Untitled Texas Attorney General Opinion ( 1971 )

Hon. Jess M. Irwin, Jr. Opinion No. M- 944
Commlssloner
Texas Rehabilitation Commission Re: May the Texas Rehabllita-
1301 West 38th Street tion Commission deposit
Austin, Texas 78705 finds received from local
agencies under a federal
establishment grant in a
Dear Mr. rwin: local depositor: .~
In your letter requesting an opinion from this office,
you submit the following facts:
'The Texas Rehabilitation Commission Is
authorized to sponsor various local rehabllita-
tlon agencies for the purpose of obtaining Federal
funds to be used for initial staffing, equipping,
or remodeling or expansion of buildings used as
rehabilitation facilities. Generally, the local
rehabilitation agency applying through the Com-
mission for grant funds will be a state school,
hospital, Goodwill Industries, or similar organlza-
tion. Grant funds are provided by the U. S. Depart-
ment of Health, Education and Welfare on an 80$-
20% basis with 20$ of the funds being provided by
the local agency.
"Durlnc FY 70-71 the Commission had establlsh-
ment grant implementation in the amount of $987,214.
If all grant funds are fully utilized this will re-
sult In 20$, or $197,442 being contributed by the
local agencies. Grant funds are expended on the
basis of monthly reports from the grantee, there-
fore, the use of the funds Is spread over the entire
fiscal year or longer. Thus, there is a possibility
of earning a considerable sum of interest if deposit
of the funds from the local agencies is authorized
to be deposited In local depositories. The sole
purpose of placing such funds in local depositories
is to earn Interest to be used in the rehabilitation
program of the Commission."
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Hon. Jess Irwin, page 2 (M-944)
In addition, you have also advised us that grant funds provided
to the Texas Rehabilitation Commission by the United States
Department of Health, Education and Welfare are deposited In the
State Treasury. With regard to these facts you ask the following
question:
"May the Texas Rehabilitation Commission
deposit funds received from local agencies
under a Federal establishment grant in a local
depository?"
Section 6 of Artfle XVI of the Constitution of Texas,
as adopted by the electorate in 1956, provides, In part, as follows:
"(b) State agencies charged with the
responsibility of providing services to those
who are blind, crippled, or otherwise physically
or mentally handicapped may accept money from
private or federal sources, designated by the
private or federal source as money to be used
in and establishing and equipping facilities
for assisting those who are blind, crippled,
or otherwise physically or mentally handicapped
in becoming gainfully employed, in rehabilitating
and restoring the handicapped, and in providing
other services determined by the state agency to
be essential for the better care and treatment of
the handicapped. Money accepted under this sub-
section 1s state money. State agencies may spend
money accepted under this subsection, and no other
money, for‘specific programs and projects to be
conducted by local level or other priv&te, non-
sectarian associations, groups, and nonprofit
organizations, in establishing and equioplng
facilities for assisting those who are blind,
crippled, or otherwise physically or mentally
handicapped in becoming gainfully employed, in
rehabilitating and restoring the handicapped, and
in providing other services determined by the
state agency to be essential for the better care
or treatment of the handicapped.
"The state agencies may deposit money ac-
cepted under this subsection either in the state
treasury or in other secure depositories. . . .(l
(Emphasis ours)
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Hon. Jess Irwin, page 3 (M-944)
This constitutional provision authorizes state
agencies charged with responslbillty for providing services
to those physically or mentally handicapped to spend money
accepted under the provlslons of Section 6 of Article XVI
for specific grograms and projects. Such programs may be
conducted by . . . local level or other private, non-
secta$ian associations, groups, and nonprofit organizations
in providing services determined by the state agency
to'bd essential for the better care or treatment of the hand-
icapped. Attorney General's Opinion M-91 (1967).
Pursuant to the provisions of Section 6 of Article
XVI of the Texas Constitution, the Texas Rehabilitation Com-
mission was created by the Legislature In 1969 by the enact-
ment of Senate Bill 110, Acts 6lst Legislature, Regular
Session, chapter 40, page 103 (Article 26751 . Vernon's Civil
Statutes). Sec. 10 of this Article 267~1 reads as follows:
"Sec. 10. The state treasurer is hereby
authorized to receive all monies appropriated
by Congress and allotted to Texas for carrying
out the purposes of this Act or agreements,
arranaements. or olans authorized therebv; and
to make disbursements therefrom upon the-certifi-
cation of the Commissioner. All ubllc monies
available to the agency shall be eoosited, ad-
ministered, and disbursed in the same manner and
under the same conditions and requirements as
provided by law for other public funds in the
state treasury. The State Auditor shall regularly
audit all accounts established by the Commission
In local depositories, to assure that non- ubllc
funds made available to the CommissionTTi.i&-
-or bequest, by local organizations desiring
to participate in projects for the handicapped
authorized In Subsection (b) of Section 6 of
Article XVI of the Texas Constitution, or by
endowment, are expended in a manner consistent
with the purposes of this Act, and the Commission
shall comply with such reporting procedures as
the State Auditor might prescribe for the Com-
mission's acceptance, hoi;ding,investment and
use of non-public funds. (Emphasis ours)
'Under the express provisions of Section 6(b) of Article
XVI money received by the Texas Rehabilitation Commission f$om
private and federal sources is declared to be "state money. In
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Hon. Jess Irwin, page 4 (M-944)
the case of Lower Colorado River Authority v. Chemical Dank &
Trust Co., 185 S.W.2d 4bl (Tex.Clv.App. 1945) ffi d 144 T
n S.W.2d 48 (1945), It was held that fu8ndsz:Tlected zii
deposited by the Lower Colorado River Authority, an agency of the
State, to be used only for a public purpose and subject to expendi-
ture by the authority only for such purpose were without doubt
public funds. On the basis of the holding in this case, It Is our
opinion that money received by the Texas Rehabilitation Commission
from local governmental agencies and other State agencies for the
purpose authorized by Section 6(b), Article XVI of the Texas Con-
stitution, and Article 26752 also would be 'state money." Also
under this Section, the TextisRehabilitation Commission has the
option of depositing such money in the State Treasury or some other
secure depository.
The provisions of Sec. 10, Article 26751 , classifies
funds available to the Texas Rehabllitatlon Commission as public
and non-public funds. In construing the provisions of this Sec-
tion 10 and taking into consideration the express provisions of
Section 6, Article XVI of the Texas Constitution, we conclude
that money available to the Texas Rehabilitation Commission which
is deposited in the State Treasury shall be handled, administered
and disbursed in accordance with the provisions of the "State
Depository Act" (Articles 2525-2529d, Vernon's Civil Statutes.)
We also hold that money which the agency places in a local deposi-
tory Is subject to a regular audit by the State Auditor. Moreover,
the agency is selecting a local depository for funds available to
It must comply with the provisions of Article 2529c, Vernon's Civil
Statutes, which provides, In part, as follows:
"Section 1. The selection and qualification
of depositories for the deposit of public funds
of all agencies and political subdivisions of the
state shall be In accord with the laws now In
effect and hereinafter enacted pertaining thereto.
"Sec.2. . . .
"A bank shall not be disqualified from bidding
and becoming the depository for any agency or oolitical
subdivision of the state by reason of having one or
more officers, directors or stockholders of said bank
who individually or collectively own or have a bene-
ficial Interest in not more than 10 percent of the
bank's outstanding capital stock, and at the same
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Hon. Jess Irwin, page 5 (M-944)
time serves as a member of the board, commission,
or other body charged by law with the duty of
selecting the depository of such state agency
or political subdivision; provided, however, that
said bank must be selected as the depository by a
majority vote of the members of the board, commls-
sion, or other body of such agency or political
subdivision and no member thereof who is an officer,
director or stockholder of the bank shall vote or
participate In the proceedings. . . .'
You are advised, in answer to your question, that the
Texas Rehabilitation Commission is authorized to deposit funds
received from local agencies under a federal establishment grant
in a local depository.
SUMMARY
The Texas Rehabilitation Commission Is au-
thorized to deposit funds received from local
agencies under a federal establishment
a local depository. Art. XVI, Sec. 6(by:a::xin
Const., Art. 26751 , Sec. l,G+V.C .S.
Very truly your;;,
Prepared by Ivan R. Williams, Jr.
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Kerns Taylor, Chairman
W. E. Allen, Co-Chairman
Ed Esquivel
Austin C. Dray, Jr.
Jack Goodman
Ray McGregor
NOLA WHITE
First Assistant
ALFRED WALKER
Executive Assistant
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