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                                            The Attorney              General of Texas
                                                             August 20, 1982
MARK WHITE
Attorney General


                                           Honorable James A. Gray                 Opinion No. ML'-505
Supreme        Court     Building
                                           Burleson County Attorney
P. 0. BOX 12546
                                           Caldwell, Texas   77836                 Re:    Selection  of   county
Austin.    TX. 76711- 2546
5121475-2501                                                                       depository  owned by  holding
Telex    9101674-1367                                                              company in which county judge
Telecopier     512/475-0266                                                        owns stock

                                           Dear Mr. Gray:
1607 Main St., Suite 1400
Dallas. TX. 75201-4709
2141742-6944                                    You ask whether a bank is disqualified from serving as a county
                                           depository where the county judge is an officer and director of the
                                           bank and owns less than 1% of the issued and outstanding shares of the
4624 Alberta           Ave.. Suite   160
E, Paso, TX.           79905.2793
                                           bank's capital stock.    You also ask if the same bank would be
9151533.3464                               disqualified from serving as county depository where the county judge
                                           is an officer and director of the holding company which recently
                                           acquired the bank.   The judge owns 17% of the capital stock of the
1220 Dallas Ave., Suite 202
                                           holding company.
tiouston,    TX. 77002-6986
7131650-0666
                                                Article 2529c, V.T.C.S., governs the issues       raised   by   your
                                           opinion request,,and it provides, in pertinent part:
606 6,oadw.w             Suite 312
Lubbock.   TX.          79401.3479
                                                        A bank shall not be disqualified from bidding
8061747-5238
                                                     and becoming the depository for any agency or
                                                     political subdivision of the state by reasm      of
4309 N. Tenth, Suite 6                               having   one   or  more    officers,   directors or
bkA,len,     TX. 78501-1665                          stockholders of said bank who individually       or
5121662-4647
                                                     collectively own or have a beneficial interest in
                                                     not more than 10 percent of the bank's outstanding
 200 Main Plaza. Suite 400                           capital stock, and at the same time serves as a
 San Antonio,  TX. 762052797                         member of the board, commission, or other body
 512/225-4191                                        charged by law with the duty of selecting the
                                                     depository   of such state agency or political
 An Equal       opportunityi
                                                     subdivision; provided, however, that said bank
 Affirmative      Action     Employer                must be selected as the depository by a majority
                                                     vote of the members of the board, commission, or
                                                     other body of such agency or political subdivision
                                                     and no member thereof who is an officer, director
                                                     or   stockholder  of    the   bank   shall  vote or
                                                     participate in the proceedings.




                                                                         p. 1819
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Honorable James A. Gray - Page 2     (Mw-505)




V.T.C.S. art. 2529c, 52.    Attorney General Opinion H-596 (1975) is
dispositive of your first inquiry.    Therein, we determined that, in
accordance with article 2529c, section 2, V.T.C.S., a bank could serve
as county depository where the county judge owned stock in the bank
and served on the board       of directors   if the members    of the
commissioners court did not collectively own more than 10% of the bank
stock and interested members did not participate in the vote.      YOU
have not stated whether any other member of the commissioners court
owns or has a beneficial     interest in the stock of the bank in
question.   Assuming that the county judge is the only member of the
commissioners court with an interest in the bank stock, his ownership
of less than 1% of the outstanding capital stock clearly would not
serve to disqualify the bank so long as the county judge does not
participate   in the selection process.     If other members of the
commissioners court also have an interest in the bank stock, the bank
would not be disqualified unless the collective interest of the
members exceeds 10%.

     Your inquiry regarding the county judge's ownership of 17% of the
outstanding   capital  stock of the bank holding      company  is not
susceptible to a definite answer.    If the bank holding company is a
one-bank holding company where the bank is the corporation's sole
asset, the likelihood is that the county judge then has a "beneficial
interest" in more than 10% of the bank's outstanding stock. In such a
case, the bank would clearly be disqualified from serving as a county
depository.    If the bank holding company is a multi-bank holding
company, the judge's beneficial interest would have to be determined
on an individual basis.

                              SUMMARY

            A bank is not disqualified from serving as a
         county depository where an officer, director, and
         1% shareholder of the bank is the county judge, so
         long as the county judge does not participate in
         the voting     on   the   selection   of   the   county
         depository and his interest in the bank stock
         combined with that of any other members of the
         commissioners court does not exceed 10%. The bank
         may be disqualified       by virtue    of the county
         judge's   ownership    of   17% of the outstanding
         capital   stock   of    the bank    holding    company,
         depending upon the judge's resulting "beneficial
         interest" in the bank stock.




                                         MARK      WHITE
                                         Attorney General of Texas




                                   p. 1820
Honorable James A. Gray - Page 3   (MW-505)




JOHN W. FAINTER, JR.
First Assistant Attorney General

RICHARD E. GRAY III
Executive Assistant Attorney General

Prepared by Catherine B. Fryer
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Susan L. Garrison. Chairman
Jon Bible
Catherine B. Fryer
Rick Gilpin
Patricia Hino-josa
Jim Moellinger
Bruce Youngblood




                              P. 1821
