Case Information
*1 The Attorney General of Texas March 15, 1983
JIM MATTOX
Attorney General Opinion No. JM-13 Telex Supreme Austin. P. 0. BOX 12546 [51214752501] Telecopier 9101874-1367 TX. 78711. Court Building 5121475.0266 [2548] Austin, Texas Texas College and University P. 0. Box 12788, Capitol Station Coordinating Board Commissioner System for safekeeping with another Re: district deposit Whether by bank of funds may be placed junior to eecure college bank 1607 Main St., Suite 1400 Dallas, TX. 75201-4709 Dear Commissioner Ashworth: 2141742.8944 4624 Alberta El Paso. TX. 79905-2793 Ave.. Suite 160 held by those depository pledged by depository
You ask two questions banks banks. regarding to secure First, the safekeeping you ask: junior college of securities funds r May a bank, chosen as a depository by a public .~20 Dallas Ave.. Suite 202 junior college and pledging to cover
Houston. TX. 77002.6966 the funds on deposit by the college, legally 713/650-0666 those securities in safekeeping with another bank is owned by the same holding company that owns a depository bank? 806 Broadway. Suite 312 Lubbock. TX. 79401-3479 6061747-5236 Section 130.084 of the Texas Education Code provides: The board of trustees junior college districts
4309 N. Tenth, Suite E shall be governed in the establishment, management McAllen, TX. 76501-1665 512/682.4547 and control of the junior college by the general
law governing the establishment, management and control independent school districts insofar 200 Main Plaza, Suite 400 the general law is applicable. San Antonio. TX. 76205-2797 5121225.4191 The provisions the Education Code relating to districts, section 130.001, et seq., do not contain a provision relating to junior depositories. Thus, according the express language of section 130.084, districts are governed by the School Depository Act, section 23.71 et seq. of Education Code. of the Education Code permits a depository
to deposit or pledge approved securities "with the school district, with a trustee designated by the school district." No other provision in the School Depository Act makes reference to a trustee holding approved for a depository - Page 2
“Designate” is not defined in the Education Code. Words that are not defined in a statute are given their ordinary significance unless they are words of art or words connected with a particular subject matter. V.T.C.S. art. 10, §l; National Life Company v. Stegall, S.W.2d 155, 157 (Tex. 1943). mDesignate” means to indicate or set apart for a purpose or duty. Black’s Law Dictionary (5th ed. 1979); Webster’s New Collegiate Dictionary 308 (1977). Thus, a school district may specify the trustee bank.
The power to designate includes the power to approve disapprove a trustee bank. Neither the School Depository Act nor any other statute of which we are aware prohibits a depository bank from placing for safekeeping pledged securities in another bank owned by the sane holding company that owns the depository bank. Thus, the answer to your first question is yes, g the bank in which the securities are to be placed is designated by the school district the “trustee” bank. You also ask:
If the answer to question (1) is yes, does section 23.79(c), Texas Education Code, give the college the authority to direct the depository pledged securities in safekeeping with a bank independent of the holding company?
We believe our discussion of your first question answers your of the Texas Education Code clearly second question. provides the school has the authority to select the trustee or bank in which the pledged securities shall be kept. This interpretation is consistent with the remaining provisions of section 23.79(c), which give the school district authority to designate the amount of approved and to approve the substitution approved‘securities by the depository bank.
SUMMARY
With the approval the district, a depository bank holding public funds may place for safekeeping its with another bank that is owned by the same holding company as the depository Section 23.79(c) the Education Code authorizes a junior to direct depository bank to place the pledged in safekeeping with a bank independent of the holding company.
JIM MATTOX Attorney General of Texas Mr. Kenneth H. Ashworth - Page 3
TOM GREEN
First Assistant Attorney General
DAVID R. RICHARDS
Executive Assistant Attorney General
Prepared by Yolanda McKeeman
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Susan L. Garrison, Chairman
Jon Bible
Rick Gilpin
Yolanda McKeeman
Jim Moellinger