Court Opinion

ID: 4130273
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:02:22.479832+00
Date Added: 2024-06-11T14:33:16.615447
License: Public Domain

TEE   ATTORNEY    GENERAL
                           OF TEXAS

     Mr. William D. Taylor        Opinion No. JM-1196
     Interim Executive Director
     Department of Commerce       Re: Whether interest earned on
     P. 0. BOX 12728              monies in the Texas Exporters
     Capitol Station              Loan Fund may be used to admin-
     Austin, Texas 78711          minister  the Texas Exporters
                                  Loan Program  (RQ-1786)

     Dear Mr. Taylor:

          You ask about the proper construction    of House Bill
     369, which created the Texas Exporters Loan Fund.1 Specifi-
     cally, you ask whether interest earned by the deposit     of
     money in the fund created by that bill may be "used" to
     administer the program  authorized by that bill. The bill
r-   provides that the costs of administering the program must be
     paid by interest earned by the deposit~of money in the fund
     and by fees collected    in connection   with the program.
     However, a rider to the appropriations    act provides  that
     administration of the program shall be financed from fees
     generated from the program.   The rider omits any reference

           1. Senate Bill 223, which was a general "clean up"
     bill, made necessary     corrections   to Title 4 of      the
     Government Code, conformed Title 4 of the Government Code to
     certain acts of the 70th Legislature, and also codified in a
     nonsubstantive way various statutes    in that title.    Acts
     1989, 71st Leg., ch. 4, at 200. Article 3 of the bill added
     Subtitle F to the Government Code, which deals with commerce
     and industrial development.     Chapter 481 of Subtitle     F
     codified various statutes governing the Texas Department   of
     Commerce.   In addition to Senate Bill 223, the 71s.t Legis-
     lature enacted fifteen other bills that either amended or
     added sections to chapter 481, including Rouse Bill 369,
     which added section 481.059. Section 481.059 of the Govern-
     ment Code was not amended by any of the other bills enacted
     by the 71st Legislature.

                                  p. 6312
Mr. William D. Taylor - Page 2         (JM-1196)

to interest generated      by the     deposit of the   money in   the
fund.

     House Bill 369 added section 481.059 to the Government
Code, which creates the Texas Exporters      Loan Fund and
authorizes the Texas Department of Commerce to use that fund
to guarantee  loans made by private     lenders to certain
businesses under certain conditions.  Acts 1989, 71st Leg.,
ch. 818, 5 1, at 3751.       Section 481.059 provides     in
pertinent part:

            (a) The Texas exporters loan fund is a
        fund in' the     state treasury.     The
        consists of. appropriations or transfers    made
        to the fund, guarantee      fees, other money
        received   from operation     of the     program
        established by this section, and interest
        paid on monev in the fund. Money in the fund
        may be used only to carry out the purposes of
        this section.   If any appropriations are made
        to the department from the general       revenue
        fund to carry out this section for a fiscal
        year, at the end of that fiscal year .the
        unexpended balance of those appropriations
        shall be transferred    to the Texas exporters
        loan fund.

           .   .   .   .

            (g) The department   shall administer   the
        program established   by this section in the
        same manner as its other programs under this
        chapter, except as provided otherwise by this
        section.   ecostsnadmlnisterino
                     e                              thg
        WO
         ;                                   a       on
        monev in the fund and bv fees collected      in
        connection  with    the nroaram.      (Emphasis
        added.)

     A rider to the appropriations act passed during   the
same legislative .session limits the funding source    for
paying the costs of administration of the program only to
those fees generated by the program. Rider 37 provides the
following:

        TEXAS EXPORTERS LOAN FUND. Contingent    upon
        the final.passage of Senate Bill 165, Seven-
        ty-first Legislature, or similar  legislation

                                    p. 6313
Mr. William D. Taylor - Page 3   (JM-1196)

        relating to the Texas Exporters Loan Fund,
        there is hereby appropriated in fiscal year
        1990 to the Texas Department     of Commerce
        $2,000,000 out of the General Revenue Fund to
        establish  the Texas Exporters    Loan Fund.

        financed from fees aenerated from the      Texas
        wo*ers    man ~uru3.2
Acts 1989, 71st Leg., ch. 1263, art. I, at 5169.      (Emphasis
added.)

     You suggest that there is an irreconcilable   conflict
between the bill and the rider and that the bill controls.
In your letter requesting an opinion from this office, YOU
state:

      2. The bill to which the rider refers, Senate Bill
165, differed    from the    bill finally enacted by        the
legislature, House Bill 369, in one important respect      that
    relevant. to your inquiry.       Subsection   (g) of    the
%mittee    substitute for Senate Bill 165, which governed the
administration of the program, provided:       "The department
shall administer the program established by this section     in
the same manner   as its other  programs  under  this  article,
except as provided otherwise by this section."     Senate Bill
165 omitted any reference to using the fees collected        in
connection with the program      (or, for that matter,      any
reference to using interest earned from the deposit of the
money in the fund). Senate Bill 165 was not enacted by the
legislature: its house counterpart, House Bill 369, was.

     Rider 37, which was made effective expressly upon the
passage of S.B. 165 or a comparable    bill, apparently  was
drafted to reflect the language set forth in S.B. 165, not
the language contained    in H.B. 369.     Thus, the    bill
ultimately enacted by the legislature    creating the fund
required that interest earned by the deposit of the money in
the fund comprise one of the two funding sources that the
legislature could appropriate   to pay for the costs of
administering the loan program. Rider 37 further limited
for the duration  of this biennium  the funding source  from
which the program's  administrative costs could come, i.e.
only to the fees generated by the program.

                              p. 6314
Mr. William D. Taylor - Page 4    (JM-1196)

             The statute, Section      481.059,    clearly
        provides that such interest may be used        for
        administration and that the interest is part
        of the Texas Exporters Loan Fund. The Fund,
        including the interest, is appropriated         to
        Commerce in SB 222 [the appropriations       act].
        As was the case in mlock            Calvert    480
        S.W.Zd 367 (Tex. 1972), thereVis elsewh6re in
        the statutes authority to use the interest in
        the Fund      for administration.3        [Section
        481.059(g) of the Government Code.] Althouah
        1 he            e                                t
        snecificallv    mentioned   in    SB 222,     both
        leaislative intent and the a n ral orincinle
        under Article     III. Sec. 3: eof the Texas
        Constitution      that    aeneral     leaislation
        controls   over conflictina      1 ouaae    in an
        annrooriations act, indicate tE:t Commerce is
        authorized     to    use   the    interest     for
          dministration of the Texas Exnorters        Lo
        &nd or ara         [TEX. ATT'Y GEN. OP. NO;:
        V-1254 ;195:; ; M-1041 (1972); TEX. ATT'Y GEN.
        LA NO. 72 (1973).]     (Emphasis added.)

     We are unclear     whether,  by   asking whether    the
commission may "usen the interest that accrues     from the
deposit of the money, you are asking whether       the bill
supersedes the rider and thereby author-    the legislature
to appropriate interest earned by the deposit of the money
in the fund for the purposes of administering the program,
or whether you are asking whether the legislature   actuallv
has appropriated   such interest.    For purposes   of this
opinion, we assume that      you are asking whether      the
legislature has appropriated the interest earned, regardless
of whether  that appropriation   has been effected by the
general law or the appropriations bill.    We conclude  that
section 481.059 of the Government Code acts as a limitation
on the sources  from which the legislature may appropriate

          We note that in Bullock v. a    rt. 480 S.W.2d 367
(Tex. 31972) the Texas Supreme Court expre&ly   declined  to
grant the keguested petition    of mandamus  to compel the
comptroller to pay out of state funds the expense of a party
primary election because there was ~g statute empowering the
secretary of state to so expend state money.

                               P. 6315
Mr. William D. Taylor - Page 5   (JM-1196)

moneys for administration.    The requirement that administra-
tive costs "must be paid '1 from certain sources means that no
other source of funding may be used for administrative
costs. We conclude that 'the legislature has not appro-
priated accrued interest generated by the deposit of money
in the fund: therefore, we answer your question        in the
negative.

     Section 6 of article VIII of the Texas Constitution
governs the withdrawal of money from the state treasury and
provides in pertinent part:

           No money shall be drawn from the Treasury
        but in pursuance  of specific appropriations
        made by law; nor shall any appropriation   of
        money be made for a longer term than two
        years.

     Section 6 has been construed consistently to require an
appropriation by the legislature before any money can be
paid out of the state treasury. &iahtfoot v. Lane, 140 S.W.
89 (Tex. 1911); Pickle v. Finley, 44 S.W. 480 (Tex. 1898).
An ap ropriation  may be effected either by the constitu-
     g
tion, by statute,5 or by a general appropriation      bill.6

           S e.  a      Tex.   Const.  art.  III,    5 49-b
(estabtishitg vzte&s#     land fund and appropriating   all
moneys   in the fund    for purchase  of land to sell to
veterans.)

      5. See, e-a., Acts 1959, 56th Leg., ch. 150, § 4, at
260 (amending V.T.C.S. art. 695c, 5 27).    In an earlier
opinion, this office declared:

      This does not mean that general legislation may not
   contain an appropriation which is merely incidental to
   and necessary to carry out the subject and purpose   of
   the general law. [Citation omitted.] Neither does it
   mean that a general appropriation bill may not contain
   general   provisions    and  details    limiting    and
   restricting the use of the funds therein appropriated,
   if such provisions are necessarily connected with and
   incidental to the appropriation  and use of the funds
   and if they do not conflict with or amount to general
                                         (Footnote Continued)

                             p. 6316
Mr. William D. Taylor - Page 6    (JM-1196)

See aenerally Susman, Fiscal and Constitutional Limitations,
44 Tex. L. Rev. 106 (1965).      Regarding  whether  certain
language is sufficient to effect an appropriation, the Texas
Supreme Court long ago declared:

           It is clear that an appropriation need not
        be made  in the general appropriation   bill.
        It is also true that no specific words     are
        necessary in order to make an appropriation;
        and it may be conceded, as contended, that an
       .appropriation may be made by implication when
        the language employed   leads to the belief
        that such was the intent of the Legislature.

Pickle v. Finley, sunra, at 480-81. In what is probably the
leading case in this area, National  Biscuit Co. v. State,
135 S.W.2d 687  (Tex. 1940), the Texas Supreme      Court
declared:

           As just stated, one of the provisions  of
        Sec. 6 of article    8 of our Constitution
        requires all appropriations  of money out of
        the State Treasury to be specific.     It is
        settled that no particular  form of words is

(Footnote Continued)
   legislation.   [Citations omitted.]

Attorney General Opinion V-1254   (1951).

      6.   In an earlier opinion, this office declared:

      If a bill does more than set aside a sum of money,
   provide the means of its distribution, and to whom    it
   shall be distributed,    then it is a general       law.
   [Citations omitted.]     The   distinction  between    a
   general appropriation bill and general legislation has
   been recognized in this State in the simple fact that
   the former merely     sets apart sums of money       for
   specific objectives   and uses while the latter does
   more than merely appropriate    and limit the use of
   funds. General    legislation  constitutes  a separate
   subject and cannot be included within        a general
   appropriations bill.   [Citations omitted.]

Attorney General Opinion M-1199   (1972).

                              p: 6317
     Mr. William D. Taylor - Page 7   (JM-1196)

             required to render an appropriation   specific
             within the meaning of the constitutional
             provision under discussion.   It is sufficient
             if the Legislature.authorizes the expenditure
             by law, and specifies the purpose for which
             the appropriation is made. An appropriation
             can be made for all funds coming from certain
             sources and deposited in a special fund for a
             designated purpose.   In such instances, it is
             not necessary   for the appropriating Act to
             name a certain sum or even a certain maximum
             SUlU.

     Id. at 693.

          The issue is whether the language set forth in either
     the statute or rider effect an appropriation      of earned
     interest consistent with the requirements of section 6 of
     article VIII of the Texas Constitution.     The language of
     neither the statute nor the appropriations act rider expli-
     citly effects such an appropriation: the issue is whether
     such language effects an appropriation      by implication.
C    Based upon our examination  of prior authority, we conclude
     that neither the language of section       481.059 of    the
     Government Code nor the language of Rider 37 effects      an
     appropriation of earned interest.

          Appropriations by implication have been found under
     certain circumstances.   In Atkins v. State Hwv . DeD't, 201
S.W. 226 (Tex. Civ. App. 1917, no writ), the court held that
     the following    language did effect an appropriation     by
     implication:

                All funds coming into the hands of the
             Highway   Commission,    derived   from     the
             registration fees hereinbefore provided    for,
             or from other sources, as collected, shall be
             deposited with the State Treasurer      to the
             credit of a special   fund designated as 'The
             State Highway Fund,' and shall be naid only
             on warrants issued bv the State ComntroU
             unon vouchers drawn bv the Chairman of t:e
             Commission, such vouchers   to be  accompanied
             by itemized sworn statements of the expendi-
             ures, except when such vouchers are for the
             regular salaries of the employees       of the
             Commission.   The said State Highway       Fund
,-
             shall be expended by the State          Highway

                                  p. 6318
Mr. William D. Taylor - Page 8 (JM-1196)

        Commission for the furtherance of public road
        construction  and the establishment     of  a
        system of State highways, as contemplated and
        set forth in this Act.   (Emphasis added.)

Acts 1917, 25th Leg., ch. 190, at 424. The court concluded
that the language set forth above indicated the legisla-
ture's          intent that the fees involved be appropriated.
Because the general         laws at issue contained language very
similar to that underscored above, several attorney        general
opinions held that those statutes involved also effected
apprOpriatiOnS.         See also Attorney General Opinions   c-297
 (1964); V-923, V-895, V-887 (1949).

      On the other hand, several attorney general    opinions
held that language contained    in various general   laws or
appropriation act provisions did not effect any appropria-
tion.    For example,   in Attorney   General  Opinion V-412
(1947), this office was asked, inter alia, whether         an
amendment passed   in 1947 to then V.T.C.S.    article  6053,
which conferred broad regulatory   authority on the Railroad
Commission governing butane and liguified petroleum    gases,
effected an appropriation   of license    fees collected   in.
connection with the act. The amendment provided:

           All fees received by the state         from
        licenses issued under this Act shall be made
        available to the Railroad Commission for use
        in paying the legitimate expenses incurred in
        administering and enforcing the provisions of
        this Act, and for no other purpose: provided,
        however, that any excess funds remaining    at
        the end of each two-year period shall go to
        the General Fund.

Acts 1945, 49th Leg., ch. 358, at 634. The appropriations
act passed in 1947 contained a rider that provided that all
fees received by the commission under article 6053 shall be
paid into the General Revenue Fund. This office concluded
that the language set forth above did not have the effect of
appropriating the license fees collected.

     In Attorney General Opinion V-923 (1949), this        office
was asked to construe the following two paragraphs:

           All such fees as are collected under this
        Act shall be deposited in the State Treasury
        in a special fund under the title of the

                               p. 6319
     Mr. William D. Taylor - Page 9     (JM-1196)

             Texas Vegetable   Certification   fund.     The
             purpose of the fees being     to pay  for the
             enforcement  of the     law and to      provide
             inspections called' for: it further being the
             purpose to make the law self-supporting.

                Out of the fees collected under this Act,
             the Chief of the Warkets       and  Wardhouse
             Division of the Department     of Agriculture
             shall be paid in addition to the amount of
             his salary in the general appropriation   bill
             in the sum of Pour Hundred and Eighty Dollars
             ($480) per annum: which amount is hereby
             appropriated for said purpose.

     Acts 1949, 51st Leg., ch. 581, at 1130. The opinion held
     that the second paragraph makes 'a definite     and specific
     appropriation, but that the first paragraph,      because  it
     failed to contain the words      l'which amount   is. hereby
     appropriated for said purposesn that is set forth in the
     second paragraph, did not effect an appropriation.   See also
     Attorney General Opinion V-1422 (1952).7
.-
          We think that the language set forth in section 481.059
     of the Government Code and in Rider 37 is comparable to the
     language of the statutes discussed     in Attorney   General
     Opinions V-412 and V-923. Therefore, we conclude that no
     appropriation of earned interest is effected by either the
     general law or the rider. The bill merely authorizes     the
     legislature to appropriate money from two sources; the rider

                This office declared     in Attorney General   Opinion
     v-14227 i1952) :

         The fact that an assessment is made and collected  and
         the fund is earmarked by general statute for a certain
         use does not make it available unless it is also
         appropriated  by   the Legislature    for that    use.
         Furthermore, even though a general statute specifies
         payment of a certain amount, the amount actually paid
         is determined by the amount appropriated by the Legis-
         lature.

     L    at 3 (citations omitted).

                                      p. 6320
Mr. William D. Taylor - Page 10 (JM-1196)

                                                                   4

merely limits the source to one and, in effect, carves out a
subset from the bill for the duration of this biennium.

     Riders to an appropriations   act frequently serve this
sort of function: a rider may prohibit a state agency      from
using appropriated money for activities that the agency       is
otherwise  authorized  to   conduct.    Se . e.a       Attorney
General Opinions JW-860 (1988): U-499 (19z9). F&r example,
state agencies    have statutory     authority   to    purchase
insurance policies protecting   against claims arising under
the Tort Claims Act.    Civ. Prac. & Rem. Code § 101.027.
However, the general   appropriations act for the current
fiscal year prohibits   any appropriated   money    from being
expended for such purpose:

           None of the funds appropriated in this Act
        may be expended fo'r the purpose of purchasi'ng
        policies of insurance covering claims arising
        under the Texas Tort Claims Act.

Acts 1989, 71st Leg., ch. 1263, art. V, 5 55, at 5797;   see
Attorney General Opinion JW-625 (1987).    We conclude  that
section 481.059 does serve to limit the sources from which
the administration of the loan program may be funded, but it
does not effect an appropriation of those moneys.

                        SUMMARY

           The interest earned by the deposit      of
        money in the Texas Exporters   Loan Fund has
        not been appropriated during the current bi-
        ennium to pay for the costs of administering
        the loan program.

                                   LJ Ed&
                                   _
                                       Very truly you

                                       JIM
                                            A',,
                                               MATTOX
                                                        ,

                                       Attorney General of Texas

WARYRRLLRR
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

                              p. 6321
Mr. William D. Taylor - Page 11   (JM-1196)

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney,General

RKNEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Jim Moellinger
Assistant Attorney General

                              p. 6322