THEATTORNICYGENERAI. 

OIF %-EXAS 

August 24, 1964 

Honorable 3esae 

State Treasurer 

Austin, Texas 

Dear Mr. James: 

James Opinion No. C- 297 

Re: Where the 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, may the cost of 

such publication be paid out 

of the general appropriation 

to the State Treasurer’s office, 

and If not, may the expense of 

publication be incurred and 

paid from the special trust 

fu’uiTas money accrues to such 

You have requested an opinion of this office Involving 

the following questions: 

Where the 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 ~pald from regular appropriations from the 

Qeneral Revenue Pund made to this office for general operating expenses. 

?(2) If we are prohibited from paying the 

expense of such publication from the above referred 

to General Revenue Fund appropriations, is there any 

prohibition against Incurring the expenses of publication as required by Section 5 and 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 him as a special trust fund for 

the purposea of this Article, and deposited in 

the manner provided by law for the deposit of 

said funds. . . . ” 

The ordinary meaning of the word “shall” is mandatory 

and equivalent to “must. ” Also, when the 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 

306 S W 2d i 

8 of Ariicle 

Tex.Clv.App. 1957) No cases have Involved 

8 or the intent of-the Lenlslature within 

this Article. Initiated hereuMer Is a new and separate admlnlstlration of funds subject to escheat held by life insurance companlet 

The Auatln.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 we think 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 OS abandoned fundo held by life 

. insurance companies and due and plyrble under any 

life or endowment Insurance 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. We are of the opinion 

that the cost of publication may not be paid out of the general 

appropriation to the State Treasurer’s office. 

Your second question Is whether the expense of publication may be Incurred and paid from the special trust fund as 

money accrues to such fund. Section 6 of Article VIII of the 

Constitution of Texas provides that no money may be drawn from 

;;; treasury unless a specific appropriation has been made there- 

. Article 4.08, Section 9 reads in part: 

“Upon receipt of any unclaimed funds from 

such life insurance companies by the State Treasurer, he shall pay forthwith three-fourths of the 

amount thereof into the general funds of the state 

for the use of the state. The remaining one-fourth 

shall be administered by him as a special trust fund 

for the purposes of this Article, and deposited in 

the m$nner provided by law for deposit of said funds. 

. . . 

Essential elementa required in a valid appropriation 

were dlscueaed in Atkins v. State Highway Department, 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, B 23 which 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, Pat50 4 (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 when an act of 

the Legislature sets apart,shd s~eolally designates the mone 

derived from a particular sour00 OS revenue to a partlcu I-9 ar 

~~ct5~‘~d~~~~:~~~~~~*~~’ ti??%la~%~nds 

&II life ins&& oompanie~ whlohj’as collected, are deposited 

with the State Treaenmer to the credit of a special trust fund 

to administer the purposes of the Aot. A valid appro r;;t;;z 

of money within the meaning of Article VIII, Section Ii 

Constitution of Texas wao made by the Legislature in Article 4.08, 

Seotion 9 for the purpose8 stated in the Act. 

After the Legislature has appropriated money for a state 

agency to Its use and maintenance, that agency may Incur debts 

and pay thos!? debts a8 money accrues 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 bZnd a apeolal f’und containing lnsuffiolent 

funds was corisidered. The Court said at pages 378 and 379: 

. .A11 general leglsl~tlve ,approprlations 

for the support of the &ate government and its 

various departments and aotlvltles are made for a 

future biennium, the revenues to meet which are 

prospective and poese6s an element of uncertainty 

equally as great as that incident to those we are 

considering. We know of no instance in which the 

accumulation of such revenues In the treasury is 

a prerequisite to Incurring govdrllaent llablllty. 

The Legislature 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. . . . 

We are 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 and paid from the special trust fund a8 mopey accrues 

,, 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 may not be 

paid qut of the general appropriation to the State 

Treasurer’s office, but the expense of publication 

may be 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:ml rmkh 

APPROVEDI 

OPlyIOH COHNITTEE 

W. V. Qeppert , Chairman 

Pat Bailey 

Gordon Case 

R,Iou;gler 

EPROVRD FOR THE ATTORWRY IEWERAL 

: Stanton Stone 

-1422-