Untitled Texas Attorney General Opinion ( 1980 )

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The Attorney General of Texas
July 23, 1980
MARK WHITE
Attorney General
Honorable WarrenG. Hard@ Opinion No. MW-213
Treasurer of the State of Texas
L.B.J. Buildhg Re: Whetherthe Comptroller may
Austin, Texas initiate direct deposit procedures
for payroll warrants by magnetic
tape transfer service
Dear Mr. Hard&:
You have requested our opinion regard@ the direct deposit of payroll
warrants issued to state employees. The Comptroller has announced his
intention of initiating mqnetic tape transfer service to Austin banks for
direct depcsit of payroll warrantsissued to employees of his office. You ask
a number of questions regard@ this pmctice, and variations thereof.
Initially, we note that an indivi&al is at liberty to designate a bank as
his egent foc,eollection purposes. A bank is expressly empowered:
to act as [aI fiscal egent or transfer agent and in
such Capacity to receive and disburse money and to
transfer registered and countersigned certificates of
stock, bands or other evidences of indebtedness.
Article 342-301(b), V.T.C.S. See Citizens National Bank of Dallas v. Hill,
505 S.W.2d 246 (Tex. 1974). Furthermore, the bank, as agent, is empowered
to endorse the warrant on behalf of the indivi&al:
An indorsement must be written b or on behalf of
the holder and on the instrument w on a paper 80
firmly affjxed thereto as to become a part thereof.
Section 3.202(b), Texas Business& Commerce Code.
A signature may be made by an rgent or other
representative, and his authority to make it may be
established es in other cases of representation. No
particular form of appointment is necessary to
establish such authority.
‘p. 681
.
‘HonorableWarren G. Herding - Page Two (Mw-213)
Section 3.403(a), Texas Business & Commerce Code. Thus, the Comptroller would
clearly be authorized, at the instruction of a state employee, to transfer the
employee’s pay warrant directly to his designated bank. The bank, acting as the
employee’s agent, would then deposit the warrantin his account.
We also believe that article 4350, V.T.C.S., contemplates the issmce of the
warrantdirectly to the employee’s designated bank:
No warrant shall be issued to any person indebted or owing
delinquent taxes to the State, or to his agent or assignee, until
such debt or taxes are paid
(Emphasis added). See aLso Acts 1979, 66th Legislature, chapter 843, at 2606,
(Comptroller authorized to transfer appropriationauthority and cash to reimburse cost
of direct deposit of state employees’claims). At the direction of the employee, the
Comptroller may issue the empIoyee’s pay warrant to his agent bank, and transfer the
warrant directly to that bank.
You next inquire about the issuance of a single pay warrant covering multiple
employees, all of whom designate a particular bank as their depository. In our opinion,
such a procedure would thwart the Comptroller’s ability to comply with various
statutes. Article 4358, V.T.C.S., for example, requires that different classes of pay
warrants be printed cn specific colors of paper and that the warrants be “serially
numbered.” Certain information must be furnished cn the warrant, including
designation of both the eppropriation and the fund from which the warrant is to be
drawn, and the initials ofthe person in the Comptrollerk office compariw the warrant
with the claim. Article 4365, V.T.C.S., ptovidw for the issuance of duplicate warrants
in certain cases. We believe the thrust of these statutes is clear: The Comptroller
must issue individual warrants to, or an behalf of, every employee receiving a salary.
We note that your question and our response are restricted to the issuance of single
paytoll warrants covering multiple employees. We do not suggest what result might
attach to diff event fact situations.
The transfer of payroll warrant information on megnetic tape would also pose
problems regardirg the requirement of indivi&al warrants. In our opinion, articles
4358 and 4365 contemplate not merely individual warrants but “warrants” within a
rather vrow range of meaning. The use of serial numbering and colored paper, and
the provision for &pIicates are not concepts readily applied to msgnetic tape. it is
pcasible that the Comptroller might furnish the bank with a magnetic tape reflecting
the information contained on the individualwarrantswritten for each employee, but be
is not authorized to issue pay warrants by transfer of information solely cn megnetic
tape. Although the statute&es not contemplate the technological advances which
would facilitate the processing of the state’s payroll, it must be amended by the
Legislature if the state is to take complete advantage of avalable innovations.
Finally, ycu ask about any liability you might incur by participating in any of the
described practices. As we have indicated, a direct deposit procedure is not in itself in
conflict with ~thestatute, so lcng as the warrants are i&%&ally issued and conform
to the traditional concept of a “warrant.” If, however, the Treasurer participates in
the issusnce of warrants by transfer of information on magnetic tape, or those
covering multiple employees, we believe he might stiject himself to liability.
p. 682,
.
Honorable Warren G. Harding - Page Three (NW-3131
Article 4371, V.T.C.S., prohibits the payment of any money out of the Treasury
“except cn the warrants of the Comptroller.” We believe such warrants must be valid
on their face in order to avoid the statutory prohibition. If they fait prima facie to
comply with statutory requirements, they are invalid, and the Treasurer may not rely
on them as the basis for the payment of any money. In addition to liability on his bond,
under article 6003b, V.T.C.S., the Treasurer might also be in violation of article 4388a,
V.T.C.S., which provides:
Any person who shall knowingly and willfully violate any
provision of this Act shall be deemed guiity of a misdemeanor,
and won conviction, shall be punishedby a fine of not less than
Fifty Dollars ($50.00) nor more than Five Hundred Dollars
($500.00) or by imprisonment in the county jail for not less than
30 days nor more than six months, or by both such fins and
imprisonment.
SUMMARY
The Comptroller is authorized, at the instruction of a
state employee, to transfer the employeek pay warrant directly
to his designated bank for deposit in his account. Again, at the
employee’s direction, the Comptroller may issue the employee’s
pay warrant in the name of his sgent bank and transfer it
directly to the bank. The Comptroller may not issue a pay
warrant covering multiple employees, and hs may not issue
warrantssolely by means of magnetic tape.
h%3d?u*
MARK WHITE
Attorney General of Texas
JOHN W. FAINTER, JR.
First Assistant Attorney General
TED L. HARTLEY
Executive Assistant Attorney General
Prepared by Rick Gilpin
‘Assistant Attorney General
APPROVED:
OPINIONCGMMHTEE
C. Robert Heath, Chairman
Susan Garrison
Paul Gavia
Rick Gilpin
Tom Pollan
Mitch Winnick
p. 683