QTNfice
of ttp Elttornep @eneral
State of Qexae
DAN MORALES
ATTORNEY
GENERAL January 25,1993
Mr.MarvinJ.Titznlw Opiion No. DM-197
Bxecutive Director
Texas SurphrsProperty Agency Re: Whethex the Texas Surplus Property
P. 0. Box 8120 Lww is. authorized to obtain Sre and
San Antonio, Texas 78208-0120 msuranw to protect agency
buildings, and related questions (RQ-53)
Dear Mr. Tii:
On behalf of the Texas Surplus Property Agency, you ask whether the agency is
luthorizedtoobtain~Mdcasualtyinsurancetoinsureitswarehouses.
The Texas Surplus Property Agency was created pmsuant to V.T.C.S. article
6252-6b and given responsiiUity for receiving, warehousing, and redisbiiuting surplus
federal property pursuant to the Federal Property and Administrative Services Act of
1949, title 40 ofthe United States Code section 484(j). V.T.C.S. .art. 6252&b, 5 4(a). (b);
see Attorney General Opinions JM-639 (1987); JM-417 (1985) (discussing duties of
Texas Surplus Property Agency). It is also responsible for warehousing and redistributing
surplus state property. V.T.C.S. art. 6252-6b, 0 4(n). Pursuant to this statutory
authoriation, the agency operates warehouses in Houston, Lubbock, and San Antonio.
In August 1984, the state auditor recommended that the agency obtain insurance
to cover the buildings it owned. In March 1985, the Texas Surplus Property Agency
obtained fire and casualty insuranw to cover its warehouses. In January 1991, the
Comptroller of Public Accounts advised the agency that a voucher submitted to the
comptroller requesting payment for tire and casualty insurance would not be paid. The
comptroller stated that “a state entity may not purchase fire insurance for its buildings and
the contents there-inunless it has both explicit or implied statutory authority and a specific
appropriation for that purpose.” The comptroller concluded that there was no such
authority in the present case.
Attorney General Opiion JM-551(1986) determined that state policy prevented a
~43~9~purchasing insurance policies on state buildings or their contentq unless
legisBtion expremly authorized the purchase. The opinion relied on Senate Concurrent
Resolution No. 3 of 1921 which stated that it was the policy of the state to seKinsurel its
p. 1041
Mr.MarvinJ.Titrman - Page 2 (DM-197)
buildings through a state self-insuranw timd and to thereafter prohiiit state agencies from
obtainhg property insuranw to wver state buildingss S.C.R 3, Acts 1921,37th Leg., 2d
C.S., at 369. A long line of attorney general opinions have relied on this wncurrent
resohnion to reach the same conclusion. See Attorney General Opinions JM-551 at 5;
M-1257 (1972); C-193 (1963); V-722 (1948); O-6246, O-5824 (1944); O-3000 (1941)
(dying on Attorney General Opiions O-201, O-184 (1939)); C-1762 (1940); O-1100,
O-842. O-201, O-184 (1939); see ulw Attorney General Opiions JM-547 (1986) (state
agency may insure mail in transit; cost is an additional cost of postage); M-581 (1970)
(Texas Employment Conunksion may pumhase property insurance for buildings with
hds granted by federal government and appropriated by legislature for this purpose).
The wncurrent resolution is not state law. Article III, section 30 of the Texas
Constitution rewires that laws must be passed by a bii rather than a resolution; therefore
a resolution does not have the same force and effect as a law introduced by a bii. See
sounders v. Srizte, 341 S.W.2d 173;178 (Tex. Crim. App. 1960); C$oks v. Cole, 102
S.W.2d 173, 176-77 (Tex. 1937); Cc&y v. TexasDiv. of the Vnitedhghters of the
Cmfeakrag, 164 SW. 24,26 (Tar. Cii. App.-Austin 1913, writ refd. Moreover, the
proposed self-insurancescheme,whichwasthebasisforthewnaurent resolution’spolicy
that “no insurance policiesshallbe taken out upon any of the public buildings of this
atrlte,”was never adopted. We have fixmd no Texas statute that establishes a state self-
cwcorr& herein, That herq?er It shall be md is themd pliqv of this Sate
that the State shall cmy its own insarmw upon State bvildtngs and contents,
andihatnoi Nvnncr policies
shallbe taken out vpm my @he public bull&gs
of this ate, nw upm the cantcnlr the?wJ 8lul ‘he sl8’8 Bo8d d c4mllolud au
olh8rBo8rdsllwingcb8rg8ofbuildiogroflksl8le,wdlkWnlW’8druch
bllodh&.8rchactyiannrtednollohavcruchbuildingswrpropcrty~
achvitkandiwthcrcmsybeitansiathappqri&onbills8uthoridngthc
crcpclnditurcdmonyforlb8paymentofiwnaweprollliuln8
M&d that M Is &&red to be the policy of the &zte hewaflera~the end
of each two yram piad to eel alide appadnrorrly one per cent of the v&k? of
oil public bulldlngs owned by tht State, as a sinktng#md until ten per cent of the
total value of all such buildings hav been occmdoted,andthatthissinkingfund
~kinvcdedinlchoo]~intbercbooldirtriccld~Stw....
AC’S19X,37& Leg.. 7.dC.S.,at 369(aopbasisad&d).
p. 1042
Mr.M.awinJ.Tii - Page 3 PM-197)
insurance~3llndtheGenaalServicescOmmissionhasw~~thatthestatehes
nevexestablishedtheself’-msumncethndproposedinthewncurrem resohltion.
We wnchd~ however, that the much-reiterated prohiion against the pmchase
ofpropertyhmlmnce by state agencies in the absence of specitic legislative authorization
doesexpressstatepolicy. Thispolicyisr~cctedinllrticleW,section17oftheTexsr
Constitution, which establishes a special fimd to be used by specikd institutions of higher
education for land acquisition, building wnstruction, and other related purposes. The
institutions of higher education that be&t f+omthe special thnd are barred &om receiving
additional general revenue lids
for squiring land . . . , for wn&uctmg or equipping buildings or
other pemanent improvemen@or for major repair and rehabiitation
of buildings or other pamane~t imp- Ssxceptthat:
(1) in the case of Sre or natumJ disaster the legislature may
appropriate Eromthe general revenue an amount sutlicient to replace
the minsud loss of any building or other permanent improvement .
....
Tex. Const. art. VIJ, 5 17(j).
Moreover, the legislature has determined that the state shag not pm&se
insumnw even to cover certain liabiies toward third parties. The state is seKinsming
with respect to injuries of state employees wmpensable under the work&s wmpensation
statute for state employees. V.T.C.S. art. 83098, 0 2. The Tacap Tort Claims Act
authoriws govemmental lmits to purchase insunmw to protect the unit and its employees
against claims under the act, Civ. Prac. & Rem. Code Q 101.027(a), but the legislature has
wnsistently barred the use of appropriated lkls for this purpose. See Acts 1991,72d
Leg., 1st C.S., ch. 19, art. V, 0 53, at 1032; Attorney General Opiions JM-889 (1988);
N-551 (1986); H-900 (1976).
Siiy, under the Texas Disaster Act of 1975 the legislature authorised state
agencies to purchase property damage insumnw under limited ciramamces:
p. 1043
Mr.MatvinJ.Tii - Page 4 (DM-197)
GM Code 5 418.172(a).’ It is noteworthy that the legiskum adopted an authorization
toplrchasePropaty insumnwthatisnobroaderthan neccssq to quaI@ for fsdaal
disasterwsistMw.
In summary, the policy expressed in the wnwrrent resolution is embodied in
variousenactmantswllwmingthepurwaseofinsumnw by 8tate agaxiea. We caanot
ignore this evidenw of legkkive intent. Acwrdingly, we wnchrde that the Texas Surplus
~0paty4P9~Y~plrchasepropaty blSUfMWtOWVaitS-illthC
absence of statutory authorization. We tlnd no basis in the languaga of article 6252-6b,
V.T.C.S., for wnch~dingthat the l&lature intended the Texas Surphrs Property Agency
to be able to purcbasa propsrty insuranw. Nor does the fbderal law or mgulations
adopted themmder authoriw the agen9 to purchase prom inwranw tocmyoutits
responsiities in distrii surphu fwcral property. A federal rule applicable to the
rgencyprovidesthatastrrteagencyiswtrequindtounyinsurance on federal surplus
personal property as a wndition for aquhing it to dktribute to eligible recipients. 41
C.F.R 8 101-44.205(c). The rule governs the distribution of tha proceeds of proparty
inauanw where the state has it. It is not relevant to your question. Acwrdingly, the
Texas SurphrsProperty Agency does not have authority to purchase property insumnw to
wveritswarehouses.
You~so~whahatheStateofTexssisob~~~toactrsaself-insurato
wverSreorcasuahydamagetoagcncybuildings. Aspreviouslydiswssed,thereisno
stateself’asurance hd to cover state property. Jn Attorney General Opiion JM-551 at
5. this office stated that it is the policy of this state to make “special appropriations to
repair and replace tkcilities and equipment destroyed or damaged by...Sre, flood,
windstorm, and hurricane.” See Acts 1983, 68th Leg.. ch. 3, at 7 (supplunental
appropriation to repair and renovate areas of capitol damaged by tkc); Acts 1981, 67th
Leg.. chs. 628,585,83 (appropriationsto PM AmericanUniversity for hurricane damage,
to North Texas State University for wind damage, and to Texas Forest Service of the
Texas A & M University System for windstorm damage). Thus, the cost of repairing or
replacing damaged state property is thnded by special legislativeappropriation, rather than
by insumnw proceeds or a ssKimuran cc !bnd. Appropriation of state money is a
lt@l.ati~ iimction, Bullock v. Gherf, 480 S.W.2d 367 (Tex. 1972). and it is within the
1~s power to decide whether an appropriation should be made to repair or replace
particular proper&y.See generol& Ten. Coast. art. III, 80 1.35; art. VII& 0 6.
‘We do not h8vc aBciai’- to dokrmiw wbdks f&ion 418.172(r)ataboha lk
surphlsFmpalyAgaKyloolwlnplupcnyinsurmcc. See 42 U.S.C. $040128,5154; 56 Fed. I@
64558(1991)(k&rim Rule - la be adiM al 44 C.F.R 206).
p. 1044
Mr.MarvinJ.Titman - page 5 (DM-197)
SUMMARY
State agencies may not purche property insumce without
legidhe ahorhtion. The Texas Surplus Property Agency does
not have authority to spend appropriated timds to purchase property
insurMwtow~~~ses.
DAN MORALES
Attorney Oeneral of Texas
WILL PRYOR
FiiAssistantAttomeyoweral
MADELEINE B. JOHNSON
chair, opiioll colmnittee
PmparedbySusanL.Ganison
Assistant AttomeyGeneral
p. 1045
Untitled Texas Attorney General Opinion
Combined Opinion