# TheAttorney General ofTexas

December 7,1981 MARKWHITE Attorney General

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An Equal OppOrtunityi Aftirmative Action Employer Honorable Warren G.Harding StateTreasurer L.B.J. StateOffice Building P. 0.Box 12608, Capitol Station Austin, Texas 78711 Opinion No. MW-405

Re: The funding of escheat investigations

Dear Mr. Harding:

You advise that holders of dormant bank deposits and inactive accounts may not be complying with the provisions of article 3272b, V.T.C.S., which require that such fundsbe delivered tothe custody of the state treasurer. You believe the services of a certified public accountant and anattorney with expertise in therecovery ofunclaimed property would be helpful to your office, and wish to know if such personnel canbe employed and, if so,outofwhich fund theirexpenses and feesor salaries shouldbepaid.

The General Appropriations Act for thebiennium ending August 31, 1983, appropriates money to the treasury department for "escheat management." Acts 1981, 67th Leg., ch. 875, art. I, at 3333, 3517. Among the funds supplying the money appropriated is the Escheat Expense and Reimbursement Fund No. 152. Id. (method of financing). That is a fund established by article 3272a, V.T.C.S. A different fund styled the "State Conservator Fund" is established by article 3272b. V.T.C.S.

Both statutes are a part of Title 53 dealing with escheats. Section 15(a)of article 3272a states:

There is hereby created a revolving fund to be known as the 'Escheat Expense and Reimbursement Fund' in the amount of One Hundred Thousand Dollars ($1000,000) to be held by the State Treasurer,... one half (k)ofwhich shall be used by the Treasurer and theAttorney General,... for the purpose of enforcement of the provisions of thisTitle, including theexpense ofpublishing of notices, examinations, travel, court costs, witness fees, employment of such additional assistants and otherpersonnel asmaybenecessary for such purposes in either of their offices at

p. 1375Honorable Warren G.Harding -Page 2 (MW-405)

salaries not to exceed the rate paid other employees for similar services, and all other expenses necessary for enforcement of this Title. (Emphasis added).

The fundestablished by article 3272a isearmarked "for thepurpose of enforcement of theprovisions of thisTitle." (Emphasis added).
The "State Conservator Fund" of article 3272b. comprised of escheated accounts and other property, is earmarked for the "enforcement of theprovisions of thisArticle." Asyounoted article 3272b ("this Article") addresses depositories -- meaning banking institutions and other organizations that receive andhold deposits of money for others -- and the disposition of dormant or inactive accounts. See Attorney General Opinion C-107 (1963). Section 5 of article 3272b specifically establishes the "State Conservator Fund":

fromwhich there shallbe setaside andmaintained
a revolving expense fund of Twenty-five Thousand Dollars ($25,000) for the purpose of paying expenses incurred by the State Treasurer in the enforcement of the provisions of this Article, including the expense of publications, forms, notices, examinations, travel, and employment of necessary personnel.... The expense fund of Twenty-five Thousand Dollars ($25,000) is hereby appropriated to the State Treasurer for the purposes above stated for the biennium ending August 31, 1963.

You suggest that the legislature intended by the foregoing provision to make available to your office the $25,000 revolving expense fund in addition to any other funds appropriated for the purpose of defraying escheat management expenses. The lack of an express requirement that the article 3272b expense fundbe subject to recurring appropriations is contrasted with the language of article 3272a establishing the Escheat Expense and Reimbursement Fund (also a revolving fund)which expressly states, "The [funds] shallbe subject to... appropriation by the Legislature for the purpose of enforcing thisTitle." Id. 515.

The absence of express language authorizing or requiring a legislative biennial appropriation does not make this fund available toyour office without appropriation. Article VIII, section 6 of the Texas Constitution specifies:

No money shall be drawn from the Treasury but in pursuance of specific appropriations made by law;

p. 1376Honorable Warren G.Harding -Page 3 (MW-405)

nor shall any appropriation ofmoney bemade fora longer term than twoyears....
Moreover, by making an initial appropriation of the fund for the biennium ending August 31, 1963, the 57th Legislature signified that the fundwas tobe deposited in the treasury and appropriated by the legislature asneeded. Themoney in the fund isearmarked foruse by the treasurer as specified andcannotbe devoted toanyotherpurpose, but it cannot be withdrawn from the treasury for such use unless properly appropriated therefor. See Johnson V. Ferguson, 55 S.W.2d 153 (Tex.Civ.App. -Austin, writ dism'd). The initial appropriation served only for the 1962-1963biennium. SeeDallas Countyv.McCombs, - 140S.W.2d 1109 (Tex. 1940).

It follows that the money appropriated for escheat management, but not the unappropriated money in the article 3272b revolving expense fund, is available to your office for the purpose of paying the salary and expenses ofpersons toassist in the investigation and recovery of unclaimed property. Your office has ample authority to use the appropriated funds for that purpose. Both articles 3272a and 3272b evidence the legislative intent that the treasurer actively pursue enforcement of the statutory provisions, employing personnel for that purpose and paying their expenses. See Attorney General Opinion C-388 (1965).

We advise thatyoumay employ experts toaidyou in the recovery of unclaimed property, and that their expenses and fees or salaries should be paid from the amount appropriated to your office by the legislature for "Escheat Management," or from other "Fiscal Management" sub-items transfered thereto. See Attorney General Opinion M-1010 (1971). Cf. Letter Opinion NrMS-258 (1956) (no appropriation). You should, of course, consult pertinent riders to the appropriations act. See Acts 1981, 67th Leg., ch. 875, art. V, 581, 2(s), 9, 40, 41, 68,: 3333, 3766, 3794, 3801, 3815, 3816, 3823 (riders re: position classification plan and schedule, manual of accounts, court representation, outside legal counsel, consultant contracts). See also V.T.C.S. art. 664-4 (professional services procurement act; V.T.C.S. art. 6252-11 (position classification act); V.T.C.S. art. 6252-11~ (private consultants).

SUMMARY
The treasury department may employ experts to aid in the recovery of escheated property and pay theexpenses and feesor salary thereof from funds appropriated toit.

p. 1377Honorable Warren G.Harding -Page 4 (Mw-405)

Very trulyyours,

MARK WHITE Attorney General ofTexas

JOHNW. FAINTER, JR. FirstAssistant Attorney General

RICHARD E.GRAY III Executive Assistant Attorney General
Prepared by Bruce Youngblood Assistant Attorney General

APPROVED: OPINION COMMITTEE

Susan L.Garrison, Chairman JonBible Rick Gilpin JimMoellinger BruceYoungblood

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