Court Opinion

ID: 4131587
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:17:24.518917+00
Date Added: 2024-06-11T14:32:37.059949
License: Public Domain

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                                 The Attorney         General of Texas
                                                   Way 20, 1982

MARK WHITE
Attorney General

                               Mr. Ernie W. Tullis                     opinion NO.   MN-474
Supreme Court EuildlnO         Administrator
P. 0. BOX 12546                Texas Employment Commission             Re: Proper method of financing
Austin, TX. 7671% 2546
5121476-2501
                               101 East 15th Street                    unemployment    benefits   for
T&x    9101674.1367            Austin, Texas   78778                   former state employees
Telecopier 51214750266
                               Dear Mr. Tullis:
1607 Main St.. Suite 1406
                                    You inquire as to the proper method of financing unemployment
Dallas. TX. 75201-4766
21417428944                    insurance benefits for ex-state employees. You state that the Texas
                               Employment Commission believes that funding beyond the original
                               legislative appropriations for the Unemployment Compensation Benefit
4624 Alberta Ave.. Suite 160   Account for former state employees should come from funds collected by
El Paso. TX. 79905-2793
915/5x?-3464
                               the comptroller from each state agency in reimbursement of
                               unemployment benefits paid to the agency's ex-employees, a system of
                               reimbursement contemplated by article V. section 55 of the current
1220 Dallas Ave.. Suite 202    appropriations act. On the other hand, you state that the comptroller
Houston. TX. 27002.6666
                               has failed to place such reimbursements in the Unemployment
71316500666
                               Compensation Benefit Account and that he insists that any additional
                               funding of this account should come from Fund No. 165. a Special
606 Btoadway. Suite 312        Administration Fund created by section 26 of the Texas Unemployment
Lubbock. TX. 73461-3476        Compensation Act, codified as article 5221bL22a. V.T.C.S. [hereinafter
8061747-5238                   these funds may be referred to as the "Benefit Account" and the
                               "Administration Fund" respectively]. The Unemployment Compensation
4309 N. Tenth. Suite S         Benefit A&count is established by the Texas Unemployment Compensation
McAlle”, TX. 78501-1665        Act and designated by the commission as Fund No. 937. V.T.C.S. art.
5w662.4547                     5221b-7. You advise that the situation causing this disagreement
                               developed in 1981.
200 Main. Plaza, Suite 400
San Antonio, TX. 762052797          In order to determine the proper method of additional funding of
6l2l2254191                    the Unemployment Compensation Benefit Account after' the regular
                               legislative   benefit   appropriation for     such   account   becomes
                               insufficient, we must consider various provisions of the Texas
An EqualOppcxlunftyl
AffimWive Acifon Employer
                               Unemploytint Compensation Act under which, in 1972, the state elected
                               to cover for unemployment~insurance benefits all services ,performedin
                               the employ of the state and to become a reimbursing employer.
                               V.T.C.S. art. 5221b-22d.

                                    The Un&ployment   Compensation Fund is administered by the
                               commission in payment of benefits as provided in the act, from the
                               Unemployment Compensation Benefit Account. Actually, such benefits

                                                             p. 1663
                                                                         .

Mr.   Ernie W. Tullls - Page 2 (MW-474)

are not paid directly from this Benefit Account, but payments are made
from this account to the Federal Trust Account in Washington, D.C.. in
reimbursement of the Federal Trust Account of all payments made by it
as benefits to former Texas state employees.

     Article 5221b-22a establishes a special fund, separate and apart
from all public moneys or funds of this state as an Unemployment
Compensation Special Administration Fund. As amended in 1979. it now
provides that the commission may use this fund to pay costs of
administering the act. including costs of reimbursing the Benefit
Account for unemployment compensation benefits paid to former state
employees which are based on service for the .state. and the costs of
construction and purchase of buildings and land necessary in such
administration. Article 5221b-22a; as amended in 1979, further
provides, among other things. that all interest and penalties
collected under the provisions of the Texas Unemployment Compensation
Act and all moneys now on deposit in the Unemployment Compensation
Special Administration Fund shall be paid into the Unemployment
Compensation Special Administration Fund established by that article.
It also provides that the commission may, by resolution duly entered
in its minutes, charge against said moneys any expenditures which it
deems proper in the good administration of the act, provided the
commission in such resolution finds that no other funds are available
or can properly be used to finance such expenditures. .Apparently; the
fund designated in this article from which all moneys on deposit
therein were transferred is a state treasury special fund established
theretofore under the Unemployment Compensation Act.

     As already stated, the Special Administration Fund is created by
section 26 of the Texas Unemployment Compensation Act, and denominated
as Fund No. 165 by the commission. After the amendment of article
5221b-22a in 1979, the article no longer provided a continuous
appropriation of .such funds as it did prior to amendment. However. a
rider in the 1979 General Appropriations Act, provided that:

            _ _
            la111 monevs granted tothis state by the federal
            eovernment   gor   the  administration of     the
           Unemployment Compensation Act or which are now on
           deposit to the credit of any funds maintained by
           the state treasurer for the Texas Employment
           Commission and any moneys received for the credit
           of such funds are hereby appropriated for the
           purposes authorized by the... Texas Unemployment
           Compensation Act and/or for the purposes for which
           such moneys were granted. (Emphasis added).

Acts 1979. 66th Leg., ch..843, art. III, at 2632. A similarly worded
rider appears on page 3403, chapter 875 of the General Appropriations

                                 p. 1664
..   ,

         Mr.   Ernie W. Tullis - Page 3   (MW-474)

         Act for fiscal years 1982-1983. Acts 1981, 67th Leg., ch. 875. art.
         I, at 3403.

              Considering the foregoing statutes in conjunction with the
         provisions of the appropriations bills enacted by the Sixty-seventh
         Legislature, it seems clear that reimbursements of the payment of
         unemployment benefits for former state employees is authorized to be
         made from the Special Administration Fund No. 165 from the moneys
         appropriated by the legislature for such purpose by the aforementioned
         appropriations bill riders. Article 5221b-22a expressly provides such
         authority.

              Further, a rider to the 1981 General Appropriations Act provides
         as follows:

                       a.   At the close of each calendar quarter, the
                    Texas Employment Commission shall prepare a
                    statement reflecting the amount of unemployment
                    benefits paid to all former State employees based
                    on wages earned from State employment and present
                    it to the Comptrolier of Public Accounts, who is
                    hereby directed to pay by warrant out of funds
                    appropriated from the General Revenue Fund such
                    amount to the Unemployment Compensation Benefit
                    Account to reimburse it for such payments.

                       The heads of State agencies, institutions,
                    departments, commissions, boards, divisions, or
                    other units of State government are directed to
                    determine the proportionate amount        of   the
                    reimbursement or payment due from funds'other than
                    General Revenue Funds and to         present the
                    Comptroller  of  Public  Accounts  a  purchase or
                    transfer voucher requesting reimbursement from
                    such funds to General Revenue, and shall reimburse
                    the General Revenue Fund with a check for funds
                    not in the State Treasury. Such transfers and
                    payments as are authorized under law shall be made
                    periodically. The Comptroller of Public Accounts
                    -Y     prescribe   accounting    procedures. and
                    regulations to implement this section.

                      ~b.   An . agency.    institution,   department,
                    commission, board. division or other unit of State
                    government is authorized to allocate funds to a
                    revolving account created on'its books to receive
                    contributions from funds other       than General
                    Revenue   based    on    a   percentage-of-payroll
                    assessment to be determined by such unit of

                                          P-   1665
r
    Mr. Ernie W. Tullis - Page 4   (MW-4741

              government for the purpose of reimbursing the
              General Revenue Fund for unemployment benefits
              paid.

    Acts 1981, 67th Leg., ch. 875. art. V. 955 at 3820-21.   See also Acts
    1979. 66th Leg., ch. 843. art. V. 057 at 2922-23.

          A state agency as an employer under the Texas Unemployment
     Compensation Act is liable under article 5221b-5a to the reimbursement
     provisions as     is   any   other reimbursing employer. - Article
     5221b-5b(c)(2) provides that upon notice by the commission of
     delinquency in payment of reimbursements by a governmental employer,
     the comptroller shall pay a sum to the commission in the amount of the
    'delinquency from any funds which would otherwise be due from the state
     to the delinquent governmental employer. You do not advise as to
     whether any such'transfer of funds has occurred. The funds herein
     under consideration are funded periodically by appropriations from the
     state's general revenue and from the Federal Unemployment Trust Fund.~
     You inform us that the lack of reimbursement of the Benefit Account
     from funds of the various ,participatingstate agencies results from
     the failure of the legislature to appropriate funds to individual
     agencies for such purpose. Cf. Acts 1981, 67th Leg., ch. 875, art. I,
     at 3403, 3406; Acts 1979. 66thLeg., ch. 843, art. III. at 2632. 2636
     (specific appropriations to T.E.C. for Administration Fund).

         The foregoing legislative actions created a system carefully
    designed to reimburse the expenditures of the Texas Employment
    Commission in paying unemployment benefits to which former state
    employees are entitled. Fund No. 937, the Unemployment Compensation
    Benefit Account, definitely appears to be the primary source from
    which benefit payments are to be made. This fund is designed to be
    replenished by periodically assessed reimbursements from the state
    agencies for ,the benefits received by their former employees. These
    reimbursements are to be collected by the comptroller and paid into
    such Benefit Account, which is under the general control of the Texas
    Employment Commission.

         If this 'statutory system was fully implemented, this Benefit
    Account would seem to be self-sustaining with respect ,tdits funds for
    the purpose of paying benefits. In practice, however, .according to
    information submitted in connection with this opinion request. the
    Benefit Account is not self-sustaining, because no funds are
    appropriated to state agencies to use in reimbursing the expenditures
    of the Texas Employment Commission of sums paid into the Trust Fund in
    Washington, D.C., for benefits paid therefrom to their former
    employees. Reimbursements from these agencies would have to come from
    their funds which you state have already been appropriated for other
    state purposes. Consequently, as we are informed, the T.E.C. Benefit
    ~Account has been operating with a deficit the last few years due to

                                   p. 1666
.       .

    .       .   Mr.   Ernie W. Tullis - Page 5   (MW-474)

                the lack of reimbursement from these agencies. This deficit appears
                to have been partially remedied during this time by periodic
                legislative appropriations to the Benefit Account from the state's
                general revenue and funds transferred from the supplementary fund,
                Special Administration Fund No. 165.

                      This Administration Fund is funded by interest and penalties
                collected from the employers for infractions of the Unemployment
                Compensation Act, article 5221b-1, et seq., V.T.C.S.. federal money
                grants and state general revenue appropriated by the legislature for
                payment of administrative expenses of the unemployment benefit
                program, ,including p yment of the benefits theniseives whenever
                *eC=.5Sary.  See V.T.C.;. art. 5221b-22a. This supplementary function
                of the Administration Fund is further substantiated by the specific
                transfer appropriations by the legislature from this Administrative
                Fund to the Benefit Fund, General Appropriations Act, Acts 1981,
                Sixty-seventh Legislature, chapter 875, article I, at 3402, together
                with the generally worded appropriation of the balance of the
                Administration Fund for the purposes authorized by the Texas
                Unemployment Compensation Act. id. at 3403. and. more specifically, by
                the additional provision in article 5221b-22a that any expenditures
                from this Administrative Fund which the commission deems proper may be
                made upon a finding that no other funds.are available or can properly
                be used to finance .such expenditures.         Under the prevailing
                circumstances concerning the status of the Benefit Account, there is
                nothing in the statutes to prevent the commission from resolving that
                the only funds now available to finance such benefit payments are
                those contained in the Administrative Fund. We caution, however, that
                any federal funds placed in Fund No. 165 may be used for the purposes
                authorized by article 5221b-22a. V.T.C.S.. only where the terms of the
                grant permit their use for those purposes.          -Cf. 42 U.S.C.A.
                §1103(c)(l), (2) (certain federal funds transferred to state for
                payment of benefits may be used for administrative expenses only where
                appropriation specifies amount for administrative expense).

                     We conclude, therefore, that benefits to former state employees
                may properly be financed from either or both of such funds during the
                fiscal lives of the .1980-1981 Appropriations Bill and the current
                1982-1983 Appropriations Bill,      although   the   funds   of   the
                Administration Fund should be used to reimburse or supplement the
                Benefit Account only when the funds in that account are found by the
                commission to be insufficient for such purposes. In no instance is
                any state official involved authorized to draw, issue or honor for
                payment a warrant on any appropriation in the state treasury for any
                amount in excess of the amount then contained in such appropriated
                funds. Tex. Const. art..VIII, 56.

                                                 p. 1667
,   -   Mr. Ernie W. Tullis - Page 6      (MW-474)

                                       S U M M A R-Y

                    Payments of unemployment benefits to former
                 state employees entitled thereto are to be
                 financed    primarily   from    the   Unemployment
                 Compensation Benefit Account, designated as Fund
                 NO. 937.     When such fund is exhausted or
                 insufficient, it may be replenished for such
                 purpose     secondarily    from     the    Special
                 Administrative Fund, designated as Fund No. 165.
                 In such cases. both funds are.properly considered
                 as being subject to the financing of benefit
                 payments. No funds may be withdrawn from the
                 state treasury in excess of the amount therein
                 appropriated for the purposes for which the
                 warrant is drawn.

                                               kwn?w%&l

                                                  MARK      WHITE
                                                  Attorney General of Texas

        JOHN W. FAINTER. JR.
        First Assistant Attorney General

        RICHARD-E. GRAY III
        Executive Assistant Attorney General

        Prepared by Robert L. Lattimore
        Assistant Attorney General

        APPROVED:
        OPINION COMMITTEE

        Susan L. Garrison, Chairman
        Jon Bible
        Rick Gilpin
        Patricia Einojosa
        Robert L. Lattimore
        Jim Moellinger

                                        p. 1668