Untitled Texas Attorney General Opinion ( 1985 )

The Attorney General of Texas
HB:V 28. 1985
JIM MAlTOX
AttorneyGeneral
Supreme
Ccd Building hr. Robert C. Laniw OpinionNo. m-321
P. 0. Box 1254S Chairman
Auslln. TX. 76711~2543 StateDepartmento!lHighways Re: Whether interest on coustitu-
51214752501 and Public Transportation tionallydedicated funds may be
Telex 9101874.1367
Telecopier 512I475-0266
Dewitt C. Greer Eigbway Bldg. diverted to general revenue by
11th & Brazes statuteor by appropriationsact
Austin,Texas 7awi rider
714 Jackson. Suite 7W
Dallas, TX. 752024506 Dear hr. Lanier:
214ll4269)4
You ask two questionsregardingthe appropriationof interestou
4824 Alberta Ave.. Suite 160 funds dedicatedby the conatitutiouto highway purposes. You do not
El Paso, TX. 79935.2793 Inquire about other:aourcea of tavanue for the atate highway fund.
OlY533as4 You first ask:
1001 Texas. Suite 700
1. C;viintereston dedicatedfundsbe divert.ed
Houston. TX. 77002.3111 to gener,sl
revenueby appropriations
act rider7
71Y223.5886
Article 2543d. V.T.C.S.. governsthe dispositionof intereston
time depositsof etate funds. Section1 of this statute provides as
806 Broadway. Suite 312
Lubbock, TX. 79401-3479
follow:
SO6n47.5238
Section 1. Interest received on account of
time deposits of moneys in funds and accounts in
4309 N. Tenth. Suite B
the charne'of the State Treasurershall be allo-
HcAllen. TX. 78501-1685
51216824547
cated al; follows: To each constitutionalfund
there aball be credited the pro rata portion of
the int&eat received due to such fund. The re-
2130Main Plaza, Suite 400 mainder DE the interestreceived.vith the exceu-
San Antonio, TX. 782052797 tion of that portion requiredby other statutes to
51m254181
be credited on a pro rata basis to protested tax
payments,shall be creditedto the GeneralRevenue
An Equal OpPCWtUnitYl Fund. Th,sinterestreceivedshallbe allocatedon
Afflrmstlva Action EmPlOYer a aonthlg basis. (Rupbasisadded).
This provision relpliresthat intereston constitutionallydedicated
funds be allocated to the principal,and uot to the general revenue
fund. Attorney Gmeral Opinion h-466 (1969) consideredthe applica-
tion of article2543d, V.T.C.S.. to a numberof funds in charge of the
state treasurer. Three of the funds derivedfrom former articleVII,
section 17 of thf:Texas Constitution,vhich levied a tax to fund
constructionat designatedinstitutionsof higher education. See Ten.
S.J. Res. 4, 50th Leg., 1947 Tex. Gen. Laws 1184; Tex. ST Res.
p. 1469
* _- .
. t
Pk. Robert C. Lanier - Page i! (.I&321)
24. 59th Leg., 1965 Tex. Gel. Laws 2197. Tbe opinion concludedthat
those three funds were constitutionalfunds vithiu the meaning of
article 2543d, V.T.C.S., awl interest received on account of time
depositsthereonvas to be creditedto the fund.
It is well establishedthat the legielature may not enact, amend,
or reoeal a nenerallaw by rmorooriationact rider. Tex. Const. art.
III, 935; Moore v. Sheppard;,' 192 S.U.2d 559 (Tex. 1946); Linden v.
49 s.w. 578 (Tex.-'ta99); Attorney General Opinions J?i-167
E%r
.~.~ . . m-104 (1979): n-1:.41 (1972): V-1254, V-1253 (1951); G-552
(1939). A ride; which attempted tom-appropriate to general revenue
interest received on account of time deposits of constitutionally
dedicated funds would be isvalid as an attempt to amend or repeal
article 2543d,V.T.C.S. Iu:ereston constitutionally dedicatedfunds
may not be divertedto general revenueby appropriationact rider in
contraventionof article2543d,V.T.C.S.
YOU next ask:
2. Is it perrlsaible to divert intereat by
atatute on highway department constitutionally
dedicatedfunds to generalrevenue?
Article VIII, section l-a of the Texas Constitutiondedicates
revenuesreceivedfrom motor vehicle registrationfees and motor fuel
taxes to the provision,maintenance,and policingof public roadways.
This constitutionalprovisionstates in part:
Sec. 7-a. Sub.ject to legislativeappropria-
on county and wad district bonds or varrants
voted or issued prior to January 2. 1939, and
declared eligibleprior to January 2, 1945, for
payment out of the County and Road District
Righway Fund uniier existing lav; provided, bow-
ever, that one-f'curth (l/4) of such net revenue
from the motor f,nrltax shall be allocated to the
Avaflable School Fund. . . . (Emphasis added).
p. 1470
Hr. Robert C. Lanler - Page 1’ (JIG321)
The term “couatructing”
in al:ticle
VIII, section7-a. does not Include
merely the clearlq;and gradingof the roadbedand
the pouring of the concrete,but includes ‘every-
thing appropriate1.y connected with, and ueces-
sarily incidental!:oithe completeaccomzplishment’
of the generalpurposefor vhich the fund exists.
State v. City of Austin, 331 S.W.td 737, 746 (Tex. 1960) (cost of
utility relocationnecessitatedby improvementof federally-funded
highways).
Article VIII, section7. of the Texas Constitutionprohibitsthe
legislature from borrowing, or In any manner diverting from its
purpose, any specialfund. %nstitutional funds can be transferredto
the general revenuefund only by constitutionalamendment. CarrollV.
Williams,202 S.U. 504 (Tex. ‘1918)(countyfunds).
In Lawson v. Baker, 221)S.W. 260 (Tex. Civ. App. - Austin 1920.
writ ref‘d), the Austin Cclurtof Civil Appeals determlned that
interest earned on a special fund created or recognized by the
conatitutloubecame part of tihatfund. A taxpayerbrought the suit to
test the constitutionality of the State Depository Law enacted in
1919. Acts 1919, 36th Leg.,,ch. 145, at 266. The law provided that
the interest on all funds depositedwould become part of the general
revenue. Id. at 269 (formerarticle 2427 R.C.S.). The court stated
as follows?
We think it is cle.arthat the interest earned by
deposit of speci;l:lfunds is an increment that
accrues to such special fund, and any attempt of
the Legislatureto make such interest a part of
the general rwenr;:is futile. in the face of the
constitutionalpn%isions creating or dedicating
these funds to sprzialpurposes. The broad langu-
age of the act would seem to make the interest
upon all funds,wt.ethergeneralor special,become
part of the general revenue,and this portion of
the law, if so construed,would authorizea diver-
sion of the special funds from their constitu-
tionalpurpose,wcluldspeciallyviolate section7,
article8. and would be unconstitutionaland void.
(Emphasisadded).
Lawson v. Baker, supra, at 272. The court found that the statute
could be upheld by a constructionallocatingto constitutionalfunds
the interest earned thereon or by severing the unconstitutional
portion.
According to the opinion in Lawson V. Baker, the legislature
lacks paver to enact a statutedivertinginterestOD constitutionally
p. 1471
Mr. Robert C. Lanier - Page 4 (JR-3211
dedicated funds to general rftvenue.The supreme courts of Missouri
the questionyou ask: whetherinterest
and Oregon have each considerc!il
earned on a constitutionally d.adicatedhighway fund must be credited
to that fund. State Eiuhwa< Cowlsdon v, Sr&nhove~, 504 S.W.Zd 121
(Ho. 1973); State v. Straub. 630 P.2d 229 (Or. 1965) (en bane). Each
court relied on Lavson v. BakM: to hold that the legislaturecould not
---
enact a statute divertinn to the neneral fund the interest on the
constitutional highway fugd.
We conclude that the legislaturelacks authority to enact a
statute divertingto the general rwenue fund Intereston the motor
vehicle fees and motor fuel taxes dedicated to highuay purposes by
articleVIII, section7-a of the Texas Constitution.
Interest on constitutionallydedicated funds
may not be diverted to general revenue by appro-
priation act ride>:in contraventionof article
2543d.V.T.C.S.
The legislature lacks authority to enact a
statute diverting ,to the general revenue fund
intereston the motor vehicle fees and motor fuel
taxes dedicated to highway purposes by article
VIII. section7-a c~fthe Texas Constitution.
.IIn MATTOX
AttorneyGeneralof Texas
TOM GREEN
First AssistantAttorneyGen,r:cal
DAVID R. RICRARDS
ExecutiveAssistantAttorney(General
ROBERT GRAY
SpecialAssistantAttorney General
RICK GILPIN
Chairman,OpinionCommittee
Preparedby Susan L. Garrison
AssistantAttorneyGeneral
p. 1472
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T Wt. Robert C. Lanier - Page 5 (J?I-321)
I
APPROVED:
OPIRIONCOHMITTEE
Rick Gilpin,Chairman
Jon Bible
Colio Carl
Susan Garrison
Tony Guillory
Jim noellinger
JenniferRiggs
Nancy Sutton
Bruce Youngblood
p. 1473