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The Attorney General of Texas
Way 20, 1982
MARK WHITE
Attorney General
Mr. Ernie W. Tullis opinion NO. MN-474
Supreme Court EuildlnO Administrator
P. 0. BOX 12546 Texas Employment Commission Re: Proper method of financing
Austin, TX. 7671% 2546
5121476-2501
101 East 15th Street unemployment benefits for
T&x 9101674.1367 Austin, Texas 78778 former state employees
Telecopier 51214750266
Dear Mr. Tullis:
1607 Main St.. Suite 1406
You inquire as to the proper method of financing unemployment
Dallas. TX. 75201-4766
21417428944 insurance benefits for ex-state employees. You state that the Texas
Employment Commission believes that funding beyond the original
legislative appropriations for the Unemployment Compensation Benefit
4624 Alberta Ave.. Suite 160 Account for former state employees should come from funds collected by
El Paso. TX. 79905-2793
915/5x?-3464
the comptroller from each state agency in reimbursement of
unemployment benefits paid to the agency's ex-employees, a system of
reimbursement contemplated by article V. section 55 of the current
1220 Dallas Ave.. Suite 202 appropriations act. On the other hand, you state that the comptroller
Houston. TX. 27002.6666
has failed to place such reimbursements in the Unemployment
71316500666
Compensation Benefit Account and that he insists that any additional
funding of this account should come from Fund No. 165. a Special
606 Btoadway. Suite 312 Administration Fund created by section 26 of the Texas Unemployment
Lubbock. TX. 73461-3476 Compensation Act, codified as article 5221bL22a. V.T.C.S. [hereinafter
8061747-5238 these funds may be referred to as the "Benefit Account" and the
"Administration Fund" respectively]. The Unemployment Compensation
4309 N. Tenth. Suite S Benefit A&count is established by the Texas Unemployment Compensation
McAlle”, TX. 78501-1665 Act and designated by the commission as Fund No. 937. V.T.C.S. art.
5w662.4547 5221b-7. You advise that the situation causing this disagreement
developed in 1981.
200 Main. Plaza, Suite 400
San Antonio, TX. 762052797 In order to determine the proper method of additional funding of
6l2l2254191 the Unemployment Compensation Benefit Account after' the regular
legislative benefit appropriation for such account becomes
insufficient, we must consider various provisions of the Texas
An EqualOppcxlunftyl
AffimWive Acifon Employer
Unemploytint Compensation Act under which, in 1972, the state elected
to cover for unemployment~insurance benefits all services ,performedin
the employ of the state and to become a reimbursing employer.
V.T.C.S. art. 5221b-22d.
The Un&ployment Compensation Fund is administered by the
commission in payment of benefits as provided in the act, from the
Unemployment Compensation Benefit Account. Actually, such benefits
p. 1663
.
Mr. Ernie W. Tullls - Page 2 (MW-474)
are not paid directly from this Benefit Account, but payments are made
from this account to the Federal Trust Account in Washington, D.C.. in
reimbursement of the Federal Trust Account of all payments made by it
as benefits to former Texas state employees.
Article 5221b-22a establishes a special fund, separate and apart
from all public moneys or funds of this state as an Unemployment
Compensation Special Administration Fund. As amended in 1979. it now
provides that the commission may use this fund to pay costs of
administering the act. including costs of reimbursing the Benefit
Account for unemployment compensation benefits paid to former state
employees which are based on service for the .state. and the costs of
construction and purchase of buildings and land necessary in such
administration. Article 5221b-22a; as amended in 1979, further
provides, among other things. that all interest and penalties
collected under the provisions of the Texas Unemployment Compensation
Act and all moneys now on deposit in the Unemployment Compensation
Special Administration Fund shall be paid into the Unemployment
Compensation Special Administration Fund established by that article.
It also provides that the commission may, by resolution duly entered
in its minutes, charge against said moneys any expenditures which it
deems proper in the good administration of the act, provided the
commission in such resolution finds that no other funds are available
or can properly be used to finance such expenditures. .Apparently; the
fund designated in this article from which all moneys on deposit
therein were transferred is a state treasury special fund established
theretofore under the Unemployment Compensation Act.
As already stated, the Special Administration Fund is created by
section 26 of the Texas Unemployment Compensation Act, and denominated
as Fund No. 165 by the commission. After the amendment of article
5221b-22a in 1979, the article no longer provided a continuous
appropriation of .such funds as it did prior to amendment. However. a
rider in the 1979 General Appropriations Act, provided that:
_ _
la111 monevs granted tothis state by the federal
eovernment gor the administration of the
Unemployment Compensation Act or which are now on
deposit to the credit of any funds maintained by
the state treasurer for the Texas Employment
Commission and any moneys received for the credit
of such funds are hereby appropriated for the
purposes authorized by the... Texas Unemployment
Compensation Act and/or for the purposes for which
such moneys were granted. (Emphasis added).
Acts 1979. 66th Leg., ch..843, art. III, at 2632. A similarly worded
rider appears on page 3403, chapter 875 of the General Appropriations
p. 1664
.. ,
Mr. Ernie W. Tullis - Page 3 (MW-474)
Act for fiscal years 1982-1983. Acts 1981, 67th Leg., ch. 875. art.
I, at 3403.
Considering the foregoing statutes in conjunction with the
provisions of the appropriations bills enacted by the Sixty-seventh
Legislature, it seems clear that reimbursements of the payment of
unemployment benefits for former state employees is authorized to be
made from the Special Administration Fund No. 165 from the moneys
appropriated by the legislature for such purpose by the aforementioned
appropriations bill riders. Article 5221b-22a expressly provides such
authority.
Further, a rider to the 1981 General Appropriations Act provides
as follows:
a. At the close of each calendar quarter, the
Texas Employment Commission shall prepare a
statement reflecting the amount of unemployment
benefits paid to all former State employees based
on wages earned from State employment and present
it to the Comptrolier of Public Accounts, who is
hereby directed to pay by warrant out of funds
appropriated from the General Revenue Fund such
amount to the Unemployment Compensation Benefit
Account to reimburse it for such payments.
The heads of State agencies, institutions,
departments, commissions, boards, divisions, or
other units of State government are directed to
determine the proportionate amount of the
reimbursement or payment due from funds'other than
General Revenue Funds and to present the
Comptroller of Public Accounts a purchase or
transfer voucher requesting reimbursement from
such funds to General Revenue, and shall reimburse
the General Revenue Fund with a check for funds
not in the State Treasury. Such transfers and
payments as are authorized under law shall be made
periodically. The Comptroller of Public Accounts
-Y prescribe accounting procedures. and
regulations to implement this section.
~b. An . agency. institution, department,
commission, board. division or other unit of State
government is authorized to allocate funds to a
revolving account created on'its books to receive
contributions from funds other than General
Revenue based on a percentage-of-payroll
assessment to be determined by such unit of
P- 1665
r
Mr. Ernie W. Tullis - Page 4 (MW-4741
government for the purpose of reimbursing the
General Revenue Fund for unemployment benefits
paid.
Acts 1981, 67th Leg., ch. 875. art. V. 955 at 3820-21. See also Acts
1979. 66th Leg., ch. 843. art. V. 057 at 2922-23.
A state agency as an employer under the Texas Unemployment
Compensation Act is liable under article 5221b-5a to the reimbursement
provisions as is any other reimbursing employer. - Article
5221b-5b(c)(2) provides that upon notice by the commission of
delinquency in payment of reimbursements by a governmental employer,
the comptroller shall pay a sum to the commission in the amount of the
'delinquency from any funds which would otherwise be due from the state
to the delinquent governmental employer. You do not advise as to
whether any such'transfer of funds has occurred. The funds herein
under consideration are funded periodically by appropriations from the
state's general revenue and from the Federal Unemployment Trust Fund.~
You inform us that the lack of reimbursement of the Benefit Account
from funds of the various ,participatingstate agencies results from
the failure of the legislature to appropriate funds to individual
agencies for such purpose. Cf. Acts 1981, 67th Leg., ch. 875, art. I,
at 3403, 3406; Acts 1979. 66thLeg., ch. 843, art. III. at 2632. 2636
(specific appropriations to T.E.C. for Administration Fund).
The foregoing legislative actions created a system carefully
designed to reimburse the expenditures of the Texas Employment
Commission in paying unemployment benefits to which former state
employees are entitled. Fund No. 937, the Unemployment Compensation
Benefit Account, definitely appears to be the primary source from
which benefit payments are to be made. This fund is designed to be
replenished by periodically assessed reimbursements from the state
agencies for ,the benefits received by their former employees. These
reimbursements are to be collected by the comptroller and paid into
such Benefit Account, which is under the general control of the Texas
Employment Commission.
If this 'statutory system was fully implemented, this Benefit
Account would seem to be self-sustaining with respect ,tdits funds for
the purpose of paying benefits. In practice, however, .according to
information submitted in connection with this opinion request. the
Benefit Account is not self-sustaining, because no funds are
appropriated to state agencies to use in reimbursing the expenditures
of the Texas Employment Commission of sums paid into the Trust Fund in
Washington, D.C., for benefits paid therefrom to their former
employees. Reimbursements from these agencies would have to come from
their funds which you state have already been appropriated for other
state purposes. Consequently, as we are informed, the T.E.C. Benefit
~Account has been operating with a deficit the last few years due to
p. 1666
. .
. . Mr. Ernie W. Tullis - Page 5 (MW-474)
the lack of reimbursement from these agencies. This deficit appears
to have been partially remedied during this time by periodic
legislative appropriations to the Benefit Account from the state's
general revenue and funds transferred from the supplementary fund,
Special Administration Fund No. 165.
This Administration Fund is funded by interest and penalties
collected from the employers for infractions of the Unemployment
Compensation Act, article 5221b-1, et seq., V.T.C.S.. federal money
grants and state general revenue appropriated by the legislature for
payment of administrative expenses of the unemployment benefit
program, ,including p yment of the benefits theniseives whenever
*eC=.5Sary. See V.T.C.;. art. 5221b-22a. This supplementary function
of the Administration Fund is further substantiated by the specific
transfer appropriations by the legislature from this Administrative
Fund to the Benefit Fund, General Appropriations Act, Acts 1981,
Sixty-seventh Legislature, chapter 875, article I, at 3402, together
with the generally worded appropriation of the balance of the
Administration Fund for the purposes authorized by the Texas
Unemployment Compensation Act. id. at 3403. and. more specifically, by
the additional provision in article 5221b-22a that any expenditures
from this Administrative Fund which the commission deems proper may be
made upon a finding that no other funds.are available or can properly
be used to finance .such expenditures. Under the prevailing
circumstances concerning the status of the Benefit Account, there is
nothing in the statutes to prevent the commission from resolving that
the only funds now available to finance such benefit payments are
those contained in the Administrative Fund. We caution, however, that
any federal funds placed in Fund No. 165 may be used for the purposes
authorized by article 5221b-22a. V.T.C.S.. only where the terms of the
grant permit their use for those purposes. -Cf. 42 U.S.C.A.
§1103(c)(l), (2) (certain federal funds transferred to state for
payment of benefits may be used for administrative expenses only where
appropriation specifies amount for administrative expense).
We conclude, therefore, that benefits to former state employees
may properly be financed from either or both of such funds during the
fiscal lives of the .1980-1981 Appropriations Bill and the current
1982-1983 Appropriations Bill, although the funds of the
Administration Fund should be used to reimburse or supplement the
Benefit Account only when the funds in that account are found by the
commission to be insufficient for such purposes. In no instance is
any state official involved authorized to draw, issue or honor for
payment a warrant on any appropriation in the state treasury for any
amount in excess of the amount then contained in such appropriated
funds. Tex. Const. art..VIII, 56.
p. 1667
, - Mr. Ernie W. Tullis - Page 6 (MW-474)
S U M M A R-Y
Payments of unemployment benefits to former
state employees entitled thereto are to be
financed primarily from the Unemployment
Compensation Benefit Account, designated as Fund
NO. 937. When such fund is exhausted or
insufficient, it may be replenished for such
purpose secondarily from the Special
Administrative Fund, designated as Fund No. 165.
In such cases. both funds are.properly considered
as being subject to the financing of benefit
payments. No funds may be withdrawn from the
state treasury in excess of the amount therein
appropriated for the purposes for which the
warrant is drawn.
kwn?w%&l
MARK WHITE
Attorney General of Texas
JOHN W. FAINTER. JR.
First Assistant Attorney General
RICHARD-E. GRAY III
Executive Assistant Attorney General
Prepared by Robert L. Lattimore
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Susan L. Garrison, Chairman
Jon Bible
Rick Gilpin
Patricia Einojosa
Robert L. Lattimore
Jim Moellinger
p. 1668