Court Opinion

ID: 4136970
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:19:34.138629+00
Date Added: 2024-06-11T14:35:31.935363
License: Public Domain

.     .

                                        OF mxAs
                                       A.us- 11.
                                               vYxc?zAs
          FVILLWILSON
    ATTORNEY           ORNERAL

                                     January 29,   1957

      Honorable Jesse James                  Opinion No. WW-11
      State Treasurer
      Capitol station                        Re: Whether the Housi
      Austin, Texse                              Authority Bpnds be3 d
                                                 by the First National
                                                 Bank of Memphis, Texas,
                                                 are eligible  as collat-
          Dear Mr. Jamen:                        eral for State Funds.
          Your reaent letter presents the question of whether bonds              ’
          issued by a Public Rousing Authority may be uned an collat-
          eral to secure the deposit of State funds.
          Article   2529, V.C.S.,   is the statute wh$ch permits a deposi-
          tory of State funds to post a surety bond or ple          e certain,
          types of securities     as collateral    for State depoa9 ts.   None
          of the enumerated types o,f securities       will cover the obll-
          gations Issued or to be issued by a Public Housing Aut~horlty
          unless the language “all other bonds which are guaranteed as
          to both principal    and interest     by the United States” is ap-
          plicable.
       The Housing Authority bonds tendered were issued pursutit to
    ., the prOVisIOns of Chapter 8, of Title 42; 0. s. c. A. Under
       Sections 1410 and .1421(a.) of that chapter, the United~States
       may obligate   itself  to guarantee that annual contributions
       will be made to supplement local funds ia an amount not to
       exceed the principal    and interest  to become due. The contract
       between the Federal Government and the Public Housing Authority
       may’provlde that the interest     and sinking fund will be used
       for the purpose of paying the obligation,      but this payment of
       the obligrtlon    is not guaranteed by the United States Govern-,
       ment . Accordingly,    the bonds are not eligible   a8 collateral
       for State deposits under the provisionti of Article     2529, V.C .S.,
       since the quoted language, when taken w’fth the other language
       of the Act, evidences a clear intent that the payment a the
       princfM1    &    1nteaWt must be the obligation    guaranteed by
       the Federal Government.
          The State     Depository Law, insofar as the enumerated eligible
          seouritfes     are concerned, is the general law, and where a
Honorable Jesse James, page #2 (W-11)

special act states that an additional security may be used
as collateral, that special act will be treated as an ex-
ceDtion to the normal rule in order that both enactments
-~c~-~~   ~~~

may apply to their appropriate:spheres. S_imusonv. Booth,
163S.W. 2d 1080 (Tex.Civ.App., 1942) error ref.; 39 Ta
JI1F., "Statutes" Sets. 81,82.In 1939, the Legislature of
Texas, 46th Legislature, page 427 (codified by Vernon as
Article 1269k-1) Dassed such a special statute, which reads,
in part:        . -
                "Notwithstanding any restrictions on in-
                vestments contained in any laws of this
                state, the state and all public officers
                . . . may legally invest any sinking funds
                      in any bond .      issued by a housing
                &th&lty    pursuant to Che Housing Authority
                Law (Article 1269k, V.C.S.) . . . or issued
                by any other public housing authority or
                agency inthe United States, when such bonds
                      are secured by a pledge of annual con:
                tributions to be paid by the United States
                Government or'any agency thereof, and such
                bonds . . . shall be authorized eecurits f,or
                all public  deuosits . . .'I(Emphasis supplied)

~The caption of the act reads, in Dart, as follows:
                'An act to provide that bonds and other    .~
                obligations issued by any public housing
                authority or agency in the United States,
                when secured by a pledge of annual contrl-
                butlons to,be Daid by the United States
                Government, shall be security for all Dub-
                lit deposits‘and legal investments for the
                state and public officers . . ." (Emphasis
                supplied).
The effect of the 1939 statute is to add, by special enact-
ment, an additional type of eligible security as collateral
for state deposits. In no other manner are the provisions
of Article 2529, V.C.S. affected. Upon the basis of the
information which has been furnished.to this office, we are
unable to determine whether availabillty of the entire prln-
cipal and interest requirements of these particular bonds
is the subject of the guarantee by the Federal Government
as permitted, but not required, by the provisions of Chap-
ter8 of Title 42, U. S. C. A.
   BQnorable~~~Jesse James, page 3 (e-11)
                          ,.   ,.,

,:,.,,Acci&f&ly,       you and the State Depository Board are respect-
   ‘. fully ,advised that the obligations    may be accepted as col-
       lateral   for state deposits only if the Federal Government
   -‘+u arantees that annual contributions      will be made, sufficient
     ;’ o ,supplement local funds,, so as to meet the principal    and
       interest   requirements of the particular    bonds tendered as the
     .‘eame shall become due.     Each bond transcript   will have to be
      examined individually     to determine if, this requirement has
      oreen met.

                                    SUMMARY
              Public.Housing   Authority bonds, issued pur-
              suant to Chapter 8 of Title 42, U.S.C.A.,
              may be used as collateral      for state de-
              posits under Article     1269kfl,_V,C.S.,      only
              if the p&W&u&r ,bond,s are +&cutied ,by a
              pledge of annual contributibnr,,‘l)fi,‘,the    Fed-
              era1 Government or agency there@;           We have
              not been supplied with the transoript          au-
              thorizing   the issuance of these bonds and,
              therefore,   can not pass upon your direct
              question.    The ,provisions of Article       299,
              as modified by Article     1269k-l.,,,V&.$.,      pre-
              bcribing the llmitatlons     Andyconditions      up-
              on the deposif.,oS collateral,.,   securities     are
              applicable   to suah bonds. ‘,

                                           Very truly, yours,

                                           wIIJ,‘wmso~
                                           Attorney    General

                                           By+c4Y17D.~~~~
                                                   I,,~,,
                                              Elbprt M. Morrow
   EN&s                                          Aeristant ,,
   APPROVEIJz
   OPINIONCOMMITTEE.
   H. Grady Chendlerj Chairman