Honorable Joe Nelson
Chief Accountant
Board of County and District Road Indebtedness
Austin, Texas
                                   Opinion No. 0-4893~
                                       Re: Should the Statesiontln-
                                       ue to participate in the
                                       payment of.principal and
                                       Interest on the'bondknow
                                       In default after Shelby'.
                                       County'.hasbecopene%urrent
                                       by.the refunding of said
       Sir:                            bonds?
               We have your letter setting forth certain facts and
requesting      our opinion on the question stated. The fact6
are:
            "Shelby County Road District No. 6 has an
       issue of bonds outstanding which has been In
       default since 1933.
            "Shelby County now proposes to refund all of
       the outstanding bonds of this district and claims
       that they should recelve.State aid on the bonds
       that are now In default."
               Your request Is:
            "In view of your~opinions Nos. 0-3623 and O-4474,
       please advise this Board if, in.your opinion, thenState
       should continue to participate in the payment of the
       principal and Interest on the bonds now In default
       after Shelby County haa,,becomecurrent by the re-
       runding of these bonds.
          You do not.lnform us whether or not the bonds re-
ferred to are eligible bonds; but we 2re assuming for the
purpose of this opinion that they are eligible for a certain
percentage of State aid and that the Board of County~and Road
District Indebtedness has heretofore ascertained and deter-
mined that said bonds, in whole or in part, were eligible to
participate in the moneys coming into the County and Road
.   .                  .--




        Honorable Joe Nelson, page 2   (O-4893)


        District Highway Fund.

                  Subsection (a) of Section 6 of House Bill 688 passed
        by the Forty-sixth Legislature, Regular Session, 1939, reads,
        in part, as follows:
                 "All bonds, warrants or evidences of lndebted-
            ness heretofore issued by counties or defined
            road diatrlcts of this State which mature on or
            after January 1, 1933, insofar as amounts of
            same were Issued for and the proceedshave been
            actually expended on the construction of roads
            that constituted and comprised a part of the system'of
            designated State highways on September 17, 1932, or
            which subsequent to said date and prior to January 2,
            1939, have been designated a part of the system
            of State highways + * * whether said indebtedness
            Is now evidenced by the oblinations originally Issued,
            or & refunding obligations or both, shall be eligible
            G participate in the distribution of the moneys
            coming Into said County and District Highway Fund,
            subject to the provisions of this Act; * * * shall
            participate ,ln said County and Road District Highway
            Fund as of the date of the deslgnttion of said road as
            a part of the State system * * +.    (Underscoring ours).
                  Subsection (c) of Seotlon 6 provides,in part:
                 "It shall be the ~duty of the Board of County and
            Road DlstrlctIndebtedness * + * to ascertain and
            determine the amount of indebtedness eligible
            under the provisions of this section of this Act
            to participate In the moneys coming Into said
            County and Road District Highway Fund * * + And
            said obligations.to:sald amount and,extent shall
            be eligible for participation in the moneys com-
            ing Into the County and Road District Hlghway Fund,
            and said ascertainment and determination shall be
            certified to the County Judge by said Board and all
            of the unmatured outstanding obligations of said
            issue shall ratably have the benefit of said~parti-
            cipation in said moneys * * * The ascertainment and
            determination by the Board, after reasonable notice
            and hearing, of the amount of any county or defined
            road district obllaatlon ellaible under the orovi-
            slons of this Act 5 + *:shali be final and cbnclu-
            sive and shall --
                           not be subjects    revlewT   any:other
            tribu%".nderscorlng       ours-)-.
.   .,        .

         z-




                  Honorable Joe Nelson, page 3 1 (O-4893)    :



                            Section lof~this   Act conta%ns the fpllov+g   language:
                            "And it is hereby determined that the further
                       provisions of this Act constitute fair, just and
                       equitable compensation, repayment and reimburse-
                       ment to said counties and defined districts for
                       their aid and assistance to the State in the con-
                       struction of the State highways * * + And fully
                       discharges the legally implied obligations of the
                       State to compensate, repay and reimburse agencies
                       of the State for expenses incurred at the Instance
                       and solicitation of t.heState as well as expenses
                       incurred for the.benefit of the State * * *'I.
                            The broad purpose of the Act as stated in the.,fore-
                  going section is to reimburse the counties and districts for
                  the amount they have expended on State highways. Until each
                  county and each road district has been completely reimbursed
                  the State Highway Department does not have title, according
                  to the Act, of the State highways located In thevarious "
                  counties and road districts.
                            If the Board of County and Road District Indebted-
                  ness has heretofore ascertained and determined the amount
                  of bonds of Road District No. 6~of Shelby County eligible
                  under the provisions of the:State Aid Act, said ascertain-
                  ment and determination is "final and conclusive", and ac-
                  cording to the plain provision of Subsection (a) of Section
                  6, first above quoted, the refunding bonds are likewise eli-
                  gible for participation.
                             It Is true that it is provided in Subsection (m) of
                   Section 6 of the State Aid Act that "Any county, the Commis-
                   sioners' Court of which fails or refuses to comply,with the
                   provisions of this Act in all things, * * * shall not parti-
                   cipate in any of the benefits of this Act so long --
                                                                     as such
                   col;jnty
                          fails E refuses to,comply --
                                                     with the>rovisions there-
                  -of .                      c

                            It seems that a county which has reinstated Its
                  status by complying with the law and refunding its bonds,
                  thereby making them current, it could no longer be said
                  that it Is failingor refusing to comply with the provisions
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                                                         !.,.. _




            Honorable Joe Nelson, page 4    (O-4893)


            of the Act, and we think It would then be entitled to
            partiolpate In the:benefits of the Act.


                                              Very truly yours,
                                              ATTQRNEYGENERALOFTEXAS


                                              By   /a/ C. F. Gibson
                                                   C. F. Gibson
                                                   Assistant
            APPROVED NOV. 6, 1942

            /a/ Grover Sellers
            FIRST ASSISTANT
            ATTORNEYGENERAL

            CFG/s/cs
                                    APPROVED OPINION
                                       ~ONMI~
                                       BY, BWB
                                         Cha,itimari
