The Attorney General of Texas
JIM MAlTOX Narember 13. 1985
Attorney General
Supreme Court Building Gary E. Miller, M.D. Opinion No. JU-378
P. 0. Box 12546 Colluaissioner
Austin. TX. 78711- 2546 Texas Department of Mental Realth Re: Whether funds paid to
5121475-2501 and Mental Retar'dation a Mental Eealth and Mental
Telex 9101674.1367
P. 0. Box 12668 Retardation facility for
Telecooier 51214750266
Austin, Texas 78711 services rendered pursuant
to a contract are appro-
714 Jackson. Suits 700 priated to that facility
Dallas. TX. 75202.4506
2141742.6944
Dear Dr. Miller:
4624 Alberta Ave., Suite 160 You inquire about the proper disposition of funds received by the
El Paso. TX. 799052793 Texas Department elfMental Realth and Mental Retardation [hereinafter
915/5333464
-1 under a wntract with a private entity. You provide the
following background information about the contract:
1001 Texas, Suite 700
Houston, TX. 77002-3111 State schools for the mentally retarded . . . have
7131223.5686 an oppol:tunityto assist private, not for profit
service providers in the delivery of community-
based residential services through the use of
806 Broadway, Suite 312
Lubbock, TX. 79401-3479
state anployees to operate or partially operate
8061747.5238 such services on a contract basis. The private,
not for profit service provider could qualify for
ICF-MR 1:srtification [intermediate care facility
4309 N. Tenth. Suite B
for the mentally retarded; see 42 U.S.C.
McAllen. TX. 76501-1665
51216824547 11396d(c), cd)] and thereby become eligible to
receive reimbursement for such services from the
Federal Government through the Texas Department of
200 Main Plaza. Suite 400 Human Resources. The private, not for profit
San Antonio, TX. 762052797
service provider would, in turn, pay the state
5121225.4191
school rll or part of such funds as consideration
for the :servicesof the school's employees under
An Equal Opportunityi the provisions of the contract.
Affirmative Action Employer
You state that the contract will be made under authority of section
2.13, article 5547-202, which provides as follows:
Sec. 2.13. The Department may cooperate,
negotiate and contract with local agencies,
hospitals, private organizations and foundations,
communilg centers, physicians and persons to plan,
p. 1726
Dr. Gary E. ~liller- Page 2 (JM-378)
develop and provide community-based mental health
and mental retardation services.
You do not ask whc:thersection 2.13 authorizes such a contract,
and if it does, vhether it could constitutionally do so. -See Tex.
Comet. art. III, S51. !!tmask the folloving question:
Are funds received by a Texas Department of Mental
Health and Mental Retardation operated facility as
consideration :for services rendered to a private,
not for profit entity pursuant to contract re-
appropriated t,o the facility which provided such
services? (Emphasis added).
You cite the follwing rider to the Appropriations Act as being
relevant to your questim:
Sec. 27. RRIHBDRSEMENTS AND PAYMENTS. Any
reimbursements received by an agency of the state
for authorixd services rendered to any other
agency of thtz state government, and any private
sources and aa:{payments to an agency of the state
save-nt male in settlement of a claim for
are hereby appropriated to the agency of
damages, --
the State rrwiving such reimbursements and pay-
ments for useliuring the fiscal year in which they
are received.
The reimbc.rsementsand payments received shall
be credited by the comptroller to the agency's
current appropriation items or accounts from which
the expenditures of like character were originally
made, or in the case of damage settlements to the
appropriation,items or accounts from which repairs
or replacemerltsare made; provided, however, that
any refund oi'less than fifty dollars ($50) to an
institution c'f higher education for postage,
telephone se.nrice,returned books and materials,
cylinder ar.d container deposits, insurance
premium and like items, shall be deposited to the
current fund account of the institution in the
State Treamry and such funds are hereby re-
appropriated.
Acts 1985, 69th Leg., cb. 980, art. V. 527, at 7779.
The payments uni,er the proposed contract are payments from
private sources subject. to the above Appropriations Act provision.
The State Funds Reform Act provides that:
p. 1727
Dr. Gary E. Miller - Page 3 (JM-378)
Fees, fines, pcualties, taxes, charges, gifts,
grants, donations, and other funds collected ot
received by a s'tate agency under law shall be
deposited in the treasury, credited to a special
fund or funds, sad subject to appropriation on19
for the purposes for which they are otherwise
authorized to be expended or disbursed. A deposit
shall be made at the earliest possible time that
the treasury cat accept those funds, but not later
than the seventh day after the date of receipt.
V.T.C.S. art. 4393-1, 54.(1(,4(a)(former V.T.C.S. art. 4393c reenacted
as part of Treasury Act, Acts 1985, 69th Leg., ch. 240. at 2078,
2104). The funds are to be deposited to the credit of the General
Revenue Fund unless the mco,eyis expressly required to be deposited to
another fund or account. Id. 54.004(b). The Texas Department of
Mental Health and Mental !%etardationis a state agency subject to the
State Funds Reform Act. See Attorney General Opinion MW-454 (1982).
Funds the department res:zes under the contract are subject to
article 4393-1, V.T.C.S., a,ndmust be deposited in the treasury within
seven days after the date c'freceipt.
Rider 27, quoted above, appropriates the payments received by
MIIMR under contract for use during the fiscal year received. The
funds are credited to the agency's appropriation items or accounts
"from which the expendimres of like character were originally
made. . . .'I The funds received under the proposed contract will
constitute reimbursement for services of employees of state schools
for the mentally retarded. The rider appropriates these payments to
the items of appropriation or accounts from which the employees ware
paid.
The current General Appropriations Act includes the following
items in the appropriation to the Texas Department of Mental Realth
and Mental Retardation:
STATE SCEOO1.SFOR TRE MRNTALLY RETARDED
For the Years &ding
August 31, August 31,
1986 1987
1. Administration Program: [amounts of appro-
a. Superinte:ldent(plus priation items
house ,andutilities) deleted]
b. Other Administrative
and Stn:EfDevelopment
Servic2:3
2. Auxiliary Seru:LcesProgram
p. 1728
Dr. Gary E. Miller - Pa:ce4 (JM-378)
3. Residential !ServlcesProgram
4. Utilities (non-transferable)
5. Community-Based Residential
Service Program
6. Non-Residential Treatment.
Education and Rehabilitation
Services Program
GRAND TOTAL, STATE SCHOOLS $246,318,003 $246,318,003
. . . .
It is the i:n:entof the Legislature that the above
appropriated fmds be allocated and expended as nearly
as practicable by the facilities enumerated below in
the amounts spczified for each facility.
Abilene State !Ichool [specific amount
Austin State School allocated each
Brenham State Ikhool school deleted]
Corpus Christi State School
Denton State School
Fort Worth State School
Lubbock State licbool
Lufkin State S~:bool
Mexla State School
Richmond State School
San Angelo Sta:e School
San Antonio Stite School
Travis State S~:hool
TOTAL $246.318.003 $246.318.003
Acts 1985, 69th Leg., c!a.980, at 7536-37.
The legislature appropriated funds to the state schools as a
group for the various programs and purposes numbered 1 through 6, and
it also stated the apprmimate amount of the total appropriation to go
to each school. The items numbered 1 through 6 are the items of
appropriation vhich f'und the state schools, including salaries of
their employees. Art Lcle V, section 27 appropriates funds received
under the proposed contract to the appropriation item from which
derive the salaries of employees performing services under the
contract. -See Tcx. Coast. art. VIII, $6. Therefore. funds received
p. 1729
Dr. Gary E. Miller - Page 5 (JM-378)
under such contracts are appropriated to the Department of Mental
Realth and Mental Retardation for the programs of the state schools
described in the Appropriations Act. The rider does not appropriate
these receipts to the state Ischoolwhose employees generated the=.
SUMMARY
The State Funds Reform Act, article 4393-1,
V.T.C.S., applies to funds received by the Texas
Department of Ment,alEealth and Kental Retardation
from a private source. These funds must be placed
in the treasury. Article V. section 27 of the
General Approprjstions Act appropriates those
funds to the department's appropriation items from
vhich the state'flexpenditures under the contract
were made.
J-A/b
Very truly yours
.
-
JIM MATTOX
Attorney General of Texas
MARY KELLER
Executive Assistant Attorney General
ROBERT GRAY
Special Assistant Attorney G,eneral
RICK GILPIN
Chairman, Opinion Committer!
Prepared by Susan L. Garriwm
Assistant Attorney General
APPROVED:
OPIHICN COmITl'EE
Rick Gilpin, Chairman
Colin Carl
Susan Garrison
Tony Gulllory
Jim noellinger
Jennifer Riggs
Nancy Sutton
Sarah Woelk
Bruce Youngblood
p. 1730