- ,
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:
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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,
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. .
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."
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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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