OF TEXAS
AURTIN. Tmcxas 78711 -. .I_
C)J!rii
Orern~!nr
February 25, 1977
The Honorable Bob Bullock Opinion No. H-947
Comptroller of Public Accounts
State of Texas He: Transfer of funds
104 L.B.J. State Office Bldg. by ~the Comptroller
Austin, Texas 78711
Dear Mr. Bullock:
You have requested our opinion concerning your authority
to transfer funds from the General Fund to the Department of
Public Welfare's Commodity Distribution Fund pursuant to
section 3 of article 5 of the 1973 Appropriations Act. Acts
1973, 63rd Leg., ch. 659 at 2197.
That section provides:
In each instance in which an operating fund
or account is created by the provisions of
this Act, the responsible officials of the
State are authorized to transfer into such
operating fund or account sufficient moneys
from local funds and Federal grants of funds
to pay proportionally the costs of matching
State employees retirement contributions, the
State's share of Old Age and Survivors
Insurance and the proportionate cost of
premiums of policies containing Group Life,
Health, Hospital, Surgical, and/or Medical
Expense Insurance for retired employees and
officials.
This language has been contained in each appropriations
act since 1969. In Attorney General Opinion M-1173 (1972),
this office ruled that section 3 constituted an authorization
for the Comptroller to transfer funds to the State Law Library.
The opinion states that such a transfer could include:
P. 3958
The Honorable Bob Bullock - page 2 (H-947)
the matching funds appropriated from the
general revenue fund by the provisions of
section 3 of Article V . . . . Id. at 5.
It is not clear whether section 3 was construed to constitute
an open-ended appropriation or whether it merely authorized
a transfer of general revenue funds for the State's contribu-
tion for employees who are paid from the General Fund.
Admittedly, the language quoted above would seem consistent
with the former construction. However, article 5, section 3
authorizes the transfer of only "local funds and Federal
grants." Since Opinion M-1173 discussed neither the definition
of "local funds" nor the pertinent general law, its analysis
is insufficient to answer the present inquiry.
The legislation pertaining to the payment of the State's
contributions to the Retirement System, Old Age and Survivor's
Insurance (OASI), and insurance for retirees requires that
such payments be made from the "respective funds appropriated
. . . to pay the salary . . .of the member for whose benefit
the contribution is made." V.T.C.S. art. 6228a, 5 8A. See
V.T.C.S. art. 695h, S 5, 6(b)(l); Ins. Code art. 3.50-2,F
15(b). The Appropriations Act of 1973 implemented this
legislation by making separate appropriations from the
respective funds for each of the three contributions. Acts
1973, 63rd Leg., ch. 659, art. II at 1866; art. III at 1953-54.
In our understanding, these contributions are either drawn
by the Retirement System directly from the respective fund
from which the particular salaries are paid or from an
operating fund into which such funds have been transferred.
See Acts 1973, 63rd Leg., ch. 659, art. III at 1919-20,
which creates an Attorney General's Operating Fund and
transfers moneys thereto from fourteen special funds. Where
such an operating fund is utilized, the salaries paid therefrom
are actually being paid from the funds which have constituted
the operating fund; the consolidation of such funds is for
convenience. Accordingly, the general law and the appropriations
act require the subject contributions to be made from the
funds from which the operating fund is constituted. These
contributions could be drawn directly from the various funds
by the Retirement System; however, for administrative convenience
the Retirement System may require the proportionate contribution
from each fund to be transferred to the operating account
from which the salaries are finally drawn. V.T.C.S., art.
6228a, 5 6A(b)6; Ins. Code art. 3.50-2, 9 4; V.T.C.S. art.
695h. 5 7.
P. 3959
The Honorable Bob Bullock - page 3 (H-947)
Thus the Legislature has created a system by which
money is appropriated from each fund to pay the contributions
for employees whose salaries are paid therefrom. Your
question involves the transfer of general revenue funds
into a special fund for the purpose of paying such fund's
proportionate share of the State's contributions. We note
that most of the Commodity Distribution Fund consists of
moneys appropriated from the General Revenue Fund for
financing the State's Food Stamp program. Acts 1973, 63rd
Leg., ch. 659, art. II at 1857; see Rider 25, Id. at 1863.
As we discussed above, the State'scontributions for employees
paid from the appropriation from General Revenue should be
financed therefrom in the proportion that such appropriation
is utilized to pay the salaries of such employees. Any
transfers necessary to this transaction are made pursuant to
the requirements of the Retirement System. We will therefore
address the application of other provisions to transfers from
General Revenue other than those necessary to the above
described transaction.
Article 5, section 3 of the 1973 Appropriations Act,
reproduced in part above, authorizes the transfer of "local
funds and Federal grants" into an operating fund for payment
of the subject contributions. Thus this transfer was
authorized thereby only if the General Fund is a local fund
or federal grant. We do not believe the Legislature intended
it to be so characterized. Article 4, section 20 of the
Appropriations Act contains the language "regardless of
whether said appropriation items are General Revenue or
local funds in character . . . .' Acts 1973, 63rd Leg.,
ch. 659, art. IV at 2150. Clearly, a distinction is drawn
between local funds and the General Fund. In addition,
article 5, section 31 of the Appropriations Act provides in
part:
In the event the amounts of Federal funds,
local funds, or funds other than appropria-
tions from the General Revenue Fund, have been
estimated in this Act in sumsgreater than
are actually received by the respective
agencies of the State, this Act shall not
be construed as appropriating additional
funds from General Revenue to make up such
differences. Acts 1973, 63rd Leg., ch. 659,
art. V at 2211.
P. 3960
. .
The Honorable Bob Bullock - page 4 (H-947)
Once again, a clear distinction was drawn between federal
and local funds and the General Revenue Fund. --
See also
"Method of Financing" for Department of Public Welfare, Acts
1975, 64th Leg., ch. 743, art. II at 2491.
Accordingly, in our opinion article 5, section 3 did
not authorize a transfer of General Revenue Funds to the
Commodity Distribution Fund, since the General Revenue Fund
is not a local or federal fund. Attorney General Opinion
M-1173 is hereby overruled to the extent of conflict. Since
the Legislature has elsewhere provided for the State's
contributions for employees paid from special and general
funds, it appears that section 3 was intended to provide
for the transfer of funds to pay "proportionally" the
State's contributions for employees paid from local funds
and federal funds, for these contributions were not provided
by the specific appropriation for the three contributions.
Our attention has been directed to article 695c, section
4(12), V.T.C.S., which provides in part:
The State Department of Public Welfare is
authorized to accept, expend, and transfer
any and all Federal and State funds appropriated
for such purposes.
As we decided in Attorney General Opinion H-679 (1975), this
provision authorizes the transfer of appropriated funds.
However, the Legislature did not appropriate these funds
to the Department of Public Welfare, and thus article 695c
did not authorize their transfer.
SUMMARY
Article 5, section 3 of the 1973
Appropriations Act did not authorize the
transfer of General Revenue Funds to the
Department of Public Welfare's Commodity
Distribution Fund. Such a transfer may
be made pursuant to the requirements of
the Retirement System where the transferred
P. 3961
The Honorable Bob Bullock - page 5 (H-947)
funds are used to pay the State's contributions
to OASI, retirement and insurance for
employees paid from appropriations from the
General Fund.
Very truly yours,
Attorney General of Texas
APPROVED:
Opinion Committee
jwb
P. 3962