The Attorney General of Texas
June 6, 1980
MARK WHITE
Attorney General
Honorable Warren G. Hardirg Opinion No. m-193
Texss State Treasurer
LBJ Build@ Re: Distribution of interest in
Austin, Texss 787ll suspense account.
Dear Mr. Harding:
You have’requested our opinion regard@ the distribution of interest
on funds received by the State for disbursement to counties pursuant to 16
U.S.C. section 500. That statute provides, in pertinent part:
. . . [Tlwenty-five per centum of all moneys received
during any fiscal year from each national forest shall
be paid, at the end of such year, by the Secretary of
the Treasury to the State or Territory in which such
national forest is situated, to be expended as the
State or Territorial legislature may prescribe for the
benefit of the public schools and public roads of the
county or counties in which such national fcrest is
situated.. . .
The legislature has prescribed the distribution of these funds as follows:
Whereas Congress has heretofore passed a law
which provides that thereafter twenty-five per
centurn (25%) of all moneys received during any fiscal
year from each national forest shall be paid at the
end thereof by the Secretary of the Treasury to the
State or Territory in which said forest is situated to
be expended as the State cr Territorial Legislature
may prescribe for the benefit of the public schools
and the public roads of the county cr counties in
which the national forest is situated, and whereas the
Legislature of the State of Texas has not prascribed
any method for prorating said funds, now, therefore,
be it enacted that the Commissioners Courts of the
counties in Texas in which such national forests are
situated are hereby authorized to prorate sIl such
funds received and to be received from the Federal
Government for timber and all other income derived
from such lands as follows:
p. 625
Honorable Warren G. Harding - Page Two (Ml+193)
Fifty per cent (50%) of such money received shall be allocated to
the school districts in proportion to the area in said districts, and
fifty per cent (50%) of same to the county for the benefit of the
public roads in said county. . . .
V.T.C.S. art. 2351b-4. Pursuant to these statutes, the State Treasurer received a check
from the United States Department of Agriculture, in the amount of $1,415,000, on
October 5, 1979. The funds were disbursed to the various counties as of December 31,
1979. You ask about the disposition of interest earned on the money &ring the
approximately three months it was in the custody of the State Treasurer.
Article 2543d, V.T.C.S., pmvides:
Section 1. Interest received on account of time deposits of
moneys in funds and accounts in the charge of the State Treasurer
shall be allocated as follows: To each constitutional fund there
shall be credited the pro rata pcrtion of the interest received due
to such fund. The remainder of the interest received, with the
exception of that portion required by other statutes to be credited
on a pro rata basis to protested tax payments, shall be credited to
the General Revenue Fund. . . .
In Attorney General Opinion M-468 (19691, this office held that article 2543d is not
applicable to interest on federal funds granted to the State for specific purposes. Such
funds are trust funds, and any income &rived therefrom becomes part of the fund, to be
used only for the purpcees for which the grant was made, and not for the general operation
of State government. See Attorney General Opinion H-1040 (1977).
The funds about which you inquire are clearly to be expended for a specific purpose,
i.e., “for the benefit of the public schools and public roads of the county or counties in
which [the] national forest is situated.” 16 U.S.C. S 500. Furthermore, in Trinity
Independent School District v. Walker County, 287 S.W.2d 717, 722 (Tex. Civ. App. -
Galveston 1956, writ rePd n.r.e.1, the court held that the purpose of the federal statute is:
to create trusts for the benefit of counties in which national
forests are located in recognition of the national interest in
education and road building.
(Emphasis added). In our opinion, since funds distributed under the authority of 16 U.S.C.
section 500 are trust funds, article 2543d, V.T.C.S., is inapplicable. As a result,
depository interest earned on such funds should be disbursed to the appropriate counties on
a pro rata basis.
P. 626
Honorable Warren G. Harding - Page Three (l’lN-lg3)
SUMMARY
Depository interest earned on federal funds disbursed by the
State Treasurer to wuious counties under 16 U.S.C. section 500
should be distributed to the appropriate counties on a pro rata
basis.
MARK WHITE
Attorney General of Texas
JOHN W. FAINTER, JR.
First Assistant Attorney General
TED L. HARTLEY
Executive Assistant Attorney General
Prepared by Rick Gilpin
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
C. Robert Heath, Chairman
Jim Allison
Jon Bible
Walter Davis
Susan Garrison
Rick Gilpin
Bruce Youngblood
p. 627