January 27, 1939
Hon. Charley Lockhart
State Treasurer
Capitol Building
Austin, Texas'
Dear Mr. Lockhart:
ophi0n NO. 152
Re: Water Improvement District Bonds as collateral
for State funds in State Depository
YOU request an opinion a6 to whether Wichita County Water Improvement District
No. 1 Refunding Bonds, Series 1938, are eligible under the provisions of
Article 2529, as amended, as collateral for the deposit of State funds.
Article 2529 is enacted as a limitation upon the authority of the Treasurer
in the accepting of certain kinds of securities as a pledge to secure the
deposit of State funds by State depositories. The act, therefore, should
be strictly construed to give effect to that purpose, and no security which
does not clearly fall within the empress terms of the act should be
accepted. The only provision of the act under which the bonds of water
improvement districts might fall is that wh9dh provides for the pledging
of "bonds issued by municipal corporations in Texas." If becomes necessary,
therefore, to determine whether the water improvement district involved is
a "municipal corporation," within the meaning and intent of the act. In
determining this question, it is first necessary to determine in what sense
the term "municipal corporation" was intended by the Legislature in the
particular context.
A "municipal" corporation in the broad sense of the term includes every
corporation which pertains to%& internal government of the State 'or
Nation, and if the term is used inthatbroad sense, it would include
subdivisions of the State as counties, road $,istricts,school districts,
navigation districts,and water improvement districts. However, in the
primary sense of the term a "municipal" corporation pertains only to
incorporated cities, towns or villages; and in this sense a corporation
is not municipal unless it is organized for the government of a single city,
town, village or other compact community of persons. 19 Ruling Case Law, p.
691. Whether Article 2529 uses the term in its broad or in its primary
-citignification
must be determined by the context of the act and the purposes
intended to be effected thereby by the Legislature. 19 Ruling Case Law
p. 692.
Hon. Charley Lockhart, January 27, 1939, Page 2 (O-152)
Bearing in mind the purpose of the act involved herein, and having due
regard to its history and the context of the act, it is clear that the
term "municipal corporations"is used in the act in its primary
signification, and does not-include such corporations as might otherwise
ordinarilybe :onstrued as muaicipal corporations in the broad sense of
the term. This is made clear by the action of the Legislature in
detailing specifically in the act such public corporations as counties,
road districts, V-independentand common school districts. If the term
municipal corpcration hadbeenintended in its broad s.:.~gnification,
there
would have been'~nonecessit) Lor the specific mention of tneee particular
corporations for they would have been included, of necessity, in the term
"municipal corporations".
The intent of the Legislature is‘further made clear by noting that the
original act. prior to its amendment, contains specific provision mr
the acceptance of bonds of navigation districts, the authority for the
creation of which by the Legislature appears in the same constitutional
provision which .authorizesthe creation of water improvement districtsI
The amendment eiiminated such provision, thereby clearly evidencing the
'Lntehtimof the Legislature that bonds of navigation districts ShoUld no
longer be accepted by the Treasurer, yet if the term "municipal corporatica"
be given its broad sigcificstion, such bonds would still be eligible for
acceptance.
We, therefore, Ooncluk that the words "bonds of municipal corporations
in Texas" are used 111izticle 2529 in their primary signification, as
indicated *'lereinabove,and that, therefore, bonds of water improvement
districts in Texas are not authorized to be pledged as collateral for the
deposit of State funds.
Yours very Cruly
ATTOMEY GENERAL OF I%'XAS
s/R. W. Fairchild
A’;;
Pi.W. Fairchild
Assistant
RWF:bt/ ldw
APPROVED:
s/ GFLRALDC. MANN
ATTORNJ3Yixx33AL OF TExAs
Untitled Texas Attorney General Opinion
Combined Opinion