THEA~~~~NEY GENERAL
OFTEXAS
Hon. J. T. McMillan Opinion No. O-3928
Deputy Commissioner Re: Whether or not the Banking Com-
Department of Banking missioner has authority to allocate
Austin, Texas the current lump-sum departmental ap-
propriation to the Banking Department
for then salaries and expenses of bulld-
ing and loan associations, loan and
Dear Mr. McMillanl brokerage companies, and credit unions.
We beg to acknowledge receipt of your letter asking
for a construction of the current appropriation act for the
State Banking Department insofar as it concerns the division
embracing building and loan associations, loan and brokerage
companies, and credit unions. Your precise questions are as
follows:
‘I(1) Does the Banking Commissioner have authority to
allocate the items in the Second Division between the
Building and Loans, Loan and Brokerage and Credit Unions?
“(2) If so, can the Banking Commissioner employ the
same method of allocation as was evidently used by the
Legislature- To illustrate, can the Banking Commissioner
determine administratively that the cost of enforcing the
Building and Loan Law shall not exceed $12,425.00 (70%
of $17,750,00); that of enforcing the Loan and Brokerage
Law shall not exceed $3%550.00 (20% of $179750.00) and
the cost of enforcing the Credit Union Law shall not ex-
ceed $1,775.00 (10% of $17,750.00), and having done so
allocate to building and loan items or portions of items
under the Second Division without regard to the actual
purpose of expenditure totalling $12,425.00; to loan and
brokerage companies items or portions of items totalling
.$3,550.00 and to credit unions items or portions of items
totalllng $1,775.00, and direct payment accordingly?
“(3) Zf you have indicated in response to the second
question that the Banking Commission,er can employ the meth-
od of allocation above outlined, then if the Commissioner
has made such allocation and discovers that the allocations
are not in accordance with fact, can he change such alloca-
tion so as to accord with the facts as they develop?
“(4) If you, in answer to QuestionNo. 2, have indi-
cated that the method of allocation outlined in that ques-
tion is not usable, then please indicate the method of
Hon. J. T. McMillan, page 2 (O-3928)
allocation which should be used by the Commissioner,
“(5) If there is any different rule applicable to
salaries provided for under the appropriation as aistin-
guished from travel expense and other items of expense,
please indicate what this difference may be and the proper
method of allocation of each.”
The appropriation for the division of the department
above mentioned is as follows:
“29. Supervisor Bldg. ma Loan and Loan
and Brokerage and Credit Unions) eO.OOO..OeO $ 4,250.OO
30. &Examiner .*..~~.0.*.....0.***~.~.~~.~.~~~~~* ~9~~~~~
Examiner .~.e.o~eoO~eo . . . . **.0.00..~*0...~e. , 0
g: Bldg. and Loan and Loan and Brokerage and
Credit Union Legal Adviser (part-time) o *. 1,aoo.oo
33. Bldg. and Loan and Loan and Brokerage and
Credit Union travel and other items of
contingent expense, including bona
premiums 4t,5OO.OQ
TOT& -- Building and Loan and Loan and
Brokerage and Credit Union Division $ 179750.00”
The appropriation to the division for each fiscal
year is identical.
If the appropriation under consideration came solely
from the General Fund of theState unaffected by the source and
purpose of the fund or funds invo i vea, your questions would be
easily answered, but this is not the case.
Section 1 of S.B. No. 42& in which is found the de-
partmental appropriation under consideration declares:
IIT& the several sums of money herein specified or
so much Lhereof as may be necessary, are hereby approprf-
ated out of any moneys in the State treasury, not otherwise
appropriated in the General Revenue Fund or special funds
as may be shown for the support and maintenance of the sev-
eral departments and agencies of the State government for
the two-year period, beginning September 1, 1941, and end-
ing &ugust 319 19430”
So that, the lump sum of $17,750.00 appropriated to
the purposes enumerated in the division under consideration has
been, perforce of the terms of the Senate Bill it self 9 appro-
priated from the General Fund or from special funds as the per-
manent statutes may provide with respect to the three @lasses of
corporations embraced in the division.
Hon. J. T. McMillan, page 3 (O-3928)
Section 9 of the Building and Loan Associations Act
(Ver.Civ.Stat.Art. 88la) authorizes the Banking Commissioner to
collect certain fees from building and loan associations in
lieu of examination fees, expressly providing that the assess-
ment by the Banking Commissioner shall be for enough
9.o carry out the provisions of this Act; and said fees
when collected shall be placed in a separate fund with the
State Treasurer to be expended during the current year, or
so much thereof as may be necessary in carrying out the
provisions of this Act; and should there be an unexpended
balance at the end of the year, the Banking Commissioner of
Texas shall reduce the assessment for the succeeding year,
so that the amount produced and paid into the State treas-
ury, together with said unexpended balance in the treasury,
will not exceed the amount appropriated for the current
year, to pay all necessary expenses of supervising the op-
eration and examining the business of the associations do-
ing business under the provisions of this Act, which funds
shall be paid out upon requisition made out and filed by
the Banking Commissioner of Texas, when the Comptroller
shall issue warrants therefor”
The Loan and Brokerage Companies Act (Ver.Civ.Stat.,
Art. 1524a) provides for fees to be paid by such companies, as
foll.ows:
“Said corporation shall pay the actual traveling ex-
penses, hotel bills, and all other actual expense incident
to such examination and a fee not exceeding one-eighth of
one per cent of its actual paid-in capital. (Sec.2)***
and (such companies as have sold in Texas their bonds,
notes, certificates, debentures, or other obligations{ or
are offering for sale in Texas their bonds, notes, certi-
ficates, debentures p or other obligations) shall file a
copy of such statement with the Banking Commissioner of
Texas, together with a fee of Ten ($10.00) Dollars for fil-
ing . (Sec.4)*** The corporation shall pay a fee of Fifteen
($15.00) Dollars for filing each such statement.” (Sec.
7)
The statute does not direct the disposition to be made
by the Banking Commissioner of these examinations and statement
fees. Impliedly, they are to be paid by him into the General
Fund of the State treasury.
H.B. No. 845 of theRegular Session of the 47th Legis-
lature, amending Article 2465 of the Revised Civil Statutes of
Texas, 1925, and the amendments thereof, relating to credit Un-
ions, declares with respect to these as follows:
Hon. J. T. McMillan, page 4 (O-3928)
“The Banking Commissioner shall cause each credit
union to be examined at least once yearly, such examina-
tion to be made by (1) some competent person or persons
designated by the Banking Commissioner who shall be paid
by the Banking Commissioner an amount not to exceed ninety
(90) per cent of the fees as herein provided, which said
fees shall be paid to said banking commissioner by the re-
spective unions examined as provided by this Act as com-
pensation for his or their services and as reimbursement
for travel expenses and other expenses incurred; (2) by
one or more credit union examiners who shall be appointed
by the Banking Commissioner and shall receive a salary of
not exceeding Three Hundred Dollars ($300000) per month,
and shall be reimbursed for travel expenses in the sum of
Four Dollars ($4.00) per day, plus cost of transportation,
such examiners to retain their salary and expenses as above
provided out of fees collected by them as hereinafter pro-
vided; (3) or by the Deputy Commissioner, Departmental
Examiner, any bank examiner, assistant bank examiner,
building and loan supervisor or building and loan examiner,
who shall receive and retain the fees collected by them as
hereinafter provided, such fees so collected to be cred-
ited on the salary of the person collecting the same, so
that such person shall in no event receive compensation in
excess of his salary as provided by law.
“Each credit union examined shall pay an examination
fee fixed by the Banking Commissioner not to exceed Twenty-
five Dollars ($25.00) per day per person engaged upon such
examination.
“All fees as above provided shall be paid by the cred-
,it union to the person or persons making the examination,
and such persons shall make a monthly account to the Bank-
,ing Commissioner of the fees so collected during the pre-
ceding month, fees in excess of those retained by the ex-
,aminer as above provided shall be paid to the Banking Com-
missioner and by him deposited with the State Treasurer to
be held in a special fund and used for the purpose of en-
forcing the provisions of this law.”
It will therefore be seen that those fees paid by
building and loan associations go into a separate fund with the
State Treasurer; those fees paid by loan and brokerage companies
are to be paid into the General Fund of the State Treasury; while
a comparatively small portion of the fees paid by credit unions
are to be paid into a special fund with the State Treasurer*
“The “separate fund” paid by the building and loan as-
sociations and the Rtspeciallt fund paid by the credit unions are
to be used for the express purpose of expenses in adminiStering
the laws governing these respective corporations.
Hon. J. T. McMillan, page 5 (O-3928)
A rider attached to the appropriation for the State
Banking Department declares:
l’Subject to the limitations hereinafter provided,
there is appropriated to the Banking Department an amount
equal to the total fees and revenues collected by said de-
partment during the biennium ending August 31, 19439 plus
an amount equal to the total fees and revenues collected by
said department during the biennium ending August 31, 1943,
plus an amount equal to the fees and revenue collected b
said Department during the biennium ending August 31e 19i: 1,
in excess of the expenditures of said Department during
sald~biennium, and the Department shall limit its expendi-
tures to such amounts, provided that said Department shall
n,ot, in any event, anything in this bill to the contrary
n,otwithstanding, spend more during the biennium than the
total itemized appropriations for said biennium; further,
provided that if during the first year of the biennium said
Department shall spend less than the total itemized appro-
priation for said year, then said unexpended balance shall
be expendable during the second year of the biennium for the
purpose of enforcing the laws of this State for which said
Department is charged with responsibility of enforcement,
a.nd further providing that not more than seventy-five per
c,ent (75%) of the appropriation for the Building and Loan-
Loan and Brokerage-Credit tinion Division shall be payable
out of the special account created and maintained by the
collection of fees by the Banking Department under and pur-
suant to the Building and Loan Laws of this State, I(
The construction of this rider necessarily enters into
any consideration of the answers to your questions*
This rider pertains to the entire appropriation for
the Banking Department 9 which appropriation includes, of courses
not only the division hereinbefore discussed but lfkewise the
first division--that of State banking corporations.
Now, article 362 of the Revised Civil Statutes declares:
“Except as to savings banks, the expense of every gen-
eral and special examination shall be paid by the corpora-
tion examined in such amount as the Commissioner shall cer-
tify to be just and reasonable, and assessments therefor
shall be made by the Commissioner upon the banks examined
fn proportion to assets or resources held by the bank upon
the da,tes of the examination of the various banks,‘”
Article 363, governing the disposition of such fees,
declares:
Hon. J. T. McMillan, page 6 (O-3928)
“All sums collected as examination fees shall be paid
by the Commissioner directly to the State treasury to the
credit of the General Revenue Fund. Expenses of examina-
tion and of the Commissioner in enforcing the provisions of
this title shall be paid upon the certificate of the Com-
missioner by warrant of the Comptroller upon the State treas-
ury. It
It is the rule that an appropriation act canc;;itka;e
the effect to repeal, amend or modify a general law.
Steele, 57 Tex. 203; Linden v. Finley, ~92 Tex. 451; Attorney l
General’s Opinion 1916-1918, p0 110; Attorney General’s Opinion
No. 2965 1934-1936,p. 46; Attorney General’s Opinion No, 2970,
1934-193&, PO 72; attorney General’s Opinion No. O-18,37).
Since the Building and Loan &isociations Act specifi-
cally limits the purpose for which the “separate fund” under that
iict has been accumulated to the express purpose of enforcing the
law governing such &asociation, and since H.B, No. 845 restricts
the use of the 8’special ‘I fund created by fees from credit unions
to the purpose of enforcing the provision of the Credit Unions
rict, the Legislature is powerless by its Appropriation Act 9 to
divert such funds from the respective purposes for which they
were solely destined by statute to another purpose. (See O-2641,
copy herewith).
You are therefore respectfully advised that since the
Legislature has no authority to allocate these special or separ-
ate funds to any other use or p’urpose than the use or purpose for
which they were created, it follows that you, as Bankin,g Commis--
sioner, have no such power. No allocation of the appropriation
can be made in such manner as to violate the respective statutes
creating these special funds.
It does not follow from what we have said, however,
that the Banking Commissioner has no discretion or authority to
allocate to an extent the lump-sum appropriation of $179750.00
to the division of the department under consideration. The con-
text of this appropriation, and especially when construed in the
light of the rider above quoted, indicates clearly that the Leg-
islature intended that the Banking Commissioner should have the
power to allocate this lump-sum appropriation to the purposes of
supervising the respective corporations mentioned insofar as it
(the Legislature) had authority to ,>rovide for allocatfon.
We think the Banking Commissioner would have authority
in the exercise of his sound official discretion to allocate the
lump-sum appropriation in any way and to any extent that does not
violate the statutes hereinabove quoted and discussed, requirin,g
the use of separate funds and special funds therein mentioned ,to
be devoted solely to the statutory purposes for which they were
created.
-
Hon. 3. T. McMillan, page 7 (O-3928)
It may be thus said, by way of illustration, of Items
29, 30, 31, 32 and 33 comprehending salaries for supervisor, ex-
aminers, and legal adviser 9 and travel and contingent expenses
where the service or travel and contingent expense are with re-
spect to two or more of the corporations being considered in ac-
cordance with the equi,ties of the situation; that is to say, the
reasonable pro rata share of such salaries or expenses to be paid.
No scientific basis or statutory basis whatsoever can be given
for such allocation. The whole matter rests in a fair exercise
of the sound official discretion of the Banking Commissioner in
the light of all the facts surrounding the matter. His discre-
tion when fairly exercised under the circumstances would be con-
elusive, even upon the courts. The courts would have no authority
to re.vise such discretion thus lodged in the Banking Commission-
er in the absence of fraud, arbitrariness or lack of fact basis
reasonably necessary to support his conclusions.
This discretion of the Commissioner may, we think, be
exercised again and as often as the necessities require to effeet
a re-allocation. We are also inclined to the view, and so ad-
vise you, that in the exercise of this discretion in the matter
of allocating the appropriation for salaries, the Commissioner
would, be justified in considering the contingencies known and un-
known of the seasonal fees entering into the fund or funds.
The allocation made by the Commissioner in the manner
we have suggested with respect to the items of salaries for the
supervisor, the examiners ,, and the attorney should not, we think,
be afr‘ected by the known fact that in very truth it may happen
that such officers for a given month may actually be engaged Sn
activities concerning on,e only, or two only of the group of cor-
porations with respect to which his salary has been appropriated.
A salary payment is not legally contingent upon the officer’s
actual discharging his official duties anew. See Spears v. Shep-
pard, 150 S.W.(2) 769,
Just what extra requirements will be made of the depart-
ment with respect to bookkeeping, +,nd thus what additional re-
quirements will be made in the ma:;ter of travel and expense ac-
coun:;s will be required, we can not say, Much of the information
upon which the Commissioner could and would act in allocating
such appropriation would of necessity be known to him. We refer
especially to the character and extent of the services performed
by the supervisor, exami.ners and legal adviser. But, whatever
may be the additionally irn-posed duties, requirements and the like,
Hon. J. T. McMillan, page 8 (O-3928)
upon the department, we know of no other way to properly inter-
pret the Hppropriation Act, and to advise with respeet to its
practical application.
Very truly yours,
ATTORNEYGENERALOF TEXAS
By /s/ Ocle Speer
Ocie Speer, Assistant
APPROVEDSEP 23, 1941
/s/ Gerald C. Mann
ATTORNEYGENERALOF TEXAS
APPROVED: OPINION COMMITTEE
BY: BWB, CHAIRMAN
OS-MR:wb