The Attorney General of Texas
November 5, 1980
Honorable Warren G. Harding Opinion No. m-264
State Treasurer
P. 0. Box 12608 Re: Whether the Texas Housing
Capitol Station Agency can appoint a custodian of
Austin, Texas 78711 its funds other than the state
treasurer
Dear Mr. Hard@:
Ycu I’ve requested cur opinion as to whether the Texas Housing
Agency may appoint a custodian for its reserve funds and other funds which
is not the state treasurer. The Texas Housing Agency Act, V.T.C.S. article
12691-6, provides that the Texas Housing Agency may create and establish
with-the state treasurer a reserve fund consisting of proceeds from bond
salea or other resources as additional security for the agency’s bonds. Sees.
2(u), 32. Section 32 of the act provides in considerable detail how such a
reserve fund should be constituted and managed.
However, we believe the establishment of the reserve fund with the
treasurer is a permissive and not a mandatory act of the agency. Section
32(a) states that “[tl here 9 be created and established by the egency,”
with the state treasurer, the Texas Housing Agency Reserve Fund.
(Emphasis added). The term “may” generally connotes a permissive function.
District Grand Lodge No. 25 Grand United Order of Odd Fellows v. Jones,
160 S.W. 2d 915 (Tex. 1942). Tide Water Oil Co. v. Ross, 123 S.W. 2d 479
(Tex. Civ. App. -Galveston 1938), aff’d, 145 S.W. 2d 1089 (Tex. 1941).
Moreover, section 32(g) of article 12691-6 states as follows:
Notwithstanding the foregoing provisions of this
section, the sgency may or may not, at its option,
create or fund the reserve fund and may issue its
bonds which are not secured by the reserve fund, or
any account therein, but which may be secured by any
other or separate reserve fund or account to be kept
at any place, or secured in any other manner provided
in the agency’s bond resolutions. (Emphasis added).
We believe it is clear from this provision that the establishment of the
reserve fund with the treasurer is optional with the sgency. The agency may
establish such a fund at any place or secure it in any other manner provided
by its statute and included in its bond resolutions.
p. 840
Honorable Warren G. Harding - Page Two @W-2641
The agency is also empowered to select a depository for its revenues and funds,
other than appropriated funds, after taking bids to secure the most favorable interest
rate. V.T.C.S. art. 12691-6, S19. We note that other agencies have been given authority
to deposit funds outside the State Treasury. See V.T.C.S. art. 6674v, §§13,14 (Texas
Turnpike Authority); Letter Advisory No. 132 (19m
In our opinion, the Texas Housiw Agency has the option of utilizing the state
treasury as a depository for funds other than appropriated funds under both its enabling
legislation and general law relating to selection of depositories of state agencies,
V.T.C.S. article 2529c, section 2. However, the agency is not required to use the state
treasury for such funds.
SUMMARY
The Texas Hous& Agency is not required to create a reserve
fund in the state treasury to secure its bonds, but may create a
reserve fund to be kept elsewhere. The sgency may depceit its
non-appropriated funds in a depository other than the state
treasury.
MARK WHITE
Attorney General of Texas
JOHN W. FAINTER, JR.
First Assistant Attorney General
RICHARD E. GRAY III
Executive Assistant Attorney General
Prepared by Susan Garrison & Susan VOSS
Assistant Attorneys General
APPROVED:
OPINION COMMlTTEE
Susan L. Garrison, Acting Chairman
Jon Bible
Bill Campbell
Ride Gilpin
Susan vces
p. 841