OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 
Honorable Claude A. Wllllame,~ Page 2 

We are informed by letter from the State Treasurer 

that separate book aooounts are maintained upon all of the 

various funds administered by the State Treasurer, but the 

funds themselves are oommlngled. 

After the various State depoeltoriea are seleoted 

by reason of their having qualified under our ttatutet, Artiale 2632, Vernon's Revised Clvll Statutes, provides h&v the 

funds may be deposited by the Treasurer. Artlolt 2532, supra, 

mada ln part as follows: 

*After the dtpositorler have qualified aa 

provided in the preotdlng ortiolte, it ahall 

be the duty of the Treasurer to depoalt the 

funds belonging to the State In suah dtpoaltories, an far as praotioal on a fair peroantage basis, and shall at all timea keep euoh 

funds equitably jxorated in proportion to the 

amount whioh taoh la entitled to rsoeive by 

drawing warrants alternately thereon, or by 

apportioning the warrants 80 drawn." 

The offloe of the Trtaturer now handles all of tit 

funda plaotd in its hand6 In the name manner, inoluding the 

Gtnrral Fund, the various apeoial fund6 and the trust funds, 

rush ae eaoheat funda and unemployment ooapentation funds. J 

The office of the Trtaaurer has cainted out to us that should 

that offloe be required to maintain rpparate bm aooounte for 

the Various fund@, that whop nbank cenda in a group of warrants 

to the FrtasUWr for payme+ and theat warrmtt ware drawn on 

mare than one fund, tht Stats Treaturtr would be required to 

draw at many drafts in payatnt of the warrant am there were 

funds agalnmt rhleh the rarrantr were lrsue& 

Subrequent to the tnaetmant of the State depository 

laws mentioned above, the 44th Legislature enaottd the Ttxar 

Unemployment Compensation Aot , whioh bar been amended by the 

46th and 40th Seesions of tho Ltgialature. The 47th Leglelaturt amended Beotion 9 of the lot in some reaptots, but rtenaottd the rtatute ortaflng thla fund ar found in 8. B. 4O@. 

ArtloLa 5931-b. Vernon(a Rerl8td 01~11 Statutst, Beotlon 7, 

nor reads in part-i?tbfollowmt 
Honorable Claude A. WIlliamis, Page 3 

asto. 9. (a) E&ablIshment and oontrol: 

There Is hereby emtablltahed~ae a swnd, 

separate and apart from all pub110 monies or 

funds of thin rtate an Unemployment CompensatLon 

Fund, whioh ahall be administered by the oommltslon txolutlvtly for the purpoetr of this aot 

. . . 

WStotIon (b) Aooountr and deposltrr The 

State Treaaurtr ahall be treaaurtr and tiuatodlan 

of the fund, who 8hall admlnlettr euoh fund In 

aooordanoe with the dlrtotiont of the oonuuleelon 

The Treasurer rhall maintain wlthin~tht 

&d'thrtt ttparate aooounta: (1) a oltarlng aooount, (2) an unemployment trust fund aooount, 

and (3) a benefit aooount. All monies payable to 

the fund, upon reotlpt thereof by the commission, 

ehall be forwardrd to the Treasurer, who &all lmmediately deposit them in the olearlng aooount 

in-tie 

after olearmoe thereof, all other monies 

oltarlng bdount ahall be Immediately de- l 

posited with the Seoretary of the Treasury of the 

United State8 of Amtrloa to the oredit of the aooowt of this State In the Unemployment Trust Fund 

,.-. . monies In the oltaring and benefit6 aooounts may be depoalted by the Treaaurtr, under 

the dlTtotIan of the oommlselon, In any bank or 

pub110 depoaItory,in whIoh general fund8 of the 

state may be depomlttd. . . . The fitatt Trgaaurer &all be lirble, on his of flolal bond, for 

the faithful ptrformanoe of his duties In oonneetlon with the Unemployment Compensation Fund provided under this Aot. Suoh llablllty on the offlolal bond ah&l1 be eff’eotlve Immediately upon 

the enaotmtnt of thie provlalon, and such llabllIty shall exist In addition to the liability of 

any separate bond existent on the efftotlve date 

of thle provielon, or whloh may be given In the 

future . All ~*UIO reoovertd for lorate euetalned 

by the fund ehallbe depoelfed therein.* 

These ttatuttt havlrq been enacted after the enaotment of the Btatc depprltory laws Rnd In view of the express 

language of the leglalaturt that the unemployment fund be 

gstabllnhed ae a speolal fund, separate and apart from all 
. 

Honorable Claude A. Williams, Page 4 

public monies or funds of thle State that 1s in itself suffloient evidenoe of the Intention of the legislature that the' 

Treasurer of this State Is authorized to handle these funds 

a8 dlreoted by the oommleslon and not In aocordanot with the 

general laws of the State upon the deposit of State funds. 

After the Informal meeting attended by representatives of the Soolal Security Board; representatives of the 

Texas Employment Comptnratlon Commlsslon, members of the 

Treasurer'8 offloe and a member of the Attorney C+eneral's 

offloe, the Supreme Court of Texas deoided and rendered Its 

opinion In the oate of Friedman v. Amerloan Surety Company 

of N&w York, 161 S. W. (2d) 670. At page 580 of this oplnIon the court said: 

*The money hart Involved Is not the property 

of ths state In any oapaolty, but Is a trust fund 

to be held out of the State Treasury, but In the 

hands of the State Treasurer as Trustee, for the 

benefit of a olaes of employees whose employers 

pay It In by virtue of a tax levied, the tax being 

In the nature of an exolse tax." 

The Supreme Cowt thus raid that these funds were to 

be held out of the treatury. It evidently understood fully the 

tffeot of that language for It also said that the Treasurer was 

only'tht Trustee of the monies. 

In the FrIedman oate the court followed Its opinion 

in the oaet of Manlon v. Lockhart, 114 S. W. (2d) 217. There 

the oourt held that the funds were trust fund6 to be held by 

the Treasurer as ourtodlan. The epeoiflo dtslgnatlon of the 

unemployment funds by the ltgitlature and the admonition as to 

the tetablIehment of a separate fund to be held apart from all 

pub110 monies of this etate olearly differentiates these monies 

from the general and speolal funds of the state. 

The letter of Mr. llltohell attaohed to your request 

directs our attention to Section 303 (a) of the Soolal Seourlty 

Aot. We see no reason to consider the appllcatlon Of this 
Honorable Claude A. Willlams, Page 5 

etatute for we have no Information that the Texas Unemployment Co~ptneatlon Commleslon has fAlled to comply with Ite 

requirement. 

We notlot that Seotlon Q(b) ae enacted by the 47th 

Regular Strzlon of the Lkglelature oontalns the ?ollow+ng 

languaget 

'All moneys in this fund ehall be depoalttd, admlnlztered and disbursed, In the same manner and under the ,eame oondltlons and requirements 

at la provided by Law for other sptolal fundr In 

the State Treaeury.* 

This language wae not In the Aot until thin aatndment 

beaame effeotlve April 24, 1941. We do not believe that 'It wae 

the 'Intention of the Leglelature to alter the oharaoter of the 

unemployment funds at thle time by thle language. On the kentrary, we believe that It wae Intended to advise the Treaeurtr 

.to uze the zame zafeguarda In prottotlng these funds ae Ie used 

with state funds. In view of the other language uetd In catting up this fund It dose not appear to uz that there waz an 

Intention that the unemployment,monIee be oommlngled with epeolal 

or general ?unds.o? the State. 

'Ae examination of the deolelon In the Friedman oaze 

and of the pe*tlntnt statutee Imprtssea upon UE the aonoluelon 

thz> the State Trtaeurtr Ie authorized and dIreote$ to tztabllrh \ 

-bank aom for unemployment oempWiha- \ 

tlon fundr. We realize the extra burden this will plaeo upon ~-_-j 

the Txqtqr, but It Is one IHpoeed by the Leglslaturo. 

APPROVED AU@ 16; 1941 

(Signed) Gerald C. Mann 

Yours. vtrr truly 

ATTORNEY GXNr;BAL OF TEXAE 

ATTORNEY '3EiNEBAL OT TEXAS 

MiIIreJ 

4)WOVED OPINION COYMITTEL 

By BWB Chairman 

By (Signed] Yorrle Hodges 

Norris Hodges 

Aseletant 

OK 

ORL