## THEATTORNICYGENERAI. OIF %-EXAS

August 24, 

## 1964

Honorable 3esae State Treasurer Austin, Texas

Dear Mr. James: James Opinion No. C- 297 Re: Wherethe special trust fund created by Section 9 of Article 4.08, Texas Insurance Code, contains insufficient funds to pay for publication of notices required under Section 5of such Article, maythe cost of such publication be paid out of the general appropriation to the State Treasurer’s office, and If not, maythe expense of publication be incurred and paid from the special trust fu’uiTas moneyaccrues to such
You have requested an opinion of this office Involving the following questions:

Wherethe special trust fund created by Section 9 of Article 4.08, Texas Insurance Code, contains insufficient funds to pay for publication of notices required under Section 5 of, such Article:

“(1) Whether the cost of such publications can be ~paldfrom regular appropriations from the Qeneral Revenue Pundmadeto this office for general operating expenses. ?(2) If weare prohibited from paying the expense of such publication from the above referred to General Revenue Fundappropriations, is there any prohibition against Incurring the expenses of publication as required by Section 5and later making payment from the special trust fund provided for In Section 9 of said Article 4.08, Texas Insurance Code.”

-1418-Hon. Jesse Jamear page 2 

### (C-297)

Texas Insurance Code (Vernon’s 1948) Article 

### 4.08, Section 5 reads In part:

.The axpense8 of publication shall be cha$d against the special trust fund provided for in Section 9.” Article 

### 4.08,Section 9 reads in part: .The remaining one-fourth shall be admlni&ked by himas a special trust fund for the purposea of this Article, 

### anddeposited in the mannerprovided by law for the deposit of said funds.

. . .” The ordinary meaning of the word “shall” is mandatory and equivalent to “must.” Also, whenthe intent clearlp Indicates that the word “shall” as uaed In a statute Is Intended to be mandatory, it is inconsistent with any idea of discretion and is mandat~~orel14c;aren v. St 92 Tex.Crim. 449, 199 S.W. 811 (1917); v Hancoclc 1 S.W. 

### 694,700 (Tex.Clv.App. 1917); Jaynes



### 306SW2d i 8of Ariicle Tex.Clv.App. 1957) Nocases have Involved

8 or the intent of-the Lenlslature within this Article. Initiated hereuMer Is a newand separate admlnlstlration of funds subject to escheat held by life insurance companlet

TheAuatln.Court of Civil Appeals in the case of Lawson v. Baker, 220 S.W. 

### 260 (Tex.Clv.App. 1920, error ref.) conaa specla’l state revolving fund and the intent of the Le

### if lslature In administration of that fund. The Court saidsat page 

### 26 t

“It is a paramount rule of statutory construction that in case of doubt, the intention of the Legislature is to be ascertained If possible.

. . .

“The emergency clause of a statute Is often an Important ala In detemainlng the legislative purpose; 3d in,thls case wethink it peaullarly ao. . . . The Emergenoy Clause, $eotion 3 o? Article 4.08, reads in part: “The fact that the pre8ent laws provld-ing toti the escheat OSabandoned fundo held by life

. insurance companies and due and plyrble under any life or endowmentInsurance policy or annuity

-1419,Hon. Jesse James, page 

### 3 (C-297)

contract which has matured or terminated are indefinite, lnadequftte and confusing, creates an amergenoy
. . . Article 4.08, Section 

### 9 creates a special trust fpnd from specific unclaimed finds of life insurance companies. To provide expenses of publication and administration of the act is the specific purpose of the special trust find of Section 9. The Emergency Clause clearly states that the Legislature intended to eliminate indefinite and confusing laws applicable to~llfe insurance companies. Interpretation of mandatory language in Section 

### 5 should resolve doubt or confusion as to the fund from which money originates in Article 4.08 for expenses of publication. The Legislature intended to eliminate confusion through mandatory deslgnatlo~ In Section 

### 5 of the Section 9 $pectal trust fund as the only fund to be charged with expenses of publication. Weare of the opinion that the cost of publication maynot be paid out of the general appropriation to the State Treasurer’s office.

Your second question Is whether the expense of publication maybe Incurred andpaid from the special trust fund as moneyaccrues to such fund. Section 

### 6 of Article VIII of the Constitution of Texas provides that nomoneymaybe drawnfrom ;;; treasury unless a specific appropriation has been madethere-

. Article 4.08, Section 9reads in part:

“Uponreceipt of any unclaimed funds from such life insurance companies by the State Treasurer, he shall pay forthwith three-fourths of the amountthereof into the general funds of the state for the use of the state. Theremaining one-fourth shall be administered by himas a special trust fund for the purposes of this Article, and deposited in the m$nnerprovided by law for deposit of said funds.

. . .Essential elementa required in a valid appropriation were dlscueaed in Atkins v. State HighwayDepartment, 201 S.W. 

### 226 (Tex.Clv.App. IVIB). Th C t Id d tingent amounts to be deposited to a specialefu~drinc%s,e~&hc~~gislature. Ch. 190, B23which read In part:

“All funds coming Into the hands of the highway commission, derived from the registration fees herein before provided for, or from other sources, as collected, shall be deposited with the state treasurer to the credit of a special fund

-14to-.

Hon. Jesse James, Pat504 (C-297)
designated ept).

the ‘state hlghway fund’ and shall

“,;,pz @ ~,only ‘In the maper provided In the

%.wposes stated. The Courts held that this provlsl@n allocating contingent amounts to a speolal fund oonatltuted a valid appropriation within the moaning ot Artlole VIII, Section 6 of the Constitution of Texas. An appmrlation Occurs whenan act of the Legislature sets apart,shd s~eolally designates the mone I-9 derived from a particular sour00 OSrevenue to a partlcu ar ~~ct5~‘~d~~~~:~~~~~~*~~’ ti??%la~%~nds &II life ins&& oompanie~ whlohj’as collected, are deposited with the State Treaenmerto the credit of a special trust fund to administer the purposes of the Aot. Avalid appro r;;t;;z of moneywithin the meaning of Article VIII, Section Ii Constitution of Texas waomadeby the Legislature in Article 4.08, Seotion 9 for the purpose8 stated in the Act.

After the Legislature has appropriated moneyfor a state agency to Its use andmaintenance, that agency mayIncur debts andpay thos!? debts a8moneyaccrues to the administering fund. See our Opinion No. o-1544. In the oaee of Ferguson v. Johnr@n, 57 S.W.28 372 (Tex.Clv.App. 1933, error diem.), contractual power of a state agency to bZnda apeolal f ’und containing lnsuffiolent funds was corisidered. TheCourt said at pages 378 and 379:

. .A11 general leglsl~tlve ,approprlations for the support of the &ate government and its various departments andaotlvltles are madefor a future biennium, the revenues to meet which are prospective andpoese6s an element of uncertainty equally as great as that incident to those weare considering. Weknowof no instance in which the accumulation of such revenues In the treasury is a prerequisite to Incurring govdrllaent llablllty. TheLegislature Itself creates such llablllty in advance of covering treasury receipts in cases of specific appropriations, **and** authorizes creation of such llabllity by Its oontraotlng agencies.

‘The departmental constructlqn evidenced by the uniform practice of contracting against .anticlRated revenues stands unchallenged in the record.

. . . Weare of the opinion that the appropriation by the Legislature for funds collected through esoheat procedures from

-1421-Hon. Jesse James, page 5 (C- a71

life insurance companies allows expenses of publication to be inqurred andpaid from the special trust fund a8mopeyaccrues

,,to auc~ fund.
SUMMARY

Where the special trust fund created by Section 9 of Article 4.08, Texas Insurance Code, contains insufficient funds to pay for publlcation of notices required under Section 5 of such Article,, the coat of such publication maynot be paid qut of the general appropriation to the State Treasurer’s office, but the expense of publication maybe Incurred and paid from the special trust fund a8 money accrues to such fund. Very truly your8, WAGOONER

CARR Attorney General
By:Gordon Rouser Assistant (tH:mlrmkh APPROVEDI OPlyIOHCOHNITTEE W.V. Qeppert, Chairman Pat Bailey Gordon Case R,Iou;gler
EPROVRDFORTHEATTORWRY IEWERAL : Stanton Stone

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