OFFICE OF

.



# THE ATT RNEY 

# GENERAL

AUSTIN~ TEXAS

February 12, 1948

Honorable George H. Sheppard Comptroller of Public Accounts Austin, Texas OpinionNo. V-501

Re: Construction of H. B. 674, 50th Legislature,as to whether said actmakes an appropriation of proceeds of sales and transfer of property supplementary to the regularbiennial 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 FiftiethLegislature:

"'Themoney 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 shallbe made to the fund from which such property could be purchased.

. . . *'Any propertywhich has become unfit for use, or no longer needed,when placed under the jurisdictionof the State Board of Controlby any department, commission, board, or other State agency, including State Eleemosynary Institutions,colleges, institutions of higher learning,and theHon. 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 intrinsicvalue 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 transferredproperty, from which suchproperty couldhave been purchased,and credit the fund from which such property couldhave been purchased,to the State agency that transferred such pro erty to the State Board of Control,

. O ..I PUnderscoring supplied)

"The questionarisesunder the administration of thisAct as to whether moneys received from the sale of propertybelonging to a State agency, etc.,whether such propertywas purchasedby funds from the currentappropriationor a prior appropriation, shallbe credited to the current appropriationand supplementthe currentappropriation,,

or whether thesemoneys are credited to the appropriated fund and are not supplementalto the current appropriation for the State agency, etc.

"None of the moneys received from the sale of such goods were taken into consideration~whenthis department certifiedthe GeneralAppropriationBillunder Section boa of Article III of the Constitution.

"I shallthank you to advise this departmentwhether the moneys received from the sale of such propertyare 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 departmentreceiving same.Hon. GeorgeH. Sheppard, Page 3 (V-501 1

"If you rule that themoneys received under this Act are supplementalto the current appropriations,then does the bill become non-operativeafter 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 reportswith your reply."

You present two questionswhich we restate as follows:

(1) Whether themoneys received from the sale of such property are supplementalto the currentappropriation, or whether they are a credit to the appropriated fund and are not subjectto the use or bepefits of the department receiving same.

(2) "If you rule that the moneys received under this Act are supplementalto the current appropriations, then does the bill become non-operativeafter 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, institutionsof higher learning,and the Texas Prison System, when it shallbecome unfit for use, or no longer needed. Section 2 authorizes the State Board of Control to transferpropertyno 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, institutionsof higher learning, and the Texas Prison System specificallyexcludedby Section 1. Section 2 also provides for trade-in of such property on new property of the same type.

Both sectionsprescribe the method of accounting to be adopted by the Comptroller in handling a sale
or transfer of property comprehendedby the Act. In neither case, however, is a supplementalappropriationmadeHon. George H. Sheppard, Page 4

to the regular biennial appropriationto the respective departments, boards, agencies of the state, or institutions comingwithin the terms of the Act. The Act does not make an appropriation of any funds arising from a sale of propertyunder Section 1 or arising from~a transfer as provided in Section 2, and does not operate to increase or diminish the currentbiennial appropriation. Therefore
,your certificateas to the available and prospective funds to meet the GeneralAppropriationBill under Sec. 49a of Art. III of the Constitution is not involved. Whether it be a sale or transfer, the Act does nothingmore than prescribea method of bookkeeping to be followedby the Comptroller in handlingthe proceeds of a sale or handlingan exchange of property from one State department,board, agency or institutionto another. Its operation is not limited to two years, but, for the
reasons hereinafter set out, the bill shouldbe amended
or reworded by the Legislature in the future to make its full intent completelycertain.

In the case of a sale or transfer, it is our opinion that the Act requires the credit to be made to the itemized appropriationof the selling or transferring Department in the current appropriationbill from which such property could have been purchased. Such credit then stands in the place of the propertywhich
was given up by the Department receiving the credit.

The question then arises as to whether the creditedDepartmentmay use this credited sum for all purposes covered by the itemizedappropriation 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 considerabledisagreement in this office. The uncertainty and ambiguity of the Act and the conflict of opinion thereonwithin this office have caused the long delay in the completion of this opinion. The intent of the Legislatureand whether it used words sufficient to carry out such intenthas causedus great concern, After carefully studying the entireAct together and reviewing the public policy involved and the evilswhich the Legislatureapparentlydesired to remedy by this Act, we have concludedthat itwas the intention of the Legislature to allow departmentsto trade in, exchange, or sell surplus or unfit personalproperty 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 itemizationsare so,broad that credits from personal property could be used to pay seasonalhelp, salaries, and other expenseswhich 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 Actmay 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 propertywill remain subject to future appropriation or use specifiedby the Legislature or will revert to the general fund or other appropriate fund after the currentbiennium as provided by other laws on the subject.

SUMMARY

Credits for personal property transferred or sold by State departmentsunder House Bill 674, 50th Legislature, should be made to the itemizedappropriation from which the property couldhave been purchased. Such creditsmay be used only to replace or purchase the same or a similartype of personalproperty,

Yours very truly

MTMlv&DdA ATTORNEY GENERALOF TEXAS

ATTORNEY GENERAL

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