Texas Attorney General Opinion: JM-142 Page: 2 of 8
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Honorable Luther Jones - Page 2
(a) The district shall have an interest and
sinking fund which shall include all taxes
collected under this chapter.
(b) Money in the interest and sinking fund may
be used only:
(1) to pay principal and interest on the
bonds;
(2) to defray the expenses of assessing and
collecting the taxes; and
(3) to pay principal and interest due under
a contract with the United States if bonds have
not been deposited with the United States.
(c) Money in the fund shall be paid out of the
fund on warrants by order of the board as provided
in this chapter.
(d) The depository shall receive and cancel
each interest coupon and bond as it is paid and
shall deliver it to the board to be recorded,
cancelled, and destroyed. (Emphasis added).
Unambiguous statutory language is not subject to construction,
but must be enforced as written. Ex parte Roloff, 510 S.W.2d 913
(Tex. 1974); Col-Tex Refining Co. v. Railroad Commission of Texas, 240
S.W.2d 747 (Tex, 1951). The clear language of the statute requires
that money in the interest and sinking fund be expended only for three
specified purposes. The district is without authority to expend the
funds for any other purpose. But see Water Code 51.437 (permitting
the investment of the funds in certain instances). Moreover, absent
specific statutory authority to the contrary, monies in an interest
and sinking fund may be used for no other purpose than the one for
which it was created. Bexar County Hospital District v. Crosby, 327
S.W.2d 445 (Tex. 1959). See Attorney General Opinion H-658 (1975).
This rule applies when bonds remain outstanding. The rule is
less clear when all of the outstanding bonds have been retired and
there remains a surplus in the interest and sinking fund. In specific
instances, the Texas Legislature has permitted the expenditure of
surplus interest and sinking fund monies after the bonds outstanding
are retired. See, e.g., V.T.C.S. arts. 723, 752a. The Water Code,
however, is silent as to whether surplus monies in the interest and
sinking fund can be expended after the bonds outstanding are retired.
It has been suggested that any surplus monies in the interest and
sinking fund can be expended for any lawful purpose of the taxingp. 608
(JM-142)
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Texas. Attorney-General's Office. Texas Attorney General Opinion: JM-142, text, April 11, 1984; (https://texashistory.unt.edu/ark:/67531/metapth272582/m1/2/: accessed April 25, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.