OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN
February 17, 1939

lion. J. IL McDonald, Cd86iOner Departillmt

of Agrioll1tulv Aunt&n, Tour

urmant to tha prof House Bill No. 664, Vera8 Cltrua Market- * Article 5764a or Revised Civil Eltatutea.
tsr of February on to various RI *Texas Citrus Vernon's RevlSed on the tollowfunotlonlngof the marketing agraemOnt ad into under the Toxam Citrus Marketing Aot be 80 reported to the Gtatr Ccanptrollsr an& dsposited.in

the State Trea8urg.wHon. J. IS. MoDonald, ?sbruary 17, 1939., Page 2.

Par ths purpose of snswerlng the above Inquiry, we have also taksn Into ccmlasratlon the tows and provisiona ot the amendedMarketing Agreement regulating the handling of citrus fruit grown In Cameron, Eldalgo and Uillacy Countiesbetween the handlers of citrus fruit In this ares and the Commlsslonsrof Agrleultursof the Stats of Texas.

Sootlon S ot the Marketing Aot sonstltutss the authority and power of the Commfsslonsrof Agrlculturs for sntsring Into a Cltrus~Markstlng Agreement. It reads as follows:

Vubjeot to the provisionsof this Aot; the CommlsslonsrIs hereby authorized and smpowered to executemarketing agreementsand to lssus lloenssaunder this Act to persons engaged in transaotlona or Intrastateoommsros wlthln the areas of this Stats in the markstIng, proossalng;

packing, shipping,handling or distributing

or citrus iNitS." Section 0 (1) of the Marketing Aot provides for the crsitlon of *an admlnlatratlvscoa@ttss or oommittsss* by the terms of any MarketingAgrsemsnt, sxecutsd under the Act in the following language:

OY(arkst.lng

arssmsnts sxsoutsdand llosnsss lssusd under this Act, shall, in addition, oontaln one or more of the following terms and eondltlons: '(1) Proridingror the sslsotlonby the CommissIonor,

or a method for the sslsctlon by the Commlsslonsr, of an admlnlstratlvscommittee or oommlttdssand defining their powera and duti0s.m Ssotion 0 (1) of the Aot further defines and limits the powers ai such admninlstratlvs oomnlttes,towit: (a) To admlnlstsrlng suoh llosnse In aocordanoswith its terms and provisions; (b) To making rules and regulationsto effectuate the terms and provlslonsoi suoh license;

.Eon. J. IL irrcDonsld, February 17, 1939, Pegs 5.

(.o) To rsoslvlng,lnveatlgatlng and rsporting to the Coamiaslonsr aomplalntaof vlolatlona or auoh llosnsa; (d) To rscaamtendlng to the Commlaolonor amsndmsntato auoh llasnas; (01 To oollsotlngfrom sash handler a fee or laasaamsntrspreasntlng his prop rata aharo of ouch oatlmgtsdexpdnesa,Lncludlngsxpenasa incurred In hearingsheld on, and In the oxsou- .tlon of l

uah marketingagrssnmnt, aa the Commlaalonsr,after the autiasion to him by auah l dmlnlatrative

agsnoy or agencies 0r a proposed budget, find0 will probablybs required to oovar sxpsndlturaa

naoaaaarilyto bs Incurredby auoh~mgenayor agendaa, during any psrlod l pscilflad

by him, for the amlntsnsnosand funotlonlngof l

uoh agsncy or agencies;to rsuoaivlng,

expending

and aooountlng ror the funds r0 aollectsd,and to ret- to ouch hsndlsr hi8 pro rata ahars of any unexpendedbalances which the admlnlatrstlre sommlttss or oommlttes8, wlththe appkvsl of the Commiaalonsr, flnda am not 80 rsqulrsd;W
We are aonasrnsdwlth the aonatruotlon of the above **quOt8d** rub-heading~(81 of Section 0 (1) of the A&.
It dsflnss the powers of ths l dmlnlatratlva oonmltteeunder the Marketing Aat, rslatlva to an dalnlatmtlon or an operatingfund. Hrat,, the aamulttss la authorized to aollsot from each handler of oltrua a re0 or,asasasmsnt

rsprsssntlng

that handlsrqa pro rata ahers or the estimated sxpsnee of admlnlatsrlug ths KarkstlngAgreement. The amount of assessment la baaed. upon a budget preparedby the oommltteaand approved by the Coamilsafonsr

or Agrioultursfor a rlsoal period dealgmtad by him. Said amount la to be dstermlned by t&s Cozamlasloner

or Agrloulturs. said budget la dealgnsd to ccivsr all sxpsndlturss whloh night nsosssarlly be lneurrsdby the oommlttss In admlnlatsrlng the terms and prwlalona of the Act.

Ssoondly,after aubmlttingthe budget to the Coanmlsslonsr

of Agrloultursand oollsotlngthe aaaeaamsnt or fee deolded upon by ths Lhmniaaionsr, the aamittsa 16

- .Hon. J. X. MaDonald, February 17, 1939, Page 4.

eivsn the power oS *rsoslvlng, sxpsnding,and aocounting for the funds so oollsctsd.~

Finally, In sold Ssotlon 8 (l), (a) It la the duty of the aomnlttss to return to each contributing handler his proportionate share of any unexpendedbalance of the administration fund, which the oommlttsa or Cwnmlsalonerof Agricultureflnda wlll not be needed.

The language of sub-baading (a) of Section 8 (1) of the Act, In ooncluaion, authorizesthe committee let, to rscslva the asasaamsntalevied by the Ccannlal i o n s ron the baala of the canmlttss~aown rscomasndation; 2nd.,'to sxpsnd ouch funds and give sn acoountlng; and, 3rd.. to return to the handlersany balancemloh the oommlttssand Comlsslonsr of Agriculturedeclds la not required to meet the expsnsss of any fiaoal period.

Section 8 (11, (a) thus gives the adminlstrstire aomulttas, set up In the KarkstlngAgreement, l xtanalvs aontml over the operatingfund rslaed by aasaaaamnt,lncludlng the power to Bake dlaburesmsnts therefrom.

Section 16 (21, however,while further dssigna4- lng uld aollsctsd funds for the purposes set out In the MarketingAgreement., requires that a record be kspt and a raport be filed with the Commleslousr of Agrlculturs rr0m time to tlnks. It reads an follows:

-AAny funds oollsatsdby the admlnlstratire agsncy from the levying of auah Sees and asaseamsntashall be used forth8 purpose set forth In the marketingagreement or license under which It wss oollsctsd. A full and aomplate racord thereof shall be kspt to which the Commissioner

may hars'accsss

at any time, and a report of the aotlrltlsaand proceedings shall be filed wlth the Commissioner Srom time to tlnm as ha may requlrs.n Thus far It la apparent from the tanas of the MarketingAct that the Commissioner of Agriculture,after exsmlnlngthe proposedbudget aubmlttedto him by the administrative

committeehas the right to set the fee or sssssamsntto be levied; that he hsa the right to approveHon. J. 11. M?Donald,Psbruary 1.7, 1939, Page 3.

the unaxpendadbalance ab the admlnlatratlon fund to be dlvlded among the lundlera on a pro rata basis; and that he has the right to have l oceaa to the reuorda of the oom.ltteeat any time and reoelve a report on the ~~;~eand dispositionof funds by the l&&xlatmtlve

. Sootion 17 of the Marketing Act so&orb upon the Commiaaionerof Agrioulturel ddltlonalrights and powers in respect to the flnanoea of the ldmlnlatratlva aamalttee. It provideras follows:.

(I

. . . The Ccmmla6lonerahall thereafterexact and require, by requlaltlonon the appropriate ldmlnlatratlvs

committee sr aommlttaaa, aharged with the oollaotlon sf funds for expansesunder o u c h m r ke til y

lgm a m a nt ,

t h a t a u o h o o md tt a e

or acamlttesasolleot, report, and pay wer monthly to the Ccaamlaaloner the amount ~decamd nsoeaaary and aufflclent,

and raquialtloned

from auoh ldrinlstmtlva amanitteeor aorenitteaa by the Caumlaedoner,

to defray the aotual expenses of the Commlsalomr to be lnourrsdduring the subsequent

month in the admlnlatmtlon and enforcement

of any auoh narketing agreement or lloenae,under ouch rules and ra(pllatlona as ha may pmaorlbs.’
We oonatrue said prmlalon to men that the Carepiaalonsr

oS Agticulture la entitled to reoelve from the adminlatrati

on fund any auoh amount of money as he oalaulatesla nscsaaaryand auSSloient to aover ouch aotual l

xpenaea a0 hs, In hls orrioial oapaclty a0 Coa+ miaalonsr of Agricultureand ths Departxnent of Agrioulture, will Incur for the next ensuingmonth, in aamsatlon dth hla duties In admlnlatsring the Marketing ‘ngraamant.

It gives him the authorityto requlaltlonthe administrative

oaPmittea,

uhlah has aontrol war the operatingrun6 to supply him with au& l x P e n s e moneY. The l.mguage cf Seotlon 17 deelgnatea “the lotual UPOne or the Conrmiasioner

. . . ln the a&alnlatmtion and enSoroamentwof the MarketingAgreement as the datemining amoUnt oS the raqulaltlonfunds.Hon. J. B. McDonald, February 17, 1939, &is 6.

'The aeoond paragraph Of Seatlon 17 deals rith aunusued, anexpended and unrequlaitlonsd aaseasmsnta~ In the r0ii0ting bmgi~g8:

‘gut all monaya aolleotadfrom asaeasRents, or othsrwlae,lmpoaed;under thla Act and under msrketlng agreementsexecuted In ~*usnCs thereof,'orliaenaea ia6aued thsreunder, by the admlnlstmtlve odttes or 0oarmnitteea

created urdsr this Act, not reqUlaltlons6

by the Camulaalonsc for a&nlnla'trstire lx p w a e s as herslnbetore provided In this Section, shall renaln In the custody of such admlnlatratlvs

coanalttes

or aonohittssa~untll the 0108s or the aurrsntma*stlng *es*on or year for which asms was oollscted (not to extend further thsn the psrlod coveredby ouch marketingagreement),at which time the a&Inlatmtlve committee or ooarmittsss ahsll return to much handler or handlershis pro rsta share of ouch unususd, unexpendedand unrequlsltloned aaaeairmsnt

or asaessmsnta.~

ConetxulngSections 8 (1) (8) and 17 Of the Act together, It la apparent that the operatingfund conposed of aaeeaamsnta or tees levied on the jnndlera by the a&zlnlstratlve

ooormittss

la aubjsot to three uses. (1) It la aub)ct to be raqulaltloned on a monthly baa18 by the Commlaslonsr oi Agriculture for an amount neusssaryto cover hla expsnasaand the expenses of his dspartrent inourred through his bslw a psrty to the MarketingAgreement. (2) It la subject to the authorizedaxpendltureaof the aommittss 1 Section 8 (1). (a) 1 chargedwith the adnlnlstrstion of the Ksrkstlng Agreemnt set up under the Act. (3) If at the alose cb a rlacal period, there r-ins any unususd, unexpendedor ~SqUiaitlOnad portion or the operatingfund, said balance is dlv:ded among the assessed handlers,eaah handler rsoslvlng hls pro rata share Of said remaining rund0.Hon. ,J. X, HoDonald, February 17, 1939, Page 7.

Seotlon 18 (1) relates to the moneys requlaltlonsd by the Canml,asloner of Agrlaulturefrom the opsmting fund in the ouatody of the adminlatrstlvs oommlttee. It provides that:

*All moneys reoslved by the Commlsslonor hereunder ahall be by hint, at thcend of eaoh month, reported to the State Comptroller and at the same time depoaltsd In the Stats Treasury. All moneys so oredltsdare hereby 

### l pproprlatad

for use of eald Corqdssloner to be expended In accordancewith lsw ln aarry- %ng out the ~provlalona hsraof.W Seotlon 18 (X) requires the bommlaslonsrof Agrloultureto *submit quarterlyto the admlnlatratlvs l genoy umisr eaoh msrkstlng agreemsnt or license a aomplete statementof reeslpta and expendituresin aonneotlon

rith the admlnlatratlon of each marketing agreement or license during the querter.w

It la our opinion that the lsglalatlvelntent behind the Act wss that both the Commlaalonsr of Agriaulture

and the a&lnlatratlve agenay, oreatsd under the a@irksting agreemsnt,

be authorlaed and mpowersd to make neoeaaary 

### l xpsndlturea

aonnected with their respectivedutlsa and functiona In aarrylng out the terms and provl~ona of a m?trketlng agreamsnt. Provlalon la made, both for a aheck by the Commlaalon6r

upon the 

### l

xpsndltureaof the oommlttee and an accountingby ths Commissioner of Agricultureto the admlnlatratlve aonmlttee of hle receiptsand expenditures. Since the Commlsslonsr af Agriculturela a public offlolaland a State orri08~, the Act requires that moneys expsndsdby him be reported to the Ccmptrollerand deposited In the Stats Treasury. The aommlttee,being a prlvats organization

set up by a voluntaryagreement, Is by authority of the Act a auatodian of the operatingfund and may make axpendltureaof same without convertingsaid moneys lntb public funds.Hon. J. X. XoDonsld, Iebrwmy 17, 1939, Page 8.

Section 12 states 

### l xpllclty that: sell moneys solleotad from aaasasmsnta

. . . not requlsltionsd

by the Commissioner for l dm lni a t r e ti V8

axpsnaes . . . shall remain In the ouatody of such l Qnlnistrstlve

commlttss

. . . a Thla applies not only to that portion of the unrequIaltlonsd

funds to be returned to the hsndlsrs on a pro rata bssla, but alao to the moneys to be used and expendedby the aommlttes In properlyadministering the tonne and provision6of the agreement.

The provlalonaof the mrkstlng agresmsnt entered intc by the Commlsalonsrof Agriculture and the handlersot cltrua fruit, grown In Cameron, Hldalgo and Xillscy Countles, austsln the construction we have placed upon ths atorsm~tloned asctlona of the Aot. Seotion 1 of Article 2 oS the marketing agrsamsntareatss certain admInlatrstlve agenoles ln the r0iiaring language:

*A Crooners

Induatry CommIttee and a ShippersMarketing CommItteeare hereby established

which shall admlnlatsr the ferns and provisionsof this agresmsnt as hareInafter 8peOlflcally provided,and the membsrahlp of which ahall be selected In accordsnoswith the provIsIona oS thla artlc1e.s Seotlon S (2) of said Article lists the duties of the Growers Industry Committeeas follows:

(a) to act aa lntswsdlary between the Commlaalonsr

and.ths producersand handlers: (b) to furnish the CommIssIonorauoh available InSormstlon as he may request; (a) to appoint ouch employeesas It may dssm nscsasaryand to detsnnlne the salaries and dsrlns the duties aS any auah employsea;

- .Hon. J. X. YcDonald, February 17, 1939, Page 9.

(6) to osuas the books of the Groirera Industry Committee to be audited by one or more osrtlrled pub110 aooountanta at least once for eaoh orop year and at luah other time as the Growers IndustryCommitteedemo neoeasary or as the Canmlsslonsr

may request, and to ills wlth the ~~aalonsr coplea of all audit yports made;

(0) to make .auch

aatlamtss Or the total **Crop8** oS fruit includingthe grads and alas 6latrIbutlon

ther8o.S

as msy be deemed mceaaarg by said sommlttee In connection dth the administration

of Articles IV and V hereof, or as may be prsaoribsdby the Commissioner. (f) to psrionn auah duties In connection with the aiLnlnlstrstlon of ths Tsxsa Citrus XarketlngAct aa may from tlms to time, be aasigned to It by the Commlasioner.R Section 6 oS~ArtIcls2 deqla with +m.ud8.R It states: *All funds receivedby the &owera Industry CcmmIttes,

pursuant to any provisionsOS this agreementshall be used aolsly for the purposes herein apecIfledand shall be aooountsd for In ths Sollwlng msnnsr: (1) The ComaIaslonsr IMP, at anytime, requlrs the Growers Industry Committee and Its mmbsra to account for all receiptsand dlaburasmsnta. (2) Upon the rsmoval or expirationof the term or 0rriO8 or any member 0r the Growers IndustryCanmlttes, such member ahall aoaount Sot all receiptsand dlaburaemsnts and deliver all property

end funds In his hands, together with all books and records in his possssslonto hIa aucosssor In office, and shall execute such aaslgumsnta and other instrumentsas msy be nscssea.rjr or appropriateto vsat ln auah auocsssorfull title to all of the property, funds and claims vested In ouch mambsr pursuant to this agrssmsnt.aHon. J. X. YoDonsld, February 17, 1939, Page 10.

The lmpllaatlonthroughoutaald aectiona la that the Growers Industry Ccmualttee **ht?iE** full power to rake b diabursen~nta

from the operatingfund uhlch lt haa aollectsd l dl which rsmalns In Its austoUy.

. Article 1x1 of the amendedMarketingAgreement covers wexpenass

and asseagPsnts.~ Seotlon 1 OS Artlole III provides that:
Vhs Growers IndustryCommittee la authorized to inour.auohexpenses as the Gommlssloner may find t0 be necessaryto oarry out the functions OS both aommlttssaunasr this agreementduring the de8lgnsted fiscal period. The funds to aovsr ouch expenses shall be aoquirsdby the levying of aaasasrmntsupon handlers as hsrslnafterprovided.*
&Id section conSormewlth tha requirements OS Seotlon 8 (1) (a) OS the Act which authorizesthe oammittss to rake axpsndltursson the basis of a budget submitted to the Commlaslonsrof Agriculturefor a 8psolSlsdperiod.

Gsotlona 2, 3, 4, 5 and 6 of Article III provide for acmputatlon0r rate OS asas8amsnt,payment 0r same by handler, a proportionate refund, ldorsaas rate 0r aasessment and amlntensncsof suit by the Growers IndustryColnmittss toi aollectlon of hsndlsr*epro rata share of the expenses.

The above reasonI% and ofnstruatlon, placed upon the pertinent sectionsof the exas Citrus )Carksting Agreement and the amendedMarketing Agreement, lead ua to the conclusionthst the Act requires that only ouch money8 is plight

be rsqulaltloned

by the COUimlSslOnSr Of Agriculturefor the purposes of defraying axpsn8sa lnourrsd by himself and his departmentin administering the provlslons OS the Act be reported to the State Comptroller and de)oalted in the Stats Trsaaury.'

It la our opinion that the admlnlstratlvs oommlttes .la legally authorizedand empoweredto msks necessaryand aufflclsntexpenditures and ths Sunda whloh It uses for operating expensesmay, under authority of the Act, remain In its custody, only the unexpendedand unuaued portion **bslng** rsturnsblsto the handler8 on a pro rata basis.Hon. J. E. MoDonald, F8bruery 17, 1939, Page 11

This deolsion overrulesthe letter opinion of 3. II. Broadhurst,

AesistantAttorney General, dellvsrsd November 3, 1937 inrorar a8 it holds that @tha oommitteehave no authority to expend any money 80 oolleotadl rospt by paying that amount over to the Commissioner of Agrloulturs,

vrhioh has been raquleitloned

by him* and *Iso the oplnlon of K. L. Williford, Aasf etant Attorney Goneral,Qrllvered September 13, 1938, to the ram@ efieot.

Trusting that we have fully answered your inquiry, we arm Yours very truly ATI ’ ORNEY

GENERAl OF-TEXAS

BY Di& Stout

Aesietant

DS:ob
APPROVED:

ATTORNW GENERAL OF TEXAS