Court Opinion

ID: 4134559
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:51:47.309673+00
Date Added: 2024-06-11T14:34:22.587505
License: Public Domain

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              Honorable James E. Jeffrey              Opinion   No. M-107
              County Attorney
              Taylor County Courthouse                Re:   Whether a Commissioners
              Abilene,  Texas                               Court is authorized to
                                                            designate a bank as
                                                            county depository   under
                                                            the fat ts and circum-
              Dear Mr. Jeffrey:                             stances presented
                        You have requested    the opinion of this office re-
              garding the above question.     In this connection you have sup-
              plied the following facts:
                          “A certain bank desires to be designated
                    as a county depository      to receive funds which
                    will result from a bona issue as a result of
                    an election    this year.    The bank could not file
                    an application     to qualify as a county depository
                    at the February regular term because one of the
                    members of the Commissioners Court is a director
                    and owns stock in such bank. We understand that
                    Legislation    was enacted this year removing such
                    inhibition    in situations   where a county official
                    owned less than lO$ of the stock in a bank seek-
                    ing designation     as a county depository.   The mem-
                    ber of the Commissioners’ Court owns less than
                    lO$ of the stock in the bank, and he is still         a
                    director . ”
                           In examining the question you have posed, the follow-
               ing statutes,   quoted in pertinent  part, are applicable:
                          “Art. 2544.    The Commissioners Court of each
                    county is hereby authorized and required at the
                    February Regular Term thereof next following        each
                    general election   to enter into a contract with any
              s,.   banking corporation,    association   or individual
                    banker in such county for the depositing       of the
                    public funds of such county in such bank or banks.
                    Notice that such contracts      will be made by the
                    Commissioners Court shall be published by and
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                                                                               ..   .

Hon. James E. Jeffrey,     page 2,   (M-107)

     over the name of the County Judge, once each
     week for at least twenty (20) days before the
     commencement of such term in some newspaper
     published in said county; . . . .”
            “Art. 2545. Any banking corporation,
     association    or individual   banker in such
     county desiring     to be designated as county
     depository    shall make and deliver     to the
     County Judge an application      applying for
     such funds and said application        shall state
     the amount of paid up capital       stock and per-
     manent surplus of said bank and there shall
     be furnished    with said application     a statement
     showing the financial     condition    of said bank
     at the date of said application        which shall
     be delivered to the County Judge on or before
     the first    day of the term of the Commissioners
     Court at which the selection       of the deposi-
     tories is to be made. . . .I’
             “Art. 2546.    It shall be the duty of the
      Commissioners Court at ten olclock. a. m. on
      the first     day of each term at which banks are
      to be selected     as county depositories,     to con-
      sider all applications      filed with the County
      Ju%e, cause such applications         to be entered
      upon the minutes of the Court and to select
      those applicants     that are acceptable    and who
      offer the’ most favorable       terms and conditions
      for the handling of such funds and having the
      power to reject     those whose management or con-
      dition,    in the opinion of the Court, does not
      warrant placing of county funds in their pos-
      session.     . . .
            The statutes above quoted grant to the Commissioners
Court the authority    to select a county depository         or deposi-
tories  at a certain time and by following         a specified    procedure.
This office   has previously    declined   to approve any variation
from the established    procedure.     Attorney    General’s Opinion
O-3832 (1941) expressed the view that a county may properly
designate   one or more banking institutions        as County deposi-
tories,   but only if such depositories       are selected     from “those
banking institutions    who have regularly       made application     in
accordance with the statutes .” Attorney General’s Opinion
O-4451 (1942) cited Attorney General’s          Opinion 0-3832 with ap-
proval,   and declined to approve a plan,which called for varia-
tion of the depository     rules established      by statute.
.       *-   -,

    I

                  Hon. James E. Jeffrey,      page 3,     (M-107)

                              The contention    has been advanced that an’enactment
                  of the 60th Legislature      can be construed to make it permissible
                  for the particular     bank involved in your question to become
                  qualified   as a county depository      immediately.    The new statute
                  in question is Acts, 60th Legislature,        1967, Chapter 179, Page
                  370, codified   as Article    2529c, Vernon’s Civil Statutes.        This
                  Act provides,   in essence,    that a bank shall not be disquali-
                  fied from becoming the depository        for any political    subdivision
                  by virtue of the fact that a member of the Board or Commission
                  selecting   such depository    holds ten percent or less of the
                  bank’s outstanding capital      stock.    This Act went into effect
                  as an emergency measure on May 12, 1967.          The said new statute
                  does not purport to amend or repeal any of the statutes con-
                   trolling  the selection    of county depositories     in this State.
                   This Act by its terms overruled       the common law rule regarding
                  conflicts   of interest    where the public official      concerned with
                   selecting  the depository    holds ten percent or less of the out-
                   standing capital   stock in the said depository.         It is the view
                   of this office   that the said statute has the effect         of making
                   the bank in question immediately eligible for selection           as a
                   county depository,    but such selection    may nevertheless     be made
                   only at such time as a county depository        may properly be select-
                   ed by the county government.
                         In answer to your specific  question,   you are advised that
                  it is the opinion of this office    that the Commissioners Court
                  of a county does not have the authority      to designate a bank
                  other than the properly established     county depository   or depos-
                  itories   to receive special  funds resulting   from a county bona
                  issue.
                                              SUMMARY
                                              -------
                               Under the stated facts,   the Commissioners
                        Court of a county does not have the authority
                        to designate a bank as a county depository      in
                        addition   to other qualified   depositories to
                        receive funds resulting     from a county bona
                        issue.
                                                               truly   yours,

                   Prepared    by Malcolm L. Quick
                   Assistant   Attorney    General
                                                     - 491 -
Hon. James E. Jeffrey,   page 4,   (M-107)

APPROVED:
OPINION COMMITTEE
Hawthorne Phillips, Chairman
Kerns Taylor, Co-Chairman
Jack Sparks
Scott Garrison
Marietta Payne
John Duren
A. J. Carubbl, Jr.
Staff Legal Assistant

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