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-