April 30, 1975
The Honorable Preston L. Poole, Jr. Opinion No. H- 596
County Attorney
Courthouse, Box 296 Re: Whether a county may
Post, Texas 79356 select the county’s only bank
as county depository if the
county judge serves on the
bank’s board of directors.
Dear Mr. Poole:
You have requested our opinion concerning whether the only
bank in a county may be selected as the county depository where the
county judge owns stock in the bank and serves on the board of directors.
Attorney General Opinion C-438 (1965) answered this question
in the negative, finding that either memberehip on the board of directors
or stock ownership by the county judge, county attorney, county treasurer,
or county clerk would preclude the bank from being selected as the county
depository.
However, in 1967 the Legislature enacted article 2529c, V. T. C. S.,
which provides in part:
Sec. 2. . . .
A bank shall not be disqualified from bidding
and becoming the depository for any agency or
political subdivision of the state by reason of
having one or more officers, directors or stock-
holders of said bank who individually or collectively
own or have a beneficial interest in not more than
10 percent of the bank’s outstanding capital stock,
and at the same time serves as a member of the
p. 2652
The Honorable Preston L. Poole, Jr. page 2 (H- 596)
board, commission, or other body charged
by law with the duty of selecting the depository
of such state agency or political subdivision;
provided, however, that said bank must be
selected as the depository by a majority vote of
the members of the board, commission, or other
body of such agency or political subdivision and
no member thereof who is an officer, director
or stockholder of the bank shall vote or participate
in the proceedings. Common-law rules in conflict
with the terms and provisions of this Act are here-
by modified as herein provided, but this Act shall
never be deemed to alter, change, amend or supersede
the provisions of any home-rule city charter which is
in conflict herewith.
Article 2529~ clearly supersedes Attorney General Opinion C-438.
Since you have informed us that the county judge owns less than one-half
of one percent and no other members of the commissioners court are
officers, directors or stockholders of the bank, it may be selected as
the county depository pursuant to article,2544, et seq., V. T. C. S. Of
course the county judge may not participate in the selection process as
he is prohibited from doing so by article 2529~.
SUMMARY
Where the members of the commissioners court do
not collectively own more than 10% of the stock of a bank,
the court may by majority vote of its members select
the bank as the county depository. The interested members
of the board may not participate in the vote.
Very truly yours,
Attorney General of Texas
p. 2653
The Honorable Preston L. Poole, Jr. page 3 (H- 596)
DAVID A$. KENDALL, First Assistant
C. ROBERT HEATH, Chairman
Opinion Committee
p. 2654