Court Opinion

ID: 4131989
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:21:48.763082+00
Date Added: 2024-06-11T14:33:33.134722
License: Public Domain

The Attorney             General of Texas
                                            October 18, 1979

MARK WHITE
Attorney General

                   Honorable Charles M. Cobb                Opinion No. MW-7 2
                   Titus County District Attorney
                   Courthouse                               Re: Selection of a hospital dis-
                   Mt. Pleasant, Texas 75455                trict depository.

                   Dear Mr. Cobb:

                         You have requested our opinion concerning the deposit of funds for the
                   Titus County Hospital District. You first inquire as to the selection of the
                   depository to be used by the district, The district was created by the 58th
                   Legislature. Acts 1983, 58th Leg., ch. 298, at 771. Section II thereof
                   provides:

                                 Sec. Il. Within thirty (30) days after the appoint-
                              ment of the Board of Hospital Managers of the
                              District and each two (2) years thereafter the said
                              Board shall select 5 depository for such District
                              which shall be one or the same depository theretofore
                              selected by the County, such depository shall secure
                              all funds of the District in the manner now provided
                              for the security of county funds.

                   (Emphasis added). This provision limits the district’s choice to the
                   institution or institutions designated as the county’s depository.

                         You next ask whether money deposited to the Interest and Sinking
                   Fund Account for the payment of bonds may be invested to draw interest
                   from .the time it is placed in the fund until needed for making interest
                   payments or principal payments on outstanding bonds. Section 3 of the 1963
                   act creating the hospital district provides that:

                              The Commissioners Court of the County shall have
                              the power and authority, and it shall be its duty, to
                              levy . . . a tax . . . for the purpose of (1) paying the
                              interest on and creating a sinking fund for bonds
                              which may have been amumed or which may be issued
                              by the Hospital District.. . .

                                               p.   220
Honorable Charles M. Cobb     -    Page Two     (NW-72)

E at 772. Section 4 provides similarly that a tax be levied to create a fund sufficient to
pay the interest and principal on the bonds as they mature. Appropriate investment of
money held in an Interest and Sinking Fund is permissible so long as sufficient sums are
available to meet oromotlv any nrincioal and interest reuuirements of outstanding
obligations. See El&r V.-C& of Forth Worth, 27 S.W. 739 (Tex. Civ. App. - 1894, wr6
ref’d); Bexar County Hospital District v. Crosby, 327 S.W.2d 445, 448 (Tex. 1959)(interest
from investment must be applied to sinking fund itself). We note that the district funds
are secured by the depository in the same manner as are county funds. See generally
Attorney General Opinions H-1254 (l9781(consolidation of funds); H-R74 (197m(proper use
of bonds proceeds); C-537 (1965)(interest earned on bond proceeds placed in sinking fund);
WW-1083Q96U;V-B82 0950; Letter Advisory No. 147(19771(investment of county sinking
funds); art. 836, V.T.C.S. -Cf. art. 779, V.T.C.S.

     The Interest and Sinking Fund account should be deposited in the depository selected
under section 11which is explicitly made the depository for g district funds.

                                      SUMMARY

           The Titus County Hospital District may select its depository from
           among those used by Titus County. The Interest and Sinking Fund
           should be deposited in the depository and may be invested to draw
           interest.

                                         *-I;g
                                               Attorney General of Texas

JOHN W. FAINTER, JR.
First Assistant Attorney General

TED L. HARTLEY
Executive Assistant Attorney General

Prepared by David B. Brooks
Assistant Attorney General

APPROVED:
OPINIONCOMMITTEE

C. Robert Heath, Chairman
Jim Allison
David B. Brooks
Walter Davis
SusanGarrison
Rick GiIpin
William G Reid
Bruce Youngblood

                                          P.    221