THEA~~~~NEY GENERAL 

OFTEXAS 

Hon. J. T. McMillan Opinion No. O-3928 

Deputy Commissioner Re: Whether or not the Banking ComDepartment of Banking missioner has authority to allocate 

Austin, Texas the current lump-sum departmental appropriation to the Banking Department 

for then salaries and expenses of bulldDear Mr. McMillanl 

ing and loan associations, loan and 

brokerage companies, and credit unions. 

We beg to acknowledge receipt of your letter asking 

for a construction of the current appropriation act for the 

State Banking Department insofar as it concerns the division 

embracing building and loan associations, loan and brokerage 

companies, and credit unions. Your precise 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 and Brokerage and Credit Unions? 

“(2) If so, can the Banking Commissioner employ the 

same method of allocation as was evidently used by the 

Legislature- To illustrate, can the Banking Commissioner 

determine administratively that the cost of enforcing the 

Building and Loan Law shall not exceed $12,425.00 (70% 

of $17,750,00); that of enforcing the Loan and Brokerage 

Law shall not exceed $3%550.00 (20% of $179750.00) and 

the cost of enforcing the Credit Union Law shall not exceed $1,775.00 (10% of $17,750.00), and having 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 or portions of items 

totalllng $1,775.00, and direct payment accordingly? 

“(3) Zf you have indicated in response to the second 

question that the Banking Commission,er can employ the method of allocation above outlined, then if the Commissioner 

has made such 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 of 
Hon. J. T. McMillan, page 2 (O-3928) 

allocation which should be used by the 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 may be and the proper 

method of allocation of each.” 

The appropriation for the division of the department 

above mentioned is as follows: 

“29. Supervisor Bldg. ma Loan and Loan 

and Brokerage 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 and Brokerage and 

, 0 

Credit Union Legal Adviser (part-time) o *. 

33. Bldg. and Loan and Loan and Brokerage 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 of theState 

purpose of the fund or funds invo i vea, 

unaffected by the source and 

your questions would be 

easily answered, but this is not the case. 

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

IIT& the several sums of money herein specified or 

so much Lhereof as may be necessary, are hereby approprfated out of any moneys in the State treasury, not otherwise 

appropriated in the General Revenue Fund or special funds 

as may be 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” 

So that, the lump sum of $17,750.00 appropriated to 

the purposes enumerated in the division under consideration has 

been, perforce of the terms of the Senate Bill it self 9 appropriated from the General Fund or from special funds as the permanent statutes may provide with respect to the three @lasses of 

corporations embraced in the division. 
Hon. J. T. McMillan, page 3 (O-3928) 

Section 9 of the 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 of examination fees, expressly providing that the assessment by the Banking Commissioner shall be for enough 

9.o carry out the provisions of this Act; and said fees 

when collected shall be placed in a separate fund with the 

State Treasurer to be expended during the current year, or 

so much thereof as may be necessary in carrying out the 

provisions of this Act; and should there be an unexpended 

balance at the end of the 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 of the associations doing business under the provisions of this Act, which funds 

shall be paid out upon requisition made out and filed by 

the Banking Commissioner of Texas, when the Comptroller 

shall issue warrants therefor” 

The Loan and Brokerage 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 a fee 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 p or other obligations) shall file a 

copy of such statement with the Banking Commissioner of 

Texas, together with a fee of Ten ($10.00) Dollars for filing . (Sec.4)*** The corporation shall pay a fee of Fifteen 

($15.00) Dollars for filing each such statement.” (Sec. 

7) 

The statute does not direct the disposition to be made 

by the Banking Commissioner of these examinations and statement 

fees. Impliedly, they are to be paid by him into the General 

Fund of the State treasury. 

H.B. No. 845 of theRegular Session of the 47th Legislature, amending Article 2465 of the 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) 

“The Banking Commissioner shall cause each credit 

union to be examined at least once yearly, such examination to be made by (1) some competent person or persons 

designated by the Banking Commissioner who shall be paid 

by the Banking Commissioner an amount not to exceed ninety 

(90) per cent of the 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 or more credit union examiners who shall be appointed 

by the Banking Commissioner and shall receive a salary of 

not exceeding Three Hundred Dollars ($300000) per month, 

and shall be reimbursed for travel expenses in the sum of 

Four Dollars ($4.00) per day, plus cost of transportation, 

such examiners to retain their salary and expenses as above 

provided out of fees collected by them as hereinafter provided; (3) or by the Deputy Commissioner, Departmental 

Examiner, any bank examiner, assistant bank examiner, 

building and loan supervisor or building and loan examiner, 

who shall receive and retain the fees collected by them as 

hereinafter provided, such fees so collected to be credited on the salary of the person collecting the same, so 

that such person shall in no event receive compensation in 

excess of his salary as provided by law. 

“Each credit union examined shall pay an examination 

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 be paid by the cred- 

,it union to the person or persons making the examination, 

and such persons shall make a monthly account to the Bank- 

,ing Commissioner of the 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 and by him deposited with the State Treasurer to 

be held in a special 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 a separate fund with the 

State Treasurer; those fees paid by loan and brokerage companies 

are to be paid into the General Fund of the State Treasury; while 

a comparatively small portion of the fees paid by credit unions 

are to be paid into a special fund with the State Treasurer* 

“The “separate fund” paid by the building and loan associations and the Rtspeciallt fund paid by the credit unions are 

to be used for the express purpose of expenses in adminiStering 

the laws governing these respective corporations. 
Hon. J. T. McMillan, page 5 (O-3928) 

A rider 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, 19439 plus 

an amount equal to the total fees and revenues 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 19 i: 1, 

in excess of the 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 of this State for which said 

Department is charged with responsibility of enforcement, 

a.nd further providing that not more than seventy-five per 

c,ent (75%) of the appropriation for the Building and LoanLoan and Brokerage-Credit tinion Division shall be payable 

out of the special account created and maintained by the 

collection of fees by the Banking Department under and pursuant to the Building and Loan Laws of this State, I( 

The construction of this rider necessarily enters into 

any consideration of the answers to your questions* 

This rider pertains to the entire appropriation for 

the Banking Department 9 which appropriation includes, of courses 

not only the division hereinbefore discussed but lfkewise the 

first division--that of State banking corporations. 

Now, article 362 of the Revised Civil Statutes declares: 

“Except as to savings banks, the expense of every general and special examination shall be paid by the corporation examined in such amount as the Commissioner shall certify to be just and reasonable, and assessments therefor 

shall be made by the Commissioner upon the banks examined 

fn proportion to assets or resources held by the bank upon 

the da,tes of the examination of the 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 of examination and of the Commissioner in enforcing the provisions of 

this title shall be paid upon the certificate of the Commissioner by warrant 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 a general law. 

Steele, 57 Tex. 203; Linden v. Finley, ~92 Tex. 451; Attorney l 

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&, PO 72; attorney General’s Opinion No. O-18,37). 

Since the Building and Loan &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. 845 restricts 

the use of the 8’special ‘I fund 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 Act 9 to 

divert such funds from the respective purposes for which they 

were solely destined by statute to another purpose. 

copy herewith). 

(See O-2641, 

You are 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, as Bankin,g Commis-- 

sioner, have no such power. No allocation of the appropriation 

can be made in such manner as to violate the respective statutes 

creating these special funds. 

It does not follow from what we have said, however, 

that the Banking Commissioner has no discretion or authority to 

allocate to an extent the lump-sum appropriation of $179750.00 

to the division of the department under consideration. The context of this appropriation, and especially when construed in the 

light of the 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. 

We think the Banking Commissioner would have authority 

in the exercise of his 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 may be thus said, by way of illustration, of Items 

29, 30, 31, 32 and 33 comprehending salaries for supervisor, examiners, and legal adviser 9 and 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 of the situation; that is to say, the 

reasonable pro rata share of such salaries or expenses to be paid. 

No scientific basis or statutory basis whatsoever can be given 

for such allocation. The whole matter rests in a fair exercise 

of the sound official discretion of the Banking Commissioner in 

the light of all the facts surrounding the matter. His discretion when fairly 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, we think, be 

exercised again and as often as the necessities require to effeet 

a re-allocation. We are 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, be justified in considering the contingencies known and unknown of the seasonal fees entering into the fund or funds. 

The allocation made by the Commissioner in the manner 

we have suggested with respect to the items of salaries for the 

supervisor, the examiners ,, and the attorney should not, we think, 

be afr‘ected by the known fact that in very truth it may happen 

that such officers for a given month may actually be engaged Sn 

activities concerning on,e only, or two only of the group of corporations with respect to which his salary has been appropriated. 

A salary 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 be made of the department with respect to bookkeeping, +,nd thus what additional requirements will be made in the ma:;ter of travel and expense accoun:;s will be required, we can not say, Much of the information 

upon which the Commissioner could and would act in allocating 

such appropriation would of necessity be known to him. We refer 

especially to the character and extent of the services performed 

by the supervisor, exami.ners and legal adviser. 

may be the additionally irn-posed duties, 

But, whatever 

requirements and the like, 
Hon. J. T. McMillan, page 8 (O-3928) 

upon the department, we know of no other way to properly interpret the Hppropriation Act, and to advise with respeet to its 

practical application. 

Very truly yours, 

ATTORNEY GENERAL OF TEXAS 

By /s/ Ocle Speer 

Ocie Speer, Assistant 

APPROVED SEP 23, 1941 

/s/ Gerald C. Mann 

ATTORNEY GENERAL OF TEXAS 

APPROVED: OPINION COMMITTEE 

BY: BWB, CHAIRMAN 

OS-MR:wb