c . . 

. * 

MARK WHITE 

Attorney General 

Supreme Court EuildlnO 

P. 0. BOX 12546 

Austin, TX. 7671% 2546 

5121476-2501 

T&x 9101674.1367 

Telecopier 51214750266 

1607 Main St.. Suite 1406 

Dallas. TX. 75201-4766 

21417428944 

4624 Alberta Ave.. Suite 160 

El Paso. TX. 79905-2793 

915/5x?-3464 

1220 Dallas Ave.. Suite 202 

Houston. TX. 27002.6666 

71316500666 

606 Btoadway. Suite 312 

Lubbock. TX. 73461-3476 

8061747-5238 

4309 N. Tenth. Suite S 

McAlle”, TX. 78501-1665 

5w662.4547 

200 Main. Plaza, Suite 400 

San Antonio, TX. 762052797 

6l2l2254191 

An Equal Oppcxlunftyl 

AffimWive Acifon Employer 

The Attorney General of Texas 

Way 20, 1982 

Mr. Ernie W. Tullis 

Administrator 

Texas Employment Commission 

101 East 15th Street 

Austin, Texas 78778 

opinion NO. MN-474 

Re: Proper method of financing 

unemployment benefits for 

former state employees 

Dear Mr. Tullis: 

You inquire as to the proper method of financing unemployment 

insurance benefits for ex-state employees. You state that the Texas 

Employment Commission believes that funding beyond the original 

legislative appropriations for the Unemployment Compensation Benefit 

Account for former state employees should come from funds collected by 

the comptroller from each state agency in reimbursement of 

unemployment benefits paid to the agency's ex-employees, a system of 

reimbursement contemplated by article V. section 55 of the current 

appropriations act. On the other hand, you state that the comptroller 

has failed to place such reimbursements in the Unemployment 

Compensation Benefit Account and that he insists that any additional 

funding of this account should come from Fund No. 165. a Special 

Administration Fund created by section 26 of the Texas Unemployment 

Compensation Act, codified as article 5221bL22a. V.T.C.S. [hereinafter 

these funds may be referred to as the "Benefit Account" and the 

"Administration Fund" respectively]. The Unemployment Compensation 

Benefit A&count is established by the Texas Unemployment Compensation 

Act and designated by the commission as Fund No. 937. V.T.C.S. art. 

5221b-7. You advise that the situation causing this disagreement 

developed in 1981. 

In order to determine the proper method of additional funding of 

the Unemployment Compensation Benefit Account after' the regular 

legislative benefit appropriation for such account becomes 

insufficient, we must consider various provisions of the Texas 

Unemploytint Compensation Act under which, in 1972, the state elected 

to cover for unemployment~ insurance benefits all services ,performed in 

the employ of the state and to become a reimbursing employer. 

V.T.C.S. art. 5221b-22d. 

The Un&ployment Compensation Fund is administered by the 

commission in payment of benefits as provided in the act, from the 

Unemployment Compensation Benefit Account. Actually, such benefits 

p. 1663 
. 

Mr. Ernie W. Tullls - Page 2 (MW-474) 

are not paid directly from this Benefit Account, but payments are made 

from this account to the Federal Trust Account in Washington, D.C.. in 

reimbursement of the Federal Trust Account of all payments made by it 

as benefits to former Texas state employees. 

Article 5221b-22a establishes a special fund, separate and apart 

from all public moneys or funds of this state as an Unemployment 

Compensation Special Administration Fund. As amended in 1979. it now 

provides that the commission may use this fund to pay costs of 

administering the act. including costs of reimbursing the Benefit 

Account for unemployment compensation benefits paid to former state 

employees which are based on service for the .state. and the costs of 

construction and purchase of buildings and land necessary in such 

administration. Article 5221b-22a; as amended in 1979, further 

provides, among other things. that all interest and penalties 

collected under the provisions of the Texas Unemployment Compensation 

Act and all moneys now on deposit in the Unemployment Compensation 

Special Administration Fund shall be paid into the Unemployment 

Compensation Special Administration Fund established by that article. 

It also provides that the commission may, by resolution duly entered 

in its minutes, charge against said moneys any expenditures which it 

deems proper in the good administration of the act, provided the 

commission in such resolution finds that no other funds are available 

or can properly be used to finance such expenditures. .Apparently; the 

fund designated in this article from which all moneys on deposit 

therein were transferred is a state treasury special fund established 

theretofore under the Unemployment Compensation Act. 

As already stated, the Special Administration Fund is created by 

section 26 of the Texas Unemployment Compensation Act, and denominated 

as Fund No. 165 by the commission. After the amendment of article 

5221b-22a in 1979, the article no longer provided a continuous 

appropriation of .such funds as it did prior to amendment. However. a 

rider in the 1979 General Appropriations Act, provided that: 

la111 _ _ monevs granted to this state by the federal 

eovernment gor the administration of the 

Unemployment Compensation Act or which are now on 

deposit to the credit of any funds maintained by 

the state treasurer for the Texas Employment 

Commission and any moneys received for the credit 

of such funds are hereby appropriated for the 

purposes authorized by the... Texas Unemployment 

Compensation Act and/or for the purposes for which 

such moneys were granted. (Emphasis added). 

Acts 1979. 66th Leg., ch..843, art. III, at 2632. A similarly worded 

rider appears on page 3403, chapter 875 of the General Appropriations 

p. 1664 
. . , 

Mr. Ernie W. Tullis - Page 3 (MW-474) 

Act for fiscal years 1982-1983. Acts 1981, 67th Leg., ch. 875. art. 

I, at 3403. 

Considering the foregoing statutes in conjunction with the 

provisions of the appropriations bills enacted by the Sixty-seventh 

Legislature, it seems clear that reimbursements of the payment of 

unemployment benefits for former state employees is authorized to be 

made from the Special Administration Fund No. 165 from the moneys 

appropriated by the legislature for such purpose by the aforementioned 

appropriations bill riders. Article 5221b-22a expressly provides such 

authority. 

Further, a rider to the 1981 General Appropriations Act provides 

as follows: 

a. At the close of each calendar quarter, the 

Texas Employment Commission shall prepare a 

statement reflecting the amount of unemployment 

benefits paid to all former State employees based 

on wages earned from State employment and present 

it to the Comptrolier of Public Accounts, who is 

hereby directed to pay by warrant out of funds 

appropriated from the General Revenue Fund such 

amount to the Unemployment Compensation Benefit 

Account to reimburse it for such payments. 

The heads of State agencies, institutions, 

departments, commissions, boards, divisions, or 

other units of State government are directed to 

determine the proportionate amount of the 

reimbursement or payment due from funds'other than 

General Revenue Funds and to present the 

Comptroller of Public Accounts a purchase or 

transfer voucher requesting reimbursement from 

such funds to General Revenue, and shall reimburse 

the General Revenue Fund with a check for funds 

not in the State Treasury. Such transfers and 

payments as are authorized under law shall be made 

periodically. The Comptroller of Public Accounts 

-Y prescribe accounting procedures. and 

regulations to implement this section. 

~b. An . agency. institution, department, 

commission, board. division or other unit of State 

government is authorized to allocate funds to a 

revolving account created on'its books to receive 

contributions from funds other than General 

Revenue based on a percentage-of-payroll 

assessment to be determined by such unit of 

P- 1665 
r Mr. Ernie W. Tullis - Page 4 (MW-4741 

government for the purpose of reimbursing the 

General Revenue Fund for unemployment benefits 

paid. 

Acts 1981, 67th Leg., ch. 875. art. V. 955 at 3820-21. See also Acts 

1979. 66th Leg., ch. 843. art. V. 057 at 2922-23. 

A state agency as an employer under the Texas Unemployment 

Compensation Act is liable under article 5221b-5a to the reimbursement 

provisions as is any other reimbursing employer. - Article 

5221b-5b(c)(2) provides that upon notice by the commission of 

delinquency in payment of reimbursements by a governmental employer, 

the comptroller shall pay a sum to the commission in the amount of the 

'delinquency from any funds which would otherwise be due from the state 

to the delinquent governmental employer. You do not advise as to 

whether any such'transfer of funds has occurred. The funds herein 

under consideration are funded periodically by appropriations from the 

state's general revenue and from the Federal Unemployment Trust Fund.~ 

You inform us that the lack of reimbursement of the Benefit Account 

from funds of the various ,participating state agencies results from 

the failure of the legislature to appropriate funds to individual 

agencies for such purpose. Cf. Acts 1981, 67th Leg., ch. 875, art. I, 

at 3403, 3406; Acts 1979. 66thLeg., ch. 843, art. III. at 2632. 2636 

(specific appropriations to T.E.C. for Administration Fund). 

The foregoing legislative actions created a system carefully 

designed to reimburse the expenditures of the Texas Employment 

Commission in paying unemployment benefits to which former state 

employees are entitled. Fund No. 937, the Unemployment Compensation 

Benefit Account, definitely appears to be the primary source from 

which benefit payments are to be made. This fund is designed to be 

replenished by periodically assessed reimbursements from the state 

agencies for ,the benefits received by their former employees. These 

reimbursements are to be collected by the comptroller and paid into 

such Benefit Account, which is under the general control of the Texas 

Employment Commission. 

If this 'statutory system was fully implemented, this Benefit 

Account would seem to be self-sustaining with respect ,td its funds for 

the purpose of paying benefits. In practice, however, .according to 

information submitted in connection with this opinion request. the 

Benefit Account is not self-sustaining, because no funds are 

appropriated to state agencies to use in reimbursing the expenditures 

of the Texas Employment Commission of sums paid into the Trust Fund in 

Washington, D.C., for benefits paid therefrom to their former 

employees. Reimbursements from these agencies would have to come from 

their funds which you state have already been appropriated for other 

state purposes. Consequently, as we are informed, the T.E.C. Benefit 

~Account has been operating with a deficit the last few years due to 

p. 1666 
. . 

. . Mr. Ernie W. Tullis - Page 5 (MW-474) 

the lack of reimbursement from these agencies. This deficit appears 

to have been partially remedied during this time by periodic 

legislative appropriations to the Benefit Account from the state's 

general revenue and funds transferred from the supplementary fund, 

Special Administration Fund No. 165. 

This Administration Fund is funded by interest and penalties 

collected from the employers for infractions of the Unemployment 

Compensation Act, article 5221b-1, et seq., V.T.C.S.. federal money 

grants and state general revenue appropriated by the legislature for 

payment of administrative expenses of the unemployment benefit 

program, ,including p yment of the benefits theniseives whenever 

*eC=.5Sary. See V.T.C.;. art. 5221b-22a. This supplementary function 

of the Administration Fund is further substantiated by the specific 

transfer appropriations by the legislature from this Administrative 

Fund to the Benefit Fund, General Appropriations Act, Acts 1981, 

Sixty-seventh Legislature, chapter 875, article I, at 3402, together 

with the generally worded appropriation of the balance of the 

Administration Fund for the purposes authorized by the Texas 

Unemployment Compensation Act. id. at 3403. and. more specifically, by 

the additional provision in article 5221b-22a that any expenditures 

from this Administrative Fund which the commission deems proper may be 

made upon a finding that no other funds.are available or can properly 

be used to finance .such expenditures. Under the prevailing 

circumstances concerning the status of the Benefit Account, there is 

nothing in the statutes to prevent the commission from resolving that 

the only funds now available to finance such benefit payments are 

those contained in the Administrative Fund. We caution, however, that 

any federal funds placed in Fund No. 165 may be used for the purposes 

authorized by article 5221b-22a. V.T.C.S.. only where the terms of the 

grant permit their use for those purposes. - Cf. 42 U.S.C.A. 

§1103(c)(l), (2) (certain federal funds transferred to state for 

payment of benefits may be used for administrative expenses only where 

appropriation specifies amount for administrative expense). 

We conclude, therefore, that benefits to former state employees 

may properly be financed from either or both of such funds during the 

fiscal lives of the .1980-1981 Appropriations Bill and the current 

1982-1983 Appropriations Bill, although the funds of the 

Administration Fund should be used to reimburse or supplement the 

Benefit Account only when the funds in that account are found by the 

commission to be insufficient for such purposes. In no instance is 

any state official involved authorized to draw, issue or honor for 

payment a warrant on any appropriation in the state treasury for any 

amount in excess of the amount then contained in such appropriated 

funds. Tex. Const. art..VIII, 56. 

p. 1667 
, - Mr. Ernie W. Tullis - Page 6 (MW-474) 

S U M M A R-Y 

Payments of unemployment benefits to former 

state employees entitled thereto are to be 

financed primarily from the Unemployment 

Compensation Benefit Account, designated as Fund 

NO. 937. When such fund is exhausted or 

insufficient, it may be replenished for such 

purpose secondarily from the Special 

Administrative Fund, designated as Fund No. 165. 

In such cases. both funds are.properly considered 

as being subject to the financing of benefit 

payments. No funds may be withdrawn from the 

state treasury in excess of the amount therein 

appropriated for the purposes for which the 

warrant is drawn. 

kwn?w%&l 

MARK WHITE 

Attorney General of Texas 

JOHN W. FAINTER. JR. 

First Assistant Attorney General 

RICHARD-E. GRAY III 

Executive Assistant Attorney General 

Prepared by Robert L. Lattimore 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Susan L. Garrison, Chairman 

Jon Bible 

Rick Gilpin 

Patricia Einojosa 

Robert L. Lattimore 

Jim Moellinger 

p. 1668