JIM MATTOX 

Attorney General 

Supreme Court Building 

P. 0. BOX 1254s 

Austin, TX. 78711. 2548 

51214752501 

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51212254191 

An Equal OpportunityI 

Affirmative Action EmPlOw 

The Attorney General of Texas 

December 18, 1985 

Mr. Vernon M. Arrell 

Commissioner 

Texas Rehabilitation Co~issiou 

118 East Riverside ‘Drive 

Austin. Texas 78704 

Dear Mr. Arrell: 

Opinion No. m-391 

Re: Disposition of income from 

Rehabilitation Commission vending 

machines and pay telephones 

You have asked whether the Board of the Texas Rehabilitation 

Commission, acting as the board of trustees of au "Employee Fund" 

established for the benefit of commission employees, may direct that 

income from vending machines and pay telephones be used to buy flowers 

either for hospitalized employees or for the funerals of 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 treasury pursuant to the State Funds 

Reform Act of 1981, now chapter 4 of the Treasury Act, article 4393-1, 

V.T.C.S. - See Acts 1985, 69th Leg., ch. 240, at 2078, 2103. 

In order to answer your questions, it is unnecessary to discuss 

at length by what: authority vending machines, pay telephones, and 

other coin-operated devices may be installed in buildings occupied 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 

deposited in the state treasury unless they are paid to a vocationally 

handicapped vendor/operator. 

If a "vending facility," as defined by section 94.001(2), of the 

Human Resources Code, has been established in a state-controlled 

building by either the Commission for the Blind or the Rehabilitation 

Commission pursuant to sections 94.002, 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 operating the 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 facilities is to determine the "assignment of the 

commissions from lending machines installed in the building." Hum. 

Res. Code §94.OlO(c). 

p. 1790 
Mr. 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 

installed in its building pursuant to section 94.010 [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 agency by 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 private purposes. 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 public purposes. Cf. Attorney General Opinion 

MW-36 (1979) (county prohib,ited from expending public funds for the 

purchase and mailing of Chri~stmas cards). 

Your second question involves chapter 4 of article 4393-1, 

V.T.C.S., the Treasury Act, which embodies the State Funds Reform Act. 

It requires that "fees, fines, penalties, taxes, charges, gifts, 

grants, donations, and other funds collected or received by a state 

a g en cy under law" shall be ;ieposited in the treasury, and credited to 

the general revenue fund "unless the money is expressly required to 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 collected by 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 handicapped operator pursuant to chapter 94 of 

the Human Resources Code, or falls within one of the statutory exemptions set out in section 4.003. You suggest the commissions from 

vending machines located ix the building occupied by the Rehabilitation Cosusission might be exempted as "trust funds." 

Subsection (b)(2) of section 4.003 of article 4393-l specifies 

that the chapter does not c:pply to "funds held in trust or escrow for 

the benefit of a person c'r entity other than a state agency." We 

think this provision would apply to the commissions collected from 

vending machines located i.n the building housing the Rehabilitation 

Commission if they were being collected for the account of a 

handicapped vendor/operator, but not when they are collected for the 

benefit of a Rehabilitation Commission employees 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 earmarked funds 

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

to which the vendors are already entitled as consideration for their 

services, and are not collected for the benefit of the state agency. 

In other cases, machine comaissions will be collected for the benefit 

of a state agency, which controls their disposition. Hum. Res. Code 

594.010. But see Hum. Res. Code 194.015(b). 

Our attention has bee3 drawn to Attorney General Opinions MW-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 Recreational Funds. The funds 

consisted of receipts frcm. the operation of commissaries, prisonsponsored recreational shows and entertainment, and all gifts and 

other income for inmate welfare. Attorney General Opinion H-610 

concluded that 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 Reform Act. 

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 charged with 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 funds may be diverted to a fund for the 

private benefit of state ,employees. Cf. Hum. Res. Code 594.015(b); 

Attorney General Opinions N-454 (198r (certain Mental Health and 

Mental Retardation funds nclt subject to deposit in state treasury); 

JM-42 (1983) (independent school districts may deposit "activity 

funds" in credit union). 

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

vending machines, pay telephones, nor other coin-operated devices, may 

be directed by the board of trustees of the Rehabilitation Commission 

to be deposited in an "Employee Fund" to be used for the private 

benefit of Rehabilitation Commission employees. Like income from 

vending machines, income from pay telephones and other coin-operated 

devices placed on public property is public money. That the State 

Purchasing and General Services Commission, rather than the Commission 

for the Blind, may be responsible for authorizing the placement of pay 

telephones and other devices does not alter the public character of 

the income realized, *0* the constitutional restrictions 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 delegated the authority to an occupying state agency, 

the State Purchasing and N:eneral Services Commission has charge and 

control of all public buildings, grounds, and property of the state. 

It is responsible for inc.ome derived from the private use of such 

p. 1792 
Mr. Vernon M. 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 statute to 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 

statute was 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 vending machines and pay telephones located in 

the building occupied by the Rehabilitation Commission -- because it 

is not expressly required by 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 overlooked sections 36 and 37 of article V of the 

General Appropriations Act, which reads: 

Sec. 36. VRNIYING MACHINES ADTRORIZRD. Except 

in those areas which are now served by vendors 

operating under 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 contract shall be filed with the State 

Purchasing and Q,n.eral Services Commission showing 

the location within 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, 

commission or 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 disposal of such funds shall be 

included in the .nmnual report of the state agency 

as required elsewhere in this Act. Vending 

machines located ,in areas or buildings now being 

serviced by vend,xcs under the supervision of the 

Blind Commission must be operated under a joint 

p. 1793 
I 

Mr. Vernon M. Arrell - Page 5 (JM-391) 

contract with 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 Services Commission and the 

net proceeds o:I such installations shall be 

collected and dellosited to General Revenue Fund by 

the State Purchasing and 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 

appropriated for 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 required elsewhere in this Act. 

General Appropriations Act!. Acts 1985, 69th Leg., art. V, 5536, 37. at 

7782-83. 

Riders to general appropriations acts cannot repeal, modify, 

amand or conflict with existing general 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 intendirg to do so will be construed, instead, to 

harmonize with existing law, if possible. See Attorney General 

Opinion JM-343 (1985). ,iuthority for determining whether 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, &, directs its use for particular purposes. 

Inasmuch as the Appropriations Act provisions cannot alter that 

authority or appropriate the income for different purposes, we 

construe the two provisions to mean, when they refer to "the board or 

commission authorizing the 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 Services Commission [or the agency to which charge and control 

of the property may 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 language employed by the 

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

legislature in 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 dispensing certain 

products and services (not operated by handicapped 

vendors) and pay telephones located in the building 

occupied by the Texas Rehabilitation Connission 

must be deposited In the state treasury and may not 

be expended for the private benefit of Texas 

Rehabilitation Commisslan employees. 

Very truly yours, 

. Jabs 

JIM MATTOX 

Attorney General of Texas 

JACKRIGHTOWRR 

First Assistant Attorney General 

MARY KRLLER 

Executive Assistant Attorney General 

ROBERT GRAY 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Bruce Youngblood 

Assistant Attorney General 

p. 1795