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FVILLWILSON
ATTORNEY ORNERAL
January 29, 1957
Honorable Jesse James Opinion No. WW-11
State Treasurer
Capitol station Re: Whether the Housi
Austin, Texse Authority Bpnds be3 d
by the First National
Bank of Memphis, Texas,
are eligible as collat-
Dear Mr. Jamen: eral for State Funds.
Your reaent letter presents the question of whether bonds ’
issued by a Public Rousing Authority may be uned an collat-
eral to secure the deposit of State funds.
Article 2529, V.C.S., is the statute wh$ch permits a deposi-
tory of State funds to post a surety bond or ple e certain,
types of securities as collateral for State depoa9 ts. None
of the enumerated types o,f securities will cover the obll-
gations Issued or to be issued by a Public Housing Aut~horlty
unless the language “all other bonds which are guaranteed as
to both principal and interest by the United States” is ap-
plicable.
The Housing Authority bonds tendered were issued pursutit to
., the prOVisIOns of Chapter 8, of Title 42; 0. s. c. A. Under
Sections 1410 and .1421(a.) of that chapter, the United~States
may obligate itself to guarantee that annual contributions
will be made to supplement local funds ia an amount not to
exceed the principal and interest to become due. The contract
between the Federal Government and the Public Housing Authority
may’provlde that the interest and sinking fund will be used
for the purpose of paying the obligation, but this payment of
the obligrtlon is not guaranteed by the United States Govern-,
ment . Accordingly, the bonds are not eligible a8 collateral
for State deposits under the provisionti of Article 2529, V.C .S.,
since the quoted language, when taken w’fth the other language
of the Act, evidences a clear intent that the payment a the
princfM1 & 1nteaWt must be the obligation guaranteed by
the Federal Government.
The State Depository Law, insofar as the enumerated eligible
seouritfes are concerned, is the general law, and where a
Honorable Jesse James, page #2 (W-11)
special act states that an additional security may be used
as collateral, that special act will be treated as an ex-
ceDtion to the normal rule in order that both enactments
-~c~-~~ ~~~
may apply to their appropriate:spheres. S_imusonv. Booth,
163S.W. 2d 1080 (Tex.Civ.App., 1942) error ref.; 39 Ta
JI1F., "Statutes" Sets. 81,82.In 1939, the Legislature of
Texas, 46th Legislature, page 427 (codified by Vernon as
Article 1269k-1) Dassed such a special statute, which reads,
in part: . -
"Notwithstanding any restrictions on in-
vestments contained in any laws of this
state, the state and all public officers
. . . may legally invest any sinking funds
in any bond . issued by a housing
&th<y pursuant to Che Housing Authority
Law (Article 1269k, V.C.S.) . . . or issued
by any other public housing authority or
agency inthe United States, when such bonds
are secured by a pledge of annual con:
tributions to be paid by the United States
Government or'any agency thereof, and such
bonds . . . shall be authorized eecurits f,or
all public deuosits . . .'I(Emphasis supplied)
~The caption of the act reads, in Dart, as follows:
'An act to provide that bonds and other .~
obligations issued by any public housing
authority or agency in the United States,
when secured by a pledge of annual contrl-
butlons to,be Daid by the United States
Government, shall be security for all Dub-
lit deposits‘and legal investments for the
state and public officers . . ." (Emphasis
supplied).
The effect of the 1939 statute is to add, by special enact-
ment, an additional type of eligible security as collateral
for state deposits. In no other manner are the provisions
of Article 2529, V.C.S. affected. Upon the basis of the
information which has been furnished.to this office, we are
unable to determine whether availabillty of the entire prln-
cipal and interest requirements of these particular bonds
is the subject of the guarantee by the Federal Government
as permitted, but not required, by the provisions of Chap-
ter8 of Title 42, U. S. C. A.
BQnorable~~~Jesse James, page 3 (e-11)
,. ,.,
,:,.,,Acci&f&ly, you and the State Depository Board are respect-
‘. fully ,advised that the obligations may be accepted as col-
lateral for state deposits only if the Federal Government
-‘+u arantees that annual contributions will be made, sufficient
;’ o ,supplement local funds,, so as to meet the principal and
interest requirements of the particular bonds tendered as the
.‘eame shall become due. Each bond transcript will have to be
examined individually to determine if, this requirement has
oreen met.
SUMMARY
Public.Housing Authority bonds, issued pur-
suant to Chapter 8 of Title 42, U.S.C.A.,
may be used as collateral for state de-
posits under Article 1269kfl,_V,C.S., only
if the p&W&u&r ,bond,s are +&cutied ,by a
pledge of annual contributibnr,,‘l)fi,‘,the Fed-
era1 Government or agency there@; We have
not been supplied with the transoript au-
thorizing the issuance of these bonds and,
therefore, can not pass upon your direct
question. The ,provisions of Article 299,
as modified by Article 1269k-l.,,,V&.$., pre-
bcribing the llmitatlons Andyconditions up-
on the deposif.,oS collateral,., securities are
applicable to suah bonds. ‘,
Very truly, yours,
wIIJ,‘wmso~
Attorney General
By+c4Y17D.~~~~
I,,~,,
Elbprt M. Morrow
EN&s Aeristant ,,
APPROVEIJz
OPINIONCOMMITTEE.
H. Grady Chendlerj Chairman