OFFICE OF . 

THE ATT RNEY GENERAL 

AUSTIN~ TEXAS 

February 12, 1948 

Honorable George H. Sheppard 

Comptroller of Public Accounts 

Austin, Texas Opinion No. V-501 

Re: Construction of 

H. B. 674, 50th 

Legislature, as 

to whether said 

act makes an appropriation of 

proceeds of sales 

and transfer of 

property supplementary to the 

regular biennial 

appropriation. 

Dear Sir: 

Your request for an opinion is as follows: 

"1 quote the following excerpts from 

House Bill No. 674, Acts of the Regular 

Session of the Fiftieth Legislature: 

"'The money from the sale of such 

property, less the expense of advertising 

the sale, shall be deposited in the State 

Treasury to the credit of the department; 

commission, board, or other State agency, 

which transferred the property to the State 

Board of Control. The credit to such department, commission, board, or other State 

agency shall be made to the fund from which 

such property could be purchased. . . . 

*'Any property which has become unfit 

for use, or no longer needed, when placed 

under the jurisdiction of the State Board 

of Control by any department, commission, 

board, or other State agency, including 

State Eleemosynary Institutions, colleges, 

institutions of higher learning, and the 
Hon. George H. Sheppard, Page 2 

. 

(V-501) 

Texas Prison System, may be transferred 

by the State Board of Control to any institution 

or other 6 

department, commission, board, 

tate agency in need of same, and 

the proper debit and credit shall be made 

on the basis that such property can be purchased in the market at the time of the 

transfer, if a market exists, and if not, 

at its actual or intrinsic value as set by 

the State Board of Control. The State 

Comptroller shall, upon information furnished by the State Board of Control, debit the anoronriation of the State agenT 

receiving such transferred property, from 

which such property could have been purchased, and credit the fund from which such 

property could have been purchased, to the 

State agency that transferred such pro erty 

to the State Board of Control, . O ..I P Underscoring supplied) 

"The question arises under the administration of this Act as to whether moneys 

received from the sale of property belonging to a State agency, etc., whether such 

property was purchased by funds from the 

current appropriation or a prior appropriation, shall be credited to the current appropriation and supplement the current appropriation,, or whether these moneys are 

credited to the appropriated fund and are 

not supplemental to the current appropriation for the State agency, etc. 

"None of the moneys received from the 

sale of such goods were taken into consideration ~when this department certified the 

General Appropriation Bill under Section 

boa of Article III of the Constitution. 

"I shall thank you to advise this department whether the moneys received from 

the sale of such property are supplemental 

to the current appropriation, or whether 

they are a credit to the appropriated fund 

and are not subject to the use or bene~fits 

of the department receiving same. 
Hon. George H. Sheppard, Page 3 (V-501 1 

"If you rule that the moneys received 

under this Act are supplemental to the current appropriations, then does the bill become non-operative after two years from its 

date? 

"I am attaching hereto reports of sale 

or transfers of State property that have 

been received by this department for your 

study in answering this question. I shall 

thank you to return these reports with your 

reply." 

You present two questions which we restate as 

follows: 

(1) Whether the moneys received from the sale 

of such property are supplemental to the current appropriation, or whether they are a credit to the appropriated 

fund and are not subject to the use or bepefits of the department receiving same. 

(2) "If you rule that the moneys received under this Act are supplemental to the current appropriations, then does the bill become non-operative after two 

years from its date?" 

House Bill No. 674, 50th Legislature, is divided 

into two sections, exclusive of the emergency section. 

The first section authorizes the Board of Control to sell 

personal property belonging to the State, under the control of any department, commission! board, or other State 

agency, except State eleemosynary Institutions, colleges, 

institutions of higher learning, and the Texas Prison System, when it shall become unfit for use, or no longer 

needed. Section 2 authorizes the State Board of Control 

to transfer property no longer needed, or which has become unfit for use, from one State department, commission, 

board, or other agency, to another State board, commission, or agency, and in addition includes eleemosynary 

institutions, colleges, institutions of higher learning, 

and the Texas Prison System specifically excluded by Section 1. Section 2 also provides for trade-in of such 

property on new property of the same type. 

Both sections prescribe the method of accounting to be adopted by the Comptroller in handling a sale 

or transfer of property comprehended by the Act. In neither case, however, is a supplemental appropriation made 
Hon. George H. Sheppard, Page 4 

to the regular biennial appropriation to the respective 

departments, boards, agencies of the state, or institutions coming within the terms of the Act. The Act does 

not make an appropriation of any funds arising from a 

sale of property under Section 1 or arising from~a transfer as provided in Section 2, and does not operate to increase or diminish the current biennial appropriation. 

Therefore , your certificate as to the available and prospective funds to meet the General Appropriation Bill under Sec. 49a of Art. III of the Constitution is not involved. Whether it be a sale or transfer, the Act does 

nothing more than prescribe a method of bookkeeping to 

be followed by the Comptroller in handling the proceeds 

of a sale or handling an exchange of property from one 

State department, board, agency or institution to another. 

Its operation is not limited to two years, but, for the 

reasons hereinafter set out, the bill should be amended 

or reworded by the Legislature in the future to make its 

full intent completely certain. 

In the case of a sale or transfer, it is our 

opinion that the Act requires the credit to be made to 

the itemized appropriation of the selling or transferring Department in the current appropriation bill from 

which such property could have been purchased. Such 

credit then stands in the place of the property which 

was given up by the Department receiving the credit. 

The question then arises as to whether the 

credited Department may use this credited sum for all 

purposes covered by the itemized appropriation to which 

it is credited or whether such use is limited to the replacement of the same type of property. On this question there has been considerable disagreement in this 

office. The uncertainty and ambiguity of the Act and 

the conflict of opinion thereon within this office have 

caused the long delay in the completion of this opinion. 

The intent of the Legislature and whether it used words 

sufficient to carry out such intent has caused us great 

concern, After carefully studying the entire Act together and reviewing the public policy involved and the 

evils which the Legislature apparently desired to remedy 

by this Act, we have concluded that it was the intention 

of the Legislature to allow departments to trade in, exchange, or sell surplus or unfit personal property for 

the purpose of replacing it with the same type of fit 

and usable property. 
Hon. George H. Sheppard, Page 5 (V-501) 

We do not believe that the Legislature intended 

that the credit from trade-ins, exchanges, transfers or 

sales could be used for all purposes specified in the 

itemized fund or appropriation from which the particular 

item of property could have been purchased. If so, some 

of the itemizations are so,broad that credits from personal property could be used to pay seasonal help, salaries, and other expenses which have no relation to the 

replacement of the particular type of property involved 

in the trade, exchange, or sale. To apply that interpretation to the Act would be giving it the effect of an 

appropriation, which cannot be done in view of the other 

provisions of the Act. 

Therefore, it is our opinion that the credits 

for trade-ins, transfers, and sale of personal property 

covered by this Act may be used only toward the replacement or purchase of the same or a similar type of personal property. Any credits over and above the amounts 

used on replacement or purchase of the same or a similar 

type of property will remain subject to future appropriation or use specified by the Legislature or will revert 

to the general fund or other appropriate fund after the 

current biennium as provided by other laws on the subject. 

SUMMARY 

Credits for personal property transferred or sold by State departments under 

House Bill 674, 50th Legislature, should 

be made to the itemized appropriation from 

which the property could have been purchased. 

Such credits may be used only to replace or 

purchase the same or a similar type of personal property, 

Yours very truly 

MTMlv&DdA ATTORNEY GENERAL OF TEXAS 

ATTORNEY GENERAL 

LPL:jcp:erc