JIM MATTOX Attorney General

Supreme Court Building P. 0. BOX 1254s Austin, TX. 78711. 2548 51214752501 Telex 9101874.1387 Telecopier 5121475.0266

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An Equal OpportunityI Affirmative Action EmPlOw 

# The Attorney General of Texas

December18, 1985

Mr. VernonM. Arrell Commissioner Texas Rehabilitation Co~issiou 118 East Riverside ‘Drive Austin.Texas 78704

Dear Mr. Arrell: OpinionNo. m-391

Re: Disposition

of income from Rehabilitation

Commission

vending machinesand pay telephones

You have asked whether the Board of the Texas Rehabilitation Commission,acting as the board of trustees of au "Employee Fund" establishedfor the benefit of commissionemployees, may direct that income from vendingmachinesand pay telephones be used to buy flowers either for hospitalized employees

or for the funeralsof employees and their family mmhrs, or be used for other purposes benefiting commission employc!es generally. You also ask whether these monies must be deposited in the state treasurypursuant to the State Funds Reform Act of 1981,now chapter4 of the TreasuryAct, article4393-1, V.T.C.S. See Acts 1985, 69th Leg., ch. 240, at 2078, 2103.

-
In order to answer your questions,it is unnecessaryto discuss at length by what:authority vending machines, pay telephones, and other coin-operated devicesmay be installedin buildingsoccupied by state agencies,

because the commissions therefrom

may not be placed in
an "Employee Fund" such as you describe in any event; they must be depositedin the state treasury unless they are paid to a vocationally handicapped

vendor/operator.

If a "vending facility," as definedby section 94.001(2), of the Human Resources Code, has been established in a state-controlled buildingby either the Commissionfor the Blind or the Rehabilitation Commission

pursuant to sections94.002, 94.003 and 94.007 [see, e.&, V.T.C.S. art. 8801 (coin-operated service,music, skill and pleasure machines)],

the voszationally

handicapped

person operatingthe facility is entitled to %e commissions from competing vending machines installed

in the bu:tlding;

but if the Commission for the Blind and the Rehabilitation

Comn:Lssion

have decided not to locate such a "vending facility," in a 'wilding, the agency issued a general permit to arrange for vending facilitiesis to determinethe "assignment of the commissionsfrom lending machines installed in the building." Hum. Res. Code §94.OlO(c).

p. 1790Mr. Vernon M. Arrell - Page 2 (34-391)

Even if the Rehabilii:ation Commission could be considered an agency "granted a general permit" to arrange for vending facilities and determine the assignment of commissions from vending machines installedin its buildingpursuant to section94.010 [a question we do not address],we do not believe it could validly "assign" them to a fund operated for the private benefit of Rehabilitation C=ission employees. While machine ccmrmissions may be assigned to handicapped vendors as part of the consideration for their agreement to operate vending facilities on the premises

, money paid to a state agencyby a vending company or other firm as consideration for the placement of its machines on state property is money belonging to the state. It may not be used for privatepurposes. Texas Const. art. III, $51. In
answer to your first question,we do not believe the use of public funds to purchase flowers~1s: expressions

of condolence

could normally be considered

a use for publicpurposes. Cf. AttorneyGeneralOpinion MW-36 (1979) (countyprohib,ited from expendingpublic funds for the purchaseand mailing of Chri~stmas cards).

Your second question involves chapter 4 of article 4393-1, V.T.C.S.,the Treasury Act, which embodiesthe State Funds ReformAct. It requires that "fees, fines, penalties, taxes, charges, gifts, grants, donations,and other funds collectedor receivedby a state g cy under law" shall be ;ieposited in the treasury,and creditedto a en the generalrevenue fund "unless the money is expressly requiredto be deposited in another fund, trust fund or special account not in the General Revenue Fund." 1r.T.C.S. art. 4393-1, 14.004. (Emphasis added).

No law requires that the money collectedby the Rehabilitation Commission as commissions from vending. machines installed in its building be deposited in another fund, trust fund, or special fund, and it must be deposited in the general revenue fund of the state unless it is paid to a handicappedoperatorpursuant to chapter 94 of the Human ResourcesCode, or fallswithin one of the statutoryexemptions set out in section 4.003. You suggest the commissions from vending machines located ix the building occupiedby the Rehabilitation Cosusission

might be exemptedas "trust funds."

Subsection (b)(2) of section 4.003 of article 4393-l specifies that the chapterdoes not c:pply to "funds held in trust or escrow for the benefit of a person c'rentity other than a state agency." We think this provisionwould apply to the commissionscollected from vending machines located i.nthe building housing the Rehabilitation Commission if they were being collected for the account of a handicapped

vendor/operator,

but not when they are collectedfor the benefit of a Rehabilitation Commissionemployees fund. Cf. Attorney General Opinion MW-590 (1982) (physicians' fees at certain state hospitals not exempt from deposit in state treasury). Commissions collected for the benefit of handicapped vendors are earmarkedfunds

p. 1791Mr. VernonM. Arrell - Page: 3 (JM-391)

to which the vendors are already entitledas consideration for their services,and are not collectedfor the benefit of the state agency. In other cases,machine comaissions will be collectedfor the benefit of a state agency,which controlstheir disposition. Hum. Res. Code 594.010. But see Hum. Res. Code 194.015(b).

Our attention

has bee3 drawn to AttorneyGeneralOpinionsMW-363 (1981) and E-610 (1975), which involved a fund for the Windham Independent School District, a nongeographical school district operated

by the Texas Department of Corrections

for the benefit of its inmates, and similar Educ;itional and RecreationalFunds. The funds consisted of receipts frcm.the operation of commissaries,prisonsponsored recreationalshows and entertainment, and all gifts and other income for inmate welfare. Attorney General Opinion H-610 concludedthat the funds f.eld were trust funds, and Attorney General Opinion MW-363 concluded zhat they were "held in trust" within the meaning of the State Funds ReformAct.

It is unnecessary

hers to review or affirm all that was said in those opinions. It is sufficient to note that expenditures of money to advance the welfare of :.nmates by a state agency chargedwith their
care is not an expenditure for private purposes; such expenditures
serve a proper public purpose. Attorney General Opinions H-610 and MW-363 do not hold that public fundsmay be divertedto a fund for the private benefit of state ,employees.Cf. Hum. Res. Code 594.015(b); Attorney General Opinions N-454 (198r (certainMental Health and Mental Retardationfunds ncltsubject to deposit in state treasury); JM-42 (1983) (independent school districts may deposit "activity funds" in creditunion).

In sum, we are of the opinion that the income from neither vendingmachines,

pay telephones,

nor other coin-operated devices,

may be directedby the board of trusteesof the Rehabilitation Commission to be deposited in an "Employee Fund" to be used for the private benefit of RehabilitationCommission employees. Like income from vending machines, income from pay telephonesand other coin-operated devices placed on public property is public money. That the State Purchasing

and General ServicesCommission, rather than the Commission for the Blind,may be responsible for authorizing

the placement

of pay telephonesand other devices does not alter the public characterof the income realized, *0* the constitutionalrestrictions on its disposition.

Unless control has been specifically delegated to a different agency by law, or unless the State Purchasing and General Services Cosraission

has delegatedthe authorityto an occupyingstate agency, the State Purchasingand N:eneral Services Commissionhas charge and control of all public buildings,grounds, and property of the state. It is responsiblefor inc.ome derived from the private use of such

p. 1792Mr. VernonM. Arrell - Pags: 4 (n-l-391) .

property that it may achorize. V.T.C.S. art. 601b, 594.01(a), 4.01(c),4.15(a),4.15(b). Revenues it receives from leasing space to private tenants in state-cwned buildings "to serve the needs of the employees

and visitors in the buildings" are required

by statuteto be deposited to the credit of'the general revenue fund and may be used only for "building and pror'erty

services

performed

by the Commission." V.T.C.S.art. 601h, 14.15(i). In our opinion the term "lease" in this statutewas used in a broad sense that includes "licenses"and other lesser rights. See Hancock V. Bradshaw,

- -- 350 S.W.2d 955 (Tex. Civ. APP. - Amarillo 1961, no writ) (coin-operated machines). See also Tips v. United States, 70 :?..2d 525 (5th Cir. 1934) (federal"lease"); Kibbin v. McPaddin,259 Sik'. 232 (Tex. Civ. App. - Beaumont 1924,writ ref'd) (nontechnical use of term). Cf. Doncliff Realty Corp. v. Miller, 225 A.2d 52 (R.I. 1964) (statute)
Thus, income from vendingmachines and pay telephoneslocated in the building occupiedby the Rehabilitation Commission-- because it is not expressly requiredby general law to be deposited in another fund, trust fund or special fund - must be deposited in the general
revenue fund of the state pursuant to the State Funds Reform Act. V.T.C.S.art. 4393-l.

We have not overlookedsections 36 and 37 of article V of the GeneralAppropriations Act, which reads:

Sec. 36. VRNIYING

MACHINES ADTRORIZRD. Except in those areas which are now served by vendors operatingunder supervision of the Blind CommlsSiOU, vending machines may be placed on stateowned or leased property or in state-owned or leased buildings only with the approval of the governing

boards or commissions and such approval shall be recordei in the minutes of the body. A copy of the contractshallbe filedwith the State Purchasing

and Q,n.eral

ServicesCommission showing the locationwithin the agency and the terms of the contract. Pxoceeds, net revenues,rentals or commissions received shall be accounted for as state revenue aad the amount so collected is hereby appropriated to the institution,board, commissionor agency for use as directed by the board or commiss:ton authorizing

the installation. The amount of sutb proceeds, net revenues,

rentals
or commissions

ar.d disposalof such funds shallbe included in the .nmnual report of the state agency as required elsewhere in this Act. Vending machines located ,in areas or buildings now being servicedby vend,xcs under the supervision of the Blind Commissionmust be operated under a joint

p. 1793I Mr. VernonM. Arrell - Page 5 (JM-391)

contractwith the machine owners and the vendors operating under the supervision of the Blind Commission.

Sec. 37. PAY STATION TELEPHONES AUTRORIZD. Pay station telephones may be located in the capitol area only with the approval of the State Purchasing

and Ggr.eral

ServicesCommission and the net proceeds o:I such installations shall be collected

and dellosited

to GeneralRevenueFund by the State Purchasingand General Services Commission. In other areas pay telephones may be located in state-(owned or leased buildings or on state-owned land only with the approval of the governing

board or commission and the net proceeds shall be collectsed and accounted for as state
revsnue and the amount so collected is hereby appropriatedfor use by the agency as determined by the governing

board or commission. The amount of net proceeds and disposal of such funds shall be included in the annual report of the state agency as requiredelsewherein this Act.

GeneralAppropriations Act!. Acts 1985, 69th Leg., art. V, 5536, 37. at 7782-83.

Riders to general appropriations acts cannot repeal, modify, amand or conflict

with existinggeneral law because such matters are foreign to the subject of "appropriations." Tex. Const. art. III, 935; Moore v. Sheppard,19:! S.W.2d 559 (Tex. 1946). Riders that could be interpreted

as intendirgto do so will be construed,instead, to harmonize with existing law, if possible. See Attorney General Opinion JM-343 (1985). ,iuthority for determiningwhether vending machines or other coin-,operated devices will be installed on state-controlled

property is vested by existing general law in the Commission

for the Blind aud the State Purchasing and General Services Commission,

primarily. Geaoral law also "earmarks" machine income in
some instances,

&, directsits use for particular purposes.

Inasmuch as the Appropriations Act provisionscannot alter that authority or appropriate the income for different purposes, we construethe two provisionsto mean, when they refer to "the board or commissionauthorizingthe installation," either the Commission for the Blind [or the Rehabilitation Commission pursuant to section 94.003(b) of the Ruman Rr:sources Code] or the State Purchasing and General ServicesCommission[or the agency to which charge and control of the propertymay have hen given by statute or delegated pursuant to article 601b, §4.01(c),V.T.C.S.]. Cf. Rum. Res. Code 094.004. Such a construction does uo violence to the languageemployedby the

p. 1794Mr. VernonM. Arrell - Page 6 (34-391)

legislaturein the Appropriations Act riders and avoids the need to pronounce the passages violative of the constitution. See Jessen Associates,

Inc. v. Bullock,,

531 S.W.2d 593 (Tex. 1975). -

SUMMARY

Income from vouding machines dispensingcertain products and services (not operatedby handicapped vendors)and pay telephones located in the building occupied by the Texas RehabilitationConnission must be depositedIn the state treasuryand may not be expended for the private benefit of Texas Rehabilitation

Commisslan employees.

Very truly yours,

. 

# Jabs

JIM MATTOX AttorneyGeneralof Texas

JACKRIGHTOWRR First Assistant

AttorneyGeneral

MARY KRLLER Executive

Assistant

AttorneyGeneral

ROBERT GRAY SpecialAssistant

AttorneyGeneral

RICK GILPIN Chairman,

OpinionCommittee
Prepared

by Bruce Youngblood Assistant

AttorneyGeneral

p. 1795