TEE ATTORNEY GENERAL 

OF TEXAS 

Mr. William D. Taylor Opinion No. JM-1196 

Interim Executive Director 

Department of Commerce Re: Whether interest earned on 

P. 0. BOX 12728 monies in the Texas Exporters 

Capitol Station Loan Fund may be used to adminAustin, Texas 78711 minister the Texas Exporters 

Loan Program (RQ-1786) 

Dear Mr. Taylor: 

You ask about the proper construction of House Bill 

369, which created the Texas Exporters Loan Fund.1 Specifically, you ask whether interest earned by the deposit of 

money in the fund created by that bill may be "used" to 

administer the program authorized by that bill. The bill 

r- provides that the costs of administering the program must be 

paid by interest earned by the deposit~of money in the fund 

and by fees collected in connection with the program. 

However, a rider to the appropriations act provides that 

administration of the program shall be financed from fees 

generated from the program. The rider omits any reference 

1. Senate Bill 223, which was a general "clean up" 

bill, made necessary corrections to Title 4 of the 

Government Code, conformed Title 4 of the Government Code to 

certain acts of the 70th Legislature, and also codified in a 

nonsubstantive way various statutes in that title. Acts 

1989, 71st Leg., ch. 4, at 200. Article 3 of the bill added 

Subtitle F to the Government Code, which deals with commerce 

and industrial development. Chapter 481 of Subtitle F 

codified various statutes governing the Texas Department of 

Commerce. In addition to Senate Bill 223, the 71s.t Legislature enacted fifteen other bills that either amended or 

added sections to chapter 481, including Rouse Bill 369, 

which added section 481.059. Section 481.059 of the Government Code was not amended by any of the other bills enacted 

by the 71st Legislature. 

p. 6312 
Mr. William D. Taylor - Page 2 (JM-1196) 

to interest generated by the deposit of the money in the 

fund. 

House Bill 369 added section 481.059 to the Government 

Code, which creates the Texas Exporters Loan Fund and 

authorizes the Texas Department of Commerce to use that fund 

to guarantee loans made by private lenders to certain 

businesses under certain conditions. Acts 1989, 71st Leg., 

ch. 818, 5 1, at 3751. Section 481.059 provides in 

pertinent part: 

(a) The Texas exporters loan fund is a 

fund in' the state treasury. The 

consists of. appropriations or transfers made 

to the fund, guarantee fees, other money 

received from operation of the program 

established by this section, and interest 

paid on monev in the fund. Money in the fund 

may be used only to carry out the purposes of 

this section. If any appropriations are made 

to the department from the general revenue 

fund to carry out this section for a fiscal 

year, at the end of that fiscal year .the 

unexpended balance of those appropriations 

shall be transferred to the Texas exporters 

loan fund. 

. . . . 

(g) The department shall administer the 

program established by this section in the 

same manner as its other programs under this 

chapter, except as provided otherwise by this 

section. ecostsnadmlnisterino e thg 

WO ; a on 

monev in the fund and bv fees collected in 

connection with the nroaram. (Emphasis 

added.) 

A rider to the appropriations act passed during the 

same legislative .session limits the funding source for 

paying the costs of administration of the program only to 

those fees generated by the program. Rider 37 provides the 

following: 

TEXAS EXPORTERS LOAN FUND. Contingent upon 

the final.passage of Senate Bill 165, Seventy-first Legislature, or similar legislation 

p. 6313 
Mr. William D. Taylor - Page 3 (JM-1196) 

relating to the Texas Exporters Loan Fund, 

there is hereby appropriated in fiscal year 

1990 to the Texas Department of Commerce 

$2,000,000 out of the General Revenue Fund to 

establish the Texas Exporters Loan Fund. 

financed from fees aenerated from the Texas 

wo*ers man ~uru3 . 2 

Acts 1989, 71st Leg., ch. 1263, art. I, at 5169. (Emphasis 

added.) 

You suggest that there is an irreconcilable conflict 

between the bill and the rider and that the bill controls. 

In your letter requesting an opinion from this office, YOU 

state: 

2. The bill to which the rider refers, Senate Bill 

165, differed from the bill finally enacted by the 

legislature, House Bill 369, in one important respect that 

relevant. to your inquiry. Subsection (g) of the 

%mittee substitute for Senate Bill 165, which governed the 

administration of the program, provided: "The department 

shall administer the program established by this section in 

the same manner as its other programs under this article, 

except as provided otherwise by this section." Senate Bill 

165 omitted any reference to using the fees collected in 

connection with the program (or, for that matter, any 

reference to using interest earned from the deposit of the 

money in the fund). Senate Bill 165 was not enacted by the 

legislature: its house counterpart, House Bill 369, was. 

Rider 37, which was made effective expressly upon the 

passage of S.B. 165 or a comparable bill, apparently was 

drafted to reflect the language set forth in S.B. 165, not 

the language contained in H.B. 369. Thus, the bill 

ultimately enacted by the legislature creating the fund 

required that interest earned by the deposit of the money in 

the fund comprise one of the two funding sources that the 

legislature could appropriate to pay for the costs of 

administering the loan program. Rider 37 further limited 

for the duration of this biennium the funding source from 

which the program's administrative costs could come, i.e. 

only to the fees generated by the program. 

p. 6314 
Mr. William D. Taylor - Page 4 (JM-1196) 

The statute, Section 481.059, clearly 

provides that such interest may be used for 

administration and that the interest is part 

of the Texas Exporters Loan Fund. The Fund, 

including the interest, is appropriated to 

Commerce in SB 222 [the appropriations act]. 

As was the case in mlock Calvert 480 

S.W.Zd 367 (Tex. 1972), thereVis elsewh6re in 

the statutes authority to use the interest in 

the Fund for administration.3 [Section 

481.059(g) of the Government Code.] Althouah 

1 he e t 

snecificallv mentioned in SB 222, both 

leaislative intent and the a n ral orincinle 

under Article III. Sec. 3: eof the Texas 

Constitution that aeneral leaislation 

controls over conflictina 1 ouaae in an 

annrooriations act, indicate tE:t Commerce is 

authorized to use the interest for 

dministration of the Texas Exnorters Lo 

&nd or ara 

V-1254 ;195:; 

[TEX. ATT'Y GEN. OP. NO;: 

; M-1041 (1972); TEX. ATT'Y GEN. 

LA NO. 72 (1973).] (Emphasis added.) 

We are unclear whether, by asking whether the 

commission may "usen the interest that accrues from the 

deposit of the money, you are asking whether the bill 

supersedes the rider and thereby author- the legislature 

to appropriate interest earned by the deposit of the money 

in the fund for the purposes of administering the program, 

or whether you are asking whether the legislature actuallv 

has appropriated such interest. For purposes of this 

opinion, we assume that you are asking whether the 

legislature has appropriated the interest earned, regardless 

of whether that appropriation has been effected by the 

general law or the appropriations bill. We conclude that 

section 481.059 of the Government Code acts as a limitation 

on the sources from which the legislature may appropriate 

We note that in Bullock 

(Tex. 31972) 

v. a rt. 480 S.W.2d 367 

the Texas Supreme Court expre&ly declined to 

grant the keguested petition of mandamus to compel the 

comptroller to pay out of state funds the expense of a party 

primary election because there was ~g statute empowering the 

secretary of state to so expend state money. 

P. 6315 
Mr. William D. Taylor - Page 5 (JM-1196) 

moneys for administration. The requirement that administrative costs "must be paid '1 from certain sources means that no 

other source of funding may be used for administrative 

costs. We conclude that 'the legislature has not appropriated accrued interest generated by the deposit of money 

in the fund: therefore, we answer your question in the 

negative. 

Section 6 of article VIII of the Texas Constitution 

governs the withdrawal of money from the state treasury and 

provides in pertinent part: 

No money shall be drawn from the Treasury 

but in pursuance of specific appropriations 

made by law; nor shall any appropriation of 

money be made for a longer term than two 

years. 

Section 6 has been construed consistently to require an 

appropriation by the legislature before any money can be 

paid out of the state treasury. &iahtfoot v. Lane, 140 S.W. 

89 (Tex. 1911); Pickle v. Finley, 44 S.W. 480 (Tex. 1898). 

An ap ropriation 

g 

may be effected either by the constitution, by statute,5 or by a general appropriation bill.6 

S e. a 

(estabtishitg vzte&s# 

Tex. Const. art. III, 5 49-b 

land fund and appropriating all 

moneys in the fund for purchase of land to sell to 

veterans.) 

5. See, e-a., Acts 1959, 56th Leg., ch. 150, § 4, at 

260 (amending V.T.C.S. art. 695c, 5 27). In an earlier 

opinion, this office declared: 

This does not mean that general legislation may not 

contain an appropriation which is merely incidental to 

and necessary to carry out the subject and purpose of 

the general law. [Citation omitted.] Neither does it 

mean that a general appropriation bill may not contain 

general provisions and details limiting and 

restricting the use of the funds therein appropriated, 

if such provisions are necessarily connected with and 

incidental to the appropriation and use of the funds 

and if they do not conflict with or amount to general 

(Footnote Continued) 

p. 6316 
Mr. William D. Taylor - Page 6 (JM-1196) 

See aenerally Susman, Fiscal and Constitutional Limitations, 

44 Tex. L. Rev. 106 (1965). Regarding whether certain 

language is sufficient to effect an appropriation, the Texas 

Supreme Court long ago declared: 

It is clear that an appropriation need not 

be made in the general appropriation bill. 

It is also true that no specific words are 

necessary in order to make an appropriation; 

and it may be conceded, as contended, that an 

.appropriation may be made by implication when 

the language employed leads to the belief 

that such was the intent of the Legislature. 

Pickle v. Finley, sunra, at 480-81. In what is probably the 

leading case in this area, National Biscuit Co. v. State, 

135 S.W.2d 687 (Tex. 1940), the Texas Supreme Court 

declared: 

As just stated, one of the provisions of 

Sec. 6 of article 8 of our Constitution 

requires all appropriations of money out of 

the State Treasury to be specific. It is 

settled that no particular form of words is 

(Footnote Continued) 

legislation. [Citations omitted.] 

Attorney General Opinion V-1254 (1951). 

6. In an earlier opinion, this office declared: 

If a bill does more than set aside a sum of money, 

provide the means of its distribution, and to whom it 

shall be distributed, then it is a general law. 

[Citations omitted.] The distinction between a 

general appropriation bill and general legislation has 

been recognized in this State in the simple fact that 

the former merely sets apart sums of money for 

specific objectives and uses while the latter does 

more than merely appropriate and limit the use of 

funds. General legislation constitutes a separate 

subject and cannot be included within a general 

appropriations bill. [Citations omitted.] 

Attorney General Opinion M-1199 (1972). 

p: 6317 
Mr. William D. Taylor - Page 7 (JM-1196) 

C 

,- 

required to render an appropriation specific 

within the meaning of the constitutional 

provision under discussion. It is sufficient 

if the Legislature.authorizes the expenditure 

by law, and specifies the purpose for which 

the appropriation is made. An appropriation 

can be made for all funds coming from certain 

sources and deposited in a special fund for a 

designated purpose. In such instances, it is 

not necessary for the appropriating Act to 

name a certain sum or even a certain maximum 

SUlU. 

Id. at 693. 

The issue is whether the language set forth in either 

the statute or rider effect an appropriation of earned 

interest consistent with the requirements of section 6 of 

article VIII of the Texas Constitution. The language of 

neither the statute nor the appropriations act rider explicitly effects such an appropriation: the issue is whether 

such language effects an appropriation by implication. 

Based upon our examination of prior authority, we conclude 

that neither the language of section 481.059 of the 

Government Code nor the language of Rider 37 effects an 

appropriation of earned interest. 

Appropriations by implication have been found under 

certain circumstances. In Atkins v. State Hwv . DeD't, 201 

S.W. 226 (Tex. Civ. App. 1917, no writ), the court held that 

the following language did effect an appropriation by 

implication: 

All funds coming into the hands of the 

Highway Commission, derived from the 

registration fees hereinbefore provided for, 

or from other sources, as collected, shall be 

deposited with the State Treasurer to the 

credit of a special fund designated as 'The 

State Highway Fund,' and shall be naid only 

on warrants issued bv the State ComntroU 

unon vouchers drawn bv the Chairman of t:e 

Commission, such vouchers to be accompanied 

by itemized sworn statements of the expendiures, except when such vouchers are for the 

regular salaries of the employees of the 

Commission. The said State Highway Fund 

shall be expended by the State Highway 

p. 6318 
Mr. William D. Taylor - Page 8 (JM-1196) 

Commission for the furtherance of public road 

construction and the establishment of a 

system of State highways, as contemplated and 

set forth in this Act. (Emphasis added.) 

Acts 1917, 25th Leg., ch. 190, at 424. The court concluded 

that the language set forth above indicated the legislature's intent that the fees involved be appropriated. 

Because the general laws at issue contained language very 

similar to that underscored above, several attorney general 

opinions held that those statutes involved also effected 

apprOpriatiOnS. See also Attorney General Opinions c-297 

(1964); V-923, V-895, V-887 (1949). 

On the other hand, several attorney general opinions 

held that language contained in various general laws or 

appropriation act provisions did 

tion. 

not effect any appropriaFor example, in Attorney General Opinion V-412 

(1947), this office was asked, inter alia, whether an 

amendment passed in 1947 to then V.T.C.S. article 6053, 

which conferred broad regulatory authority on the Railroad 

Commission governing butane and liguified petroleum gases, 

effected an appropriation of 

connection with the act. 

license fees collected in. 

The amendment provided: 

All fees received by the state from 

licenses issued under this Act shall be made 

available to the Railroad Commission for use 

in paying the legitimate expenses incurred in 

administering and enforcing the provisions of 

this Act, and for no other purpose: provided, 

however, that any excess funds remaining at 

the end of each two-year period shall go to 

the General Fund. 

Acts 1945, 49th Leg., ch. 358, at 634. The appropriations 

act passed in 1947 contained a rider that provided that all 

fees received by the commission under article 6053 shall be 

paid into the General Revenue Fund. This office concluded 

that the language set forth above did not have the effect of 

appropriating the license fees collected. 

In Attorney General Opinion V-923 (1949), this office 

was asked to construe the following two paragraphs: 

All such fees as are collected under this 

Act shall be deposited in the State Treasury 

in a special fund under the title of the 

p. 6319 
Mr. William D. Taylor - Page 9 (JM-1196) 

Texas Vegetable Certification fund. The 

purpose of the fees being to pay for the 

enforcement of the law and to provide 

inspections called' for: it further being the 

purpose to make the law self-supporting. 

Out of the fees collected under this Act, 

the Chief of the Warkets and Wardhouse 

Division of the Department of Agriculture 

shall be paid in addition to the amount of 

his salary in the general appropriation bill 

in the sum of Pour Hundred and Eighty Dollars 

($480) per annum: which amount is hereby 

appropriated for said purpose. 

Acts 1949, 51st Leg., ch. 581, at 1130. The opinion held 

that the second paragraph makes 'a definite and specific 

appropriation, but that the first paragraph, because it 

failed to contain the words l'which amount is. hereby 

appropriated for said purposesn that is set forth in the 

second paragraph, did not effect an appropriation. See also 

Attorney General Opinion V-1422 (1952).7 

.- 

We think that the language set forth in section 481.059 

of the Government Code and in Rider 37 is comparable to the 

language of the statutes discussed in Attorney General 

Opinions V-412 and V-923. Therefore, we conclude that no 

appropriation of earned interest is effected by either the 

general law or the rider. The bill merely authorizes the 

legislature to appropriate money from two sources; the rider 

This office declared in Attorney General Opinion 

v-14227 i1952) : 

The fact that an assessment is made and collected and 

the fund is earmarked by general statute for a certain 

use does not make it available unless it is also 

appropriated by the Legislature for that use. 

Furthermore, even though a general statute specifies 

payment of a certain amount, the amount actually paid 

is determined by the amount appropriated by the Legislature. 

L at 3 (citations omitted). 

p. 6320 
Mr. William D. Taylor - Page 10 (JM-1196) 

4 

merely limits the source to one and, in effect, carves out a 

subset from the bill for the duration of this biennium. 

Riders to an appropriations act frequently serve this 

sort of function: a rider may prohibit a state agency from 

using appropriated money for activities that the agency is 

otherwise authorized to conduct. Se . e.a 

General Opinions JW-860 (1988): U-499 (19z9). 

Attorney 

F&r example, 

state agencies have statutory authority to purchase 

insurance policies protecting against claims arising under 

the Tort Claims Act. Civ. Prac. & Rem. Code § 101.027. 

However, the general appropriations act for the current 

fiscal year prohibits any appropriated money from being 

expended for such purpose: 

None of the funds appropriated in this Act 

may be expended fo'r the purpose of purchasi'ng 

policies of insurance covering claims arising 

under the Texas Tort Claims Act. 

Acts 1989, 71st Leg., ch. 1263, art. V, 5 55, at 5797; see 

Attorney General Opinion JW-625 (1987). We conclude that 

section 481.059 does serve to limit the sources from which 

the administration of the loan program may be funded, but it 

does not effect an appropriation of those moneys. 

SUMMARY 

The interest earned by the deposit of 

money in the Texas Exporters Loan Fund has 

not been appropriated during the current biennium to pay for the costs of administering 

the loan program. 

Very truly you , LJ _ 

A',, Ed& 

JIM MATTOX 

Attorney General of Texas 

WARYRRLLRR 

First Assistant Attorney General 

LOU MCCREARY 

Executive Assistant Attorney General 

p. 6321 
Mr. William D. Taylor - Page 11 (JM-1196) 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney,General 

RKNEA HICKS 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Jim Moellinger 

Assistant Attorney General 

p. 6322