                      The Attorney               General .of Texas
                                           October    10,     1976
JOHN L. HILL
Attorney General


                   Honorable Joe Resweber                            Opinion No. l-I- 1254
                   County Attorney
                   1001Preston - Suite 634                           Re: Consolidation       of various
                   Houston, Texas 77002                              funds and bank accounts          of
                                                                     Harris County and Harris County
                                                                     Flood Control District.

                   Dear Mr. Resweber:

                           You have requested   an opinion on the following       questions   which you
                   have   submitted:

                                      1. Can the proceeds from various County bond
                                issues be consolidated into one fund?

                                       2. Can all the interest and redemption funds
                               created for the payment of interest on, and principal
                               ~of, the various county bond issues be consolidated into
                               one fund?

                                      3.     Can all the money held by the County
                                pursuant   to federal grants be consolidated into one
                                fund?

                                      4.   Can County funds (except           interest and
                                redemption   funds) derived from the          County’s ad
                                valorem taxes be consolidated?

                                      5. Is the County required to maintain a separate
                                bank  account in the County depository for each of the
                                various county funds?

                                       6. Can the proceeds from the various Harris
                                County Flood Control District bond issues be con-
                                solidated into one fund?

                                      ‘7. Is the Harris County Flood Control District
                                required to maintain a separate bank account in the
                                Harris County Flood Control District depository for




                                                     p.     4975
Honorable Joe Resweber     -   Page 2   (R-1254)



           each of the various Harris County Flood Control        District
           funds?

      Proceeds from the sale of bonds can be used only for the purpose for which
the bond issue states. Barrington v. Cokinos, 338 S.W.2d 133 (Tex. 1960); Attorney
General Opinion H-968 (1977). Therefore, if consolidation of bond proceeds into one
fund would result in improper use of the bond revenue, such consolidation would be
unlawful. Only if the bonds were issued for the same purpose could the proceeds
from their sale be consolidated into one fund.

      An interest and sinking fund may be dispersed only for the purpose of paying
the interest or redeeming the bonds for which the fund was established.   V.T.C.S.
art. 839; Attorney General Opinion M-841 (1971). Therefore, a consolidation of
these accounts would be impermissible if it would result in an improper use of the
fund.

       The consolidation of federal grant money depends on the attendant rules and
regulations under which the grant was made. There is no state law which prohibits
consolidation of these moneys as a general matter.     Thus, an answer to question
number 3 depends on the language and the purpose of each grant.

       Except for taxes raised to retire public debt, which are assessed and collected
separately, ,‘(a]ny county may put all tax money collected by the county into one
general fund, without regard to the purpose or the source of each tax.” Tex. Const.
art. Vlll, S 9. Therefore, proceeds derived from the county’s ad valorem tax may be
consolidated. Attorney General Opinion H-194 (1974).

       We find nothing in state law which would forbid the county from placing the
various county funds into one bank account so long as those funds which have a
limited purpose are segregated by the proper accounting procedures. SS Attorney
General Opinion M-975 (1971). The county is not required to maintam a separate
bank account for each fund.       The county auditor has the authority to adopt
regulations regarding the accounting procedures used for county revenues. V.T.C.S.
arts. 1656, 1656a, 1657.

      The Harris County Flood Control District may not consolidate funds derived
from bond issues if those issues were for different purposes. See Barrin on, supra.
However, the district may maintain its funds in one bank      -+ account I proper
accounting procedures are used to insure that the various funds are used only for
their designated purposes. Attorney General Opinion M-975 (1971).
                                   SUMMARY

            Proceeds of various bond issues and interest and sinking
            funds cannot be consolidated       into one fund if the
            consolidation would result in an improper use of the money.




                                         p.   4976
                                       ii   f




Honorable Joe Resweber   -   Page 3   (H-1254)



          Proceeds from a county’s ad valorem             taxes may be
          consolidated.   Different county funds may      be placed in a
          single bank account if proper accounting        procedures are
          adopted to insure that the funds are utilized    for the correct
          purposes.




                                            Attorney General of Texas

APPROVED:




Opinion Committee

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