Court Opinion

ID: 4134464
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:50:33.929108+00
Date Added: 2024-06-11T14:36:36.816228
License: Public Domain

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                         February 19, 1968

Honorable C. H. Cavness                Opinion No. M- 203
State Auditor
Sam Houston State Office               Re:   Whether authority exists to
  Building                                   permit those current local
Austin, Texas                                funds of higher educational
                                             Institutionsin the State
                                             Treasury (a8 specified In
                                             Article 2543c, V.A.C.S.)
                                             which are reasonably es-
                                             timated not to be needed
                                             in any given period of
                                             time, to be placed on a
                                             time depO8it basis, and
Dear Mr. Cavness:                            related que8tlon.s.
              In reference to your recent request for our opinion, you
    ask the following questions of this office:
                 "1. Does sufficient authority now exist to
            permit the current local funds of.hlgher educa-
            tional institutionsIn the State Treasury specified
            in Article 2543c, Vernon's Texas Civil Statutes,
            which are reasonably estimated not to be needed
            in any given period of time, to be placed on a
            tlme deposit basis?
                 "2. If sufficientauthority does exist:
                      "a. Does the duty for putting these
                          State funds to work and for ne-
                          gotiating with the depositories
                          on such matters as the rate of
                          return lie with the State Depos-
                          itory Board or with the governing
                          boards of the colleges and unlver-
                          sltles Involved?
                      "b. Does the responsibility for deter-
                          mining the amount of such funds

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                              :,:i#(

Hon. c. H. Cavness, page 2 (n-203)

                     available for placement on a time
                     deposit basi8 lie with the State
                     DepositoryBoard or with the goxern-
                     lng boards of the Institutions?
          Act8 1951, 52nd Legislature,R.S., chapter 474,  codified
as Article 2543c, Vernon's Civil Statutes, specificallyrepealed
In Section 5 thereof, Article 2654d, Vernon's Civil Statutes. The
pertinent provisions of Article 2543~~ are set out as follows:
          'Section 1. The Governing Board8 of the State
     Institutionsof higher education of this State are
     directed to designate special depositorybanks, sub-
     ject to the approval of the State Treasurer, for the
     purpose of receiving and keeping certain receipt8 of
     the lnstltutlonsof higher education of this State
     separate and apart fron.'fundsnow deposited in the
     Treasury. The receipts here referred to are de8-
     crlbed In Section 3 of thle Act. . , .
          "Sec. 2.  Nothing In this Act shall Invalidate,
     repeal, or in anywise affect the provisions of
     Title   , as amended, o    e evlse     V    tatutes
     of 1925, usually referred to as the~state Depository
     Law; providing, however, the llmltatlonof deposits
     contained In Article 2532 of Vernon's Texas Civil
     Statute8 shall not apply Insofar as the specific
     funds enumerated In this Act are concerned.
     (mphasls added.)

          It Is noted that Section 2 of Article 2543c, Vernon'8
Civil Statutes, expressly retained and Implementedthe provlslons
of the State depository law, with one exception. Consequently,
the provlelons of Article 2525, Vernon'8 Civil Statutee, et 8eq.,
are applicable to the handling of fund8 under Article 2543~.
           Article 2525 reads, In part, a8 follows:

                               -975-
Hon. C. H. Cavness, page 3 (M-203)

          "The State Treasurer, a8 secretary,together
     with one (1) citizen of the state, appointedby
     the Governor . . .and the Banking Comml8sloner,
     shall conatltute the State DepositoryBoard. Said
     Board shall have the right and the power to make
     and enforce such rules and regulationsgoverning
     the eStabli8hmentand conduct of State Depositories
     and the handling of funds therein as the public lnter-
     est may require, not lnconsletentwith the provisions
     of the laws governing euch depO8itOrie8,which rules
     and renulatlons shall be In writing and entered unon
     the ml&tes of the Board. Said Board shall have the

          The list of receipts which may be controlledby Govern-
ing Beards of Institutionsof Higher Learning are found In Article
2654d, Vernon's Civil Statutes, which reads, In part, a8 follows:
           'Section 1. The governing boards of . . .,
     may retain control respectively of the following
     sums of money collected at each of said several
     InstitutionsIn carrying out the functionsof an
     educational Institution. such as funds collected
     from student fees of ali klnds;~chsrgesfor use
     -of room8 and dormitories; receipts from meala.,
     cafes and cafeterias; fees on deposit refundable
     to   students   under   certain   conditiona:   receiata
     From school athletic activities; Income from
     student publicationsor other student activities;
     receipts from sale of publication products and
     miscellaneous supplies and equipment; students'
     voluntary deposits of money with said schools
     for safe keeping; all other fee8 and local in-
     stitutionalIncome of a strictly local nature
     ax-isinn
     _--_--.  out
              --. of
                  -- and
                     _.--     bv
                              -virtue of the educational
     activities, or     research or demOn8tratlOn  carried
     on by each and     all of said several schools:
     IEmphasIs added.)
          For purposes of discussion of this question It.Is
assumed that the excluded funds set out In Article 2543c, Sec-
tion 3, Vernon's Civil Statutes, Includes the llat of funds In
control of the GoverningBoards of InstitutionsIn Article 2654d,

                                   -976-
                                                    .     .

Hon. C. H. Cavness, page 4 (M-203)

Section 1, Vernon's Civil Statutes~,which are required to be
deposited In the depository bank or banks at an agreed rate of
interest, as provided In Section 2 of 8UCh Article. Under such
assumption, no conflict Is found between the two provisions.
If a conflict were to be found, then Article 2543~ would con-
trol because of the express repealer contained In Section 5
thereof.
          From a plain reading of the statutes, therefore, It Is
apparent that sufficient authority now exists to permit the funds
specified In Article 2543~ to be placed on a time deposit basis.
          In answer to your question No. 2, (a) and (b), Article
2543~ expressly provides that the State Depository Law Is ap-
plicable under Section 2 thereof. Therefore, pursuant to Article
2525, the State Depository Board would have the duty of determining
both the amount of such funds available for placement on a time
deposit basis and for negotiating a contract for the rate of
return for such funds, whether on demand or time deposit, with
the local depository banks.
          The chronological passa e of these laws, the State
Depository Law In 1931, Article 2g54d In 1941, and Article 2543~
In 1951, with the progresslve.requlrementsfor placing state money
on earnings, Indicates the continuing concern of the Legislature
by specific designation of duties and methods.
          Only those receipts specificallymentioned In Section
1 of Article 2654d are under the control of the Governing Boards
of Institutions for these purposes, and such boards~are specl-
flcally directed by the provisions thereof to deposit such funds
In the depository bank or banks at an agreed rate of Interest as
provided In Section 2 of said Article.
                     SUMMARY
          Sufficient authority now exists to permit
     the current local fund8 of higher educational
     InstitutionsIn the State Treasury, as specified
     In Article 2543c, V.C.S., to be placed on a time
     deposit basis with local depository banks. The.
     State Depository Board under provisions of Article
     2525, V.C.S., ha8 the duty~of negotiating the con-
     tract for the rate of return (interest)with the
     local depository banks and also has the respon-
     sibility for determining the amount of such fund8
     available for placement on "demand deposits" and
     on "time deposits."

                            -977-
Hon. C. H. Cavness, page 5 (M-203)

                                 truly youre,

Prepared by Pat Cain
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Hawthorne Phillips, Chairman
Xerns Taylor, Co-Chairman
W. V. Geppert
Scott Garrison
Bill Allen
Bill Craig
A. J. CARUBBI, JR.
Executive Assistant

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