Court Opinion

ID: 4142427
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:21:49.45936+00
Date Added: 2024-06-11T14:35:51.042763
License: Public Domain

THEA~~~~NEY                         GENERAL
                             OFTEXAS

Hon. J. T. McMillan               Opinion No. O-3928
Deputy Commissioner               Re:    Whether or not the Banking Com-
Department    of Banking          missioner   has authority    to allocate
Austin,   Texas                   the current    lump-sum departmental      ap-
                                  propriation    to the Banking Department
                                  for then salaries    and expenses    of bulld-
                                  ing and loan associations,       loan and
Dear Mr. McMillanl                brokerage    companies,   and credit   unions.
            We beg to acknowledge       receipt    of your letter       asking
for a construction      of the current     appropriation       act for the
State Banking Department       insofar    as it concerns       the division
embracing building      and loan associations,        loan and brokerage
companies,   and credit    unions.     Your precise      questions    are as
follows:
              ‘I(1)    Does the Banking Commissioner   have authority    to
      allocate      the items in the Second Division    between the
      Building      and Loans, Loan and Brokerage    and Credit  Unions?

              “(2)    If so, can the Banking Commissioner                 employ the
      same method of allocation               as was evidently       used by the
      Legislature-        To illustrate,           can the Banking Commissioner
      determine      administratively           that the cost of enforcing          the
      Building     and Loan Law shall            not exceed $12,425.00        (70%
      of $17,750,00);        that of enforcing           the Loan and Brokerage
      Law shall      not exceed $3%550.00 (20% of $179750.00)                   and
      the cost of enforcing            the Credit      Union Law shall       not ex-
      ceed $1,775.00        (10% of $17,750.00),            and having done so
      allocate     to building        and loan items or portions           of items
      under the Second Division              without     regard   to the actual
      purpose of expenditure             totalling     $12,425.00;      to loan and
      brokerage      companies      items or portions          of items totalling
      .$3,550.00     and to credit         unions items or portions          of items
      totalllng      $1,775.00,       and direct      payment accordingly?
             “(3)    Zf you have indicated      in response     to the second
      question    that the Banking Commission,er        can employ the meth-
      od of allocation      above outlined,     then if the Commissioner
      has made such allocation        and discovers      that the allocations
      are not in accordance       with fact,    can he change such alloca-
      tion so as to accord with the facts           as they develop?
             “(4)    If you, in answer to QuestionNo.          2, have indi-
      cated that the method of allocation           outlined     in that ques-
      tion is not usable,       then please   indicate      the method of
Hon.    J.   T. McMillan,       page   2    (O-3928)

        allocation      which    should     be used     by the    Commissioner,
                “(5)      If there is any different    rule applicable     to
        salaries       provided   for under the appropriation     as aistin-
        guished      from travel     expense and other items of expense,
        please     indicate     what this difference   may be and the proper
        method of allocation          of each.”
              The appropriation    for         the     division    of the      department
above    mentioned  is as follows:
“29. Supervisor      Bldg. ma Loan and Loan
    and Brokerage       and Credit Unions)             eO.OOO..OeO $             4,250.OO
30. &Examiner   .*..~~.0.*.....0.***~.~.~~.~.~~~~~*                              ~9~~~~~
    Examiner    .~.e.o~eoO~eo        . . . . **.0.00..~*0...~e.                    ,    0
g:  Bldg. and Loan and Loan and Brokerage                      and
          Credit     Union Legal Adviser              (part-time)  o *.          1,aoo.oo
33. Bldg.  and   Loan    and     Loan    and   Brokerage       and
          Credit     Union travel          and other items of
          contingent       expense,        including      bona
          premiums                                                               4t,5OO.OQ
               TOT& -- Building    and Loan and Loan and
               Brokerage and Credit   Union Division                        $ 179750.00”
                The appropriation          to the     division    for   each    fiscal
year    is   identical.
            If the appropriation      under consideration     came solely
from the General Fund of theState          unaffected   by the source and
purpose  of the fund or funds invo i vea, your questions         would be
easily  answered,  but this     is not the case.
               Section    1 of S.B. No. 42& in which is found                      the   de-
partmental      appropriation    under consideration declares:
               IIT& the several   sums of money herein       specified      or
        so much Lhereof     as may be necessary,     are hereby approprf-
        ated out of any moneys in the State        treasury,     not otherwise
        appropriated    in the General Revenue Fund or special            funds
        as may be shown for the support       and maintenance        of the sev-
        eral departments     and agencies   of the State government          for
        the two-year   period,   beginning   September    1, 1941, and end-
        ing &ugust 319 19430”
              So     that,    the lump sum of $17,750.00    appropriated     to
the purposes         enumerated     in the division under consideration        has
been, perforce          of the terms of the Senate Bill      it self 9 appro-
priated    from      the General Fund or from special       funds as the per-
manent statutes            may provide with respect   to the three     @lasses of
corporations         embraced in the division.
Hon.   J.   T. McMillan,      page   3    (O-3928)

              Section    9 of the Building      and Loan Associations    Act
(Ver.Civ.Stat.Art.        88la) authorizes      the Banking Commissioner     to
collect    certain    fees from building       and loan associations   in
lieu of examination        fees,  expressly     providing  that the assess-
ment by the Banking Commissioner            shall   be for enough
       9.o carry     out the provisions       of this Act; and said fees
       when collected       shall be placed      in a separate      fund with the
       State Treasurer        to be expended during the current           year,    or
       so much thereof        as may be necessary       in carrying     out the
       provisions     of this    Act; and should there be an unexpended
       balance     at the end of the year,        the Banking Commissioner           of
       Texas shall      reduce the assessment        for the succeeding        year,
       so that the amount produced           and paid into the State treas-
       ury, together       with said unexpended        balance    in the treasury,
       will not exceed the amount appropriated                for the current
       year, to pay all necessary           expenses    of supervising      the op-
       eration     and examining     the business      of the associations        do-
       ing business       under the provisions       of this Act, which funds
       shall    be paid out upon requisition           made out and filed       by
       the Banking Commissioner          of Texas, when the Comptroller
       shall    issue warrants     therefor”
              The Loan and Brokerage Companies Act (Ver.Civ.Stat.,
Art. 1524a)     provides for fees to be paid by such companies,                         as
foll.ows:
               “Said corporation           shall    pay the actual       traveling        ex-
      penses,      hotel     bills,     and all other actual          expense incident
      to such examination              and a fee not exceeding           one-eighth         of
      one per cent of its actual                 paid-in    capital.       (Sec.2)***
      and (such companies              as have sold in Texas their             bonds,
      notes,      certificates,         debentures,      or other obligations{              or
      are offering          for sale in Texas their            bonds, notes,         certi-
      ficates,       debentures       p or other obligations)          shall     file     a
      copy of such statement               with the Banking Commissioner                of
      Texas, together           with a fee of Ten ($10.00)             Dollars       for fil-
      ing .      (Sec.4)***       The   corporation      shall    pay  a   fee   of    Fifteen
       ($15.00)      Dollars       for filing     each such statement.”               (Sec.
      7)
               The statute         does not direct       the disposition         to be made
by the Banking Commissioner                of these examinations           and statement
fees.     Impliedly,        they are to be paid by him into the General
Fund of the State treasury.
              H.B. No. 845 of theRegular        Session      of the 47th Legis-
 lature,    amending Article     2465 of the Revised Civil           Statutes  of
 Texas,   1925,   and  the amendments    thereof,     relating     to   credit Un-
 ions,   declares   with respect    to these as follows:
Hon.   J.   T. McMillan,      page    4   (O-3928)

              “The Banking Commissioner               shall    cause each credit
       union to be examined at least                once yearly,         such examina-
       tion to be made by (1) some competent                     person or persons
       designated      by the Banking Commissioner                who shall be paid
       by the Banking Commissioner                an amount not to exceed ninety
        (90) per cent of the fees as herein                   provided,      which said
       fees shall be paid to said banking                    commissioner       by the re-
       spective      unions examined as provided               by this      Act as com-
       pensation      for his or their          services      and as reimbursement
       for travel       expenses    and other expenses             incurred;      (2) by
       one or more credit          union examiners          who shall be appointed
       by the Banking Commissioner                and shall      receive      a salary   of
       not exceeding        Three Hundred Dollars             ($300000)      per month,
       and shall be reimbursed             for travel        expenses     in the sum of
       Four Dollars        ($4.00)    per day, plus cost of transportation,
        such examiners       to retain       their    salary     and expenses        as above
       provided      out of fees collected            by them as hereinafter            pro-
       vided;     (3) or by the Deputy Commissioner,                   Departmental
       Examiner,      any bank examiner,           assistant       bank examiner,
       building      and loan supervisor           or building        and loan examiner,
       who shall      receive     and retain       the fees collected           by them as
       hereinafter       provided,     such fees so collected               to be cred-
        ited on the salary         of the person collecting               the same, so
        that such person shall           in no event receive             compensation      in
        excess of his salary          as provided        by law.
             “Each credit   union examined shall   pay an examination
       fee fixed by the Banking Commissioner      not to exceed Twenty-
       five Dollars   ($25.00)   per day per person engaged upon such
       examination.
              “All fees as above provided       shall  be paid by the cred-
       ,it union to the person or persons        making the examination,
       and such persons      shall make a monthly account      to the Bank-
       ,ing Commissioner     of the fees so collected     during the pre-
       ceding month, fees in excess of those retained            by the ex-
       ,aminer as above provided       shall be paid to the Banking Com-
       missioner     and by him deposited    with the State    Treasurer   to
       be held in a special       fund and used for the purpose       of en-
       forcing    the provisions     of this law.”
            It will therefore      be seen that those fees paid by
building   and loan associations       go into a separate     fund with the
State Treasurer;     those fees paid by loan and brokerage           companies
are to be paid into the General Fund of the State             Treasury;     while
a comparatively     small portion     of the fees paid by credit        unions
are to be paid into a special         fund with the State Treasurer*
             “The “separate   fund” paid by the building         and loan as-
sociations    and the Rtspeciallt fund paid by the credit         unions are
to be used for the express        purpose   of expenses    in adminiStering
the laws governing      these respective     corporations.
Hon. J.     T. McMillan,      page     5        (O-3928)

              A rider     attached         to    the   appropriation        for   the     State
Banking     Department     declares:
              l’Subject     to the limitations            hereinafter        provided,
      there     is appropriated          to the Banking Department                an amount
      equal to the total            fees and revenues           collected        by said de-
      partment      during the biennium ending August 31, 19439 plus
      an amount equal to the total                  fees and revenues            collected      by
      said department          during the biennium             ending August 31, 1943,
      plus an amount equal to the fees and revenue                           collected       b
      said Department          during the biennium             ending August 31e 19i:           1,
      in excess of the expenditures                   of said Department            during
      sald~biennium,          and the Department            shall    limit     its expendi-
      tures     to such amounts,           provided      that said Department             shall
      n,ot, in any event,           anything       in this bill        to the contrary
      n,otwithstanding,          spend more during the biennium                   than the
      total     itemized      appropriations          for said biennium;            further,
      provided      that if during the first                year of the biennium             said
      Department        shall    spend less than the total                itemized       appro-
      priation      for said year,          then said unexpended             balance      shall
      be expendable          during the second year of the biennium                       for the
      purpose      of enforcing        the laws of this State for which said
      Department        is charged with responsibility                   of enforcement,
       a.nd further       providing      that not more than seventy-five                    per
      c,ent (75%) of the appropriation                   for the Building           and Loan-
      Loan and Brokerage-Credit                tinion Division         shall     be payable
       out of the special           account      created     and maintained           by the
       collection      of fees by the Banking Department                     under and pur-
       suant to the Building             and Loan Laws of this State, I(
            The construction              of this rider           necessarily       enters        into
any consideration     of the           answers to your            questions*
             This rider pertains    to the entire   appropriation     for
the Banking Department 9 which appropriation        includes,     of courses
not only the division    hereinbefore     discussed  but lfkewise     the
first  division--that   of State banking corporations.

             Now, article    362 of the Revised Civil Statutes            declares:
             “Except as to savings      banks, the expense of every gen-
       eral and special     examination    shall   be paid by the corpora-
       tion examined in such amount as the Commissioner               shall    cer-
       tify  to be just and reasonable,        and  assessments     therefor
       shall  be made by the Commissioner         upon the banks examined
       fn proportion     to assets   or resources    held by the bank upon
       the da,tes of the examination       of the various      banks,‘”
               Article     363,   governing            the   disposition        of such      fees,
declares:
Hon. J.    T. McMillan,      page   6    (O-3928)

             “All sums collected       as examination    fees shall be paid
      by the Commissioner      directly    to the State     treasury    to the
      credit     of the General Revenue Fund.         Expenses    of examina-
      tion and of the Commissioner         in enforcing     the provisions     of
      this   title    shall be paid upon the certificate          of the Com-
      missioner     by warrant   of the Comptroller      upon the State treas-
      ury. It
             It is the rule that an appropriation     act canc;;itka;e
the effect     to repeal, amend or modify a general    law.
Steele,    57 Tex. 203; Linden v. Finley,   ~92 Tex. 451; Attorney                     l

General’s    Opinion 1916-1918, p0 110; Attorney     General’s    Opinion
No. 2965 1934-1936,p. 46; Attorney        General’s   Opinion No, 2970,
1934-193&, PO 72; attorney     General’s  Opinion No. O-18,37).
               Since the Building        and Loan &isociations        Act specifi-
cally   limits     the purpose for which the “separate             fund” under that
iict has been accumulated           to the express    purpose    of enforcing      the
law governing        such &asociation,      and since H.B, No. 845 restricts
the use of the 8’special ‘I fund created           by fees from credit        unions
to the purpose         of enforcing    the provision     of the Credit      Unions
rict, the Legislature         is powerless    by its Appropriation        Act 9 to
divert    such funds from the respective           purposes    for which they
were solely       destined    by statute    to another    purpose.      (See O-2641,
copy herewith).
               You are therefore     respectfully      advised    that since the
Legislature      has no authority      to allocate     these   special   or separ-
ate funds to any other use or p’urpose than the use or purpose                     for
which they were created,         it follows       that you, as Bankin,g Commis--
sioner,     have no such power.       No allocation       of the appropriation
can be made in such manner as to violate               the respective     statutes
creating     these special    funds.
               It does not follow from what we have said,                   however,
that the Banking Commissioner              has no discretion         or authority    to
allocate      to an extent       the lump-sum appropriation           of $179750.00
to the division         of the department         under consideration.         The con-
text     of this    appropriation,      and especially       when construed       in the
light     of the rider      above quoted,       indicates    clearly     that the Leg-
islature      intended    that the Banking Commissioner              should have the
power to allocate         this lump-sum appropriation             to the purposes       of
supervising       the respective       corporations       mentioned    insofar    as it
 (the Legislature)        had authority       to ,>rovide for allocatfon.
            We think the Banking Commissioner           would have authority
in the exercise     of his sound official      discretion    to allocate      the
lump-sum appropriation       in any way and to any extent        that does not
violate  the statutes     hereinabove  quoted and discussed,         requirin,g
the use of separate      funds and special     funds therein     mentioned      ,to
be devoted   solely   to the statutory     purposes     for which they were
created.
-

    Hon. 3. T. McMillan,         page 7      (O-3928)

                  It may be thus said, by way of illustration,                     of Items
    29, 30, 31, 32 and 33 comprehending                   salaries     for supervisor,      ex-
    aminers,     and legal     adviser 9 and travel            and contingent     expenses
    where the service         or travel      and contingent          expense are with re-
    spect to two or more of the corporations                      being considered     in ac-
    cordance    with the equi,ties          of the situation;          that is to say, the
    reasonable      pro rata share of such salaries                  or expenses   to be paid.
    No scientific       basis   or statutory         basis whatsoever        can be given
    for such allocation.            The whole matter           rests   in a fair   exercise
    of the sound official           discretion       of the Banking Commissioner            in
    the light     of all the facts          surrounding       the matter.      His discre-
    tion when fairly        exercised       under the circumstances           would be con-
    elusive,     even upon the courts.             The courts        would have no authority
    to re.vise such discretion            thus lodged in the Banking Commission-
    er in the absence         of fraud,      arbitrariness          or lack of fact basis
    reasonably      necessary     to support       his conclusions.
                  This discretion      of the Commissioner      may, we think,     be
    exercised     again and as often as the necessities            require   to effeet
    a re-allocation.       We are also inclined         to the view, and so ad-
    vise you, that in the exercise           of this discretion       in the matter
    of allocating      the appropriation      for salaries,     the Commissioner
    would, be justified      in considering      the contingencies       known and un-
    known of the seasonal         fees entering     into the fund or funds.
                   The allocation       made by the Commissioner         in the manner
    we have suggested         with respect     to the items of salaries         for the
    supervisor,       the examiners ,, and the attorney          should not, we think,
    be afr‘ected      by the known fact that in very truth             it may happen
    that such officers          for a given month may actually           be engaged    Sn
    activities       concerning     on,e only, or two only of the group of cor-
    porations      with respect      to which his salary        has been appropriated.
    A salary      payment is not legally         contingent     upon the officer’s
    actual     discharging      his official     duties    anew.    See Spears v. Shep-
    pard,     150 S.W.(2) 769,
                Just what extra requirements        will be made of the depart-
    ment with respect    to bookkeeping,      +,nd thus what additional        re-
    quirements   will be made in the ma:;ter of travel          and expense ac-
    coun:;s will be required,     we can not say,        Much of the information
    upon which the Commissioner        could and would act in allocating
    such appropriation     would of necessity      be known to him.       We refer
    especially   to the character      and extent    of the services     performed
    by the supervisor,     exami.ners and legal      adviser.     But, whatever
    may be the additionally      irn-posed duties,    requirements     and the like,
Hon.   J.   T. McMillan,     page 8   (O-3928)

upon the     department,     we know of no other way to properly   inter-
pret the     Hppropriation     Act, and to advise with respeet   to its
practical     application.
                                          Very truly    yours,
                                          ATTORNEYGENERALOF TEXAS
                                          By /s/ Ocle    Speer
                                          Ocie Speer,    Assistant
APPROVEDSEP 23, 1941
/s/ Gerald C. Mann
ATTORNEYGENERALOF TEXAS
APPROVED: OPINION COMMITTEE
BY:      BWB, CHAIRMAN
OS-MR:wb