Untitled Texas Attorney General Opinion

TEE ATTORNEY GENERAL
OF TEXAS
Mr. William D. Taylor Opinion No. JM-1196
Interim Executive Director
Department of Commerce Re: Whether interest earned on
P. 0. BOX 12728 monies in the Texas Exporters
Capitol Station Loan Fund may be used to admin-
Austin, Texas 78711 minister the Texas Exporters
Loan Program (RQ-1786)
Dear Mr. Taylor:
You ask about the proper construction of House Bill
369, which created the Texas Exporters Loan Fund.1 Specifi-
cally, you ask whether interest earned by the deposit of
money in the fund created by that bill may be "used" to
administer the program authorized by that bill. The bill
r- provides that the costs of administering the program must be
paid by interest earned by the deposit~of money in the fund
and by fees collected in connection with the program.
However, a rider to the appropriations act provides that
administration of the program shall be financed from fees
generated from the program. The rider omits any reference
1. Senate Bill 223, which was a general "clean up"
bill, made necessary corrections to Title 4 of the
Government Code, conformed Title 4 of the Government Code to
certain acts of the 70th Legislature, and also codified in a
nonsubstantive way various statutes in that title. Acts
1989, 71st Leg., ch. 4, at 200. Article 3 of the bill added
Subtitle F to the Government Code, which deals with commerce
and industrial development. Chapter 481 of Subtitle F
codified various statutes governing the Texas Department of
Commerce. In addition to Senate Bill 223, the 71s.t Legis-
lature enacted fifteen other bills that either amended or
added sections to chapter 481, including Rouse Bill 369,
which added section 481.059. Section 481.059 of the Govern-
ment Code was not amended by any of the other bills enacted
by the 71st Legislature.
p. 6312
Mr. William D. Taylor - Page 2 (JM-1196)
to interest generated by the deposit of the money in the
fund.
House Bill 369 added section 481.059 to the Government
Code, which creates the Texas Exporters Loan Fund and
authorizes the Texas Department of Commerce to use that fund
to guarantee loans made by private lenders to certain
businesses under certain conditions. Acts 1989, 71st Leg.,
ch. 818, 5 1, at 3751. Section 481.059 provides in
pertinent part:
(a) The Texas exporters loan fund is a
fund in' the state treasury. The
consists of. appropriations or transfers made
to the fund, guarantee fees, other money
received from operation of the program
established by this section, and interest
paid on monev in the fund. Money in the fund
may be used only to carry out the purposes of
this section. If any appropriations are made
to the department from the general revenue
fund to carry out this section for a fiscal
year, at the end of that fiscal year .the
unexpended balance of those appropriations
shall be transferred to the Texas exporters
loan fund.
. . . .
(g) The department shall administer the
program established by this section in the
same manner as its other programs under this
chapter, except as provided otherwise by this
section. ecostsnadmlnisterino
e thg
WO
; a on
monev in the fund and bv fees collected in
connection with the nroaram. (Emphasis
added.)
A rider to the appropriations act passed during the
same legislative .session limits the funding source for
paying the costs of administration of the program only to
those fees generated by the program. Rider 37 provides the
following:
TEXAS EXPORTERS LOAN FUND. Contingent upon
the final.passage of Senate Bill 165, Seven-
ty-first Legislature, or similar legislation
p. 6313
Mr. William D. Taylor - Page 3 (JM-1196)
relating to the Texas Exporters Loan Fund,
there is hereby appropriated in fiscal year
1990 to the Texas Department of Commerce
$2,000,000 out of the General Revenue Fund to
establish the Texas Exporters Loan Fund.
financed from fees aenerated from the Texas
wo*ers man ~uru3.2
Acts 1989, 71st Leg., ch. 1263, art. I, at 5169. (Emphasis
added.)
You suggest that there is an irreconcilable conflict
between the bill and the rider and that the bill controls.
In your letter requesting an opinion from this office, YOU
state:
2. The bill to which the rider refers, Senate Bill
165, differed from the bill finally enacted by the
legislature, House Bill 369, in one important respect that
relevant. to your inquiry. Subsection (g) of the
%mittee substitute for Senate Bill 165, which governed the
administration of the program, provided: "The department
shall administer the program established by this section in
the same manner as its other programs under this article,
except as provided otherwise by this section." Senate Bill
165 omitted any reference to using the fees collected in
connection with the program (or, for that matter, any
reference to using interest earned from the deposit of the
money in the fund). Senate Bill 165 was not enacted by the
legislature: its house counterpart, House Bill 369, was.
Rider 37, which was made effective expressly upon the
passage of S.B. 165 or a comparable bill, apparently was
drafted to reflect the language set forth in S.B. 165, not
the language contained in H.B. 369. Thus, the bill
ultimately enacted by the legislature creating the fund
required that interest earned by the deposit of the money in
the fund comprise one of the two funding sources that the
legislature could appropriate to pay for the costs of
administering the loan program. Rider 37 further limited
for the duration of this biennium the funding source from
which the program's administrative costs could come, i.e.
only to the fees generated by the program.
p. 6314
Mr. William D. Taylor - Page 4 (JM-1196)
The statute, Section 481.059, clearly
provides that such interest may be used for
administration and that the interest is part
of the Texas Exporters Loan Fund. The Fund,
including the interest, is appropriated to
Commerce in SB 222 [the appropriations act].
As was the case in mlock Calvert 480
S.W.Zd 367 (Tex. 1972), thereVis elsewh6re in
the statutes authority to use the interest in
the Fund for administration.3 [Section
481.059(g) of the Government Code.] Althouah
1 he e t
snecificallv mentioned in SB 222, both
leaislative intent and the a n ral orincinle
under Article III. Sec. 3: eof the Texas
Constitution that aeneral leaislation
controls over conflictina 1 ouaae in an
annrooriations act, indicate tE:t Commerce is
authorized to use the interest for
dministration of the Texas Exnorters Lo
&nd or ara [TEX. ATT'Y GEN. OP. NO;:
V-1254 ;195:; ; M-1041 (1972); TEX. ATT'Y GEN.
LA NO. 72 (1973).] (Emphasis added.)
We are unclear whether, by asking whether the
commission may "usen the interest that accrues from the
deposit of the money, you are asking whether the bill
supersedes the rider and thereby author- the legislature
to appropriate interest earned by the deposit of the money
in the fund for the purposes of administering the program,
or whether you are asking whether the legislature actuallv
has appropriated such interest. For purposes of this
opinion, we assume that you are asking whether the
legislature has appropriated the interest earned, regardless
of whether that appropriation has been effected by the
general law or the appropriations bill. We conclude that
section 481.059 of the Government Code acts as a limitation
on the sources from which the legislature may appropriate
We note that in Bullock v. a rt. 480 S.W.2d 367
(Tex. 31972) the Texas Supreme Court expre&ly declined to
grant the keguested petition of mandamus to compel the
comptroller to pay out of state funds the expense of a party
primary election because there was ~g statute empowering the
secretary of state to so expend state money.
P. 6315
Mr. William D. Taylor - Page 5 (JM-1196)
moneys for administration. The requirement that administra-
tive costs "must be paid '1 from certain sources means that no
other source of funding may be used for administrative
costs. We conclude that 'the legislature has not appro-
priated accrued interest generated by the deposit of money
in the fund: therefore, we answer your question in the
negative.
Section 6 of article VIII of the Texas Constitution
governs the withdrawal of money from the state treasury and
provides in pertinent part:
No money shall be drawn from the Treasury
but in pursuance of specific appropriations
made by law; nor shall any appropriation of
money be made for a longer term than two
years.
Section 6 has been construed consistently to require an
appropriation by the legislature before any money can be
paid out of the state treasury. &iahtfoot v. Lane, 140 S.W.
89 (Tex. 1911); Pickle v. Finley, 44 S.W. 480 (Tex. 1898).
An ap ropriation may be effected either by the constitu-
g
tion, by statute,5 or by a general appropriation bill.6
S e. a Tex. Const. art. III, 5 49-b
(estabtishitg vzte&s# land fund and appropriating all
moneys in the fund for purchase of land to sell to
veterans.)
5. See, e-a., Acts 1959, 56th Leg., ch. 150, § 4, at
260 (amending V.T.C.S. art. 695c, 5 27). In an earlier
opinion, this office declared:
This does not mean that general legislation may not
contain an appropriation which is merely incidental to
and necessary to carry out the subject and purpose of
the general law. [Citation omitted.] Neither does it
mean that a general appropriation bill may not contain
general provisions and details limiting and
restricting the use of the funds therein appropriated,
if such provisions are necessarily connected with and
incidental to the appropriation and use of the funds
and if they do not conflict with or amount to general
(Footnote Continued)
p. 6316
Mr. William D. Taylor - Page 6 (JM-1196)
See aenerally Susman, Fiscal and Constitutional Limitations,
44 Tex. L. Rev. 106 (1965). Regarding whether certain
language is sufficient to effect an appropriation, the Texas
Supreme Court long ago declared:
It is clear that an appropriation need not
be made in the general appropriation bill.
It is also true that no specific words are
necessary in order to make an appropriation;
and it may be conceded, as contended, that an
.appropriation may be made by implication when
the language employed leads to the belief
that such was the intent of the Legislature.
Pickle v. Finley, sunra, at 480-81. In what is probably the
leading case in this area, National Biscuit Co. v. State,
135 S.W.2d 687 (Tex. 1940), the Texas Supreme Court
declared:
As just stated, one of the provisions of
Sec. 6 of article 8 of our Constitution
requires all appropriations of money out of
the State Treasury to be specific. It is
settled that no particular form of words is
(Footnote Continued)
legislation. [Citations omitted.]
Attorney General Opinion V-1254 (1951).
6. In an earlier opinion, this office declared:
If a bill does more than set aside a sum of money,
provide the means of its distribution, and to whom it
shall be distributed, then it is a general law.
[Citations omitted.] The distinction between a
general appropriation bill and general legislation has
been recognized in this State in the simple fact that
the former merely sets apart sums of money for
specific objectives and uses while the latter does
more than merely appropriate and limit the use of
funds. General legislation constitutes a separate
subject and cannot be included within a general
appropriations bill. [Citations omitted.]
Attorney General Opinion M-1199 (1972).
p: 6317
Mr. William D. Taylor - Page 7 (JM-1196)
required to render an appropriation specific
within the meaning of the constitutional
provision under discussion. It is sufficient
if the Legislature.authorizes the expenditure
by law, and specifies the purpose for which
the appropriation is made. An appropriation
can be made for all funds coming from certain
sources and deposited in a special fund for a
designated purpose. In such instances, it is
not necessary for the appropriating Act to
name a certain sum or even a certain maximum
SUlU.
Id. at 693.
The issue is whether the language set forth in either
the statute or rider effect an appropriation of earned
interest consistent with the requirements of section 6 of
article VIII of the Texas Constitution. The language of
neither the statute nor the appropriations act rider expli-
citly effects such an appropriation: the issue is whether
such language effects an appropriation by implication.
C Based upon our examination of prior authority, we conclude
that neither the language of section 481.059 of the
Government Code nor the language of Rider 37 effects an
appropriation of earned interest.
Appropriations by implication have been found under
certain circumstances. In Atkins v. State Hwv . DeD't, 201
S.W. 226 (Tex. Civ. App. 1917, no writ), the court held that
the following language did effect an appropriation by
implication:
All funds coming into the hands of the
Highway Commission, derived from the
registration fees hereinbefore provided for,
or from other sources, as collected, shall be
deposited with the State Treasurer to the
credit of a special fund designated as 'The
State Highway Fund,' and shall be naid only
on warrants issued bv the State ComntroU
unon vouchers drawn bv the Chairman of t:e
Commission, such vouchers to be accompanied
by itemized sworn statements of the expendi-
ures, except when such vouchers are for the
regular salaries of the employees of the
Commission. The said State Highway Fund
,-
shall be expended by the State Highway
p. 6318
Mr. William D. Taylor - Page 8 (JM-1196)
Commission for the furtherance of public road
construction and the establishment of a
system of State highways, as contemplated and
set forth in this Act. (Emphasis added.)
Acts 1917, 25th Leg., ch. 190, at 424. The court concluded
that the language set forth above indicated the legisla-
ture's intent that the fees involved be appropriated.
Because the general laws at issue contained language very
similar to that underscored above, several attorney general
opinions held that those statutes involved also effected
apprOpriatiOnS. See also Attorney General Opinions c-297
(1964); V-923, V-895, V-887 (1949).
On the other hand, several attorney general opinions
held that language contained in various general laws or
appropriation act provisions did not effect any appropria-
tion. For example, in Attorney General Opinion V-412
(1947), this office was asked, inter alia, whether an
amendment passed in 1947 to then V.T.C.S. article 6053,
which conferred broad regulatory authority on the Railroad
Commission governing butane and liguified petroleum gases,
effected an appropriation of license fees collected in.
connection with the act. The amendment provided:
All fees received by the state from
licenses issued under this Act shall be made
available to the Railroad Commission for use
in paying the legitimate expenses incurred in
administering and enforcing the provisions of
this Act, and for no other purpose: provided,
however, that any excess funds remaining at
the end of each two-year period shall go to
the General Fund.
Acts 1945, 49th Leg., ch. 358, at 634. The appropriations
act passed in 1947 contained a rider that provided that all
fees received by the commission under article 6053 shall be
paid into the General Revenue Fund. This office concluded
that the language set forth above did not have the effect of
appropriating the license fees collected.
In Attorney General Opinion V-923 (1949), this office
was asked to construe the following two paragraphs:
All such fees as are collected under this
Act shall be deposited in the State Treasury
in a special fund under the title of the
p. 6319
Mr. William D. Taylor - Page 9 (JM-1196)
Texas Vegetable Certification fund. The
purpose of the fees being to pay for the
enforcement of the law and to provide
inspections called' for: it further being the
purpose to make the law self-supporting.
Out of the fees collected under this Act,
the Chief of the Warkets and Wardhouse
Division of the Department of Agriculture
shall be paid in addition to the amount of
his salary in the general appropriation bill
in the sum of Pour Hundred and Eighty Dollars
($480) per annum: which amount is hereby
appropriated for said purpose.
Acts 1949, 51st Leg., ch. 581, at 1130. The opinion held
that the second paragraph makes 'a definite and specific
appropriation, but that the first paragraph, because it
failed to contain the words l'which amount is. hereby
appropriated for said purposesn that is set forth in the
second paragraph, did not effect an appropriation. See also
Attorney General Opinion V-1422 (1952).7
.-
We think that the language set forth in section 481.059
of the Government Code and in Rider 37 is comparable to the
language of the statutes discussed in Attorney General
Opinions V-412 and V-923. Therefore, we conclude that no
appropriation of earned interest is effected by either the
general law or the rider. The bill merely authorizes the
legislature to appropriate money from two sources; the rider
This office declared in Attorney General Opinion
v-14227 i1952) :
The fact that an assessment is made and collected and
the fund is earmarked by general statute for a certain
use does not make it available unless it is also
appropriated by the Legislature for that use.
Furthermore, even though a general statute specifies
payment of a certain amount, the amount actually paid
is determined by the amount appropriated by the Legis-
lature.
L at 3 (citations omitted).
p. 6320
Mr. William D. Taylor - Page 10 (JM-1196)
4
merely limits the source to one and, in effect, carves out a
subset from the bill for the duration of this biennium.
Riders to an appropriations act frequently serve this
sort of function: a rider may prohibit a state agency from
using appropriated money for activities that the agency is
otherwise authorized to conduct. Se . e.a Attorney
General Opinions JW-860 (1988): U-499 (19z9). F&r example,
state agencies have statutory authority to purchase
insurance policies protecting against claims arising under
the Tort Claims Act. Civ. Prac. & Rem. Code § 101.027.
However, the general appropriations act for the current
fiscal year prohibits any appropriated money from being
expended for such purpose:
None of the funds appropriated in this Act
may be expended fo'r the purpose of purchasi'ng
policies of insurance covering claims arising
under the Texas Tort Claims Act.
Acts 1989, 71st Leg., ch. 1263, art. V, 5 55, at 5797; see
Attorney General Opinion JW-625 (1987). We conclude that
section 481.059 does serve to limit the sources from which
the administration of the loan program may be funded, but it
does not effect an appropriation of those moneys.
SUMMARY
The interest earned by the deposit of
money in the Texas Exporters Loan Fund has
not been appropriated during the current bi-
ennium to pay for the costs of administering
the loan program.
LJ Ed&
_
Very truly you
JIM
A',,
MATTOX
,
Attorney General of Texas
WARYRRLLRR
First Assistant Attorney General
LOU MCCREARY
Executive Assistant Attorney General
p. 6321
Mr. William D. Taylor - Page 11 (JM-1196)
JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney,General
RKNEA HICKS
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Jim Moellinger
Assistant Attorney General
p. 6322