Can Texas local governments pool their public funds and hand them to a joint agency to invest together?

Texas AG Opinion JM-932: Can Local Governments Pool Their Funds to Invest?

Plain-English summary

In 1988, State Senator Ike Harris asked the Attorney General a very practical money-management question. Cities, counties, school districts, and other local governments each have public funds sitting in accounts waiting to be invested. Individually, a small entity does not have much to invest, and it may not get good returns or good advice. What if several of them combined their money into one pool, set up a joint agency to run it, and let that agency invest the whole pot together? The pool would hold legal title to the investments, spread earnings and losses proportionally among the members, and follow rules approved by all of them. Could they do that under the Interlocal Cooperation Act, the general Texas law that lets local governments team up to share services?

The Attorney General said no.

The core of the answer is about who is allowed to make investment decisions with public money. Two Texas statutes controlled that in 1988. The first, article 4413(34c), told every political subdivision to control the investment of its own funds, to designate its own officers or employees to do the investing, and to adopt written rules spelling out exactly how far those officers could go. The second, article 842a-2 (the Public Funds Investment Act of 1987), listed which kinds of investments were allowed and required that funds be invested with the care a prudent person would use with their own money. Neither statute said a governing body could hand its investment authority to some other body. And neither let a local government give away legal title to its investments to an outside agency.

Then the opinion turned to a bedrock principle of Texas government law: an official who has been given a discretionary duty cannot delegate that duty to someone else unless a statute clearly says they can. There is a difference between a ministerial duty, where the law spells out exactly what to do and leaves no room for judgment, and a discretionary duty, where the official has to weigh choices and exercise judgment. The Attorney General had no trouble placing investment on the discretionary side. Deciding how much money to invest, which instruments to buy, and how much risk to accept in exchange for a hoped-for return is a judgment call, and an important one, because public money is at stake. That kind of decision belongs to the governing body the law entrusted it to, and it cannot be shipped off to a joint agency without express permission from the Legislature.

That left the Interlocal Cooperation Act itself. It does let local governments contract with each other to carry out "governmental functions and services" (police, fire, roads, parks, waste disposal, and the like) and "administrative functions" (tax collection, purchasing, data processing, and similar routine operations). But nothing in it authorizes a local government to contract away its power to make discretionary decisions, and it says nothing at all about investment services. The Attorney General had earlier approved interlocal self-insurance pools (Opinion MW-347), but pointed out that opinion never addressed delegating a discretionary power. So the Interlocal Cooperation Act did not supply the missing authority either.

The opinion closed with a telling piece of context. The Legislature had actually studied the idea of a statewide local-government investment pool, a bill to create one had been introduced in 1985 and not passed, and lawmakers had directed the state treasurer to investigate the concept. To the Attorney General, the fact that the Legislature was still studying how to authorize such a pool was itself a signal that local governments did not already have the power to create one on their own.

Currency note

This opinion was issued in 1988. Later statutes, court decisions, and AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule mentioned here.

This is a big one for this particular opinion. Texas law changed dramatically after 1988 in exactly the direction the opinion said would require legislative action. The Legislature went on to enact a comprehensive Public Funds Investment Act (now Government Code chapter 2256) and, importantly, expressly authorized local-government investment pools, the very thing this opinion said local governments could not create on their own. Public entities today commonly invest through authorized statewide pools such as TexPool and similar programs, operating under later statutes that did not exist in 1988. The old article numbers used here (4413(32c), 4413(34c), 842a-2) have since been repealed or recodified. Anyone dealing with public-funds investment today should work from the current Government Code, not from the provisions cited in this 1988 opinion.

Who this opinion affected (as of 1988)

City, county, school district, and special district officials: The opinion told them they could not combine their funds into a jointly run investment pool under the Interlocal Cooperation Act. Each entity had to keep control of, and legal title to, its own investments, and invest through its own designated officers under its own written rules.

Officials tempted to delegate investment decisions: The opinion drew a hard line. Choosing investments is a discretionary duty that cannot be handed to another government or a joint agency without express statutory authority, if at all.

The Legislature: The opinion effectively flagged that if a local-government investment pool was wanted, lawmakers would have to authorize it directly, which they later did.

Common questions

Could Texas local governments pool their money and invest it together back then?
Not through an agency created under the Interlocal Cooperation Act. The Attorney General concluded that neither that act nor the two public-funds investment statutes gave local governments authority to pool and jointly invest their funds under a shared agency.

Why not? Sharing services is normally allowed.
Because investing public money is a discretionary duty, not a routine service. Texas law lets local governments contract to share functions like fire protection, road work, purchasing, or data processing, but making judgment calls about how to invest public funds is different, and an official cannot delegate a discretionary duty without express statutory authority.

What is the difference between a discretionary and a ministerial duty?
A ministerial duty is one the law defines so precisely that the official just carries it out, with no judgment involved. A discretionary duty requires the official to exercise judgment. The Attorney General, quoting Rains v. Simpson, placed investment decisions squarely in the discretionary category because they involve weighing amounts, instruments, and risk.

Can Texas local governments use investment pools today?
Yes. This is the key currency point. After 1988 the Legislature expressly authorized local-government investment pools, and public entities now routinely invest through authorized statewide pools under current law. This opinion describes the law before that change.

Background and statutory framework

Senator Ike Harris asked whether the Interlocal Cooperation Act, V.T.C.S. article 4413(32c), authorizes local governments as defined in that act to pool and jointly invest their public funds in investments authorized by other law, and to create an agency to administer the investments. The proposed structure was a "Joint Powers Agency" governed by a board of officials or designees of the participating governments, holding legal title to the pooled investments as custodian, with each participant owning an undivided interest in pool assets and earnings, losses, and administrative costs allocated proportionally.

The question raised the authority of public officers to delegate their power to invest public funds. Two statutes framed the analysis. Article 4413(34c), added in 1979, placed a duty on each state agency and political subdivision to adopt rules governing the investment of its local funds (Acts 1979, 66th Leg., ch. 810, at 2071). It provides that if no other law assigns responsibility for investing local funds, the political subdivision must designate one or more of its own officers or employees to have that responsibility; must adopt rules clearly specifying the scope of those officers' authority; and bars anyone from depositing, withdrawing, investing, transferring, or otherwise managing local funds without the express written authority of the governing body or chief executive officer (article 4413(34c), sections 2, 3(a), 3(b)). Article 842a-2, the Public Funds Investment Act of 1987 (Acts 1987, 70th Leg., ch. 889, at 2985), gave incorporated cities and towns, counties, school districts, and institutions of higher education (and nonprofit corporations acting on their behalf) authority to invest in various listed obligations, certificates, and agreements, and set a prudent-person standard of care (article 842a-2, sections 4, 5). Narrower investment statutes for specific entities exist as well (Local Gov't Code sections 104.002 and 140.002), but the opinion addressed the general question.

Reading those statutes, the Attorney General concluded that a governmental body must control the investment of its own funds and may delegate that responsibility only to its own officers or employees, whose authority must be clearly specified by rule and backed by written authorization from the governing body. Neither article 4413(34c) nor article 842a-2 authorizes a governing body to delegate its investment decisions to another political subdivision or to a joint powers agency, nor to give such an agency legal title as custodian of investments purchased with its funds. Article 842a-2 permits a nonprofit corporation to invest on behalf of a governmental entity but does not itself authorize forming such a corporation (contrast V.T.C.S. article 5190.6, sections 21, 22, on development corporations) and does not indicate any relinquishment of the subdivision's power or responsibility.

The opinion then applied the general rule against delegating discretionary duties. Absent express authority, the governing body of a municipality may not delegate to others the discharge of duties requiring an exercise of discretion (Home Zoological Arena Co. v. City of Dallas, 45 S.W.2d 714 (Tex. Civ. App. - Waco 1931, no writ); see generally Canales v. Laughlin, 214 S.W.2d 451 (Tex. 1948); Lipsey v. Texas Department of Health, 727 S.W.2d 61 (Tex. App. - Austin 1987, writ ref'd n.r.e.); Moody v. Texas Water Commission, 373 S.W.2d 793 (Tex. Civ. App. - Austin 1963, writ ref'd n.r.e.)), and some governmental functions are not delegable at all (Clear Lake City Water Authority v. Clear Lake Utilities Co., 549 S.W.2d 385 (Tex. 1977)). The Texas Supreme Court has distinguished discretionary from ministerial duties: where the law prescribes the duty with such precision as to leave nothing to judgment, the act is ministerial, but where it involves the exercise of discretion or judgment, it is not (Rains v. Simpson, 50 Tex. 495, 501 (1878)). The investment statutes do not define investment duties with precision; they require officers to exercise judgment under a high standard of care. Courts have already treated the related choice of a depository as a discretionary matter for a county commissioners court or a city council (Citizens State Bank of Roby v. McCain, 274 S.W.2d 184 (Tex. Civ. App. - Eastland 1954, no writ); Hartford Accident & Indemnity Co. v. Templeman, 18 S.W.2d 936 (Tex. Civ. App. - Galveston 1929, no writ)), and investing public funds involves judgment to an even greater extent.

Finally, the Interlocal Cooperation Act itself did not supply the authority. It lets a local government contract with another to perform "governmental functions and services" (defined to include police protection and detention, fire protection, streets and drainage, public health and welfare, parks, recreation, library and museum services, waste disposal, planning, engineering, and administrative functions) and "administrative functions" (routine operations such as tax assessment and collection, personnel services, purchasing, data processing, warehousing, equipment repair, and printing). No provision expressly authorizes contracting away the power to perform discretionary duties, and the act is silent as to contracts for investment services. Investment decisions, because they risk loss and possibility of gain to public funds, require an express indication of legislative intent before the responsible officers may delegate them. The Attorney General had approved interlocal self-insurance pools in Opinion MW-347 (1981) but noted that opinion expressly reserved how such a pool should be structured and did not consider delegation of discretionary powers. And the Legislature's own study of a statewide local-government investment pool, including a 1985 bill that was introduced but not adopted and a concurrent resolution directing the state treasurer to investigate the idea, reinforced the conclusion that local governments did not already have authority to pool their funds for investment.

Citations

Statutory authority:

• V.T.C.S. article 4413(32c) (Interlocal Cooperation Act; "governmental functions and services" and "administrative functions" local governments may share by contract)
• V.T.C.S. article 4413(34c) (duty of each political subdivision to control and adopt rules governing investment of its local funds)
• V.T.C.S. article 842a-2 (Public Funds Investment Act of 1987; permitted investments and prudent-person standard)
• Local Gov't Code section 104.002 (investment of trust funds and special deposits by certain cities)
• Local Gov't Code section 140.002 (investment of funds remaining in political subdivision accounts at year end)
• Local Gov't Code chapter 119 (county Government Risk Management Pool)
• V.T.C.S. article 5190.6, sections 21, 22 (development corporations; cited by contrast)

Cases (all Texas state courts):

• Home Zoological Arena Co. v. City of Dallas, 45 S.W.2d 714 (Tex. Civ. App. - Waco 1931, no writ) (governing body may not delegate discretionary duties absent express authority)
• Canales v. Laughlin, 214 S.W.2d 451 (Tex. 1948) (Texas Supreme Court; delegation of discretionary authority)
• Lipsey v. Texas Department of Health, 727 S.W.2d 61 (Tex. App. - Austin 1987, writ ref'd n.r.e.) (delegation; implied authority to delegate)
• Moody v. Texas Water Commission, 373 S.W.2d 793 (Tex. Civ. App. - Austin 1963, writ ref'd n.r.e.) (delegation of discretionary duties)
• Clear Lake City Water Authority v. Clear Lake Utilities Co., 549 S.W.2d 385 (Tex. 1977) (Texas Supreme Court; some governmental functions not delegable at all)
• Rains v. Simpson, 50 Tex. 495 (1878) (Texas Supreme Court; discretionary versus ministerial duties)
• Citizens State Bank of Roby v. McCain, 274 S.W.2d 184 (Tex. Civ. App. - Eastland 1954, no writ) (selection of depository is discretionary)
• Hartford Accident & Indemnity Co. v. Templeman, 18 S.W.2d 936 (Tex. Civ. App. - Galveston 1929, no writ) (selection of depository is discretionary)

Prior Attorney General materials referenced: H-1018 (1977); MW-347 (1981); MW-343 (1981); MW-224 (1980).

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-932
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1988/jm0932.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor OCR errors may remain; the linked PDF is authoritative. A case name the scan rendered illegible is marked in brackets.

July 26, 1988

Honorable O. H. "Ike" Harris
Chairman
Economic Development Committee
Texas State Senate
P. O. Box 12068
Austin, Texas 78711

Opinion No. JM-932

Re: Whether "local governments," as defined in the Interlocal Cooperation Act, article 4413(32c), V.T.C.S., may pool their funds for purposes of an authorized investment (RQ-1360)

Dear Senator Harris:

You ask whether the Interlocal Cooperation Act, article 4413(32c), V.T.C.S., authorizes local governments as defined in the act to pool and jointly invest their public funds in investments authorized by other law and to create an agency to administer the investments. You state that the participating local governments would provide for joint investment of public funds by contract, combining their funds in the pool. Each local government would own an undivided interest in pool assets. Money in the pool would be invested in obligations in which each participating local government's funds may be lawfully invested. Earnings and losses from all investments, as well as administrative costs of the pool, would be equitably and proportionately allocated to participants.

The contract would establish a Joint Powers Agency governed by a board of directors consisting of officials or other designees of participating local governments initially appointed by the contracting parties and thereafter elected by vote of the participating local governments. The Joint Powers Agency would hold legal title to the pooled investments as custodian for the participating local governments. The agency would make investments in accordance with basic rules and policies established by its board of directors and approved by the governing bodies of the participating local governments.

Your question relates to local governments as defined in article 4413(32c), V.T.C.S., the Interlocal Cooperation Act. These are as follows:

'local government' means a county; a home rule city or a city, village, or town organized under the general laws of this state; a special district; a school district; a junior college district; any other legally constituted political subdivision of the State of Texas or any adjoining state; or a combination of political subdivisions.

V.T.C.S. art. 4413(32c), section 3(1).

Your question and the accompanying statement of facts raises an issue of the authority of public officers to delegate their power and authority to invest public funds to a joint powers agency such as the one you describe. The discussion of this issue requires us to look at the statutes which authorize political subdivisions to make investments. Since you ask about local governments generally, we will discuss article 4413(34c), V.T.C.S., and article 842a-2, V.T.C.S., two statutes which apply to local governments. Article 4413(34c) was adopted in 1979 to place a duty on each state agency and political subdivision to adopt rules governing the investment of its local funds. Acts 1979, 66th Leg., ch. 810, at 2071. See Bill Analysis, Tex. H.B. 2122, 66th Leg. (1979). Article 842a-2, V.T.C.S., was adopted in 1987 to provide a comprehensive plan for the investment of public funds, including authorization for specific kinds of investments. Acts 1987, 70th Leg., ch. 889, at 2985. See Bill Analysis, Tex. H.B. 1488, 70th Leg. (1987). There are in addition statutes which authorize a narrow class of investments by specific local governments. See, e.g., Local Gov't Code section 104.002 (investment of trust funds and special deposits by certain cities); section 140.002 (investment in obligations of United States funds remaining in political subdivision accounts at end of year). Because of the general nature of your question, we will not address the narrower statutes.

Article 4413(34c), V.T.C.S., governs the investment of local funds, defined as follows:

'Local funds' means public funds in the custody of a state agency or political subdivision that are not required by law to be deposited in the state treasury and that the agency or subdivision has legal authority to invest.

V.T.C.S. art. 4413(34c), section 1(1). A "political subdivision" is a county, incorporated city or town, or special purpose district. Id. section 1(3).

If no law assigns an officer responsibility for investment of local funds, the political subdivision shall designate one or more officers or employees of the subdivision to have that responsibility. V.T.C.S. art. 4413(34c), section 3(a). The political subdivision shall adopt rules governing the investment of its funds, including rules that clearly specify the scope of authority of the designated officers and employees to invest public funds. Id. section 2. No one may "deposit, withdraw, invest, transfer, or otherwise manage local funds" without express written authority of the governing body or chief executive officer of the subdivision. Id. section 3(b).

Article 842a-2, the Public Funds Investment Act of 1987, authorizes an incorporated city or town, a county, a school district, or an institution of higher education as defined by section 61.003 of the Education Code to invest its funds in various obligations, certificates, or agreements set out in the statute. A nonprofit corporation acting on behalf of any of these entities may exercise its investment authority under the statute. Section 5 of article 842a-2, V.T.C.S., provides that investments shall be made in accordance with written policies approved by the governing body, which must address "liquidity, diversification, safety of principal, yield, maturity, and quality and capability of investment management, with primary emphasis on safety and liquidity." Section 4 provides the following standard of care for investing funds under article 842a-2, V.T.C.S.:

Investments shall be made with judgment and care, under circumstances then prevailing, that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.

V.T.C.S. art. 842a-2, section 4.

Article 4413(34c), V.T.C.S., establishes that a governmental body shall control the investment of its funds. It is explicit as to the persons to whom responsibility for investment may be delegated: officers or employees of the governmental body. V.T.C.S. art. 4413(34c), sections 2, 3(a). The scope of their authority must be clearly specified by rule, and they must have the written authority of the governing body or chief executive officer of the political subdivision to deposit, withdraw, invest, transfer, or otherwise manage funds eligible for investment. Id. sections 2, 3(b). This statute does not authorize the governmental body of a political subdivision to delegate its responsibility for investment decisions to another political subdivision, or to a Joint Powers Agency created by contract among several political subdivisions. Nor does it permit a governmental body to delegate to a Joint Powers Agency the authority to hold legal title as custodian to investments purchased with its funds.

Article 842a-2, V.T.C.S., deals primarily with the kind of investment instruments in which governmental bodies may place their funds. It allows a nonprofit corporation acting on behalf of any of the enumerated governmental entities to invest its funds according to the provisions of this act, but it does not itself authorize the formation of such a corporation. V.T.C.S. art. 842a-2, section 2(a). Cf. V.T.C.S. art. 5190.6, sections 21, 22 (development corporations). Nor does it indicate that investment of funds by a nonprofit corporation would involve any relinquishment of power or responsibility by the political subdivision. This statute does not authorize the delegations of authority which would be necessary to establish the investment pool you describe.

In the absence of express authority, the governing body of a municipality may not delegate to other persons the discharge of duties requiring an exercise of discretion. Home Zoological Arena Co. v. City of Dallas, 45 S.W.2d 714 (Tex. Civ. App. - Waco 1931, no writ); see generally Canales v. Laughlin, 214 S.W.2d 451 (Tex. 1948); Lipsey v. Texas Department of Health, 727 S.W.2d 61 (Tex. App. - Austin 1987, writ ref'd n.r.e.); Newsom v. [name not legible], 451 S.W.2d 948 (Tex. Civ. App. - Beaumont 1970, no writ); Moody v. Texas Water Commission, 373 S.W.2d 793 (Tex. Civ. App. - Austin 1963, writ ref'd n.r.e.). And some governmental functions are not delegable at all. See Clear Lake City Water Authority v. Clear Lake Utilities Co., 549 S.W.2d 385 (Tex. 1977).

The Texas Supreme Court has made the following distinction between discretionary and ministerial duties:

Where the law prescribes and defines the duties to be performed with such precision and certainty as to leave nothing to the exercise of discretion or judgment, the act is ministerial; but where the act to be done involves the exercise of discretion or judgment, it is not to be deemed merely ministerial.

Rains v. Simpson, 50 Tex. 495, 501 (1878).

The statutes we have discussed do not define investment duties with precision and certainty. They require public officers to exercise their judgment subject to a high standard of care. See V.T.C.S. art. 842a-2, section 4. The courts have held that the selection of a depository is a discretionary matter for the commissioners court of a county and the city council of a city. Citizens State Bank of Roby v. McCain, 274 S.W.2d 184 (Tex. Civ. App. - Eastland 1954, no writ); Hartford Accident & Indemnity Co. v. Templeman, 18 S.W.2d 936 (Tex. Civ. App. - Galveston 1929, no writ). The investment of public funds requires an exercise of judgment and discretion to an even greater extent than the selection of a depository. It involves decisions about the amount of money to invest and the allocation of funds to different kinds of investments, as well as the degree of risk to accept in exchange for an anticipated return. The governmental body or officer in which these responsibilities are vested may not delegate them to other persons in the absence of express authority.

As already pointed out, neither article 842a-2, V.T.C.S., nor article 4413(34c), V.T.C.S., authorizes the delegation of investment authority necessary to establish the investment pool you describe. Article 4413(32c), V.T.C.S., the Interlocal Cooperation Act, does not permit the necessary delegation either. This statute provides that a local government may contract with another local government to perform governmental functions and services. "Governmental functions and services" is defined as follows:

'governmental functions and services' means all or part of any function or service included within the following general areas: police protection and detention services; fire protection; streets, roads, and drainage; public health and welfare; parks; recreation; library services; museum services; waste disposal; planning; engineering; administrative functions; and such other governmental functions which are of mutual concern to the contracting parties.

V.T.C.S. art. 4413(32c), section 3(2). "Administrative functions" is defined as follows:

(3) 'administrative functions' means functions normally associated with the routine operation of government such as tax assessment and collection, personnel services, purchasing, data processing, warehousing, equipment repair, and printing.

Id. section 3(3).

No provision of article 4413(32c), V.T.C.S., expressly authorizes a local government to contract away its power to perform discretionary duties. We need not decide whether there is any implied authority to delegate the discretionary aspect of any function or service set out in article 4413(32c), V.T.C.S., based on the nature of the particular function or service. See Lipsey v. Department of Health, 727 S.W.2d at 65. The statute on the whole involves services and functions for which local governments may contract without delegating governmental powers. See Attorney General Opinion H-1018 (1977) (contract for road construction). Investment decisions, because they involve a risk of loss and possibility of gain to public funds, are governmental responsibilities of a nature to require an express indication of legislative intent before the officers to whom they are entrusted may delegate their exercise to other persons, if they are delegable at all. Article 4413(32c) is silent as to contracts for investment services, and we conclude that this statute does not authorize the delegation of investment authority to an entity created by contract.

Attorney General Opinion MW-347 (1981) concluded that local governments had power under the Interlocal Cooperation Act to contract to form self insurance pools to cover risks inherent in providing governmental functions and services. This opinion, however, also stated that "[we] express no opinion as to how such an insurance pool should be structured, and how obligations may be allocated among the members." But see Local Gov't Code ch. 119 (authorizing creation of county Government Risk Management Pool). Thus, Attorney General Opinion MW-347 did not consider any question of delegation of discretionary powers.

Finally, the legislature has considered the possibility of establishing a local government investment pool but has not adopted legislation accomplishing this. See Texas Advisory Commission on Intergovernmental Relations, Statutory Update: Investment of Idle Funds by Local Governments (1985). A bill creating a local government investment pool was introduced in the 69th Legislative Session but was not adopted. See Tex. H.B. 1464, 69th Leg. (1985). The proposed legislation would have established the investment pool as a fund in the custody of the state treasurer held outside the treasury. Local governments would have been authorized to pay funds to the treasurer for deposit in the investment pool and investment under the authority and responsibility of the treasurer. The 69th Legislature did pass Senate Concurrent Resolution No. 1 directing the state treasurer's office to "investigate the potential benefits of enhancing and supplementing financial management services that are made available to political subdivisions of the state." Tex. S. Con. Res. 1, 69th Leg. (1985). The resolution specifically stated that the investigation must consider implementation of an investment pool program for political subdivisions. Id.; see also Texas Advisory Commission on Intergovernmental Relations, Statutory Update, supra. The fact that the legislature has considered establishing an investment pool for local governments and has referred this matter to the treasurer's office for study indicates the legislature's belief that local governments do not have authority to pool their funds for investment, and it supports our conclusion that they may not contract under the Interlocal Cooperation Act to form an investment pool such as you describe.

In view of our answer to your first question, we need not answer your second question on the authority of cities and counties to withdraw funds from their depositories to invest jointly through an investment pool in obligations described in the Public Investment Act of 1987. But see Attorney General Opinions MW-343 (1981); MW-224 (1980) (discussing authority of cities and counties to withdraw funds from their depositories to invest them in federal debt instruments).

SUMMARY

Local governments are not authorized by the Interlocal Cooperation Act, article 4413(32c), V.T.C.S., to pool and jointly invest their public funds under the administration of an agency created pursuant to that act. The investment of public funds is a matter involving the exercise of discretion and it may not be delegated in the absence of express statutory authority, if at all. Article 4413(32c), V.T.C.S., does not authorize local governments to delegate to another entity their authority to make investments; nor does article 842a-2, V.T.C.S., or article 4413(34c) authorize such delegation.

Very truly yours,

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Susan L. Garrison
Assistant Attorney General