Honorable Qilbert Donmm
St&e lktardfor Vooaficmal Emsartlon
c88;~lSt8t&am
.
Oplnlon lo. Q-5853
Ret DQU the State Board of
mucation have the mAthor-
ity to ulvo r tie* a w lrll
the Army0 c01oradctiwlga-
tlon M8trlat Refunding
Rondo 00 the hl&ut b1dd.r
atlwtlws than par a#@
la o r ued
lnterarta ndth U8
obtalnurypmalumthat
ml&M be pat& ror lp ea ula -
tlve bond6 under preoent
f'avwabltmnrk+t oondltione?
And relate&guestioas.
lie are in receiptoi your letter of recent date reacf~
aa to11ow8:
Yhest8te mlwanentShoo1?uwI ow?m $Ul3,W.O0
Color&dolmfigrtion DloteiatRef. Bond8 &tad
zc uhleh mtun over a prriod of about 24 years
irola the ~eaent tam, %he werag matuHty being 14.35
5+ 9or sent intwe6t per annua
%?kk!.m:~*-bo -f kforewturlty.
"The Dimtriotham r& lppllratlonto the State
Board of &duortlonfor pormlm~ionto pay the Bond6 b>.
paylng pInalgal ti 800rued lntereetto date of &sty-
In the qplleatlon tho M&riot rtatw that the
r&oc VerImMt haa deoidedto deepen the Arroyo from
H6rllngentotheBayat Fedaml expense00 that ttm Aa--
royo till be mvlgirblr,but the Oopawment requires the
MatPlet to l’urr&ah me88~ rlghteof-uay amd otha
hofllt%ea, requlr%ngth M8trlot to rlase an Udltloml
three hundred thoumnd doll@rr. It lm mmeaented to the
Board that the Di8triotoanborrouurou& nwny to py oif
the Ron& held br the Sahool Rardandto w for thoad-
ditlobl axpen o? right8-of-way, eta at
;. lm%xlaakly
BonorabloOIlbertDenmum, Page 2
34 per cent, perhapsa lower rate on early mturltlu.
The 9rennli Bon& Mve been In good slimdIng einim they
uere lmauml. Bamver, the orIgInrlBond6uereindefault
?or severalyears.
lA8a mlng topUrpcewr th* of the follwi~qu48-
tlona that after mx lnve8tIgatlonand due oorwIdemtIon
the St&e Board of Educationreaohw tha ooncluaIonthat
the Arroyo ColoradoRavigatlonDlatrlctBonds am too
rpeculatlveto W safelyowned by the School Fund, but
that,neverthele8a,theyprobablyhavra preaonttmrket
value oon8Idemblp In exaa*a of par and learued Interest,
In vlar of the very favorablemrlat existingat this tlaa,
th4nr .
3. Doss the Board have ruthorltyto advtwt4.m
and sell these nonds to the highestblddar
at not leas than par and aoorwd intauet
and thus obtainany psaairathatlightbe
prld ior apaculatlveBomls under &wend
fWtvorsbleam-k& candItions?
2. Dow the Board have authorityto aaoept pay-
ment ot these Bonda before rPturlty?
3+ Doe8 the Baud have authorityto aoaopt pay-
!iqmt of the Bonda and reoelvoa voluntu--J
payment 0r a promlumor penalty for the pelti-
i0ge 0r gmpamt, th u80unt 0r the plvriur
to be agree4 ta by the Borrd and t& DIetrIot?
"we uould &redly lppxwdate aaauerato the foaugoing
qwstlonr In two ror our next Board meetinguhloh U
Ja 3a
I am enclosine;a aopy of the lpplIa8tlonmd8 by the
DIrtrIatto the Board l l 9,
Theonly authoritygranted to the StateBorrdof Sdu-
eation to releasemmatured bonds Ia found In &tIole 2787a,
Vm*a Amokted Civil Statute8,uhlah artlalomda um follow:
~3kkBoal-d0f Fiduoat1onry -1H the
truatteor of any aomon r&tool dintriotor of any lade-
-f l0hO01 dl8tWt Of t&U Std.0 t0 IMY Off Uhd diB-
LlonorabloOllba'thmn,PPge3
Sta te?erm.nmt School Fund, outatandlngagaln8t any
a oa al
mahOo1 dl8*lot, 0r any independent school dI8-
triot In tam St&e.
gIt8h&llbe the duty of the lchooltureteea of
any a- aohoold1strIat,oc ury indermndent echool
dletrlctof thX8 State deatiingto pilgoff and d%aahm&
any bmsded Indeb- now ourwd or here~%fter
to b8 owned by the PermanentS&o01 Fund of thlr State,
outstanding again& such didriot oc distrlotct, before
uaturltythereof,to rake diruct apPl:catlonIn wrltlng
to the State Beam2 of ESduwtIonat laaat thirtydays
before lnj interest paying date on o&Id bon@, mnklly
knWn to 8a:d State ibax'dof Educationthe dealre Of'
8aid tmBtw8 to 9ay off ti dir- said bonded In-
debtedness,or any part thereof,de8eriblnf: a&Id bon48
or the part tbreof that the trusteea deeire to pay off
8nd dlaoharge;and it ah&l1 be the duty of the State
Eoard of gdwatlon upon receiptof such applloatlonto
act thereonIn such muuker a5 they deebn boat and notify
the applicantor aPplIcantawhetherapyllcetioais ce-
fu8ed or granted In whole or In part) provldml,that
only suoh t&x mtmay ea has been oollectsdby vlrtutf of
tU levIe8 lade for the l~ifio pwpotie of p~~ltllnga
lInklngfuadmd9a interest o nth ap t
a r tlo ula
b o nda
r
to be mdeemad ahalI- be ex)#nd+din the redemption,taking
Up oi~PayIngOffOf8~~hbonda8a i%~Vi&dtiehi AOti
m&88 uid bonds are being ndwmed SOS the plrrp0M0r
being nfunded;endtheap911eat1on or the board or tru8-
tees of my oomw or Ucdopendentschool dirtriet daSir--
ingtoretln bonda a8 hemIn 9wvIdled shall Includean
8ffidwit to that 8rred in their appliarrtlon; an4 pro-
vided further,th8tIt8hllb8 wAlawfwlfaranyperlmn
upan uhou any duty mat8 In emrylng out the provIalona
Of #i8 18~ to give m rooelvsany commlasion,prealm,
Or any ccmpenaatIon+hrtewx fortht persozwnoe of such
duty or dut1.8.
Plln 9IWiSia or this Aat 8ha11 epply also to the
governingboard of all altie8,countleaend politlti 8ub-
dI+I8IonaInthIaSkteuho8e bond@@reownedmdmwbme-
lrt8rbeommlbythe Iwrmnebt school rlmd or the strte.*
Itulll be obwrvdthat the applioation far
pwml8aIonto m7 wamtured bonda mmtaoma frontho B
b o a rodr th epolitiaal lubdivlalon leeklng to 9s~ 88Ld bon&.
x0 8uthor:ty 28 mod to the l3fwd or Eduo8tion to ldvortlae
tar bide, nor to 8eU bond8 In onj oth8r mUn3.r #&n th8t 8Ot
out In hrtlala 2787,a, auora. won rweipt of the applloetlon
rraathe gwerningboard to p8y 0rfbd d.%aoharga b~ncla, ‘it
8ha11 k tb duty Of the Stata B0U-d Of EdUO&lNI l * l t0 EOt
thereonIn auoh mnnrmr ee they de- beot and notie the appll-
cants whether the lppllaatlonIs nfu8ed or ganted in whole
or In part." Tour Ttlon No, 1 la anamwed In tha negative.
Inarurcrr~kn- queetionNo.2, youare8dvieedthet
the State Board 0s Edwatltm may wmiilt the pmmayxtent 0s the
bands In question at auoh times and upon auoh condItIone 81)are
authorizedby the provIaIoneof Article2787s, above quoted.
x.nanmm )o your qumtion x0. 3, the court 0s Civil
A~pwla held In the case or Stats v. Hatcher,g S.Y. (2d 4,
(Rwer6ed by the SuprmacCourt on other grourxlc, i31S.W. m2d
499) that the State Board ol EduoatlonOOUld ~equLra a bonlu
of sixty dayc* lntercct. The court In oonst'p\Ltly; the law aaid:
"UC are unable to aonatrueit tw inhibitingthe requlreamt of
a bonus to be paid to the pcrtmxnt achsol fund for a p.rIVIltge
which the board of educationvatigiven the dlaaratlonto allow
or aeny. Suah dlaaretlon,we think,shouldadnit of reaaonrble
oondltloneIapoaedby the board of edwatlon @a a mama OS prr-
ventinglees to the permanent aohool fund by rowon of delay
In reinvestinglto mm. A bonus of lIxty deya IntePeat
eertalqlyoould not beheld unreaaonabla."
‘lo uer th
a e r efo
ldvl8edthatth8
re StateBo&rd OS
Eduoatlon may ooncLttio?a
the prwmynnt of the bon& m
queatlon under Article2787a upon prepayuentby the dXetrIct
&f;Ahn mount of intereat, ea a bonu8,aa It -7 fi% and
.
Youm very truly
By /r/ c. I. GIBsca
C, ?. Qlbaon
AwIBtaat
Untitled Texas Attorney General Opinion
Combined Opinion