Untitled Texas Attorney General Opinion

The Attorney’ General of Texas
S~zptember22, 1986
JIM MATTOX
Attorney General
Supreme Court Building Mr. Joseph C. Gagen Opinion No. JM-549
P. 0. Box 12546
Austin. TX. 76711. 2546
Chairman
51214752501 Texas Industrial Acc.LdentBoard Re: Whether the Industrial Accident'
Telex 9101674-1367 105 W. Riverside Drive Board is entitled to interest
Telecopier 5121475-0266 Austin, Texas 78700 earned in the Compensation to
Victims of Crime Fund
714 Jackson, Suite 700
Dallas. TX. 75202-4506 Dear Mr. Gagen:
2141742-6944
Article 8309-I., V.T.C.S., the Crime Victims Compensation Act,
creates at section 14 the Victims of Crime Compensation Fund "in the
4624 Alberta Ave., Suite 160
El Paso. TX. 79905.2793
state treasury," which is to be used by the Industrial Accident Board
915/533-3464 for the payment of compensation to claimants. Revenues for the fur.d
are derived from additional court costs imposed by the act upon
persons convicted of certain offenses. The act specifically prohibits
91 Tex’as, Suite 700 the payment of general revenues to persons seeking compensation under
,ston, TX. 77002-3111
the act. You ask tne following question:
, ,Y223-5666
Is the Industrial Accident Board entitled to have
606 Broadway. Suite 312 the interest earned on the Compensation to Victims
Lubbock, TX. 79401.3479 of Crime Fund deposited in the Fund?
6061747.5236
We answer your qc,estion in the negative; we conclude that such
4309 N. Tenth, Suite B interest must be deposited in the General Revenue Fund.
McAllen, TX. 76501~1666
512l682-4547
Article VIII, section 7, of the Texas Constitution provides the
following:
200 Main Plaza. Suite 400
San Antonio, TX. 76205.2797 The Legislature shall not have power to borrow, or
512/225-4191 in any manner divert from its purpose. any special
fund that may, or ought to, come into the Treasury;
An Equal Opportunity/
and shall make it penal for any person or persons
Afflrmatlve Action Employer to borrow, withhold or in any manner to divert from
its purpose any special fund, or any part thereof.
Article VIII, section 7, has been construed to require that
interest on constitxionally dedicated funds may be spent only for the
purposes for which the funds were created; a diversion of such
interest to other purposes would violate the constitution. Lawson v.
m, 220 S.W. 26t1,272 (Tex. Civ. App. - Austin 1920, writ ref'd).
Consequently, interest earned on a constitutional fund must be
credited to that fund, UdSSS the constitution itself otherwise
directs. Attorney General Opinions JM-323, JM-321 (1985); M-468
p. 2430
Mr. Joseph C. Gagen - Page 2 (JM-549)
(1969). The interest on state funds dedicated by statute, however,
may be legally severed and placed in the general fund. -- See Gulf
Insurance Co. v. James, 18!5 S.W.Zd 966 (Tex. 1945) (article VIII,
section 7, of the Texas Constitution applies only to special funds
created by the constitution, not by--statute);- Attorney General
Opinions JF-323, JM-321 (l!l85);Mw-338 (1981); see also Brazos River
Conservation & Reclamation~District v. McGraw, 91 S.W.2d 665, 674
(Tex. 1936) (article VIII, section 7, does not apply to general
revenue funds). Article 2543d (since repealed and re-codified as
section 3.042(a) of article 4393-1, V.T.C.S.) effects such a severanqe
of interest on statutory funds as a general rule.
Section 3.042(a) of article 4393-1, V.T.C.S., the article that
sets forth the powers and duties of the state treasurer, provides the
following:
Interest received from time deposits of money in
funds and accounts in the charae of the treasurer
shall be allocated as follows: to each constitu-
tional fund there: shall be credited the pro rata
portion of the i&rest received due the fund; the
remainder of thi interest received, with the
excention of that nortion required bv other
statutes to be credited on a pro rata basis to
protested tax payments, shall be credited to the
General Revenue Fund. The interest received shall
be allocated on--a monthly basis. (Emphasis
added).
The funds about which you inquire are not constitutionally dedicated
funds; rather, they are statutory funds. Consequently, pursuant to
section 3.042(a), the interest on such funds would normally be
credited to the General Rerenue Fund. However, the rule with regard
to the disposition of intere:stearned by the deposit of trust funds is
different.
This office previously has determined that the provisions of what
is now section 3.042(a) of .article4393-1, V.T.C.S., do not apply to
interest earned on trust funds that are not the property of the state
and that the state treastrcer holds as trustee out of the state
treasury. Opinions issued by this office consistently have maintained
that interest on such trust funds becomes part of the principal and,
consequently, part of the fund that generated the interest. See
Attorney General Opinions :I+306, JM-300 (1985); MU-82 (1979); H-1040
(1977); M-468 (1969). Cf. Attorney General Opinions MW-338 (1981);
H-1187 (1978). The adopxn of such a doctrine is strongly supported
by language set forth in section 4.003 of article 4393-1, V.T.C.S.,
setting forth exemptions to the reach of the act and providing
at subsection (b) the following: "This chapter does not apply
to: . . . (2) funds held in trust or escrow for the benefit of a
person or entity other thm a state agency." The issue, then, is
p. 2431
Mr. Joseph C. Gagen - Page 3 (JM-549)
whether the funds about which you inquire are trust funds, as opposed
to statutory funds. We conolude that they are statutory funds.
The opinions cited abrre indicate that in order to be charac-
terized as trust funds, the funds in question should reflect, among
other things, (1) that they are administered by a trustee or trustees,
(2) that the funds neither are granted to the state in its sovereign
capacity nor collected for t~hegeneral operation of state government,
and (3) that they are to bsz spent and invested for specific, limited
purposes and for the benefit of a specific group of individuals.
Being in the nature of a trust, such funds are entitled to retain the
proceeds from their investment. Attorney General Opinions MW-481
(1982); M-468 (1969). It :.E; clear from a reading of article 8309-1,
V.T.C.S.,.that the funds atout which you inquire fail to exhibit the
requisite trust characteristics and are thereby statutory funds whose
earned interest must be cretllited
to the General Revenue Fund.
Section 14 of the act :)rovidesthe following in pertinent part:
Sec. 14. (a) The Compensation to Victims of
Crime Fund is created in the State Treasury to be
used by the board-for the payment of compensation
to claimants under this Act and other expenses in
administering th& Act. The Compensation to
Victims of Crime &xiliary Fund is created in the
State Treasury tc-be used by the board only for
the payment of '%mpensation to claimants under
this Act. The board shall make no compensation
payments which exceed the amount of money in the
combined funds. 30 general revenues may be used
for payments unde:Lthis Act.
(b) A person s!aallpay $20 as a court cost on
conviction of any felony, $15 as a court cost on
conviction of a misdemeanor punishable by impri-
sonment or by a fine of more than $200, and $3 as
a court cost, <'IIconviction of a misdemeanor
punishable by a fine of not more than $200, other
than a misdemeanor that regulates pedestrians and
the parking of motor vehicles. . . . The court
shall require a pIerson convicted of an offense
listed under this section to pay the court cost
whether or not the court grants the person a
probated sentence. If a person is granted
deferred adjudication under Article 42.12, 42.13,
or 45.54, Code of Criminal Procedure, 1965, as
amended, at the time the court grants deferred
adjudication, the person shall pay as a court cost
the amount that the person would have otherwise
been required to 'payunder this subsection had the
p. 2432
Mr. Joseph C. Gagen - Page 1; (JM-549)
adjudication not 'lee*deferred and had the person
been finally conv:.ctedof the offense.
(c) Court costs under this section are
collected in the .same manner as other fines or
costs.
(d) The officer collecting the costs in a
municipal court case shall keep separate records
of the funds collezted as costs under this section
and shall deposft the funds in the municipal
treasury. The officer collecting the costs in a
justice. county, or district court case shall keep
separate records DE the funds collected as costs
under this sectlo:;and shall deposit the funds in
the county treasmy:.
Text of (e) as amended by Acts 1983, 68th Leg.,
p. 1739, ch. 335,12
(e) On receipt, the custodian of a municipal
or county treasur]'may deposit the funds collected
under this secticn in interest-bearing accounts.
The custodian sha:tl.
keep records of the amount of
funds on deposit rollected under this section and
shall remit to the comptroller of public accounts
before the 10th day of each month the funds
collected under this section during the preceding
month. The city and the county may retain five
percent of the fuais collected under this section
as a collection fee. The city or county may also
retain all intereritaccrued on the funds. ,
Text of (e) as amended by Acts 1983, 68th Leg.,
p. 2764, ch. 475.11
--
(e) The custodian of a municipal or county
treasury shall keep records of the amount of funds
on deposit collec,:edunder this section and shall
remit to the comptroller of public accounts before
the last day of each calendar quarter the funds
collected under this section during the preceding
quarter. The city and the county may retain 10
percent of the furds collected under this section
as a collection Eoe. If no funds due as costs
under this sectien have been collected in a
quarter, the report required for the quarter shall
be filed in the regular manner, and the report
must state that no funds due under this section ---.
were collected.
p. 2433
Mr. Joseph C. Gagen - Page 5 (JM-549)
(f) The compt:rollerof public accounts shall
deposit the funds received by him or her under
this section in y:he Compensation to Victims of
Crime Fund. Funis collected are subject to audit
by the comptrolle; and funds expended are subject
to audit by the State Auditor. (Emphasis added).
Unlike, for example, the funds created under articles 1066c,
1118x, lllSy, 5221b-7. and 6243e. V.T.C.S. (which govern local sales
and use tax, metropolitnn rapid transit authorities, regional
transportation authoritier., unemployinent compensation, and fire
fighters' relief and retirement, respectively), the funds created
under the Crime Victims CclmpensationAct do not manifest sufficient
trust fund characteristics;. See Attorney General Opinions JM-539
(19861,;JM-323, JM-321, JM-,306(1985). The act does not provide that
the funds are to be administered by a trustee or trustees or by any
public officer "in trust"; rather, the act specifies that the fund "is
created in the State Treasury." It is the case, of course, that the
act does not specify that the funds are granted to the state in its
sovereign capacity, that the act specifies rather that such funds be
paid only as compensation to claimants under the act; but the language
so earmarking the funds Liffers in no material way from language
typically found in the Appropriations Act directing the expenditure of
state funds. Further, the act does not specify that the funds be held
for a specific or identifiable group of individuals; in this instance,
the group entitled to claim compensation consists of an open-ended,
indefinite class.
We conclude that the funds created pursuant to article 8309-1,
V.T.C.S., the Crime Victins Compensation Act, are statutory funds.
Accordingly, we conclude that the Victims of Crime Compensation Fund
is not entitled to be cred:.tedwith interest earned by deposit of its
funds; article 4393-1, sect,ion3.042(a), V.T.C.S., requires that such
interest be credited to the General Revenue Fund.
SUMMARY
The Victims o:i Crime Compensation Fund is not
entitled to be credited with interest earned by
deposit of its funds; article 4393-1, section
3.042(a), V.T.C.S., requires that such interest be
credited to the General Revenue Fund.
d
Very truly yours,
A.-k
JIM MATTOX
Attorney General of Texas
p. 2434
Mr. Joseph C. Gagen - Page j (JM-549)
JACK HIGHTOWER
First Assistant Attorney Ge:wral
MARY KELLER
Executive Assistant Attome:{ General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Jim Moellinger
Assistant Attorney General
-..
p. 2435