                          October20, 1971

Honorable Bob Armstrong      Opinion No. M-975
Conunlssloner
Qeneral Land Office          Re: May the several reserve
Austin, Texas '78701             accounts wlthln a Division
                                 of the Veterans' Land Fund
                                 -beconsolidatedIn a single
                                 account so long as accurate
                                 accounting proceduresare
                                 followed to track those funds
                                 necessary to be deposited to
                                 the credit of the siverar botid
                                 issues outstandingwithin that
Dear Mr. Armstrong:              Division?
    You recently requested the oplnlon.of this office with
regard to the following question:
         "May the several reserve accounts,wlthln
    a Division of the Veterans' Land Fund be con-
    solidated In a single account so longsas accurate
    accounting proceduresare followed to track those
    funds necessary to be deposited to,the credlt'of
    the several bond issues outstandingwithin that
    Division?"
     In answering this question, we would first .llketo estab-
lish the relationshipwhich the several reserve accounts wlth-
in a Dlvlslon of the Veterans' Land Fund have to the Fund
Itself.
     Article III, Section 49b of the Texas Constitution,as
amended In 1967, speaks to the existence of and makes pro-
vision for the operation of the Veterans' Land Fund; it reads
In part:
         "By virtue of prior Amendments to this
    Constitution,there has been created a govern-
    mental agency of the State of Texas performing
    governmentalduties which has been designated
    the Veterans' Land Board. SaMBoard shall con-
    tinue to function for the purposes specified In

                             -4757-
Honorable Bob Armstrong, page 2      (M-975)




    all of the prior ConstitutionalAmendments
    except as modified herein. . .
          II
               .   .   .



         "The Veterans' Land Board may provide
    for Issue and sell not to exceed Four Hundred
    Mllilon Dollars ($400,000,000)In bonds or
    obligationsof the State of Texas for the
    pose of creating a fund to be known
                                      --.-x8=
                                        as
    Veterans'-LandFund, Two Hundred Million Dollars
    ~g200.000.000)of which have heretoforebeen
    issued and soid...
          11
               .   .   .



          "All moneys comprising a part of said
     Fund and not expended for the purposes herein
     provided shall be a part of said Fund until
     there are sufficientmoneys therein to retire
     fully all of the bonds heretofore or-hereafter
     Issued and sold by said Board, . . .
          II
           . . ." (Emphasisadded).
     The Veterans' Land Fund referred to above contains
wlthln It four (4) separate or division funds, designated.
by your Board as "DivisionA","DlvislonB", "DivisionC"
and "DivisionD" . These various divisions were created by
specific provision contained In the various bond resolutions
as adopted by the Veterans1 Land Board and relate to the
four amendments to this section of the Constitution.
     The following language contained in the 1967 amendment
to Article III,,Sectlon@b, speaks to these divisionsas:
          II      consistingof the moneys attributable
           (
     to the boids issued and sold pursuant to a single
     Constitutionalauthorizationand the lands pur-
     chased therewith). . ."
     Within these various Divisions there have been created
"ReserveFunds" for each of the bond Issues which make up the
various Divisions (I.e. State of Texas Veterans' Land Bonds,
Series 1949, 1950, and 195OA, make up Division A of the
Veterans' Land Fund) and the resolutionsauthorizingeach of
these Issues specificallystates the purpose for which these

                            -475a-
Honorable Bob Armstrong, p,age3 (M- 975)


Reserve Funds are to be used.
     The question which you have asked concerns the manage-
nientof these funds and whether or not the moneys which
make up the several reserve acoounts wlthln a Division can
be deposited In a single depository account so long.as
accurate bookkeepingand accountihg practicesare maintain&d
to insure that each designated "reserveaccount" Is credited
with the required sum.
     The management of these funds Is without question vetited
In the Veterans' Land Board by Article 5421m, Vernon's Civil
Statutes, Its Section 2(A) reads as follows:
          "The duties of the Veterans' Land Board
    as created by Article  III. Section 49-b of
    the constitutionas amended. shall be to auth-
    orize and execute negotiable bonas as provided
    by law; to provide by resolution for the use
    of'the Veterans' Land Fund In such manner as
    to effectuate the Intent of the constitution
    and of th' law; to fix the Interest rates as.
    prescribede by law; to provide for the forfeiture
    of contracts of sale and purchase and the resale
    of forfeited land: to conduct such lnvestlgatlons
    as It may deem necessary; and to formulate-such -
    policies. rules and remla%lons as may be necessary,
    not in conflict with the provisionsof the law. to
    Insure the proper administrationof the law and to
    carry out the Intent and purposes thereof."
    ‘(Emphasisadded).
     The sum of those funds which make up a Division within
the Veterans' Land Fund should be segregatedand remain
separate and apart from all other moneys and propertiesIn
the Fund but this same limitation would not necessarily
apply to the "reserve accounts" within the Dlvlslon.
     We find no prohibitionIn the Constitution 'the statutes
or the resolutionsauthorizing the various o\its&andlrigbolid
issues of the Veterans' Land Board which requires that 'Elie ..'
moneys In the variousreserve accounts be physlcalIytiggregated
from the other moneys within the Dlvlslon so long as said
funds are clearly traceable and the required amount of reserves
contemplatedby the various bond resolutionsIs maintained.
     The bookkeepingand accounting proceduresused In discharging

                           -4759-
Honorable Bob Armstrong, page 4 (M-975)


the Board's responslbllltlesIn these matters are clearly
ones of judgment and should it be found to be the better
practice-thenumerous reserve accounts within a Division ,
may be consolidated.
                        SUMMARY
          The several reserve accounts within a
     division of the Veterans' Land Fund may be
     consolidatedIn a single depositoryaccount
     so long as accurate accountingand bookkeeping
     proceduresare followed to Insure that'the
     required reserves for each bond Issue are maln-
     talned and are Identifiableas contemplatedby
     the various bond resolutions
                               V/A? truly yours.



                                       General of Texas
Preparedby Robert B. Davis
Assistant Attorney Qeneral
APPROVED:
OPINION COMMITTEE
Kerns Taylor, Chairman
W. E. Allen, Co-Chairman
Mel Corley
Joseph H. Sharpley
Roger Tyler
James Quick
SAM MCDANIEL
STAFF LEGAL ASSISTANT
ALFRED WALKER
EXECUTIVE ASSISTANT
NOLA WHITE
FIRST ASSISTANT



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