%-HE ~TTORl?GEY GENERAL 

OF- TEXAS 

Ausnlv 11. TEXAS 

WILL WILSON 

AlTORNEY OENERAI. 

June 7, 1960 

Mr. A. W. Walker Opinion No. WW-854 

County Attorney 

Dickens County Re: Whether Dickens County 

Spur Security Bank Building may deposit with the State 

spur, Texas Treasurer all of the money 

necessary to service the 

interest and principal on 

outstanding bonds 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 is more than enough money in the sinking fund established to service the bonds to pay all of the 

principal and interest that will ever be due on these bonds. 

You have asked the following question: 

"Can Dickens County deposit with the 

State Treasurer (the paying agent on such 

bonds) all of the money necessary to service the interest and principal on these 

bonds to maturity, and then spend the bal- 

> ante of the sinking fund on road purposes?" 

The outstanding road 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 outstanding Road and Bridge Warrants 

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 

establishment and disposition of a sinking fund for bonds issued under the authority of Article 2368a. Article 723, V.C.S., 

after providing that the Commissioners' Court shall levy annual 
m. 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: 

* 

. . . 

"Provided that when the principal and all 

interest on said bonds 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 said bond or bonds 

may be used by the county for maintaining and 

repairing the courthouse and jail and the 

roads and bridges of said county, as may be 

determined by the Commissioners Court." 

Thus, we see that before any of the surplus funds of 

such a sinking fund may be expended for the purposes named in 

the statute, the principal and all interest on the bonds for 

which such sinking fund was established must be fully paid. 

Article 437933, Vernonas Civil Statutes, provides for 

the discretionary designation of the State Treasurer as paying 

agent on bonds issued by counties in Texas, and designates him 

ex officio Treasurer and fiscal agent of such counties for tbe 

purpose of receiving deposits of funds for the payment of bonds 

issued by such counties and interest thereon. However, Section 

5 of Article 437933 provides that "At the request of the municipality or political subdivision, the State Treasurer shall remit 

to said municipality or subdivision of the State any balance 

remaining in his hands more than two years, for which bonds or 

coupons have not been presented for payment . D *" Therefore, 

if in 1960 Dickens County deposits with the State Treasurer all 

of the money necessary to service the principal and interest on 

the outstanding bonds to maturity, then, two years later, at 

the request of the county, any remaining balance must be remitted 

to the county. A deposit made by the present Commissioners' 

Court of Dickens County will not be binding on the county in the 

future. 

Prom the information which you have submitted to this 

office, it appears tbat the outstanding bonds above referred to 
Mr. 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 the bonds to which they pertain may not be presented 

for payment on their respective maturity dates. As long as 

the possibility remains that Dickens County could withdraw 

funds so deposited before the principal and all interest had 

been fully paid, our opinion is that the principal and all 

interest could not be considered to have been fully paid. 

We are further of the opinion that, before a county which has 

outstanding road bonds can deposit with the paying agent all 

of the money necessary to fully pay the principal and all 

interest that could ever become due, and thus have the principal and all interest considered to be fully paid, statutory 

authority must 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 fund was established must be fully paid 

before any remaining surplus can be spent, and since we are 

of the opinion that a deposit with the State Treasurer of all 

of the money necessary to service the interest and principal 

on the outstanding bonds to maturity would not have the effect 

of rendering such bonds fully paid, your question is respectfully answered in the negative. 

SUMMARY 

Under existing statutes, Dickens County 

may not deposit with the State Treasurer 

(the paying agent for the outstanding bonds) 

all of the money necessary to service the 

principal of and interest on certain outstanding bonds to maturity, and then spend 

the balance of the sinking fund on road purposes. 

Very truly yours, 

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