the purchase of necessary sites therefor; providing that 

the amount of maintenance tax, together with the 

amount of bond tax of the district shall never 

exceed One Dollar ($1) on the one hundred dollars 

valuation of taxable property; . . ." 

From the above quoted facts, it appears that Rural 

High School District No. 33 collected taxes from the rural district for the year 1939. A portion of said taxes were alloted 

to a sinking fund to retire the bonded indebtedness of Common 

School District No. 5. It appears further that the entire 

bonded indebtedness, for which the particular sinking fund involved was created, was paid off Fn March, 1939, leaving a 

balance in said fund of approximately $6,500. We assume that 

this surplus was caused by alloting more money, collected by 

the rural distrFct from the 1939 taxes, to the sinking fund 

than was necessary to pay off the bonds. 

The rule seems to be that money belonging to a bond 

fund cannot be used for maintenance. See McPhail et al v. Tax 

Collector of Van Zandt County et al., 280 S.W. 260 (writ refused.) This rule undoubtedly contemplates a situation where 

there exists outstanding bonds. However, where there are no 

outstanding bonds Fn existence, there is no need or purpose for 

an interest and sinking fund. In this connection, we quote 

from the case of Madeley et al v. Trustees of Conroe Independent School DFstrlct, et al., 130 S.W. (2d) 929 (writ dismissed 

as follows: 
Honorable John M. Turner, Page 6, O-3025 

"The following illustration Is in point 

on our holding: Where a district has Issued 

bonds and voted a tax to retire them, what becomes of the surplus of the tax when the bonds 

are retired? Sinoe it Is not reasonable that 

the exact amount of the bonds will be collected, 

on every bond issued the trustees will have In 

their hands a surplus. Again, a tax payer permlts his tax to beoome delinquent until after the 

bonds are retired; when sued, can he defend on 

the ground that the bands for which the tax against 

his property was levied have been paid off? When 

the delinquent tax is collected, how shall it be 

expended? These questions find their answer in 

Sec. 3 of Art. 7 of the Constitution; where the 

bonds have been paid off the statutes regulating 

the expenditure of the funds for their payment 

cease to oontrol the power of the trustees in 

the expenditure of the surplus, and its expenditure rests in the discretion of the trustees, 

under Sec. 3 of Art. 7 of the Constitution." 

It Is our opinion that the money in question now 

deposited In the sinking fund of former Common School District 

No. 5, all bonded indebtedness having been paid, can be properly transferred to the maintenance fund of Rural High Scho~ol 

District No. 33 upon proper order executed by officers charged 

with receiving and disbursing funds for said Rural High School 

District. 

We trust that our answer to your first question will 

satisfactorily answer your inquiry. 

Yours very truly 

ATTORNRYGRNRRALOFTRXA3 

APPROVRD JAN 22, 1941 

$/S~;;;;3;;~eps 

ATTORNRYGRNRRAL 

LS:db:mjs 

By /s/ Glenn R. Lewis 

Glenn R. Lewis 

Assistant 

By /s/ Lee Shoptaw 

Lee Shoptaw 

APPROVRD OPINION COMMITTEE 

BY fs/ BWB CHAlRMAN