JIM MATTOX 

Attorney General 

Supreme Court Building 

P. 0. Box 12546 

Austin. TX. 76711. 2546 

51214752501 

Telex 9101674-1367 

Telecopier 5121475-0266 

714 Jackson, Suite 700 

Dallas. TX. 75202-4506 

2141742-6944 

4624 Alberta Ave., Suite 160 

El Paso. TX. 79905.2793 

915/533-3464 

91 Tex’as, Suite 700 

,ston, TX. 77002-3111 

, ,Y223-5666 

606 Broadway. Suite 312 

Lubbock, TX. 79401.3479 

6061747.5236 

4309 N. Tenth, Suite B 

McAllen, TX. 76501~1666 

512l682-4547 

200 Main Plaza. Suite 400 

San Antonio, TX. 76205.2797 

512/225-4191 

An Equal Opportunity/ 

Afflrmatlve Action Employer 

The Attorney’ General of Texas 

S~zptember 22, 1986 

Mr. Joseph C. Gagen Opinion No. JM-549 

Chairman 

Texas Industrial Acc.Ldent Board Re: Whether the Industrial Accident' 

105 W. Riverside Drive Board is entitled to interest 

Austin, Texas 78700 earned in the Compensation to 

Victims of Crime Fund 

Dear Mr. Gagen: 

Article 8309-I., V.T.C.S., the Crime Victims Compensation Act, 

creates at section 14 the Victims of Crime Compensation Fund "in the 

state treasury," which is to be used by the Industrial Accident Board 

for the payment of compensation to claimants. Revenues for the fur.d 

are derived from additional court costs imposed by the act upon 

persons convicted of certain offenses. The act specifically prohibits 

the payment of general revenues to persons seeking compensation under 

the act. You ask tne following question: 

Is the Industrial Accident Board entitled to have 

the interest earned on the Compensation to Victims 

of Crime Fund deposited in the Fund? 

We answer your qc,estion in the negative; we conclude that such 

interest must be deposited in the General Revenue Fund. 

Article VIII, section 7, of the Texas Constitution provides the 

following: 

The Legislature shall not have power to borrow, or 

in any manner divert from its purpose. any special 

fund that may, or ought to, come into the Treasury; 

and shall make it penal for any person or persons 

to borrow, withhold or in any manner to divert from 

its purpose any special fund, or any part thereof. 

Article VIII, section 7, has been construed to require that 

interest on constitxionally dedicated funds may be spent only for the 

purposes for which the funds were created; a diversion of such 

interest to other purposes would violate the constitution. Lawson v. 

m, 220 S.W. 26t1, 272 (Tex. Civ. App. - Austin 1920, writ ref'd). 

Consequently, interest earned on a constitutional fund must be 

credited to that fund, UdSSS the constitution itself otherwise 

directs. Attorney General Opinions JM-323, JM-321 (1985); M-468 

p. 2430 
Mr. Joseph C. Gagen - Page 2 (JM-549) 

(1969). The interest on state funds dedicated by statute, however, 

may be legally severed and placed in the general fund. See Gulf -- 

Insurance Co. v. James, 18!5 S.W.Zd 966 (Tex. 1945) (article VIII, 

section 7, of the Texas Constitution applies only to special funds 

created by the constitution, not by--statute);- Attorney General 

Opinions JF-323, JM-321 (l!l85); Mw-338 (1981); see also Brazos River 

Conservation & Reclamation~District v. McGraw, 91 S.W.2d 665, 674 

(Tex. 1936) (article VIII, section 7, does not apply to general 

revenue funds). Article 2543d (since repealed and re-codified as 

section 3.042(a) of article 4393-1, V.T.C.S.) effects such a severanqe 

of interest on statutory funds as a general rule. 

Section 3.042(a) of article 4393-1, V.T.C.S., the article that 

sets forth the powers and duties of the state treasurer, provides the 

following: 

Interest received from time deposits of money in 

funds and accounts in the charae of the treasurer 

shall be allocated as follows: to each constitutional fund there: shall be credited the pro rata 

portion of the i&rest received due the fund; the 

remainder of thi interest received, with the 

excention of that nortion required bv other 

statutes to be credited on a pro rata basis to 

protested tax payments, shall be credited to the 

General Revenue Fund. The interest received shall 

be allocated on--a monthly basis. (Emphasis 

added). 

The funds about which you inquire are not constitutionally dedicated 

funds; rather, they are statutory funds. Consequently, pursuant to 

section 3.042(a), the interest on such funds would normally be 

credited to the General Rerenue Fund. However, the rule with regard 

to the disposition of intere:st earned by the deposit of trust funds is 

different. 

This office previously has determined that the provisions of what 

is now section 3.042(a) of .article 4393-1, V.T.C.S., do not apply to 

interest earned on trust funds that are not the property of the state 

and that the state treastrcer holds as trustee out of the state 

treasury. Opinions issued by this office consistently have maintained 

that interest on such trust funds becomes part of the principal and, 

consequently, part of the fund that generated the interest. See 

Attorney General Opinions :I+306, JM-300 (1985); MU-82 (1979); H-1040 

(1977); M-468 (1969). Cf. Attorney General Opinions MW-338 (1981); 

H-1187 (1978). The adopxn of such a doctrine is strongly supported 

by language set forth in section 4.003 of article 4393-1, V.T.C.S., 

setting forth exemptions to the reach of the act and providing 

at subsection (b) the following: "This chapter does not apply 

to: . . . (2) funds held in trust or escrow for the benefit of a 

person or entity other thm a state agency." The issue, then, is 

p. 2431 
Mr. Joseph C. Gagen - Page 3 (JM-549) 

whether the funds about which you inquire are trust funds, as opposed 

to statutory funds. We conolude that they are statutory funds. 

The opinions cited abrre indicate that in order to be characterized as trust funds, the funds in question should reflect, among 

other things, (1) that they are administered by a trustee or trustees, 

(2) that the funds neither are granted to the state in its sovereign 

capacity nor collected for t~he general operation of state government, 

and (3) that they are to bsz spent and invested for specific, limited 

purposes and for the benefit of a specific group of individuals. 

Being in the nature of a trust, such funds are entitled to retain the 

proceeds from their investment. Attorney General Opinions MW-481 

(1982); M-468 (1969). It :.E; clear from a reading of article 8309-1, 

V.T.C.S.,. that the funds atout which you inquire fail to exhibit the 

requisite trust characteristics and are thereby statutory funds whose 

earned interest must be cretllited to the General Revenue Fund. 

Section 14 of the act :)rovides the following in pertinent part: 

Sec. 14. (a) The Compensation to Victims of 

Crime Fund is created in the State Treasury to be 

used by the board-for the payment of compensation 

to claimants under this Act and other expenses in 

administering th& Act. The Compensation to 

Victims of Crime &xiliary Fund is created in the 

State Treasury tc-be used by the board only for 

the payment of '%mpensation to claimants under 

this Act. The board shall make no compensation 

payments which exceed the amount of money in the 

combined funds. 30 general revenues may be used 

for payments unde:Lthis Act. 

(b) A person s!aall pay $20 as a court cost on 

conviction of any felony, $15 as a court cost on 

conviction of a misdemeanor punishable by imprisonment or by a fine of more than $200, and $3 as 

a court cost, <'II conviction of a misdemeanor 

punishable by a fine of not more than $200, other 

than a misdemeanor that regulates pedestrians and 

the parking of motor vehicles. . . . The court 

shall require a pIerson convicted of an offense 

listed under this section to pay the court cost 

whether or not the court grants the person a 

probated sentence. If a person is granted 

deferred adjudication under Article 42.12, 42.13, 

or 45.54, Code of Criminal Procedure, 1965, as 

amended, at the time the court grants deferred 

adjudication, the person shall pay as a court cost 

the amount that the person would have otherwise 

been required to 'pay under this subsection had the 

p. 2432 
Mr. Joseph C. Gagen - Page 1; (JM-549) 

adjudication not 'lee* deferred and had the person 

been finally conv:.cted of the offense. 

(c) Court costs under this section are 

collected in the .same manner as other fines or 

costs. 

(d) The officer collecting the costs in a 

municipal court case shall keep separate records 

of the funds collezted as costs under this section 

and shall deposft the funds in the municipal 

treasury. The officer collecting the costs in a 

justice. county, or district court case shall keep 

separate records DE the funds collected as costs 

under this sectlo:; and shall deposit the funds in 

the county treasmy:. 

Text of (e) as amended by Acts 1983, 68th Leg., 

p. 1739, ch. 335,12 

(e) On receipt, the custodian of a municipal 

or county treasur]' may deposit the funds collected 

under this secticn in interest-bearing accounts. 

The custodian sha:tl. keep records of the amount of 

funds on deposit rollected under this section and 

shall remit to the comptroller of public accounts 

before the 10th day of each month the funds 

collected under this section during the preceding 

month. The city and the county may retain five 

percent of the fuais collected under this section 

as a collection fee. The city or county may also 

retain all intererit accrued on the funds. , 

Text of (e) as amended by Acts 1983, 68th Leg., 

p. 2764, ch. 475.11 -- 

(e) The custodian of a municipal or county 

treasury shall keep records of the amount of funds 

on deposit collec,:ed under this section and shall 

remit to the comptroller of public accounts before 

the last day of each calendar quarter the funds 

collected under this section during the preceding 

quarter. The city and the county may retain 10 

percent of the furds collected under this section 

as a collection Eoe. If no funds due as costs 

under this sectien have been collected in a 

quarter, the report required for the quarter shall 

be filed in the regular manner, and the report 

must state that no funds due under this section 

were collected. 

---. 

p. 2433 
Mr. Joseph C. Gagen - Page 5 (JM-549) 

(f) The compt:roller of public accounts shall 

deposit the funds received by him or her under 

this section in y:he Compensation to Victims of 

Crime Fund. Funis collected are subject to audit 

by the comptrolle; and funds expended are subject 

to audit by the State Auditor. (Emphasis added). 

Unlike, for example, the funds created under articles 1066c, 

1118x, lllSy, 5221b-7. and 6243e. V.T.C.S. (which govern local sales 

and use tax, metropolitnn rapid transit authorities, regional 

transportation authoritier., unemployinent compensation, and fire 

fighters' relief and retirement, respectively), the funds created 

under the Crime Victims Cclmpensation Act do not manifest sufficient 

trust fund characteristics;. See Attorney General Opinions JM-539 

(19861,; JM-323, JM-321, JM-,306 (1985). The act does not provide that 

the funds are to be administered by a trustee or trustees or by any 

public officer "in trust"; rather, the act specifies that the fund "is 

created in the State Treasury." It is the case, of course, that the 

act does not specify that the funds are granted to the state in its 

sovereign capacity, that the act specifies rather that such funds be 

paid only as compensation to claimants under the act; but the language 

so earmarking the funds Liffers in no material way from language 

typically found in the Appropriations Act directing the expenditure of 

state funds. Further, the act does not specify that the funds be held 

for a specific or identifiable group of individuals; in this instance, 

the group entitled to claim compensation consists of an open-ended, 

indefinite class. 

We conclude that the funds created pursuant to article 8309-1, 

V.T.C.S., the Crime Victins Compensation Act, are statutory funds. 

Accordingly, we conclude that the Victims of Crime Compensation Fund 

is not entitled to be cred:.ted with interest earned by deposit of its 

funds; article 4393-1, sect,ion 3.042(a), V.T.C.S., requires that such 

interest be credited to the General Revenue Fund. 

SUMMARY 

The Victims o:i Crime Compensation Fund is not 

entitled to be credited with interest earned by 

deposit of its funds; article 4393-1, section 

3.042(a), V.T.C.S., requires that such interest be 

credited to the General Revenue Fund. 

Very d truly yours, 

A.-k 

JIM MATTOX 

Attorney General of Texas 

p. 2434 
Mr. Joseph C. Gagen - Page j (JM-549) 

JACK HIGHTOWER 

First Assistant Attorney Ge:wral 

MARY KELLER 

Executive Assistant Attome:{ General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Jim Moellinger 

Assistant Attorney General 

-.. 

p. 2435