### GENERAL %-HE ~TTORl?GEY

OF- TEXAS
Ausnlv 11. TEXAS
WILL WILSON **AlTORNEY** OENERAI.

June 7, 1960

Mr. A. W. Walker OpinionNo. WW-854 County Attorney Dickens County Re: Whether Dickens County Spur Security Bank Building may depositwith the State spur, Texas Treasurer all of themoney necessary to service the interest and principal on outstandingbonds to maturity, and then spend the surplus in the sinking fund Dear Mr. Walker: on road purposes7

You state in your letter requesting an opinion of this office that Dickens County has some outstanding road bonds, and that there ismore than enoughmoney in the sinking fund established to service the bonds to pay all of the principal and interest thatwill ever be due on thesebonds. You have asked the followingquestion:

"CanDickens County depositwith the State Treasurer (thepaying agent on such bonds) all of the money necessary to service the interest and principal on these bonds to maturity, and then spend thebal- >ante of the sinking fund on road purposes?"
The outstandingroad bonds which you describe are Dickens County Road and Bridge Funding Bonds, Series 1936-A. These bonds were issued for the purpose of cancelling and **in** lieu of a like amount of outstandingRoad and BridgeWarrants of Dickens County pursuant to the authority of Article 2368a, Vernon's Civil Statutes. Therefore, according to the terms of this last mentioned article, Chapters 1 and 2 of Title 22, Revised Civil Statutes,are applicable and govern as regards the establishmentand dispositionof a sinking fund forbonds issued under the authority of Article 2368a. Article 723,V.C.S., after providing that the Commissioners'Court shall levy annualm. A. W. Walker, page 2 (WW-854)

ad valorem taxes sufficient to pay the interest on authorized bonds and create a sinking fund for their redemption, states:

*

. . . "Providedthatwhen the principal and all interest on saidbonds are fully paid, in the event there is any surplus remaining in the Sinking Pund, not in excess of One Thousand ($l,OOO.OO)Dollars, said remaining surplus not used in the full payment of the principal and interest on saidbond or bonds may be usedby the county formaintaining and repairing the courthouse and jail and the roads andbridges of said county, as may be determinedby the CommissionersCourt." Thus,we see thatbefore any of the surplus funds of such a sinking fundmay be expended for the purposesnamed in the statute, the principal and all interest on the bonds for which such sinking fundwas establishedmust be fully paid.

Article 437933,

Vernonas Civil Statutes,provides for the discretionarydesignation of the State Treasurer as paying agent on bonds issuedby counties in Texas, and designateshim ex officio Treasurer and fiscal agent of such counties for tbe purpose of receivingdeposits of funds for the payment of bonds issuedby such counties and interest thereon. However, Section 5 of Article 437933 provides that "At the request of themunicipality or political subdivision, the StateTreasurer shall remit to said municipality or subdivisionof the State anybalance remaining in his hands more than twoyears, forwhich bonds or couponshave not been presented for payment

. D *" Therefore, if in 1960 Dickens County depositswith the State Treasurer all of themoney necessary to service the principal and interest on the outstandingbonds to maturity, **then,** two years later, at the request of the county, any remainingbalance must be remitted to the county. A depositmade by the present Commissioners' Court of Dickens Countywill not be binding on the county in the future.

Prom the informationwhich you have submitted to this office, it appears tbat the outstandingbonds above referred toMr. A. W. Walker, Page 3 (WW-854)

will all mature within less than two years. This does not, however, negate the possibility that all of the interest coupons and thebonds to which they pertainmay not be presented for payment on their respectivematurity dates. As long as the possibility remains that Dickens County couldwithdraw funds so depositedbefore the principaland all interesthad been fully paid, our opinion is that the principal and all interestcould not be considered to have been fully paid. We are further of the opinion that,before a county which has outstanding roadbonds can depositwith the paying agent all of the money necessary to fully pay the principal and all interest that could everbecome due, and thus have the principal and all interest considered to be fullypaid, statutory authoritymust exist for such a deposit for the purpose specified. At the present time there is no such authority.

Since the principal and all interest on the bonds for which a sinking fundwas establishedmust be fullypaid before any remaining surplus can be spent, and sincewe are of the opinion that a depositwith the State Treasurer of all of the money necessary to service the interest and principal on the outstandingbonds to maturitywould not have the effect of rendering suchbonds fully paid, your question is respectfully answered in the negative.

SUMMARY
Under existing statutes,Dickens County may not depositwith the State Treasurer (thepaying agent for the outstandingbonds) all of the money necessary to service the principal of and interest on certain outstandingbonds to maturity, and then spend the balance of the sinking fund on road purposes.

Very trulyyours,
WILL WILSON Attorney~'Genera1

of Texas_ . . c

or. A. W. Walker, page 4 (WW-854)

RTL-s Assistant

APPROVED:
OPINION COMMITTEE: W. V. Geppert, Chairman
John Reeves W. E. Allen Dean Davis Charles Cabaniss

REVIEWED FOR THE ATTORNEY GENERAL By: Leonard Passmore 

## w obert T. Lewis