Court Opinion

ID: 4135163
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:59:05.27221+00
Date Added: 2024-06-11T14:01:36.162765
License: Public Domain

THEATTORNICYGENERAI.
                     OIF %-EXAS

                       August 24,         1964

Honorable 3esae James                 Opinion No. C- 297
State Treasurer
Austin, Texas                         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
Dear Mr. James:
            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 gen-
     eral 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 publica-
     tion 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 pro-
      vided 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 manda-
tory, it is inconsistent    with any idea of discretion     and is manda-
t~~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      Tex.Clv.App.    1957)   No cases have Involved
         8 of Ariicle      8 or the intent of-the Lenlslature      within
this Article.    Initiated  hereuMer    Is  a new and separate  admlnls-
tlration 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.) cona-
a specla’l state revolving   fund and the intent of the Le lslature In
administration   of that fund.   The Court saidsat page 26if
                                                           t
             “It is a paramount rule of statutory     con-
      struction    that in case of doubt, the intention
      of the Legislature    is to be ascertained   If pos-
      sible.     . . .
            “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   in-
surance 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 Legis-
lature intended to eliminate confusion through mandatory deslgnatlo~
In Section 5 of the Section 9 $pectal trust fund as the only fund
to be charged with expenses of publication.             We are of the opinion
that the cost of publication         may not be paid out of the general
appropriation     to the State Treasurer’s      office.
            Your second question Is whether the expense of publica-
tion may be Incurred and paid from the special trust fund as
money accrues to such fund.     Section 6 of Article  VIII of the
Constitution   of Texas provides that no money may be drawn from
;;;  treasury unless a specific   appropriation  has been made there-
    . Article   4.08, Section 9 reads in part:
           “Upon receipt  of any unclaimed funds from
     such life insurance companies by the State Treas-
     urer, he shall pay forthwith    three-fourths   of the
     amount thereof into the general funds of the state
     for the use of the state.    The remaining one-fourth
     shall be administered by him as a special trust fund
     for the purposes of this Article,     and deposited  in
     the m$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      con-
tingent   amounts to a speolal fund oonatltuted     a valid appro-
priation   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-9ar
~~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 publlca-
      tion 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:mlrmkh
 APPROVEDI
 OPlyIOH COHNITTEE
 W. V. Qeppert , Chairman
 Pat Bailey
 Gordon Case
 R,Iou;gler

 EPROVRD FOR THE ATTORWRY
                        IEWERAL
   : Stanton Stone

                              -1422-