Untitled Texas Attorney General Opinion ( 1985 )

.
The Attorney General of Texas
JIM MATTOX my 31, 1985
Attorney General
Eonorable William I?, Robby Opinion No. J'M-323
supremeCourtBUlldhlQ Lieutenant Goverao,r of Texas
P. 0. Box 12549
Austin. TX. 79711. 2548
P. 0. Box 12068, C,q?itol Station Re: Whether interest on non-
5121475-2591 Austin, Texaa 781’11 constitutional funds in state
Telex 9101574.1367 highvay fund may be appropriated
Telecopier 5t 21475-0255 Honorable Gib Lewis. Speaker for general revenue purposes
Texas Rouee of Repr'esentatives
714 Jackson. Suite 700 P. 0. Box 2910
Dallas. TX. 75202-4505 Austin, Texas 787 69
2141742.8944
Bonorable Grant JOnaB, Chairman
Senate Finance Committee
4824 AIberIa Ave., Suite 180
El Paso, TX. 789052793
Texas State Senate
915l533.3494 P. 0. Box 12068, Cepitol Station
Austin, Texas 78711
1001 Texas. Suite 700 Eonorable Jim Rudd, Chairman
Houston. TX. 77002.311 ,l
Rouse Appropriaticns Committee
71312236996
Texas Rouse of Representatives
P. 0. Box 2910
006 Broadway. Suite 312 Auetin, Texas 7t769
Lubbock. TX. 79401.3479
505/747-5239
Gentlemen:
4309 N. Tenth. Suite B You ask whether interest on non-constitutional funds in the state
McAllen. TX. 79501-1595 highway fund may be appropriated for general revenue purposes by rider
51215S2-4547 to the General Applwopriations Act.
200 Main Plaza. Suite 400 Article VIII, section 7-a. of the Texas Constitution dedicates to
San Antonio. TX. 782052797 highway purposes
51212254191
all net revenues remaining after peymsnt of 811
An Equal Opportunity/
refunds allowed by law and expenses of collection
Attirmrtive Action Employer derived :Erom motor vehicle registration fees, and
all taxlra, except gross production and ad valorem
taxes, on motor fuels and lubricants used to
propel wtor vehicles over public roadways. . . .
The interest on the motor vehicle registration fees and fuel taxes
dedicated to highcap purposes by article VIII, section 7-a. must also
be used for highuay purposes. A diversion of that interest to other
ournoses vould vialate
S~.``~
article VIII. section 7 of the Texas Constitu-
tion. Lavson' V. baker. 220 S.W. 260 (Tex. Civ. App. - Austin 1920.
vrit ref'd); see ,?m.T.C.S.
--- art. 2543d.
p. 1477
Bonorable William P. Robby
Ronorable Gib Lawis .
gonorable Grant JOneB
Ronorable Jim Rudd
Page 2 (JM-323)
Article VIII, section 7-a. of the TeXBB Constitution does ‘not
actually establish a state highway fund , or refer to the fund by name.
T’he fund was created by statutes which predate the adoption of article
VIII, section 7-a. in 194(i., See Tex. A.J.Res. 49. 49th Leg., 1945
Tex. Gen. Laws 1049. Art:Lcle6694, V.T.C.S., which derives from a
1917 statute, provides that
[a]11 funds coming into the hands of the Com-
mission derived :Erom the registration fees or
other sources prcvided for in this subdivision, es
collected, shall be deposited with the State
Treasurer to the credit of a special fund desig-
nated as ‘The Sta,te Highway Fund’. . . .
Acts 1917, 35th Leg., ch. ‘l!)O, 423, at 424. Sections 153.503 through
153.505 of the Texas Tax Code allocate motor fuel taxes to the state
highvay fund. These provtsions are the current codification of
statutes enacted in 1941. Acts 1941. 47th Leg., ch. 184. art. XVII,
525 at 330. The approval of article VIII, section 7-a. in 1946 gave
constitutional status to d.edications of funds already required by
statute.
There are statutory tledications of monies to the state highway
fund vhich do not have constitutional status. Article 6673a,
V.T.C.S., requires funds ilerived from the sale of excess land to be
placed in the state highwy fund. Federal aid money and county aid
money is deposited in the !state treasury to the credit of the state
highway fund. V.T.C.S. erl:. 6674e. Article 6674f. V.T.C.S.. provides
for certain transfers of general revenue to the state highway fund.
The state highway fund therefore is not a constitutional fund in
its entirety. It consists of funds dedicated to highvay purposes by
the constitution as veil 81) funds statutorily required to be placed in
the highway fund. It thus can be described as a collection of consti-
tutional and non-constitc,tional funds. Only the constitutionally
dedicated registration fees and motor vehicle fuel taxes are subject
to the rule that Interest must be spent for constitutionally
authorized purposes. See ‘I.T.C.S. art. 2543d; Lawson v. Baker, supra.
The interest on statefunds dedicated by statute to highway purposes
may be legally severed and placed in the general revenue fund. See
Gulf Insurance Co. v. Jamek, 185 S.W.2d 966 (Tex. 1945) (article VIII.
section 7, of Texas Conetitution applies only to special funds created
by the constitution, not by statutes); Attorney General Opinion w-338
(1981); see also Bra206 Rbrer Conservation & RBClBBiBtiOn District V.
HcCrav. 91 S.W.2dmji. 1936) (article VIII, sectlon 7, of the
Texas Constitution does no,t apply to general revenue funds).
Article 2543d. V.T.C.S., severs the interest from the principal
of non-constitutional funds placed in state depositories.
p. 1478
Rooorable William P. Bobby
Honorable Gib Leuie .
lionorable Grant Jones
Ronorable Jim Rudd
Page 3 (JM-323)
Section 1. hterest received on account of
time depositB of ‘mneye in funds and accounte in
the charge of the State TreeSUrer shall be allo-
cated es fOllW6: To each constitutional fund
there shall be credited the pro rata portion of
the interest rece,lved due to such fund. The re-
mainder of the iwerest received, with the excep-
tion of that powion required by other statutes to
be credited on a pro rsta basis to protested tax
payments, shall be credited to the General Revenue
Fund. The intewst received shall be allocated on
a monthly beBiB.
Interest on constitutional funds must be credited to the constitu-
tional fund and interest on trust funds must be credited to the trust
fund. See Attorney Genewl Opinions J&306 (1984); MW-82 (1979);
E-1040 (1977); M-468 (196’):). Attorney General Opinion M-468 (1969)
held that certain federal. grant funds vere trust funds, end that
interest on them could not be transferred to general revenue but
remained part of the trust fund.
Article 2543d, V.T.C.S., placed In the general revenue fund
interest on certain monies in the state highway fund, &, those
which are neither truBt funds nor constitutionelly dedicated revenues.
The legislature may appropriate by rider interest vhich article 2543d.
V.T.C.S., placed in the general revenue fund, so long as the rider is
not inconsistent with general lav. The validity of’ a particular rider
depends on its only appr’opriatlng funds or limiting an item of
appropriation. Sea Tex. Ctmst. ert. III. s35; JeBBeU ABBOCietBB, Inc.
v. Bullock, 531=.2d 593 (Tex. 1975); Moore v. Sheppard, 192 S.W.2d
559 (Tex. 1946).
SUMMARY
Interest earned on non-constitutional funds in
the state highuay fund may be appropriated for
general revenue purposes.
J
Very truly yours,
A
JIM UATTOX
Attorney General of Texas
TOU GREEN
First Assistant Attortiey General
p. 1479
Aonorsble William P. Robby
Honorable Gib Levis
Ronorable Grant Jones
Honorable Jim Rudd
Page 4 (a-323)
DAVID R. RICE&S
EXeCUtiVe ABBiBtaUt Attorrwy &Ueral
ROBWT GRAY
Special Assistant Attorney General
RICR GILPIN
Chairman, Opinion Cownittelr
Prepared by Susan L. Gerrilwn
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Rick Gilpia. Chairman
Colin Carl
SuBan GerriBon
Tony Guillory
Jim Hoellinger
Jennifer Riggs
Nancy Sutton
Bruce Youngblood
p. 1480