Texas Attorney General Opinion: MS-122 Page: 3 of 9
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Hon. J. W. Edgar, page 3 (MS-122)
a
also passed House Bill 572, Acts 45th Legislature, Regular Session,
1937, chapter 484, page 1298, which amended Article 2546, V.C.S., so
as to authorize the County Commissioners' Court to determine and
designate a portion of county funds which may be deposited as "demand
deposits" and also to determine and designate a portion of such funds
as "time deposits."
Article 2832, V.C.S., contains the current pertinent stat-
utory provisions governing the selection of depositories for funds be-
longing to independent school districts of more than 150 scholastics.
It provides, in part, that:
'" . . . the treasurer of the school fund shall be
that person or corporation who offers satisfactory bond
and the best bid of interest on the average daily balan-
ces for the privilege of acting as such treasurer."
In the case of Jones v. Marrs, 114 Tex. 62, 263 S.W. 570
(1924), the Court construed the meaning of the words "average daily
balances" used in Article 2832, V.C.S., as follows:
" . . . The various balances for the different
days in the period for which the interest is to be paid
are the daily balances for the interest period. The sum
of those daily balances divided by the number of days
in the interest period is the average daily balance for
the interest period."
Our opinion is that the words "average daily balances' have a well de-
fined and understood meaning as applied to bank deposits. The words
are used in banking circles to apply to a deposit account which has, or
may have, a changing balance from day to day. A "time deposit" does
not have an "average daily balance" as that term is used and understood
with respect to bank deposits. A "time deposit" has a balance during
the entire period agreed upon by the depositor and the bank which is
fixed, static, and does not and can not change from day to day. It is
clear, therefore, that in order for a deposit account to have an "aver-
age daily balance" it must be a "demand deposit". Further, the pro-
visions of Article 2832 require that the bond furnished by the deposi-
tory be conditioned upon "the payment of the funds received by him
upon the draft of the president of the school board. .. " The funds on
deposit are therefore required to be subject to withdrawal upon the
draft of the president of the school board. Thus, again, the provisions
of Article 2832 clearly show that the school funds of such independent
school district must be placed in "demand deposit" accounts.
The language of the pertinent portions of Article 2832 is
substantially the same as that which was previously a part of the stat-
utes governing deposits of state and county funds prior to the amend-
mentsf hich authorized "time deposits." The provisions of Article
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Texas. Attorney-General's Office. Texas Attorney General Opinion: MS-122, text, March 16, 1954; (https://texashistory.unt.edu/ark:/67531/metapth275988/m1/3/: accessed April 26, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.