            THEAITORNEY                  GENERAL
                          OF    TEXAS




HonorableH. A. Hodges
County Auditor,WillMmson County
Ge&+mm,     Texas

Dear Sir:                    : 0pinion,No.O-7087
                               Re: If?municipalbonds held by the
                                   County Iilprovements
                                                      Fund, are
                                   sold, may the premium from such
                                   bond8 be lnve8tedin U. S.
                                    GovernmentBonds?

We acknowledgere&pt of yc$ opinionrequest of recent date, end quote
from letter,(18follows:

    'IThiaCounty'8PermanentSchool Fund ownm quite a lot of Municipal
    Bon&a for which an offer of rreieral
                                       hundred dollerr premiumhas be-.
    made, if the rale lr made the principaland the premium~111 be
    invertedlz'b. 5. GovernmentBon&, by the Invertingof the premirrm
    In bonda there will be good findnclalgein over the maturity of the
    bon& rold.
                                                                   .
    "An the law directa the interertand leare money, except oil anu..
    mineral leaae6,be trsnnferredto the State and County Available
    School Fund for appor:~kkmmnn~-to the various Conrmonand Independent
    School Diatricteon a'per capita rcholsrtlc  berir it bar occurredto
    me that premlunuon bonda may be held a8 Interest,  if 110the law
    would not permit the une of the premium to purchaseadditionalbon&.

     “Kindly give me an opinionrtatingwhether or not the Commidlionere'
     Court would be authorizedunder the law to Invest the premium of bOnda
     mold in the purchaseof bonda for the use and benefit of the County
     PermanentSchool Fund?"

The Attorney General'8officeheld in OpinionNumber O-823, copy of which
is enclosed,that profit derivedfrom purchase,sale, and reinvestmentof
the cash in the PermanentSchoolFund of a county should become-a part of
the AvailableFund (citingArt. 7, Section 6,Constitutionof Texas).

In line with that opinion,we believe that the premium receivedfrom the
sale of bonds held by the PermanentSchool Fund becomes a part of the
AvailableFund.
Hon. H. A. Hodgee - Pege 2 (O-7087)



You are advieed,therefore,that the Commieeionere'  Court would not'be
authorizedunder the law to Invest the premiumfrom bonde aold in the
purcheeeof bonds for the use and bei$efitof the County PermanentSchool
Fund.

                                      Very truly youre,

                               ATTORNEX-oFTExAs

                                a/ Claud 0. Boothmen



                               By
                                    Claud 0. Boothman
                                            Assistant
COB: v/ldw

Enclosure 1

APPROVEDFEB. 23, 1946
CARLas c .~'TCSHIEY
FIRST ASSISTANT
A!lTORNEYGENEBAL

APPROVED OPINIONCOMMITTEE
By B. W. B.
CHAIRMAN
