### THEAITORNEY GENERAL
~PTExA~

GERALD C. MANN AUSTXN~ILTBXAR
--ON *TrORNEzYc4ENERAL

Honorable Eugene Brady CountyAttorney Hunt County Greenville,Texas
Dear Sir: Clginion No. O-3329 : Can the commissioners' court invest surplus bond funds in the United StatesDefense Bonds under the facts set forth?

Your letter of November 

### 13, 1941, requestingan opinion of this department on the above'stated question, reads, in part, as follows:

*Underthe terms of Article 752a RCS a special road districthas been formed in this county and bondsvoted in the amount 0f 

### Qb125,ooo.These bonds have been sold and the money is now on hand. In conformity with said article such bonds were issued for the specificpurpose of constructingmacadamized roads in the defined road precinct.
"The bonds have now been sold and said District has on hand the Qb125,OOO.They are commencing constructionof roads as soon as possible, however, they are of the opinion that onlyabout $50,000 of this amount will be used within the next two or threeyears. They desire to invest the surplus funds amounting to about $50,000 in United States Defense Bonds.
"The Commissioners'Court has requested an opinion as to whether they can legallyHonorablebugene Brady, Page 2 O-3329

invest thismoney in United States Defense Bonds,
"Article 752a provides that a road district may be createdand 6s hereby authorized to issue bonds for the purpose of the construction, maintenance and operation of macadamiaed, gravelled, or paved roads and turn pikes or in aid thereof.'
"Article 752 reads in part: 'Theelection order and notice of the election shall state the, purpose for which the bonds are to be issued, the amount thereof, rate of interest,etc.' "Article 752j provides that said bonds shall be sold to the highestbidder for cash 'andthe purchasemoney therefor shallbe placed in the County Treasury of such County to the credit of the Available Road Fund of such countyor of such political subdivisionor road district,of such countyas the casemay be.'
"Article 7520 reads as follows: 'TheCounty Treasurer is oustodian of all funds collected by virtue of this law and shall deposit themwith the CountyDepository in the sanemanner as County Funds are deposited. It shallbe the duty of the County Treasurer to promptly pay the interest, and principal as it becomes due on such bonds out of the funds collectedand deposited for that purpose.' "Article 752~ is as follows: 'Thepurchase money for such countybonds shall be paid out by the County Treasurer upon warrants drawn on the available road fund, issuedby the County Clerk, countersignedby the County Judte, upon certified accounts approved by the Conc.issionerst Court of the county; and the Furchase ,money,for suchbonds issued on the faith and credit of political subdivisionor district shallbe paid out by the county treasurer upon warrants drawn on the available road fund thereof, issued by the County Clerk, Countersignedby the County Judge and approved by the Cotmissioners' Court.'Honorable Eugene Brady, Page 3 O-3329

"Article 752~ and 7.52~ define the powers of the Commissioners'Court in awarding contracts for work to ,bepaid for out of the saidbond money. "Article 779 RCS is as follows: 'TheConmissioners' Court nay invest sinking funds accutntnulated

for the redemptionand payment of any bonds issued by sue>eounty,political subdivisionor defined district thereof, in bonds'of the United States; of Texas, or any county in this state' --------* 'No such bonds shall be purchasedwhich according to their terns mature at a date subsequentto the tine of maturity of the bonds for the nayment of which such sinking fundwas created.'
"1 have been unable to find any other statutes or any decisions touching on this question. However, from a constructionof the above articles it seems to me that the sale price of such honds are held by the County as Trustee for theRoad District and that the Commissioners'Court, nor no other authority,would be justified inexpending any of the principal raised from such bond sale for any purpose other than for the nurpose set out in the election order, that is, the construction,maintenance,etc.of roads. It is by belief that County Treasurerwould not be justified in paying out suchmoney for the purchase of defensebonc;s or for anything other than for actualmaterial, labor and suppliesused in construction,and maintenance of the roads to be built, and then only upon properwarrants upon certified accounts approvedby the Commissioners'Court. Of course I think it is clear that the Conmissioners' Court could invest any surplus '.,hat might be accummulated in the sinking funds in such defensebonds."
Article 752q,Vernon's Annotated Civil Statutes,provides:Honorable Eugene Brady ,Page 4 O-3329

"The expense incurred in surveying the boundaries of a political subdivisionor road district, and other expenses incident to the issuance of bonds of such subdivision or district, shall be paid from the proceeds of the sale of the bono's of the subdivision or district issuin!: the sane."

We have carefully considered the statutes cited in your letter, togetherwith other statutes cited in Chapter 3, Title 22,Vernon'sAnnotated Civil Statutes, relative to county and municipal bonds, etc., and agreewith the conclusion statedby you.

Therefore, it is our opinion that the commissioners* court or ;ny other authority does not have any legal authority or power to expend any portion of the principal raised from such bond salefcrany other purpos~e than for the purpose set out in the election order and those expenses authorizedby Article 752q, supra. It is our further opinion that the commissioners'court could invest any surplus that might be accununulated in the sinking fund in such defense bonds in compliancewith the provisions of Article 779,Vernon's Annotated Civil Statutes.

We thank you for the brief and the opinion expressed by you. Trusting that the foregoing fully answers your inquiry, we are
Yours very truly
ATTORNEY GENERALOFTEXAS

BY Ardell Williams

Assistant

AW:PAM
APPROVEDNOVEMBER 25, 1941 Grover Sellers FIRST ASSISTANTATTORNEY GENERAL Approved Opinion Committee By BWB, Chairman