Texas Local Government Code - LOC GOV'T § 113.005. Liability of County Treasurer

(a) The county treasurer is not responsible for any loss of the county funds through the failure or negligence of a depository. This subsection does not release the treasurer from responsibility for a loss resulting from the official misconduct or negligence of the treasurer, including a misappropriation of the funds, or from responsibility for funds until a depository is selected and the funds are deposited.

(b) A treasurer who diverts money from an interest and sinking fund or who applies money in that fund for a purpose other than as permitted by Section 113.041(h) is:

(c) The state is entitled to recover a penalty imposed under Subsection (b)(1). The amount of diverted money that is recovered under Subsection (b)(2) shall be paid into the county treasury to the credit of the fund from which it was diverted.

(d) The attorney general or the district attorney of the district in which the treasurer resides, or the county attorney in a county that is not served by a district attorney, may institute suit against the treasurer and the sureties on the treasurer's official bond to recover the amounts described by Subsection (b).