Untitled Texas Attorney General Opinion

THEATTORNEY GENERAL OF =XAS Honorable Ray A. Fowler Opinion No. C-733 Assistant Commissioner Coordinating Board Texas College and University System Austin, Texas Re: Whether money in the Texas Opportunity Plan Fund in excess of the amount immediately necessary for student loans may be invested in obligations of agencies of the United States which are not unconditionally guar- anteed by the United States. Dear Mr. Fowler: YOU have requested our opinion concerning whether money in the Texas Opportunity _ Plan Fund In excess of the amount lmmedlately necessary for student loans may be Invested in obligations of agencies of the United States which are not unconditionally guaranteed by the United States. You point out that not all direct obli- gations of agencies of the United States are uncondition- ally guaranteed by the United States, and that a differ- ence In the amount of the return on the investment is effected thereby. Investment of the funds In the Texas Opportunity Plan Fund in excess of the amount Immediately needed for student loans is governed by Section 9 of Article II of Article 2654g, Vernon's Civil Statutes, which provides: "All moneys standing to the credit of the Reserve portion of the Interest and Sinking Fund and any moneys in the Texas Opportunity Plan Fund in excess of the amount necessary -3565- Honorable Ray A. Fowler, page 2 (C-738) for student loWis may be invested by the Board in direct obligations of the United States or Its agencies or in other obligations unconditionally guaranteed by the United States. . . , except provided, however, that money in the Interest and Sinking Fund, except for that which Is In the Reserve vortlon of such fund, may be in- vested only in direct obligations of-or uncon- ditionally guaranteed by the United States which are scheduled to mature prior to the date money must be avallable for use for its intended pur- pose. . . “(Emphasis added). This provision makes two separate authorizations. It clearly provides that money in the Interest and Slnk- lng Fund, except for the Reserve portion thereof, can be Invested only in direct obligations of the United States or those unconditionally guaranteed by the United States. However, investment of moneys in the Reserve portion of the Interest and Sinking Fund and “excess moneys” In the Texas Opportunity Plan Fund Is not subject to the same restriction. An additional type of Investment is author- ized for these funds, viz. direct obligations of agencies of the United States not unconditionally guaranteed by the United States. This Is evident from the difference In the language itself and is clearly implied by the fact that had the legislature Intended no difference in the permissible scope of the investment of these funds then there would have been no reason to make separate pro- visions therefor. Therefore, we are of the opinion that the Coordinating Board has the authority to Invest moneys in the Texas Opportunity Plan Fund, In excess of the amount necessary for student loans In (1) direct obligations of the United States, (2) direct obligations of agencies of the United States, or (3) in obligations which are unconditionally guaranteed by the United States. The decision as to the type of investment, of course, lies within the sound dis- cretion of the Coordinating Board. -3566- . l Honorable Ray Fowler, page 3, (C-738) SUMMARY Moneys of the Texas Opportunity Plan Fund which are not Immediately needed for student loans may be invested In direct ob- ligations of agcncles of the United States which are not unconditionally guaranteed by the United States. Yours very truly, WAQQONER CARR Attorney General of Texas JWF:vg APPROVED: OPINIOK.COMMITTEE W. 0. Shultz, Chairman John Reeves Pat Bailey Roy Johnson Paul Phy APPROVEDFOR THE ATTORNEY GENERAL By: T. B. Wright -3567-