Case Information

*1 OFFICE OF THE ATTORNEY GENERAL OF TEXAS

AUSTIN

Ron. A. T. Prlbble

County Attorney

Hills county

Ooldthvaite, Texaa

Desr Slrr Opinion No. O-7166

same )Qildlng~ Na$ the proceeds of sn ' lnsurance',poI&cy vhtFh collected vhen a h uildlng in (I &owon school district vas destroyed

b$. fire, b,e'us&i to pey off outstanding bonds?"

'..,_ \J,.' .~

Article 2753, Vernon's Annotated Civil Statutes, rends as fQ&&ovs:

"The trustees of sng school district, upon the order of the county trustees prescribing the terms thereof, vhen deemed advisable, may mske *2 Hon.

sale of any property belonging to said school and apply the Proceeds to the purchase diatrlct, of necessary grounds, or to the build- or re- pairing of school houses, or place the proceeds to the credit of the nvellable fund of the aistrict.” (Underscoring oura) We think it lr clear that under the provisions of the above article the school trustees could purchase or build e nev building vith the funds derived from the sale you mentioned. We assume that the trustees have determined there is no need for addltlonal grounds or a nev bulldng and that they have complied vith the provlslons of the article tid placed the proceeds to the credit of the available funda of the dlstrlct. It then rests upon us to determine for vhat purposes the available echo&l fund of the district may be used.

Article 2827, V. A. C. S., subsections 1 and 2 set out the purposes for which State and county and the loca.1 These, tvo sections read as funds may be used. follovsr

“Sec. 1. The State and county available funds shall be used exclusively of teachers’ and superlntend&ta8 for the payment selarles, fees for taking the scholastic census, aud lnterest on money borroved on short time to pay salaries of teachers and superintendents, when these ssla- rles become due before funds for the current year become eveileble; provided that no loans for the purpose of payment of teachers shall be pald out of funds other than those for the then current year.

“2. Lacal school funda from district taxes, tuition fees of pupils not entitled to free tuition and other sources may be l?sed the purposes enumerated for State and county Punds and for purchaeing appliances end supplies. for the payment of insurance premiums, janitors and other emplcyea, for buying school sites, buying, bullding and repairing and ranting school houses, and for other purposes necessnry in the conduct of the public schools to be determined by the Board of TNstaes, accounts and vouchers for county districts to be ap- *3 Eon.

proved by the county superintendent; provided, that when the Stnte available fund in any city or dlstrlct is sufflclant to mnlntaln the schools thereof ln eny yeep for at least eight months, and leevs 0 surplus, such surplus mey be expended for the purposes mentioned herein.”

As ve read the above two sections of Article 2827. It is our opinion that the county evalleble fund of the ‘- district could be spent for only those purposes enumerated i.n Subsectgon 1. Neither the construction of buildings nor the peymant of outstnnding bonded indebtedness is amoe the authorized uses. Hovever, Subsection 2, dealing with the local funds derived from district echool taxes and other local sources applis,ncas and eupplles. for may be used for “~rchaalng payment of insurance premliias . . . and for oiher piwposes necessary in the conduct of the public schools to be deteraned by the Joard of TNstees. . . .I’ Subsection 2 of the Article further provides that *hen ttie Btete avelleble fund in any city or district le atiflclent to maintain the schools at least eight months, and leave a surplus, such surplus may be expended for the pur~oaes mentioned in the subsection. This deparr;sanr, in construing the effect Of this language held:

“The statutory euthorlty concerning use of such surplus State available funds is therefore, in our opinion, broad enough to permit use of such funds in retirement of bonded lndebted- ness of 8 school district.”

It is our opinion therefore that the funds you received from the sale of 6 school building, having been pl&cad funds account, lpey be expended for the in the district’s of bonds vhlch issued for the purpose of,obtein- retirement lng necessary funds to construct the building.

In msver to a question regarding the uses for vhlch money collected 8s fi?re insurance on the school building destroyed by flra,thia department held, Ln its Opinion No. 3-454, es follows:

“Our pnsver to your first question la thst

the money collected 8s fire LnsumU’lce on building destroyed by fire is 0 local fund and ten only be used for those school purposes enumersted in section 2 of Article 2827.”

756 * Hon. A. T. Prlbble

In vlev of our mover to your first question end our rensons therefor, ve nnsver your second qucstlon in the cffirm6tive.

Truatlng the above ful17 nnsvers your questions, ve are

Yours very truly ATTORNEY QEIGRAL 07 TEXAS A /- -I‘\

E. n. D&&in - Asoietnnt