Honorable Geo. A. Hight, Chief Accountant
Board of County and District Road Indebtedness
Austin, Texas                      Opinion Number O-4474
                                   Re: Can The Board of County and District
                                        Road Indebtedness, under the terms of
                                        H.B. 6, and under the provisions of
                                        the refunding plan, continue to partic-
                                        ipate in the interest maturities on the
                                        $195,000 representing the county's por-
                                        tion of the sinking fund deficit until
                                        June 10, 1952, the maturity date of
Dear Mr. Hlght:                         the obligations as presently set up?

          We acknowledge receipt of your opinion request of March 4, and quote
from your letter a8 follows:

         "On January 1, 1933, the Board of County and District Road
    Indebtedness approved for participation in the County and Road
    District Highway Fund, Hidalgo County Road & Bridge Refunding
    Bonds, Series 1932, outstanding in the amount of $1,099.000.00.

          'The percentage of participation was certified at 55%.

         "This is a term issue of bonds maturing in twenty (21))years
    with an annual sinking fund requirement of $54,959.03 of which
    the State's portion is $30,222.50 and the county's portion $24,-
    727.50. The State has provided each year its portion of the dn-
    nual sinking fund requirement and has used the funds thus aliocat-
    ed to purchase and cancel obligations of this issue.

         "The county has only provided $52,X10.03 of its sinkinb
    fund requirement, leaving a deficit in the county requirement
    amounting to $195,000.00.

          "It is now proposed to refund this issue of bonds excepting
     $195,000.00 representing the county's sinking fund deficit, into
     two issues of bonds, Series 'Al to contain the balance owed on
     the original debt by the State and will participate at 100s. The
     other, Series 'B' will be a county obligation. The $195,000.00
     representing the county's sinking fund deficit and not included
     in the refunding is to remain outstanding as presently set up.
Honorable Geo. A. Hight, page #2 (O-4474)


          "It is further proposed that the State in addition to paying
     the interest on Series 'A', which represents the unpaid portion of
     the debt owed by the State, the State will continue to pay 55% of
     the interest on the $195,000.00 not included in the refunding pro-
     gram and not having any State participation until 1952, the matur-
     ity date of the present issue.

          "QUESIION: Can this Board, under the terms of H.B. 6, and
     under the provisions of this refunding plan, continue to partici-
     pate in the interest maturit$es on the $195,000.00, representing
     the county's ppgtion of the ainking fund deficit until June 10,
     1952, the matur'ltydate of the obligations as presently set up?

          It IS our understanding that this is a term issue of bonds maturing
on June 10, 1952, and that said bonds are limited tax bonds.

          Our opinion is that the clear and unambiguous language of H.B. 6
(Acts 47th Leg., 1st '@S.) requires that the questionwe, answered in the nega-
tive. In &!ection6(m) of H.B. 6 we find the following language:

          It*** Any County, the!#@nmissioners' Court of which fails or
     refuses to comply with the provisions of this Act in all things,
     including the levy, assessment, and collect@& of a tax and at a
     rate sufficient to pay all sums due or to become due, which the
     State is unable to pay or to provide each year the proportionate
     amount of sinking fund required to redeem its outstanding bonds
     at their maturity shall not participate in any of the benefits
     of this Act so long as such county fails or refuses to comply with
     the provisions thereof LT**". (Emphasis supplied).

          It is apparent that the county has failed to comply withLtbe,Act in
all things. It has failed to provide each year the proportionate amount of
sinking fund required to redeem its outstanding bonds at their maturity.

          If the county were allowed to continue participation in State funds
%heState would be paying more money than is contemplated by the Act. In this
respect, then there would be no differeneein the situation where the State
would continue payment of interest after the maturity date of the obligations
which remained undischarged through default of the county.

          It is an elementary rule that revenue statutes are strictly construed.
It is our opinion that H.B. 6 comes within this rule. Therefore, in view of
the clear wording of the excerpt quoted above from H.B. 6 we do not believe
that Hidalgo County is entitled to any kind of participation in the County and
Road District Highway Fund.

          In view of the foregoing it is our opinion that the Board of County
and District Road Indebtedness is wi$hout authority to pay State funds to
Hidalgo County until the deficit is made up by the county, and that the is-
suance of two refunding bond issues would not alter .the situation as far as
the county's not being entitled to participation.
Honorable Gee. A. Hight, page #3    (O-4474)


          In view of the foregoing it also follows that under the terms of
H.B. 6 and under the provision of the refunding plan stated in your request,
the Board cannot legally continue to participate in the interest maturities
on the $195,00O~representing the county's portion of the siqhing fund deficit,
until June 10, 1952, the maturity date of the obligation6 as presently set
up.

            Trusting that this answer6 your question, we are

APPROVED MAR 18, 1942                      Very truly yours,

GROVER SELLERS                        ATTORNEY GENERAL OF TEXAS
First Assistant Attorney General
COB:s:hep
                                      BY    s/ Claud 0. Boothmn
APPROVED                                    Claud 0. Boothman
OPINION                                           Assistant
COMMITTEE
BY BWB
CHAIRMAN