Untitled Texas Attorney General Opinion

OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN

February 17, 1939

lion.J. IL McDonald, Cd86iOner
Departillmtof Agrioll1tulv
Aunt&n, Tour

to tha pro-
urmant
f House Bill No. 664,
Vera8 Cltrua Market-
* Article 5764a or
Revised Civil Eltatutea.
tsr of February
on to various
RI *Texas Citrus
Vernon's RevlSed
on the tollow-

funotlonlngof the marketing agraemOnt
ad into under the Toxam Citrus Marketing Aot
be 80 reported to the Gtatr Ccanptrollsr an&
dsposited.inthe State Trea8urg.w
 Hon. J. IS.MoDonald, ?sbruary 17, 1939., Page 2.

Par ths purpose of snswerlng the above Inquiry,
we have also taksn Into ccmlasratlon the tows and
provisiona ot the amended Marketing Agreement regulating
the handling of citrus fruit grown In Cameron, Eldalgo
and Uillacy Counties between the handlers of citrus fruit
In this ares and the Commlsslonsrof Agrleulturs of the
Stats of Texas.
Sootlon S ot the Marketing Aot sonstltutss
the authority and power of the Commfsslonsrof Agrlcul-
turs for sntsring Into a Cltrus~MarkstlngAgreement. It
reads as follows:
Vubjeot to the provisions of this Aot;
the CommlsslonsrIs hereby authorized and sm-
powered to execute marketing agreementsand
to lssus lloenssa under this Act to persons
engaged in transaotlonaor Intrastateoommsros
wlthln the areas of this Stats in the markst-
Ing, proossalng;packing, shipping,handling
or distributingor citrus iNitS."

Section 0 (1) of the Marketing Aot provides
for the crsitlon of *an admlnlatratlvscoa@ttss or
oommittsss* by the terms of any Marketing Agrsemsnt,
sxecutsd under the Act in the following language:
OY(arkst.lng
agrssmsnts sxsoutsd and llosnsss
lssusd under this Act, shall, in addition,
oontaln one or more of the following terms
and eondltlons:
'(1) Proridingror the sslsotlon by the
CommissIonor,or a method for the sslsctlon
by the Commlsslonsr,of an admlnlstratlvscom-
mittee or oommlttdssand defining their powera
and duti0s.m
Ssotion 0 (1) of the Aot further defines and
limits the powers ai such admninlstratlvsoomnlttes,to-
wit:
(a) To admlnlstsrlngsuoh llosnse In ao-
cordanos with its terms and provisions;
(b) To making rules and regulationsto
effectuate the terms and provlslonsoi suoh
license;

.
 Eon. J. IL irrcDonsld,
February 17, 1939, Pegs 5.

(.o)To rsoslvlng,lnveatlgatlngand rsport-
ing to the Coamiaslonsraomplalntaof vlolatlona
or auoh llosnsa;
(d) To rscaamtendlng
to the Commlaolonor
amsndmsntato auoh llasnas;
(01 To oollsotlngfrom sash handler a fee
or laasaamsntrspreasntlng his proprata aharo
of ouch oatlmgtsd expdnesa, Lncludlngsxpenasa
incurred In hearings held on, and In the oxsou-
.tlon of luah marketingagrssnmnt, aa the Com-
mlaalonsr,after the autiasion to him by auah
ldmlnlatrativeagsnoy or agencies 0r a proposed
budget, find0 will probably bs required to oovar
sxpsndlturaanaoaaaarilyto bs Incurred by
auoh~mgenayor agendaa, during any psrlod
lpscilflad by him, for the amlntsnsnosand
funotlonlngof luoh agsncy or agencies; to
rsuoaivlng, expendingand aooountlng ror the
funds r0 aollectsd,and to ret- to ouch hsndlsr
hi8 pro rata ahars of any unexpendedbalances
which the admlnlatrstlresommlttss or oommlttes8,
wlththe appkvsl of the Commiaalonsr,flnda
am not 80 rsqulrsd;W
We are aonasrnsdwlth the aonatruotlonof the
above quOt8d rub-heading~(81of Section 0 (1) of the A&.
It dsflnss the powers of ths ldmlnlatratlva
oonmlttee under the Marketing Aat, rslatlva to an daln-
latmtlon or an operatingfund. Hrat,, the aamulttss
la authorized to aollsot from each handler of oltrua a
re0 or,asasasmsntrsprsssntlngthat handlsrqa pro rata
ahers or the estimated sxpsnee of admlnlatsrlugths
Karkstlng Agreement. The amount of assessment la baaed.
upon a budget prepared by the oommlttea and approved by
the Coamilsafonsr or Agrioulturs for a rlsoal period
dealgmtad by him. Said amount la to be dstermlned by
t&s Cozamlasloner or Agrloulturs. said budget la dealgn-
sd to ccivsr all sxpsndltursswhloh night nsosssarllybe
lneurrsd by the oommlttss In admlnlatsrlngthe terms and
prwlalona of the Act.
Ssoondly, after aubmlttingthe budget to the
Coanmlsslonsrof Agrloulturs and oollsotlng the aaaeaamsnt
or fee deolded upon by ths Lhmniaaionsr, the aamittsa 16

- .
Hon. J. X. MaDonald, February 17, 1939, Page 4.

eivsn the power oS *rsoslvlng,sxpsnding,and aocounting
for the funds so oollsctsd.~
Finally, In sold Ssotlon 8 (l), (a) It la the
duty of the aomnlttss to return to each contributing
handler his proportionateshare of any unexpendedbal-
ance of the administrationfund, which the oommlttsa
or Cwnmlsalonerof Agricultureflnda wlll not be needed.
The language of sub-baading(a) of Section
8 (1) of the Act, In ooncluaion,authorizes the committee
let, to rscslva the asasaamsntalevied by the Ccannla-
lio nsr on the baala of the canmlttss~aown rscomasnda-
tion; 2nd.,'to sxpsnd ouch funds and give sn acoountlng;
and, 3rd.. to return to the handlers any balance mloh
the oommlttssand Comlsslonsr of Agriculture declds
la not required to meet the expsnsss of any fiaoal period.
Section 8 (11, (a) thus gives the adminlstrs-
tire aomulttas, set up In the Karkstlng Agreement,
lxtanalvs aontml over the operatingfund rslaed by
aasaaaamnt,lncludlng the power to Bake dlaburesmsnts
therefrom.
Section 16 (21, however, while further dssigna4-
lng uld aollsctsd funds for the purposes set out In the
Marketing Agreement.,requires that a record be kspt and
a raport be filed with the Commleslousrof Agrlculturs
rr0m time to tlnks. It reads an follows:
-AAnyfunds oollsatsdby the admlnlstra-
tire agsncy from the levying of auah Sees and
asaseamsntashall be used forth8 purpose set
forth In the marketingagreement or license
under which It wss oollsctsd. A full and aom-
plate racord thereof shall be kspt to which
the Commissionermay hars'accsssat any
time, and a report of the aotlrltlsaand pro-
ceedings shall be filed wlth the Commissioner
Srom time to tlnm as ha may requlrs.n
Thus far It la apparent from the tanas of the
Marketing Act that the Commissionerof Agriculture,after
exsmlnlngthe proposed budget aubmlttedto him by the
administrativecommittee has the right to set the fee or
sssssamsnt to be levied; that he hsa the right to approve
Hon. J. 11.M?Donald, Psbruary 1.7,1939, Page 3.

the unaxpendadbalance ab the admlnlatratlonfund to be
dlvlded among the lundlera on a pro rata basis; and
that he has the right to have loceaa to the reuorda of
the oom.ltteeat any time and reoelve a report on the
~~;~eand dispositionof funds by the l&&xlatmtlve
.
Sootion 17 of the Marketing Act so&orb upon the
Commiaaionerof Agrioulturelddltlonal rights and powers
in respect to the flnanoea of the ldmlnlatratlvaaamalttee.
It provideras follows:.
(I
... The Ccmmla6lonerahall thereafterexact
and require, by requlaltlonon the appropriate
ldmlnlatratlvscommittee sr aommlttaaa,aharged
with the oollaotlon sf funds for expansesunder
o uc hmr k etilylg m a ma nt,
th a ta uo ho o mdtta eor
acamlttesasolleot, report, and pay wer monthly
to the Ccaamlaaloner the amount ~decamd nsoeaaary
and aufflclent,and raquialtlonedfrom auoh
ldrinlstmtlva amanitteeor aorenitteaa by the
Caumlaedoner,to defray the aotual expenses
of the Commlsalomr to be lnourrsd during the
subsequentmonth in the admlnlatmtlon and
enforcementof any auoh narketing agreement or
lloenae, under ouch rules and ra(pllatlona as
ha may pmaorlbs.’
We oonatrue said prmlalon to men that the
CarepiaalonsroS Agticulture la entitled to reoelve from
the adminlatration fund any auoh amount of money as he
oalaulatesla nscsaaary and auSSloientto aover ouch
aotual lxpenaea a0 hs, In hls orrioial oapaclty a0 Coa+
miaalonsr of Agriculture and ths Departxnent of Agrioul-
ture, will Incur for the next ensuing month, in aamsa-
tlon dth hla duties In admlnlatsringthe Marketing
‘ngraamant.
It gives him the authorityto requlaltlonthe
administrativeoaPmittea,uhlah has aontrol war the
operating run6 to supply him with au& lx P ensemoneY.
The l.mguage cf Seotlon 17 deelgnatea“the lotual UPOne
or the Conrmiasioner... ln the a&alnlatmtion and en-
Soroamentw of the Marketing Agreement as the datemining
amoUnt oS the raqulaltlonfunds.
 Hon. J. B. McDonald, February 17, 1939, &is 6.

'The aeoond paragraph Of Seatlon 17 deals rith
aunusued, anexpendedand unrequlaitlonsdaaseasmsnta~
In the r0ii0ting bmgi~g8:
‘gut all monaya aolleotad from asaeas-
Rents, or othsrwlae,lmpoaed;underthla Act
and under msrketlng agreementsexecuted In
~*usnCs thereof,'orliaenaea ia6aued thsre-
under, by the admlnlstmtlve odttes or
0oarmnitteea created urdsr this Act, not re-
qUlaltlons6by the Camulaalonscfor a&nlnla'trs-
tire lx p wa es as herslnbetoreprovided In this
Section, shall renaln In the custody of such
admlnlatratlvscoanalttes or aonohittssa~untll
the 0108s or the aurrsnt ma*stlng *es*on or
year for which asms was oollscted (not to ex-
tend further thsn the psrlod covered by ouch
marketing agreement), at which time the a&In-
latmtlve committee or ooarmittsss ahsll return
to much handler or handlers his pro rsta share
of ouch unususd, unexpendedand unrequlsltloned
aaaeairmsnt or asaessmsnta.~

ConetxulngSections 8 (1) (8) and 17 Of the Act
together, It la apparent that the operatingfund conposed
of aaeeaamsnta or tees levied on the jnndlera by the
a&zlnlstratlveooormittssla aubjsot to three uses.
(1) It la aub)ct to be raqulaltloned
on a monthly baa18 by the Commlaslonsroi
Agriculture for an amount neusssary to cover
hla expsnasa and the expenses of his dspart-
rent inourred through his bslw a psrty to
the Marketing Agreement.
(2) It la subject to the authorizedax-
pendlturea of the aommittss 1 Section 8 (1). (a) 1
chargedwith the adnlnlstrstionof the Ksrkstlng
Agreemnt set up under the Act.
(3) If at the alose cb a rlacal period, there
r-ins any unususd, unexpended or ~SqUiaitlOn-
ad portion or the operatingfund, said balance
is dlv:ded among the assessed handlers,eaah
handler rsoslvlng hls pro rata share Of said re-
maining rund0.
Hon. ,J.X, HoDonald, February 17, 1939, Page 7.

Seotlon 18 (1) relates to the moneys requlal-
tlonsd by the Canml,aslonerof Agrlaulturefrom the
opsmting fund in the ouatody of the adminlatrstlvs
oommlttee. It provides that:
*All moneys reoslved by the Commlsslon-
or hereunder ahall be by hint,at thcend of
eaoh month, reported to the State Comptroller
and at the same time depoaltsd In the Stats
Treasury. All moneys so oredltsdare hereby
lpproprlatadfor use of eald Corqdsslonerto
be expended In accordancewith lsw ln aarry-
%ng out the ~provlalonahsraof.W
Seotlon 18 (X) requires the bommlaslonsrof
Agrloultureto *submit quarterly to the admlnlatratlvs
lgenoy umisr eaoh msrkstlng agreemsnt or license a
aomplete statement of reeslpta and expendituresin
aonneotlonrith the admlnlatratlonof each marketing
agreement or license during the querter.w
It la our opinion that the lsglalatlveln-
tent behind the Act wss that both the Commlaalonsr
of Agriaultureand the a&lnlatratlve agenay,
oreatsd under the a@irkstingagreemsnt,be authorlaed
and mpowersd to make neoeaaary lxpsndltureaaonnected
with their respective dutlsa and functiona In aarry-
lng out the terms and provl~ona of a m?trketlng
agreamsnt. Provlalon la made, both for a aheck by
the Commlaalon6rupon the lxpsndltureaof the oom-
mlttee and an accountingby ths Commissionerof
Agricultureto the admlnlatratlveaonmlttee of hle
receipts and expenditures. Since the Commlsslonsr
af Agriculturela a public offlolal and a State
orri08~, the Act requires that moneys expsndsd by
him be reported to the Ccmptrollerand deposited
In the Stats Treasury. The aommlttee,being a prl-
vats organizationset up by a voluntary agreement,
Is by authority of the Act a auatodian of the
operatingfund and may make axpendltureaof same
without convertingsaid moneys lntb public funds.
 Hon. J. X. XoDonsld, Iebrwmy 17, 1939, Page 8.

Section 12 states l
xpllclty that:
sell moneys solleotad from aaasasmsnta ...
not requlsltionsdby the Commissionerfor
ldmlnia tr etiV8axpsnaes ... shall remain In
the ouatody of such lQnlnistrstlvecommlttss
... a
Thla applies not only to that portion of the
unrequIaltlonsdfunds to be returned to the hsndlsrs on
a pro rata bssla, but alao to the moneys to be used and
expended by the aommlttes In properlyadministeringthe
tonne and provision6of the agreement.
The provlalonaof the mrkstlng agresmsnt
entered intc by the Commlsalonsrof Agricultureand
the handlers ot cltrua fruit, grown In Cameron,
Hldalgo and Xillscy Countles, austsln the construction
we have placed upon ths atorsm~tloned asctlona of the
Aot.
Seotion 1 of Article 2 oS the marketing
agrsamsnt areatss certain admInlatrstlveagenoles ln
the r0iiaring language:
*A CroonersInduatry CommIttee and a
ShippersMarketing CommIttee are hereby
establishedwhich shall admlnlatsr the ferns
and provisions of this agresmsnt as hare-
Inafter 8peOlflcallyprovided,and the
membsrahlp of which ahall be selected
In accordsnos with the provIsIona oS thla
artlc1e.s
Seotlon S (2) of said Article lists the duties
of the Growers Industry Committee as follows:
(a) to act aa lntswsdlary between the
Commlaalonsrand.ths producersand handlers:
(b) to furnish the CommIssIonorauoh
available InSormstlonas he may request;
(a) to appoint ouch employees as It may
dssm nscsasary and to detsnnlne the salaries
and dsrlns the duties aS any auah employsea;
- .
Hon. J. X. YcDonald, February 17, 1939, Page 9.

(6) to osuas the books of the GroireraIndustry
Committee to be audited by one or more osrtlrled
pub110 aooountantaat least once for eaoh orop
year and at luah other time as the Growers
Industry Committee demo neoeasary or as the
Canmlsslonsrmay request, and to ills wlth the
~~aalonsr coplea of all audit yports made;

(0) to make .auchaatlamtss Or the total
Crop8oS fruit including the grads and alas
6latrIbutlonther8o.Sas msy be deemed mceaaarg
by said sommlttee In connectiondth the
administrationof Articles IV and V hereof,
or as may be prsaoribsdby the Commissioner.
(f) to psrionn auah duties In connection
with the aiLnlnlstrstlonof ths Tsxsa Citrus
Xarketlng Act aa may from tlms to time, be aa-
signed to It by the Commlasioner.R
Section 6 oS~ArtIcls2 deqla with +m.ud8.R It states:
*All funds received by the &owera Industry
CcmmIttes,pursuant to any provisions OS this
agreementshall be used aolsly for the purposes
herein apecIfledand shall be aooountsd for In
ths Sollwlng msnnsr:
(1) The ComaIaslonsrIMP, at anytime, requlrs
the Growers Industry Committee and Its mmbsra to
account for all receipts and dlaburasmsnta.
(2) Upon the rsmoval or expiration of the
term or 0rriO8 or any member 0r the Growers
Industry Canmlttes, such member ahall aoaount Sot
all receiptsand dlaburaemsntsand deliver all
propertyend funds In his hands, togetherwith
all books and records in his possssslon to hIa
aucosssor In office, and shall execute such aaslgu-
msnta and other instrumentsas msy be nscssea.rjr
or appropriateto vsat ln auah auocsssor full title
to all of the property, funds and claims vested In
ouch mambsr pursuant to this agrssmsnt.a
 Hon. J. X. YoDonsld, February 17, 1939, Page 10.

The lmpllaatlonthroughoutaald aectiona la
that the Growers Industry Ccmualttee ht?iE full power to rake
diabursen~nta from the operating
b ldl which rsmalns In Its austoUy. fund uhlch lt haa aollectsd
.
Article 1x1 of the amended Marketing Agreement
covers wexpenassand asseagPsnts.~
Seotlon 1 OS Artlole III provides that:
Vhs Growers Industry Committee la authorized
to inour.auohexpenses as the Gommlsslonermay
find t0 be necessary to oarry out the functions
OS both aommlttssaunasr this agreement during
the de8lgnsted fiscal period. The funds to aovsr
ouch expenses shall be aoquirsd by the levying
of aaasasrmntsupon handlers as hsrslnafterpro-
vided.*
&Id section conSorme wlth tha requirementsOS
Seotlon 8 (1) (a) OS the Act which authorizesthe oammittss
to rake axpsndltursson the basis of a budget submitted
to the Commlaslonsrof Agriculturefor a 8psolSlsd period.
Gsotlona 2, 3, 4, 5 and 6 of Article III provide
for acmputatlon0r rate OS asas8amsnt, payment 0r same
by handler, a proportionaterefund, ldorsaas rate 0r aasess-
ment and amlntensncs of suit by the Growers Industry Colnmittss
toi aollectlon of hsndlsr*e pro rata share of the expenses.
The above reasonI% and ofnstruatlon,placed
upon the pertinent sections of the exas Citrus )Carksting
Agreement and the amended Marketing Agreement, lead ua
to the conclusionthst the Act requires that only ouch
money8 is plightbe rsqulaltlonedby the COUimlSslOnSr Of
Agriculturefor the purposes of defraying axpsn8sa lnourrsd
by himself and his departmentin administeringthe provlslons
OS the Act be reported to the State Comptrollerand
de)oalted in the Stats Trsaaury.'
It la our opinion that the admlnlstratlvsoommlttes
.la legally authorized and empowered to msks necessaryand
aufflclsntexpendituresand ths Sunda whloh It uses for
operating expensesmay, under authority of the Act, remain
In its custody, only the unexpendedand unuaued portion bslng
rsturnsbls to the handler8 on a pro rata basis.
Hon. J. E. MoDonald, F8bruery 17, 1939, Page 11

This deolsion overrules the letter opinion of 3. II.
Broadhurst,AesistantAttorney General, dellvsrsdNovember 3,
1937 inrorar a8 it holds that @tha oommittee have no authority
to expend any money 80 oolleotadlrospt by paying that amount
over to the Commissionerof Agrloulturs,vrhiohhas been ra-
quleitlonedby him* and *Iso the oplnlon of K. L. Williford,
Aasf etant Attorney Goneral, Qrllvered September 13, 1938, to
the ram@ efieot.
Trusting that we have fully answered your inquiry,
we arm
Yours very truly
ATI’ORNEYGENERAl OF-TEXAS

BY
Di& Stout
Aesietant

DS:ob
APPROVED:

ATTORNW GENERAL OF TEXAS