### 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 Fundmay be used to adminAustin, Texas 78711 minister the Texas Exporters Loan Program (RQ-1786)

DearMr. Taylor:

You ask about the proper construction ofHouse Bill 369,which created the Texas Exporters Loan Fund.1 Specifically, you ask whether interest earned by thedeposit of money inthe fund created by that bill may be "used" to administer theprogram authorized by that bill. The bill r- provides that the costs ofadministering the program must be

paid by interest earned by thedeposit~of money inthe fund andby fees collected in connection with the program. However, a rider to the appropriations actprovides that administration of the program shall be financed from fees generated fromthe 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 4of theGovernment Code to certain acts of the 70th Legislature, and also codified ina nonsubstantive way various statutes inthat title. Acts 1989, 71st Leg., ch. 4,at 200. Article 3of the bill added Subtitle Fto the Government Code, which deals with commerce and industrial development. Chapter 481 of Subtitle F codified various statutes governing the Texas Department of Commerce. Inaddition 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 Codewas not amended by any of the other bills enacted by the 71st Legislature.

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to interest generated by the deposit of the money in the fund.

House Bill 369added section 481.059 to the Government Code, which creates the Texas Exporters Loan Fund and authorizes the Texas Department of Commerce touse 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 onmonev inthe fund. Money inthe fund may beused only to carry out thepurposes of this section. Ifany appropriations aremade 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
samemanner as itsother programs under this chapter, except asprovided otherwise by this section. ecostsnadmlnisterino thg

e WO ; a on monev inthe fundandbv 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 ofadministration of the program only to those fees generated by theprogram. Rider 37provides the following:

TEXAS EXPORTERS LOAN FUND. Contingent upon the final.passage 

### ofSenate 

### Bill 165, Seventy-first Legislature, or similar legislation

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relating to the Texas Exporters Loan Fund, there ishereby 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 fromthe Texas wo*ers man ~uru32 .
Acts 1989, 71st Leg., ch. 1263, art. I,at 5169. (Emphasis added.)

You suggest that there is an irreconcilable conflict between thebill and the rider and that thebill controls. Inyour letter requesting an opinion from this office, YOU state:

2. Thebill to which the rider refers, Senate Bill 165, differed from the bill finally enacted by the legislature, House Bill 369, inone important respect that relevant. to your inquiry. Subsection (g) of the %mittee substitute for Senate Bill 165,which governed the administration of theprogram, provided: "The department shall administer theprogram established by this section in the samemanner as itsother programs under this article, except asprovided otherwise by this section." Senate Bill 165omitted any reference to using the fees collected in connection with the program (or, for that matter, any reference tousing interest earned from the deposit of the money inthe fund). Senate Bill 165was not enacted by the legislature: itshouse counterpart, House Bill 369,was.
Rider 37,which was made effective expressly upon the passage of S.B. 165 or acomparable bill, apparently was drafted to reflect the language set forth inS.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 themoney 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 theprogram's administrative costs could come, i.e. only to the feesgenerated by theprogram.

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The statute, Section 481.059, clearly provides that such interest may beused for administration and that the interest is part of the Texas Exporters Loan Fund. The Fund, including the interest, is appropriated to Commerce inSB 222 [theappropriations act]. Aswas the case inmlock Calvert 480 S.W.Zd 367 (Tex. 1972), thereVis elsewh6re in the statutes authority touse the interest in the Fund for administration.3 [Section 481.059(g) of the Government Code.] Althouah 1he e t snecificallv mentioned in SB 222, both leaislative intent and the an 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. LANO. 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 inthe fund forthe purposes of administering the program, orwhether 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 ofwhether that appropriation has been effected by the general lawor the appropriations bill. We conclude that section 481.059 of the Government Code acts as a limitation
on the sources fromwhich the legislature may appropriate

We note that inBullock (Tex.31972) v. a rt. 480 S.W.2d 367

the Texas Supreme Court expre&ly declined to grant the keguested petition ofmandamus to compel the comptroller to pay out of state funds the expense of aparty primary election because there was ~g statute empowering the secretary of state to so expend statemoney.

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moneys for administration. The requirement that administrative costs "must be paid'1fromcertain 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 inthe fund: therefore, we answer your question in the negative.

Section 6 of article VIII of the Texas Constitution governs thewithdrawal ofmoney fromthe state treasury and provides inpertinent part:

Nomoney shall bedrawn from the Treasury but inpursuance of specific appropriations made by law; nor shall any appropriation of money be made for a longer term than two years.
Section 6has 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 notmean that general legislation may not contain an appropriation which ismerely incidental to and necessary to carry out the subject andpurpose of the general law. [Citation omitted.] Neither does it
mean that ageneral appropriation billmay not contain general provisions and details limiting and restricting theuse of the funds therein appropriated, if such provisions arenecessarily connected with and incidental to the appropriation anduse of the funds and ifthey do not conflict with or amount to general (Footnote Continued)

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See aenerally Susman, Fiscal and Constitutional Limitations, 44Tex. L. Rev. 106 (1965). Regarding whether certain language is sufficient to effect an appropriation, the Texas Supreme Court long agodeclared:

It is clear that an appropriation need not bemade inthe general appropriation bill. It isalso true that no specific words are necessary inorder tomake an appropriation; and itmay be conceded, as contended, that an .appropriationmay bemade by implication when the language employed leads to the belief that suchwas the intent of the Legislature.

Pickle v. Finley, sunra, at 480-81. Inwhat isprobably 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 theprovisions of

Sec. 6 of article 8 of our Constitution requires all appropriations ofmoney out of the State Treasury to be specific. It is settled that noparticular form ofwords is

(Footnote Continued) legislation. [Citations omitted.]

Attorney General Opinion V-1254 (1951).

6. Inan earlier opinion, this office declared:

Ifabill doesmore than set aside a sum of money, provide themeans of itsdistribution, and towhom 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 inthis State inthe simple fact that the former merely sets apart sums of money for specific objectives anduses 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).

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C

,- required to render an appropriation specific within the meaning of the constitutional provision under discussion. It is sufficient ifthe Legislature.authorizes the expenditure by law, and specifies thepurpose for which the appropriation ismade. An appropriation
can bemade forall funds coming from certain
sources anddeposited ina special fund for a designated purpose. In such instances, it is not necessary forthe appropriating Act to name acertain sumoreven a certain maximum SUlU.

Id. at 693.

The issue iswhether 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 ofprior authority, we conclude that neither the language of section 481.059 of the Government Code nor the language of Rider 37 effects an appropriation ofearned interest.
Appropriations by implication have been found under certain circumstances. InAtkins v. State Hwv DeD't, . 201 S.W. 226 (Tex.Civ.App. 1917,nowrit), the court held that the following language did effect an appropriation by implication:

All funds coming into thehands of the Highway Commission, derived from the registration feeshereinbefore provided for,
or from other sources, as collected, shall be deposited with the State Treasurer to the credit ofa special funddesignated as 'The State Highway Fund,' and shallbe naid only
onwarrants issued bv the State ComntroU unon vouchers drawn bv the Chairman of t:e Commission, suchvouchers to be accompanied by itemized sworn statements of the expendiures, exceptwhen 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

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Commission forthe furtherance ofpublic road construction and the establishment of a system of State highways, as contemplated and set forth inthisAct. (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 actprovisions 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 thenV.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 thisAct shall be made available to the Railroad Commission for use inpaying the legitimate expenses incurred in administering and enforcing theprovisions of this Act, and fornoother 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 actpassed in 1947 contained arider 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 nothave the effect of appropriating the license fees collected.

InAttorney General Opinion V-923 (1949), this office
was asked to construe the following twoparagraphs:

All such fees asare collected under this Act shall bedeposited inthe State Treasury ina special fund under the title of the

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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 tomake 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 shallbe paid inaddition to the amount of his salary inthe general appropriation bill inthe sumof PourHundred and Eighty **Dollars** ($480)per annum: which amount is hereby appropriated for saidpurpose.

Acts 1949, 51st Leg., ch. 581, at 1130. The opinion held that the second paragraph makes 'adefinite 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 inRider 37 iscomparable to the language of the statutes discussed in Attorney General Opinions V-412 and V-923. Therefore, we conclude that no appropriation ofearned interest iseffected by either the general lawor the rider. The billmerely authorizes the legislature to appropriate money from two sources; the rider

This office declared inAttorney General Opinion v-14227i1952):
The fact that anassessment ismade and collected and the fund isearmarked by general statute fora certain
use does not make it available unless it is also appropriated by the Legislature for that use. Furthermore, even though ageneral statute specifies payment of acertain amount, the amount actually paid isdetermined by the amount appropriated by the Legislature.

L at 3 (citations omitted).

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4

merely limits the source to one and, ineffect, carves out a subset from the bill forthe duration of this biennium.

Riders to an appropriations act frequently serve this sort 

### of function: arider 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 

### ClaimsAct. Civ. Prac. &Rem. Code § 101.027. However, the general appropriations act for the current fiscalyear prohibits any appropriated money from being expended for such purpose:

None of the funds appropriated inthis Act may be expended fo'rthepurpose ofpurchasi'ng policies of insurance covering claims arising under the Texas Tort Claims Act.

Acts 1989, 71st Leg., ch. 1263, art.V, 555, 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 loanprogram may be funded, but it does not effect anappropriation of thosemoneys.

SUMMARY

The interest earned by the deposit of money inthe Texas Exporters Loan Fund has notbeen appropriated during the current biennium topay forthe costs of administering the loanprogram.
Very truly you , 

# LJEd&

A',,

_JIM MATTOX Attorney General ofTexas

WARYRRLLRR FirstAssistant Attorney General

LOUMCCREARY Executive Assistant Attorney General

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JUDGE ZOLLIE STEAKLEY Special Assistant Attorney,General

RKNEA HICKS Special Assistant Attorney General

RICK GILPIN Chairman, Opinion Committee
Prepared by JimMoellinger Assistant Attorney General

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