Case Information
*1 The Attorney General of Texas HB:V 28. 1985
JIM MAlTOX
Attorney General Building
Supreme Ccd P. 0. Box 1254S Auslln. TX. 76711~2543 Telex 9101874.1367 Telecopier 512I475-0266 [51214752501] hr. Robert C. Laniw Dewitt C. Greer Eigbway Bldg. State Department o!l Highways Chairman 11th & Brazes and Public Transportation Re: Whether interest on coustitu- Opinion No. m-321 tionally dedicated funds may be diverted to general revenue by statute or by appropriations act
Austin, Texas 7awi rider 714 Jackson. Suite 7W
Dallas, TX. 752024506 Dear hr. Lanier: 214ll4269)4
You ask two questions regarding the appropriation of interest ou funds dedicated by the conatitutiou to highway purposes. You do not 4824 Alberta Ave.. Suite 160 Inquire about other: aourcea of tavanue for the atate highway fund. El Paso, TX. 79935.2793 You first ask: OlY533as4 1. C;vi interest on dedicated funds be divert.ed 1001 Texas. Suite 700 to gener,sl revenue by appropriations act rider7 Houston. TX. 77002.3111 71Y223.5886 Article 2543d. V.T.C.S.. governs the disposition of interest on time deposits of etate funds. Section 1 of this statute provides as 806 Broadway. Suite 312 follow: Lubbock, TX. 79401-3479 SO6n47.5238 Section 1. Interest received on account of
time deposits of moneys in funds and accounts in 4309 N. Tenth. Suite B HcAllen. TX. 78501-1685 [51216824547] the charne'of the State Treasurer shall be allo- cated al; follows: To each constitutional fund there aball be credited the pro rata portion of
the int&eat received due to such fund. The re- 2130 Main Plaza, Suite 400 mainder DE the interest received. vith the exceu- San Antonio, TX. 782052797 tion of that portion required by other statutes to 51m254181 be credited on a pro rata basis to protested tax
payments, shall be credited to the General Revenue Fund. Th,s interest received shall be allocated on An Equal OpPCWtUnitYl a aonthlg basis. (Rupbasis added). Afflrmstlva Action EmPlOYer This provision relplires that interest on constitutionally dedicated funds be allocated to the principal, and uot to the general revenue fund. Attorney Gmeral Opinion h-466 (1969) considered the applica- tion of article 2543d, V.T.C.S.. to a number of funds in charge of the state treasurer. Three of the funds derived from former article VII, section 17 of thf: Texas Constitution, vhich levied a tax to fund construction at designated institutions of higher education. See Ten. S.J. Res. 4, 50th Leg., 1947 Tex. Gen. Laws 1184; Tex. ST Res. p. 1469 *2 _-
* . . t Pk. Robert C. Lanier - Page i! (.I&321)
24. 59th Leg., 1965 Tex. Gel. Laws 2197. Tbe opinion concluded that those three funds were constitutional funds vithiu the meaning of article 2543d, V.T.C.S., awl interest received on account of time deposits thereon vas to be credited to the fund.
It is well established that the legielature may not enact, amend, or reoeal a neneral law by rmorooriation act rider. Tex. Const. art.
III, 935; Moore v. Sheppard;,' 192 S.U.2d 559 (Tex. 1946); Linden v.
49 s.w. 578 (Tex. -'ta99); Attorney General Opinions J?i-167 m-104 (1979): n-1:.41 (1972): V-1254, V-1253 (1951); G-552 E%r .~.~ . . (1939). A ride; which attempted tom -appropriate to general revenue interest received on account of time deposits of constitutionally dedicated funds would be isvalid as an attempt to amend or repeal article 2543d, V.T.C.S. Iu:erest on constitutionally dedicated funds may not be diverted to general revenue by appropriation act rider in contravention of article 2543d, V.T.C.S.
YOU next ask:
2. Is it perrlsaible to divert intereat by atatute on highway department constitutionally dedicated funds to general revenue? VIII, section l-a of the Texas Constitution dedicates Article
revenues received from motor vehicle registration fees and motor fuel taxes to the provision, maintenance, and policing of public roadways.
This constitutional provision states in part:
Sec. 7-a. Sub.ject to legislative appropria- on county and wad district bonds or varrants voted or issued prior to January 2. 1939, and declared eligible prior to January 2, 1945, for payment out of the County and Road District Righway Fund uniier existing lav; provided, bow- ever, that one-f'curth (l/4) of such net revenue from the motor f,nrl tax shall be allocated to the Avaflable School Fund. . . . (Emphasis added).
Hr. Robert C. Lanler - Page 1’ (JIG321)
The term “couatructing” in al:ticle VIII, section 7-a. does not Include
merely the clearlq; and grading of the roadbed and the pouring of the concrete, but includes ‘every- thing appropriate1.y connected with, and ueces- sarily incidental !:oi the complete accomzplishment’ of the general purpose for vhich the fund exists.
State v. City of Austin, 331 S.W.td 737, 746 (Tex. 1960) (cost of utility relocation necessitated by improvement of federally-funded highways).
Article VIII, section 7. of the Texas Constitution prohibits the legislature from borrowing, or In any manner diverting from its purpose, any special fund. %nstitutional funds can be transferred to the general revenue fund only by constitutional amendment. Carroll V.
Williams, 202 S.U. 504 (Tex. ‘1918) (county funds).
In Lawson v. Baker, 221) S.W. 260 (Tex. Civ. App. - Austin 1920. writ ref ‘d) , the Austin Cclurt of Civil Appeals determlned that interest earned on a special fund created or recognized by the conatitutlou became part of tihat fund. A taxpayer brought the suit to test the constitutionality of the State Depository Law enacted in 1919. Acts 1919, 36th Leg.,, ch. 145, at 266. The law provided that the interest on all funds deposited would become part of the general revenue. Id. at 269 (former article 2427 R.C.S.). The court stated as follows?
We think it is cle.ar that the interest earned by deposit of speci;l:l funds is an increment that accrues to such special fund, and any attempt of the Legislature to make such interest a part of the general rwenr;: is futile. in the face of the constitutional pn%isions creating or dedicating these funds to sprzial purposes. The broad langu- age of the act would seem to make the interest upon all funds, wt.ether general or special, become part of the general revenue, and this portion of the law, if so construed, would authorize a diver- sion of the special funds from their constitu- tional purpose, wcluld specially violate section 7, article 8. and would be unconstitutional and void. (Emphasis added).
Lawson v. Baker, supra, at 272. The court found that the statute could be upheld by a construction allocating to constitutional funds the interest earned thereon or by severing the unconstitutional portion.
According to the opinion in Lawson V. Baker, the legislature lacks paver to enact a statute diverting interest OD constitutionally *4 Mr. Robert C. Lanier - Page 4 (JR-3211
dedicated funds to general rftvenue. The supreme courts of Missouri and Oregon have each considerc!il the question you ask: whether interest earned on a constitutionally d.adicated highway fund must be credited to that fund. State Eiuhwa< Cowlsdon v, Sr&nhove~, 504 S.W.Zd 121 (Ho. 1973); State v. Straub. 630 P.2d 229 (Or. 1965) (en bane). Each court relied on Lavson v. Bak M: to hold that the legislature could not --- enact a statute divertinn to the neneral fund the interest on the constitutional highway fugd.
We conclude that the legislature lacks authority to enact a statute diverting to the general rwenue fund Interest on the motor vehicle fees and motor fuel taxes dedicated to highuay purposes by article VIII, section 7-a of the Texas Constitution.
Interest on constitutionally dedicated funds may not be diverted to general revenue by appro- priation act ride>: in contravention of article 2543d. V.T.C.S.
The legislature lacks authority to enact a statute diverting ,to the general revenue fund interest on the motor vehicle fees and motor fuel taxes dedicated to highway purposes by article VIII. section 7-a c~f the Texas Constitution.
.I In MATTOX Attorney General of Texas TOM GREEN
First Assistant Attorney Gen,r:cal
DAVID R. RICRARDS
Executive Assistant Attorney (General
ROBERT GRAY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Susan L. Garrison
Assistant Attorney General
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.’ . Wt. Robert C. Lanier - Page 5 (J?I-321) T
I
APPROVED:
OPIRION COHMITTEE
Rick Gilpin, Chairman
Jon Bible
Colio Carl
Susan Garrison
Tony Guillory
Jim noellinger
Jennifer Riggs
Nancy Sutton
Bruce Youngblood