THE ATTORNEY GENERAL 

OF TEXAS 

Richards Opinion No. JM-1230 

Re: Applicability of State Funds 

Honorable Ann W. 

State Treasurer 

P. 0. Box 12608 

Capitol Station 

Austin, Texas 78711 

October 5, 1990 

Reform Act, Government Code section 404.091, et sea., to fees 

collected by the Board of Medical 

Examiners (RQ-2115) 

Dear Ms. Richards: 

You have requested our opinion regarding the applicability of the State Funds Reform Act, Texas Government Code 

section 404.091, et sea to fees collected by the Texas 

State Board of Medical Ekaminers. 

Sections 404.091 through 404.094 provide: 

s 404.091. Short Title 

This subchapter may be cited as the State 

Funds Reform Act. 

§ 404.092. Definition 

In this subchapter, "state agency" means 

an office, institution, or other agency that 

is in the executive branch of state government, has authority that is not limited to a 

geographical portion of the state, and was 

created by the constitution or a statute of 

this state, but does not include an institution of' higher education as defined by 

Section 61.003, Education Code. 

g 404.093. Applicability Of Subchapter; 

Exemptions 

(a) This subchapter applies to a state 

agency only to the extent that it is not 

otherwise required to deposit funds in the 

treasury. 

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Honorable Ann W. Richards - Page 2 (JM-1230) 

(b) This subchapter does not apply to: 

(1) funds pledged to the payment of 

bonds, notes, or other debts if the funds are 

not otherwise required to be deposited in the 

treasury; 

(2) funds held in trust or escrow for 

the benefit of a person or entity other than 

a state agency: 

(3) funds set apart out of earnings 

derived from investment of funds held in 

trust for others, as administrative expenses 

of the trustee agency: 

(4) funds, grants, donations, and 

proceeds from funds, grants, and donations, 

given in trust to the Texas State Library and 

Archives Commission for the establishment and 

maintenance of regional historical resource 

depositories and libraries in accordance with 

Section 441.074; or 

(5) funds under the management of the 

secretary-treasurer of the Anatomical Board 

of the State of Texas, as provided by Article 

4589, Revised Statutes. 

5 404.094. Funds to be Deposited in Treasury 

(a) Fees, fines, penalties, taxes, charges, 

gifts, grants, donations, and other funds 

collected or received by a state agency under 

law shall be deposited in the treasury, 

credited to a special fund or funds, and 

subject to appropriation only for the purposes 

for which they are otherwise authorized to be 

expended or disbursed. A deposit shall be 

made at the earliest possible time that the 

treasury can accept those funds, but not 

later than the third business day after the 

date of receipt. However, if an agency 

determines that for seasonal or other extraordinary reasons deposits cannot be made 

by the third business day after the date of 

receipt, the agency shall provide written 

notice of the determination to the state 

auditor and treasurer with an explanation of 

the circumstances that require the delay. If 
Honorable Ann W. Richards - Page 3 (JM-1230) 

the state auditor finds that an agency has 

not complied with this subsection, the state 

auditor shall make an estimate of any resulting financial loss to the state, taking into 

consideration compliance costs that would 

have been additionally incurred by the 

agency, and report the amount to the legislative audit committee, the governor, and the 

treasurer. 

(b) Money that is required by this subchapter or by another law to be deposited in 

the treasury shall be deposited to the credit 

of the general revenue fund unless the money 

is expressly required to be deposited to 

another fund, trust fund, or special account 

not in the general revenue fund. This 

subsection does not affect the authority of 

the comptroller or the treasurer to establish 

and use accounts necessary to manage and 

account for state revenues and expenditures. 

The Medical Practice Act, article 4495b, V.T.C.S., 

creates two funds within the Board of Medical Examiners. 

Section 3.10(a) thereof provides: 

(a) All annual reaistration fee c llected 

bv the board shall be DlaCed in Theo State 

Treasurv to the credit of the medical reaistration fund. The fees deposited to this 

special fund shall be credited to the appropriations of the board and may be spent only 

as provided by then General Appropriations 

Act, this Act, or other applicable statutes. 

Money in that fund may be used by the board 

and under its direction in the enforcement of 

this Act, the prohibition of the unlawful 

practice of medicine, the dissemination of 

information to prevent the violation of the 

laws, and the prosecution of those who 

violate the laws. All distributions from the 

fund may be made only upon written approval 

of the secretary-treasurer of the board or 

his designated representative, and the 

comptroller shall upon requisition of the 

board from time to time draw warrants upon 

the State Treasurer for the amounts specified 

in the requisition. (Emphasis added.) 

Section 2.09(k) provides: 

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Honorable Ann W. Richards - Page 4 (JM-1230) 

(k) The board shall establish by rule a 

reasonable charge for those fees not specifically determined but authorized by this Act. 

The board may not waive collection of any fee 

or penalty. The board shall place all fees 

received under authority of this Act, not 

otherwise specified, into the medical licenslna f nd The board is authorized and shall 

by anzua; budget determine e of 

handlina the funds and the purpose, consistent with this Act, for which the same may be 

used. The budgeted expenses authorized by 

the board shall not be a charge upon the 

general revenue of the state nor paid from 

the general revenue. (Emphasis added.) 

Section 3.10(a) clearly requires that the board place 

"[a]11 annual registration fees . . . in the State Treasury 

to the credit of the medical registration fund." Thus, 

irrespective of the State Funds Reform Act, the Medical 

Practice Act itself directs that annual registration fees be 

deposited in the State Treasury. 

Section 2.09(k) is silent as to the proper depository 

for fees that comprise the "medical licensing fund." 

The statute states merely that the Board of Medical -Examiners "shall . . . determine the manner of handling the 

funds . . . .I' On its face, this language is not inconsistent with the deposit of these funds in the Treasury, and, 

absent further inquiry into the relevant legislative history, a convincing argument could be made that the State 

Funds Reform Act applies to the "medical licensing fund." 

Indeed, both the State Auditor and the State Treasurer have 

made administrative determinations that fees attributable to 

the medical licensing fund must be placed in the Treasury. 

The rather convoluted history of that statute, however, 

requires a different conclusion. 

As originally enacted in 1981, the State Funds Reform 

Act, then article 4393c, V.T.C.S., contained the following 

five exemptions: 

Sec. 3. (a) This Act applies to each 

state agency only to the extent that it is 

not otherwise required to deposit funds in 

the state treasury. 

(b) This Act does not apply to: 

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Honorable Ann W. Richards - Page 5 (JM-1230) 

. 

(1) funds pledged to the payment of bonds, 

notes, or other debts if the funds are not 

otherwise required to be deposited in the 

state treasury; 

(2) funds held in trust or escrow for the 

benefit of any person or entity other than a 

state agency: 

(3) funds set apart out of earnings 

derived from investment of funds held in 

trust for others, as administrative expenses 

of the trustee agency: 

(4) funds, grants, donations, and proceeds 

from funds, grants, and donations, given in 

trust to the Texas State Library and Archives 

Commission for the establishment and maintenance of regional historical resource depositories and libraries in accordance with 

Section 2A, Chapter 503, Acts of the 62nd 

Legislature, Regular Session, 1971, as 

amended (Article 544213, Vernon's Texas Civil 

Statutes); or 

(5) the denosit of funds for state aaenties subject to review under the Texas Sunset 

&& (Article 5429k, Vernon's Texas Civil 

Statutes) for 1981. which shall be determined 

bv each aaencv's enablina statute.1 

Acts 1981, 67th Leg., ch. 835, at 3189-90 (emphasis added). 

The Board of Medical Examiners is an agency that was 

subject to review under the Texas Sunset Act in 1981. As a 

result, the State Funds Reform Act, at least initially, was 

not applicable to the board. 

In 1985, the statute was amended three times. One 

amendment, Acts 1985, 69th Leg., ch. 479, 5 93, at 1706, 

simply changed the statutory reference in the fifth 

1. This provision was added as a house floor 

amendment. Debate on H.B. 1623 on the Floor of the House, 

67th Leg. (Apr. 21, 1981) (tape available from House 

Technical Services). 

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Honorable Ann W. Richards - Page 6 (JM-1230) 

. 

exemption to the current designation. Chapter 479 explicitly 

states that it is a non-substantive revision. UL.61, at 

1652-53. Another amendment, Acts 1985, 69th Leg., ch. 485, 

5 8, at 2057-58, was part of a bill relating to the State 

Anatomical Board, and it amended the State Funds Reform Act 

by adding a sixth exemption. 

Finally, the 69th Legislature amended the Treasury Act, 

and as a part thereof, the State Funds Reform Act. As 

adopted therein, the portion regarding exemptions, section 4.003 of the act, provides: 

(a) This chapter applies to a state agency 

only to the extent that it is not otherwise 

required to deposit funds in the treasury. 

(b) This chapter does not apply to: 

(1) funds pledged to the payment of 

bonds, notes, or other debts if the funds are 

not otherwise required to be deposited in the 

treasury; 

(2) funds held in trust or escrow for 

the benefit of a person or entity other than 

a state agency: 

(3) funds set apart out of earnings 

derived from investment of funds held in 

trust for others, as administrative expenses 

of the trustee agency; or 

(4) funds, grants, donations, and 

proceeds from funds, grants, and donations, 

given in trust to the Texas State Library and 

Archives Commission for the establishment and 

maintenance of regional historical resource 

depositories and libraries in accordance with 

Section ZB, Chapter 503, Acts of the 62nd 

Legislature, Regular Session, 1971 (Article 

5442b, Vernon‘s Texas Civil Statutes). 

Acts 1985, 69th Leg., ch. 240, at 1214-15. 

It is not clear why the exemption concerning the 1981 

sunsetted agencies was omitted from chapter 240. The fact 

that it was included in chapter 485 (relating to the Anatomical Board), a substantive revision, however, means that, in 

1985, the exemption continued to be a part of the State 

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Honorable Ann W. Richards - Page 7 (JM-1230) 

Funds Reform Act, and, as such, it removed the Board of 

Medical Examiners from the purview of that statute.2 This 

result is supported by our discussion in Attorney General 

Opinion JW-479 (1986). 

In 1987, the legislature codified the State Funds 

Reform Act as part of title 4 of the Government Code. The 

portion relating to the exemptions, section 404.093 of the 

code, included the Anatomical Board exception, but omitted 

the exception regarding the agencies sunsetted in 1981. The 

provision, as adopted, states: 

(a) This chapter applies to a state agency 

only to the extent that it is not otherwise 

required to deposit funds in the treasury. 

(b) This chapter does not apply to: 

(1) funds pledged to the payment of 

bonds, notes, or other debts if the funds are 

not otherwise required to be deposited in the 

treasury: 

(2) funds held in trust or escrow for 

the benefit of a person or entity other than 

a state agency; 

(3) funds set apart out of earnings 

derived from investment of funds held in 

trust for others, as administrative expenses 

of the trustee agency; 

(4) funds, grants, donations, and 

proceeds from funds, grants, and donations, 

given in trust to the Texas State Library and 

Archives Commission for the establishment and 

maintenance of regional historical resource 

depositories and libraries in accordance with 

Section 441.074; or 

2. Furthermore, section 2 of chapter 240 repeals 

certain other statutes, but not the exemption for sunsetted 

agencies. In addition, it declares that "any amendment, 

revision, or reenactment if any of these statutes by the 

69th Legislature is preserved and given effect as a part of 

this bill." Id. at 1215. 

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Honorable Ann W. Richards - Page 8 (JM-1230) 

(5) funds under the management of the 

secretary-treasurer of the Anatomical Board 

of the State of Texas, as provided by Article 

4589, Revised Statutes. (V.A.C.S. Art. 

4393-1, Sec. 4.003.) 

Acts 1987, 70th Leg., ch. 147, g 1, at 358. Chapter 147 

specifically declares that it "is intended as a recodification only, and no substantive change in the law is intended 

by this Act." Acts 1987, 70th Leg., ch. 147, 5 2, at 536. 

Nevertheless, title 4 of the Government Code, as issued in 

1990 and as quoted at the beginning of this opinion, contains no reference to the now apparently forgotten exemption 

for agencies sunsetted in 1981. 

Title 4 of the Government Code, as presently constituted, fails to offer any clue that the State Funds Reform 

Act is inapplicable to the Board of Medical Examiners, and 

absent examination of the historical circumstances, we, like 

the auditor and the treasurer, would certainly determine 

that the act applies to the board. The supreme court, 

however, has recently made clear that this is not a course 

available to us. In Johnson v. Citv of Fort Worth, 774 

S.W.2d 653 (Tex. 1989), the court declared: 

When a conflict exists between a former 

statute and a revision made pursuant to the 

legislature's directive to the Texas Legislative Council to make a nonsubstantive revision of the statutory law, the former statute 

will control. 

Id. at 654-55; see also Minton v. Perez, 783 S.W.2d 803, 805 

(Tex. App. - San Antonio 1990, no pet.) 

Accordingly, we are compelled to conclude that the 

State Funds Reform Act is not applicable to the Texas State 

Board of Medical Examiners. 

SUMMARY 

The State Funds Reform Act, Texas Government Code section 404.091, et se . , is not 

applicable to fees collected by the Texas 

State Board of Medical Examiners. All annual 

registration fees collected by the board 

must, however, be deposited in the State 

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Honorable Ann W. Richards - Page 9 (JM-1230) 

Treasury pursuant to section 3.10(a) of the 

Medical Practice Act, article 4495b, V.T.C.S. 

Very truly yo , J-h . 

JIM MATTOX 

Attorney General of Texas 

MARY KELLER 

First Assistant Attorney General 

IOU MCCRKARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RENEA HICKS 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, opinion Committee 

Prepared by Rick Gilpin 

Chairman, Opinion Committee 

p. 6547