DAN MORALES 

ATTORNEY GENERAL 

QBffice of tly Bttornep Qheral 

&tate of IICexae 

April 11,1994 

Mr. Robert w. oee 

Chair 

Public Utility Commission of Texas 

7800 Shoal Creek Boulevard 

Austin, Texas 78757 

Opinion No. DM-288 

Re: Authority of the Public Utility 

Commission of Texas to apply for, receive, 

and expend federal funds, and related 

questions (RQ-664) 

You have requested advice about the authority of the Public Utility Commission of 

Texas to receive federal 8mds. You write that you are aware of several federal grants that 

the commission could use to acquire, analyze, and use significant new information. You 

ik3tS.k: 

Considering Chapter V, 5 22, of the Appropriations Act . , and the 

Public Utility Regulatory Act , may the [commission] directly 

or indiiectly apply for, receive, and/or expend federal finds? 

You refer to federal grants for the purpose of acquiring, analyzing, and using 

significant new information. Among other projects, you are interested in obtaining a 

federal grant to purchase a Geographic Information System, which relates data base 

information to the map. This system would enable the commission to compile and analyze 

utility information according to geographic regions. We believe article 1446c, V.T.C.S., 

the Public Utility Regulatory Act, authorizes the commission to seek federal grants to 

assist in carrying out its statutory duties. 

The commission has statutory authority to acquire and analyxe utility information, 

as well as other related kinds of information. See V.T.C.S. art. 1446c, @8(b)(5) 

(requiring commission to employ director of research experienced in analysis of industry, 

economics, energy, firel, and other related matters), 16(b) (requiring commission to 

develop long-term statewide electrical energy forecast), (e) (requiring commission to 

review and evaluate electric utilities’ forecast of load and resources). The commission has 

the general power to regulate and supervise the business of every 

public utility within its jurisdiction and to do all things, whether 

specifically designated in this Act or implied herein, necessary and 

convenient to the exercise of this power and jurisdiction. 

Id, 5 16(a). Moreover, the Public Utility Regulatory Act is to be “construed liberally to 

promote the effectiveness and efficiency of regulation of public utilities. .‘I Id. 9 89. 

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Mr. Robert W. Gee. - Page 2 (DM-288) 

We believe that the commission has authority to apply for federal grants when “necessary 

and convenient to the exercise” of its general power to regulate public utilities. In our 

opinion, the commission is authorized to seek and receive a federal grant to purchase the 

Geographical Information Service you described, assuming that the conditions attached to 

the particular grant are conditions that the commission may accept. See also Gov’t Code, 

$403.012 (comptroller may accept federal money for a state agency not otherwise 

restricted by statute, rider, or special provision in the general appropriations act). 

Whether the commission has statutory authority to apply for grants for other purposes 

must be determined on a case-by-case basis. In general, if the commission has statutory 

authority to receive an appropriation for a particular service or item, we believe it may 

also seek federal timding for that service or item. 

You are concerned, however, that article V, section 22 of the current general 

appropriations act bars the appropriation to the commission of federal finds received 

during the current biennium. Federal grant finds, like other funds received by state 

agencies, must be deposited in the state treasury. Gov’t Code 5 404.094; Attorney 

General Opinion IM-772 (1987). Once fimds are in the treasury, they may be withdrawn 

only by appropriation by the legislature. Tex. Const. art. VIII, 5 6. The general 

appropriations act may include items of appropriation, which state the amount and 

purpose of funds allocated to state agencies, and riders that detail, limit, or restrict the use 

of finds appropriated by the act.’ Tex. Const. art. III, § 35; Attorney General Opinion 

V-1254 (1951); see alsoMoore v. Sheppard, 192 S.W.2d 559, 561 (Tex. 1946); Attorney 

General Opinion DM-I 16 (1992) (general legislation may not be enacted in a general 

appropriations bill). Article V, section 22 of the general appropriations act appropriates 

federal fimds received during the current biennium to the agencies authorized to use them, 

subject to stated limitations. See Attorney General Opinions IM-772 (1987) at 7-8; H-550 

(1975) at 3-4. It states in part: 

All fimds received from the United States government by state 

agencies and institutions named in this Act are hereby appropriated 

to such agencies for the purposes for which the federal grant, 

allocation, aid, payment or reimbursement was made subject to the 

following: 

a. Except for institutions and agencies of higher education, 

federal funds including unexpended balances shall be 

deposited to and expended from the specific program 

identified under each agency’s appropriation bill pattern. 

IIn addition, article XVI, s&ion 69 of the Texas Constitution now authorizes the legislature to 

require, by rider in the general appropriations act or by separate statute, the prior approval of an 

expenditore or the emergency transfer of any hnd.5 appropziated to agencies of state government. 

p. 1534 
Mr. Robert W. Gee - Page 3 (DM-288) 

Except for institutions and agencies of higher education, no 

federal timds may be expended for strategies or Smctions 

other than those which have been reviewed by the Seventythird Legislature and authorized by specitic language in this 

Act or encompassed by an agency’s budget structure as 

established by this Act. 

Acts 1993, 73d Leg., ch. 1051, art. V, 5 22, at 5351.’ You read the first sentence in 

paragraph a. of this rider as allowing the commission to use federal timds only if its 

appropriation specifically identifies a program as timded by federal funds. Since the 

appropriation to the Public Utility Commission does not identity any program as being 

timded by federal timds, you are concerned that any federal funds granted to the 

commission during this biennium would not be appropriated to it. See Acts 1993, 73d 

Leg., ch. 1051, art. I, at 4854-61. 

The tirst sentence in paragraph a. does not expressly state that federal finds may 

only be deposited to a program specifically identified as a recipient of federal funds, but 

states that federal timds are to be deposited to “the specific program identified” under the 

agency’s appropriation bill pattern. We read “specific program” as refening to the items of 

appropriation in each agency’s appropriation. The current appropriations act refers to the 

items of appropriation as “strategies.” Moreover, in this context, the word “identified 

means “set out” or “listed” in the agency’s appropriation. Thus, federal funds granted to 

an agency may only be deposited to and spent from one of the specific programs, or 

strategies, listed in its appropriation. If the commission’s appropriation includes an item 

that may be spent for a computerized mapping system, federal funding for that purpose 

may be deposited to that item. 

The second sentence in paragraph a. prohibits the expenditure of federal funds for 

programs other than those reviewed by the 73d legislature and authorized by the specific 

language of the general appropriations act or by the agency’s budget structure. See 

generally Attorney General Opinion JM-772 (1987) (construing second paragraph of 

virtually identical provision in 1986-1987 appropriations act). Both sentences of 

paragraph a. have a similar effect: a state agency, except for an agency or institution of 

higher education, may spend federal fimds for the purpose for which they were granted 

only if the agency’s appropriation authorizes expenditures for that purpose. 

The appropriation to the Public Utility Commission appropriates funds for various 

strategies that appear broad enough to encompass an expenditure for the Geographical 

Information Service. For example, the commission receives funds to 

zArticle V, section 22 of the current general appropriations act also includes other provisions that 

are not relevant to your question. 

p. 1535 
Mr. Robert W. Gee - Page 4 (DM-288) 

Assess the demand and current supply of electricity and determine 

the need for additional resources. . 

Process and analyze filings to change boundaries 

Examine and review all construction reports filed by electric utilities 

for new transmission tines and power plants. lIHJaintain database 

of telecommunications construction information. 

Acts 1993, 73d Leg. ch. 1051, art. I, at 4856, 4857 (strategies B.l.l., B.2.1., and C.l.l.). 

In our opinion, these specific appropriation items are broad enough to encompass an 

expenditure for a Geographical Information System, and there may be other items in the 

commission’s budget that could also be spent for this purpose. Federal grant tirnds 

received for this purpose during the current biennium may be deposited to and expended 

from one of these accounts or another account that would permit the expenditure of stategenerated fimds for that purpose. See generdy Attorney General Opinion JM-916 

(1988). 

Your other questions are contingent on a contrary reading of section 22. 

Accordingly, we need not answer them. 

p. 1536 
Mr. Robert W. Gee - Page 5 (DM-288) 

SUMMARY 

The Public Utility Commission has authority under V.T.C.S. 

article 14461~ to apply for federal grants necessary and convenient to 

the exercise of its general power to regulate public utilities. Federal 

grsnt finds are placed in the state treasury, ,and chapter V, section 22 

of the current general appropriations act appropriates them to the 

agencies for the purposes for which the federal grant was made, 

subject to stated conditions. Among other conditions, section 22 

provides that federal tirnds granted to an agency, other than an 

agency or institution of higher education, may only be deposited to 

and spent from one of the specillc programs listed in the agency’s 

appropriation. If an item of appropriation in the wnunission’s 

appropriation could be spent for the purposes for which the federal 

grant was received, the federal grant funds may be deposited to and 

spent from that item. 

j-~you~o_lr 

DAN MORALES 

Attorney General of Texas 

JORGE VEGA 

Fist Assistant Attorney General 

DREW DURHAh4 

Deputy Assistant Attorney General for Criminal Justice 

WILL PRYOR 

Special Counsel 

RENEA HICKS 

State Solicitor 

SARAH J. SHIRLEY 

Chair, Opinion Committee 

Prepared by Susan L. Garrison 

Assistant Attorney General 

p. 1537