Court Opinion

ID: 4141109
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:06:55.938714+00
Date Added: 2024-06-11T14:23:08.996965
License: Public Domain

Honorable Caynor Kendall
~Investment Counsel
 State Board of Education
Austin, Texas

Dear Sir:                              Opinion Number O-5217
                                       Re; Whether taxes collected
                                            from levies made for llocal
                                            maintenance may be used to
                                            pay before maturity bonds
                                            held by the Permanent
                                            School Fund.

            We have your request for an opinion, which request   is   as   fol-
lows:

          "I sm directed by the State Board of Education to re-
     quest your opinion whether under Article 2787a, Revised
     Civil Statutes of 1925, tames collected from levies made
     for local maintenance may be used to pay before maturity
     bonds held by the Permanent School Fund."

            Article 27878 is as follows:

          1The State Board of Education may authorize the trus-
     tees of any common school district or of any independent
     school district of this State to pay off and diecharge, at
     any interest paying date whether the bonds are matured or
     not, all or any part of any bonded indebtednersnow owned
     or hereafter to be owned by the State Permanent School
     Fund, outstanding against any common school district, or
     any independent school district in this State.

          "It shall be the duty of the school trustees of any
     common school district, or any independent school district
    of this State desiring to pay off and discharge any bonded
    ,indebtednessnow owned or hereafter to be owned by the Per-
    manent School Fund of this State, outstanding against such
    district or districts, before maturity thereof, to make di-
    rect application in writing to the State Board of Education
    at least thirty days before any interest paying date on
     said bonds, making known to said State Board of Education
    the desire of said trustees to pay off and discharge said
Honorable Gay-norKendall, page 2 (O-5217)

     bonded indebtedness, or any part thereof, describing said
     bonds or the part thereof that the trustees desire to pay
     off and discharge; and it shall be the duty of the State
     Board of Education upon receipt of such application to act
     thereon in such manner as they deem best and notify the
     applicant or applicants whether the application is'refused
     or granted in whole or in part; provided, that only such
     tax money as has been collected by virtue of tax levies
     made for the specific purpose of providing a sinking fund
     and paying interest on the particular bonds to be redeemed
     shall be expended in the redemption, taking up, or paying
     off of such bonds as provided in this Act; unless said
     bonds are being redeemed for the purpose of being refunded;
     and the application of the board of trustees of any common
     or independent school district desiring to retire bonds as
     herein provided shall include an affidavit to that effect
     in their application; and provided further, that it shall
     be unlawful for any person upon whom any duty rests In car-
     rying out the provisions of this law to give or receive any
     commission, premium, or any compensation whatever for the
     perfo-ce    of such duty or duties.

          "The provisions of this Act shall apply also to the
     governing boards of all cities, counties and political
     subdivisions in this State whose bonds are owned or may
     hereafter be owned by the Permanent School Fund of the
     State."

It will be noted that the above article contains the following proviso:
"provided, that only such tax money a6 has been collected by virtue of
tax levies made for the specific purpose of providing a sinking fund
and paying Interest on the particular bonds to be redeemed shall be ex-
pended in the redemption, taking up, or paying off of such bonds as pro-
vided in this Act; unless said bonds are being redeemed for the purpose
of being refunded; and the application of the board of trustee6 of any
common or independent school district desiring to retire bonds as here-
in provided shall include an affidavit to that effect in their appllca-
-Lion."

          It is apparent from the foregoing quotation from Article 2787a
that taxes collected from levies made for local maintenance may not be
used to pay before maturity bonds held by the Permanent School Fund,
nor could taxes levied for interest and sinking fund of any other bond
issue of the district be so used, but "only such tax money as has been
collected by virtue of levies made for the specific purpose of providing
a sinking fund and paying interest on the particular bonds to be redeemed."

          In the case of State vs. Hatcher, 52 S. W. (2d) 794 the Austin
Court of Civil Appeals held that the State Treasurer could not accept
*   .--

                                                R-

    Honorable Gaynor Kendall, page 3 (O-5217)

    payment on unmatured bonds belonging to the permanent school fund except
    under conditions Imposed by the Board of Education.

                                                     Very truly yours

    APPROVED APR 22, 1943                       ATTORNEYGENERALOFTEKAS

    /s/ Grover Sellers

    FIRST ASSISIXNT                             By   /a/ C. F. Gibson
    ATTORNM GENERAL                                      C. F. Gibson
                                                            Assistant

    CFG-s-lm

          C.C.R.

                                        APPROVED
                                        OPINION
                                       COMMITTEE
                                       BY /s/ BUB
                                         CHAIRMAN