### THEA~~~~NEY GENERAL
OFTEXAS

Hon. J. T. McMillan Opinion No. O-3928 Deputy Commissioner Re: Whether or not the Banking ComDepartment ofBanking missioner has authority to allocate Austin, Texas the current lump-sum departmental appropriation to the Banking Department for thensalaries and expenses ofbulldDear Mr. McMillanl ing and loan associations, loan and brokerage companies, and credit unions.
Webeg to acknowledge receipt ofyour letter asking for aconstruction ofthe current appropriation act for the State Banking Department insofar as it concerns the division embracing building and loan associations, loan andbrokerage companies, and credit unions. Yourprecise questions are as follows:

‘I(1) Does the Banking Commissioner have authority to allocate the items in the Second Division between the Building and Loans, Loan andBrokerage and Credit Unions?

“(2) If so, can the Banking Commissioner employ the samemethod of allocation as was evidently used bythe Legislature- Toillustrate, can the Banking Commissioner determine administratively that the cost of enforcing the Building and Loan Lawshall not exceed $12,425.00 (70% of $17,750,00); that of enforcing the Loan andBrokerage Lawshall not exceed $3%550.00 (20%of $179750.00) and the cost of enforcing the Credit Union Lawshall not exceed $1,775.00 (10%of $17,750.00), andhaving done so allocate to building and loan items or portions of items under the Second Division without regard to the actual purpose of expenditure totalling $12,425.00; to loan and brokerage companies items or portions of items totalling .$3,550.00 and to credit unions items orportions of items totalllng $1,775.00, and direct payment accordingly?

“(3) Zfyou have indicated in response to the second question that the Banking Commission,er can employ the methodof allocation above outlined, then if the Commissioner has madesuch allocation and discovers that the allocations are not in accordance with fact, can he change such allocation so as to accord with the facts as they develop?

“(4) If you, in answer to QuestionNo. 2, have indicated that the method of allocation outlined in that question is not usable, then please indicate the method ofHon. J. T. McMillan, page 2 (O-3928)

allocation which should beused bythe Commissioner,

“(5) If there is any different rule applicable to salaries provided for under the appropriation as aistinguished from travel expense and other items of expense, please indicate what this difference maybe and the proper method of allocation of each.”
The appropriation for the division ofthe department above mentioned is as follows:


### “29. Supervisor Bldg. 

### ma Loan and Loan andBrokerage and Credit Unions) eO.OOO..OeO $ 4,250.OO 

### 30. &Examiner.*..~~.0.*.....0.***~.~.~~.~.~~~~~*
g: Examiner .~.e.o~eoO~eo

....**.0.00..~*0...~e. ~9~~~~~ Bldg. and Loan and Loan andBrokerage and , 0 Credit Union Legal Adviser (part-time) o*. 

### 33. Bldg. andLoan andLoan andBrokerage and 

### 1,aoo.oo

Credit Union travel and other items of contingent expense, including bona premiums 4t,5OO.OQ
TOT& -- Building and Loan and Loan and Brokerage and Credit Union Division 

### $179750.00”
The appropriation to the division for each fiscal year is identical.

If the appropriation under consideration came solely from the General Fund oftheState purpose of the fund or funds invo vea, i unaffected by the source and your questions would be easily answered, but this is not the case.

Section 1of S.B. No. 42& in which is found the departmental appropriation under consideration declares:

IIT& the several sums ofmoney herein specified or somuchLhereof as maybenecessary, are hereby approprfated out of any moneys in the State treasury, not otherwise appropriated in the General Revenue Fund or special funds as maybe shown for the support and maintenance of the several departments and agencies of the State government for the two-year period, beginning September 1, 1941, and ending &ugust 319 19430”
Sothat, the lump sumof $17,750.00 appropriated to the purposes enumerated in the division under consideration has been, perforce of the terms of the Senate Bill itself 9appropriated from the General Fund or from special funds as the permanent statutes mayprovide with respect to the three @lasses of corporations embraced in the division.Hon. J. T. McMillan, page 3 (O-3928)

Section 9ofthe Building and Loan Associations Act (Ver.Civ.Stat.Art. 88la) authorizes the Banking Commissioner to collect certain fees from building and loan associations in lieu ofexamination fees, expressly providing that the assessment by the Banking Commissioner shall befor enough
9.o carry out the provisions of this Act; and said fees when collected shall be placed in aseparate fund with the State Treasurer to be expended during the current year, or somuchthereof as maybenecessary in carrying out the provisions of this Act; and should there be anunexpended balance at the end ofthe year, the Banking Commissioner of Texas shall reduce the assessment for the succeeding year, so that the amount produced and paid into the State treasury, together with said unexpended balance in the treasury, will not exceed the amount appropriated for the current year, to pay all necessary expenses of supervising the operation and examining the business ofthe associations doing business under the provisions of this Act, which funds shall bepaid out upon requisition made out and filed by the Banking Commissioner ofTexas, when the Comptroller shall issue warrants therefor”
TheLoan andBrokerage Companies Act (Ver.Civ.Stat., Art. 1524a) provides for fees to be paid by such companies, as foll.ows:

“Said corporation shall pay the actual traveling expenses, hotel bills, and all other actual expense incident to such examination and afee not exceeding one-eighth of one per cent of its actual paid-in capital. (Sec.2)*** and (such companies as have sold in Texas their bonds, notes, certificates, debentures, or other obligations{ or are offering for sale in Texas their bonds, notes, certificates, debentures por other obligations) shall file a copy of such statement with the Banking Commissioner of Texas, together with afee ofTen ($10.00) Dollars for filing

. (Sec.4)*** The corporation shall pay afee ofFifteen ($15.00) Dollars for filing each such statement.” (Sec. 7) The statute does not direct the disposition to bemade by the Banking Commissioner ofthese examinations and statement fees. Impliedly, they are to bepaid byhim into the General Fund of the State treasury.

H.B. No. 845 of theRegular Session of the 47th Legislature, amending Article 2465 ofthe Revised Civil Statutes of Texas, 1925, and the amendments thereof, relating to credit Unions, declares with respect to these as follows:Hon. J. T. McMillan, page 4 (O-3928)

“TheBanking Commissioner shall cause each credit union to be examined at least once yearly, such examination to be madeby (1) somecompetent person orpersons designated by the Banking Commissioner whoshall be paid by the Banking Commissioner an amount not to exceed ninety (90) per cent ofthe fees as herein provided, which said fees shall be paid to said banking commissioner by the respective unions examined as provided by this Act as compensation for his or their services and as reimbursement for travel expenses and other expenses incurred; (2) by one ormore credit union examiners whoshall be appointed by the Banking Commissioner and shall receive asalary of not exceeding Three Hundred Dollars ($300000) per month, and shall be reimbursed for travel expenses in the sumof Four Dollars ($4.00) per day, plus cost of transportation, such examiners to retain their salary and expenses as above provided out offees collected bythem ashereinafter provided; (3) or by the Deputy Commissioner, Departmental Examiner, any bank examiner, assistant bank examiner, building and loan supervisor or building and loan examiner, whoshall receive and retain the fees collected by them as hereinafter provided, such fees socollected to be credited onthe salary ofthe person collecting the same, so that such person shall in no event receive compensation in excess ofhis salary as provided by law.

“Each credit union examined shall pay anexamination fee fixed by the Banking Commissioner not to exceed Twentyfive Dollars ($25.00) per day per person engaged upon such examination.
“All fees as above provided shall bepaid by the cred- ,it union to the person or persons making the examination, and such persons shall make amonthly account to the Bank- ,ingCommissioner ofthe fees so collected during the preceding month, fees in excess of those retained by the ex- ,aminer as above provided shall be paid to the Banking Commissioner andbyhim deposited with the State Treasurer to beheld in aspecial fund and used for the purpose of enforcing the provisions of this law.”
It will therefore be seen that those fees paid by building and loan associations go into aseparate fund with the State Treasurer; those fees paid byloan andbrokerage companies are to bepaid into the General Fund ofthe State Treasury; while
acomparatively small portion of the fees paid by credit unions are to be paid into aspecial fund with the State Treasurer*

“The “separate fund” paid by the building and loan associations and the Rtspeciallt fund paid bythe credit unions are to be used for the express purpose ofexpenses in adminiStering the laws governing these respective corporations.Hon. J. T. McMillan, page 5 (O-3928)

Arider attached to the appropriation for the State Banking Department declares:

l’Subject to the limitations hereinafter provided, there is appropriated to the Banking Department an amount equal to the total fees and revenues collected by said department during the biennium ending August 

### 31,19439plus an amount equal to the total fees andrevenues collected by said department during the biennium ending August 

### 31,1943, plus an amount equal to the fees and revenue collected b said Department during the biennium ending August 

### 31e i: 191, in excess ofthe expenditures of said Department during sald~biennium, and the Department shall limit its expenditures to such amounts, provided that said Department shall n,ot, in any event, anything in this bill to the contrary n,otwithstanding, spend more during the biennium than the total itemized appropriations for said biennium; further, provided that if during the first year of the biennium said Department shall spend less than the total itemized appropriation for said year, then said unexpended balance shall be expendable during the second year of the biennium for the purpose of enforcing the laws ofthis State for which said Department is charged with responsibility of enforcement, a.ndfurther providing that not more than seventy-five per c,ent 

### (75%)of the appropriation for the Building and LoanLoan andBrokerage-Credit tinion Division shall bepayable out ofthe special account created and maintained by the collection of fees by the Banking Department under and pursuant to the Building and LoanLaws of this State, I(
The construction ofthis rider necessarily enters into any consideration ofthe answers to your questions*

This rider pertains to the entire appropriation for the Banking Department 9which appropriation includes, ofcourses not only the division hereinbefore discussed but lfkewise the first division--that of State banking corporations.

Now, article 

### 362of the Revised Civil Statutes declares:

“Except as to savings banks, the expense of every general and special examination shall bepaid by the corporation examined in such amount as the Commissioner shall certify to be just and reasonable, and assessments therefor shall be madeby the Commissioner upon the banks examined fn proportion to assets orresources held by the bank upon the da,tes of the examination ofthe various banks,‘”
Article 363, governing the disposition of such fees, declares:Hon. J. T. McMillan, page 6 (O-3928)

“All sums collected as examination fees shall be paid by the Commissioner directly to the State treasury to the credit of the General Revenue Fund. Expenses ofexamination and of the Commissioner in enforcing the provisions of this title shall bepaid upon the certificate ofthe Commissioner bywarrant of the Comptroller upon the State treasury.It

the It is the rule that an appropriation act canc;;itka;e effect to repeal, amend or modify ageneral law.

l Steele, 

### 57Tex. 203; Linden v. Finley, ~92Tex. 

### 451;Attorney General’s Opinion 

### 1916-1918,p0 110; Attorney General’s Opinion No. 

### 2965 1934-1936,p. 

### 46;Attorney General’s Opinion No, 

### 2970, 1934-193&,PO72;attorney General’s Opinion No. 

### O-18,37).

Since the Building andLoan &isociations Act specifically limits the purpose for which the “separate fund” under that iict has been accumulated to the express purpose of enforcing the law governing such &asociation, and since H.B, No. 

### 845restricts the use ofthe 8’special ‘Ifund created by fees from credit unions to the purpose of enforcing the provision of the Credit Unions rict, the Legislature is powerless by its Appropriation Act9to divert such funds from the respective purposes for which they were solely destined by statute to another purpose. copy herewith). (See O-2641,

Youare therefore respectfully advised that since the Legislature has no authority to allocate these special or separate funds to any other use or p’urpose than the use or purpose for which they were created, it follows that you, asBankin,g Commis-- sioner, have no such power. Noallocation ofthe appropriation can be madein such manner as to violate the respective statutes creating these special funds.

It does not follow from what wehave said, however, that the Banking Commissioner has no discretion or authority to allocate to anextent the lump-sum appropriation of $179750.00 to the division ofthe department under consideration. The context ofthis appropriation, and especially when construed in the light ofthe rider above quoted, indicates clearly that the Legislature intended that the Banking Commissioner should have the power to allocate this lump-sum appropriation to the purposes of supervising the respective corporations mentioned insofar as it (the Legislature) had authority to ,>rovide for allocatfon.

Wethink the Banking Commissioner would have authority in the exercise ofhis sound official discretion to allocate the lump-sum appropriation in any way and to any extent that does not violate the statutes hereinabove quoted and discussed, requirin,g the use of separate funds and special funds therein mentioned ,to be devoted solely to the statutory purposes for which they were created.-

Hon. 3. T. McMillan, page 7 (O-3928)

It maybe thus said, byway of illustration, of Items 29, 30, 31, 32and 33comprehending salaries for supervisor, examiners, and legal adviser 9and travel and contingent expenses where the service or travel and contingent expense are with respect to two or more of the corporations being considered in accordance with the equi,ties ofthe situation; that is to say, the reasonable pro rata share of such salaries or expenses to bepaid. Noscientific basis or statutory basis whatsoever can begiven for such allocation. Thewhole matter rests in afair exercise ofthe sound official discretion ofthe Banking Commissioner in the light of all the facts surrounding the matter. His discretion whenfairly exercised under the circumstances would be conelusive, even upon the courts. The courts would have no authority to re.vise such discretion thus lodged in the Banking Commissioner in the absence of fraud, arbitrariness or lack of fact basis reasonably necessary to support his conclusions.

This discretion of the Commissioner may, wethink, be exercised again and as often as the necessities require to effeet are-allocation. Weare also inclined to the view, and so advise you, that in the exercise of this discretion in the matter of allocating the appropriation for salaries, the Commissioner would, bejustified in considering the contingencies known andunknown ofthe seasonal fees entering into the fund or funds.

The allocation madeby the Commissioner in the manner wehave suggested with respect to the items of salaries for the supervisor, the examiners ,,and the attorney should not, wethink, be afr‘ected bythe knownfact that in very truth it mayhappen that such officers for agiven month mayactually beengaged Sn activities concerning on,eonly, or two only of the group of corporations with respect to which his salary has been appropriated. Asalary payment is not legally contingent upon the officer’s actual discharging his official duties anew. pard, 150 S.W.(2) 769, See Spears v. ShepJust what extra requirements will bemade of the department with respect to bookkeeping, +,ndthus what additional requirements will be made in the ma:;ter of travel and expense accoun:;s will be required, wecan not say, Muchofthe information upon which the Commissioner could andwould act in allocating such appropriation would of necessity be knownto him. Werefer especially to the character and extent ofthe services performed by the supervisor, exami.ners and legal adviser. maybe the additionally irn-posed duties, But, whatever requirements and the like,Hon. J. T. McMillan, page 8 

### (O-3928)

upon the department, weknowofno other way to properly interpret the Hppropriation Act, and to advise with respeet to its practical application. Very truly yours, ATTORNEY

GENERAL

OFTEXAS By/s/ Ocle Speer Ocie Speer, Assistant
APPROVED

SEP23, 

### 1941 /s/ Gerald C.Mann ATTORNEY

GENERAL

OFTEXAS
APPROVED:OPINIONCOMMITTEE BY: BWB,CHAIRMAN
OS-MR:wb