## OF TEXAS

AURTIN. Tmcxas 78711 -..I_

February 25, 1977 Orern~!nr C)J!rii

The Honorable Bob Bullock Opinion No. H-947 Comptroller of Public Accounts State of Texas He: Transfer of funds 104 L.B.J. State Office Bldg. by~theComptroller Austin, Texas 78711

Dear Mr. Bullock:

You have requested our opinion concerning your authority to transfer funds from theGeneral Fund to the Department of Public Welfare's Commodity Distribution Fund pursuant to section 3of article 5of the 1973Appropriations Act. Acts 1973, 63rd Leg., ch. 659at 2197.

That section provides:

In each instance inwhich an operating fund
or account is created by theprovisions of thisAct, the responsible officials of the State are authorized to transfer into such operating fund or account sufficient moneys from local funds and Federal grants of funds topay proportionally the costs ofmatching State employees retirement contributions, the State's share of OldAge and Survivors Insurance and theproportionate cost of premiums of policies containing Group Life, Health, Hospital, Surgical, and/or Medical Expense Insurance for retired employees and officials.
This language has been contained in each appropriations act since 1969. InAttorney General Opinion M-1173 (1972), this office ruled that section 3 constituted an authorization for the Comptroller to transfer funds to the State Law Library. The opinion states that such a transfer could include:

P. 3958The Honorable Bob Bullock -page 2 (H-947)

thematching funds appropriated from the general revenue fund by theprovisions of section 3ofArticle V

. . . . Id. at 5.

It is not clear whether section 3was construed to constitute
an open-ended appropriation orwhether itmerely authorized
a transfer of general revenue funds for the State's contribution for employees who are paid from theGeneral Fund. Admittedly, the language quoted above would seem consistent with the former construction. However, article 5, section 3 authorizes the transfer of only "local funds and Federal grants." Since Opinion M-1173 discussed neither the definition of "local funds" nor the pertinent general law, itsanalysis is insufficient to answer thepresent inquiry.

The legislation pertaining to thepayment of the State's contributions to theRetirement System, OldAge and Survivor's Insurance (OASI),and insurance for retirees requires that such payments bemade from the "respective funds appropriated

. . .topay the salary

. . .ofthemember forwhose benefit the contribution ismade." V.T.C.S. art. 6228a, 5 8A. See V.T.C.S. art. 695h, S 5, 6(b)(l); Ins. Code art. 3.50-2,F 15(b). TheAppropriations Act of 1973 implemented this legislation bymaking separate appropriations from the respective funds for each of the three contributions. Acts 1973, 63rd Leg., ch. 659, art. IIat 1866; art. III at 1953-54. Inour understanding, these contributions are either drawn by theRetirement System directly from the respective fund fromwhich theparticular salaries are paid or from an operating fund intowhich such funds have been transferred. SeeActs 1973, 63rd Leg., ch. 659, art. IIIat 1919-20, which creates anAttorney General's Operating Fund and transfers moneys thereto from fourteen special funds. Where such anoperating fund isutilized, the salaries paid therefrom
are actually being paid from the fundswhich have constituted the operating fund; the consolidation of such funds is for convenience. Accordingly, the general law and the appropriations act require the subject contributions tobemade from the funds fromwhich the operating fund is constituted. These contributions could be drawn directly from thevarious funds by theRetirement System; however, for administrative convenience the Retirement Systemmay require theproportionate contribution from each fund tobe transferred to theoperating account from which the salaries are finally drawn. V.T.C.S., art. 6228a, 5 6A(b)6; Ins. Code art. 3.50-2, 9 4;V.T.C.S. art. 695h. 5 7.

P. 3959The Honorable Bob Bullock -page 3 (H-947)

Thus theLegislature has created a system bywhich money isappropriated from each fund topay the contributions for employees whose salaries arepaid therefrom. Your question involves the transfer of general revenue funds into a special fund for the purpose of paying such fund's proportionate share of the State's contributions. We note thatmost of the Commodity Distribution Fund consists of moneys appropriated from theGeneral Revenue Fund for financing the State's Food Stamp program. Acts 1973, 63rd Leg., ch. 659, art. II at 1857; see Rider 25, Id. at 1863. As we discussed above, the State'scontributions for employees paid from the appropriation fromGeneral Revenue should be financed therefrom in theproportion that such appropriation isutilized topay the salaries of such employees. Any transfers necessary to this transaction aremade pursuant to the requirements of the Retirement System. We will therefore address the application of other provisions to transfers from General Revenue other than those necessary to the above described transaction.
Article 5, section 3of the 1973Appropriations Act, reproduced inpart above, authorizes the transfer of "local funds and Federal grants" into an operating fund forpayment of the subject contributions. Thus this transfer was authorized thereby only if theGeneral Fund is a local fund or federal grant. We do not believe the Legislature intended it tobe so characterized. Article 4, section 20of the Appropriations Act contains the language "regardless of whether said appropriation items are General Revenue or local funds in character

. . . .' Acts 1973, 63rd Leg., ch. 659, art. IV at 2150. Clearly, adistinction isdrawn between local funds and theGeneral Fund. In addition, article 5, section 31of theAppropriations Act provides in part:

In the event the amounts of Federal funds,

local funds, or funds other than appropriations from theGeneral Revenue Fund, have been estimated in thisAct in sumsgreater than are actually received by the respective agencies of the State, thisAct shall not be construed as appropriating additional funds fromGeneral Revenue tomake up such differences. Acts 1973, 63rd Leg., ch. 659, art.V at 2211.

P. 3960. .

The Honorable Bob Bullock -page 4 (H-947)

Once again, a clear distinction was drawn between federal and local funds and theGeneral Revenue Fund. See also -- "Method ofFinancing" for Department of Public Welfare, Acts 1975, 64th Leg., ch. 743, art. IIat 2491. Accordingly, inour opinion article 5, section 3did not authorize a transfer of General Revenue Funds to the Commodity Distribution Fund, since theGeneral Revenue Fund is not a local or federal fund. Attorney General Opinion M-1173 ishereby overruled to the extent of conflict. Since the Legislature has elsewhere provided for the State's contributions for employees paid from special and general funds, it appears that section 3was intended toprovide for the transfer of funds topay "proportionally" the State's contributions for employees paid from local funds and federal funds, for these contributions were not provided by the specific appropriation for the three contributions.

Our attention has been directed toarticle 695c, section 4(12),V.T.C.S., which provides inpart:

The State Department of Public Welfare is authorized toaccept, expend, and transfer any and all Federal and State funds appropriated for such purposes.

As we decided inAttorney General Opinion H-679 (1975), this provision authorizes the transfer of appropriated funds. However, the Legislature did not appropriate these funds to theDepartment of Public Welfare, and thus article 695c did not authorize their transfer.

SUMMARY
Article 5, section 3of the 1973 Appropriations Act did not authorize the transfer of General Revenue Funds to the Department of Public Welfare's Commodity Distribution Fund. Such a transfer may bemade pursuant to the requirements of the Retirement System where the transferred

P. 3961The Honorable Bob Bullock -page 5 (H-947)

funds are used topay the State's toOASI, retirement and insurance contributions for employees paid from appropriations from General Fund.
Very truly yours,

APPROVED: Attorney General of

Opinion Committee jwb the

Texas

P. 3962