Case Information
*1 The Attorney General of Texas April 9, 1985 JIM MAlTOX
Attorney General Mr. Ed Grieham Opinion No. m-306 Supreme Ca~rl Bulldin chairmen P. 0. BOX 12549 Austin, TX. 79711. 2549 Texas Employment Cc~nlrlmission Re: Disposition 512f4752501 T.E.C. Building, Rcsm 624 earned on money in the Unemploy- Telex 910/57&1387 Austin, Texas 70i 70 ment Compensation Fund
Telecopier 51214750288
Dear Chairman Grisham: 714 Jackson. Suite 700 Dallas. TX. 75202.4505
You ask whether earned on money in the Unemployment 2141742-9944 Compensation Fund m%stahlished by section 9 of the Texas Unemployment
Compensation Act, c,odified as article 5221b-7. V.T.C.S., should be to that IFund or to the state’s General Revenue Fund. We 4924 Alberta Ave.. Suite 180 conclude that suck. interest to the Unemployment El Paso, TX. 799052793 915153x3494 Compensation Fund. The fund in question was established in 1936 as a 1001 Texas. Suile 799 Houston, TX. 77002.3111 special :Iund , separate and apart from all public 713l22W999 moneys or funds of this State . . . which shall be administctred by the Commission exclusively 606 Broadway. Suite 312 purposes of this Act. This fund shall consist of Lubbock, TX. 79401-3479 (1) all contributions collected under this 905f747~5239 Act . i . (2) all fines and penalties collected pursuant the provisions this act; (3) 4309 N. Tenth. Suite B earned upon any moneys in the fund; (4) McAllen. TX. 79501-1555 any prope’rty or securities acquired through the 5121882.4547 use of moneys belonging to the fund; and (5) all
earnings c’f such property or securities.
200 MaIn Plan, suite 400
San Antonlo. TX. 792052797 Acts 1936. 44th Let;., 3rd C.S., ch. 402, 59(a), at 2004. Section 9(b) of that act provida!tr that the “State Treasurer shall be treasurer and
custodian the Cund. . . .‘I && Althouth these provisions were subsequently emend&l. the character of the fund has not changed. See An Equal OppOrtunitYi Aflirmailve Action EmPlOYW Acts 1945, 49th Let;.. ch. 347, 55. at 594.
In 1941. the Texas Supreme Court determined the State Treasurer acts es custodian and trustee of the fund but the fund is not the property cf the state and the money collected the fund does not belong ir, the State Treasury. Friedman v. American Surety Co. of New York, 1581 S.W.2d 570 (Tex. 1941). The Supreme Court stated that the money in t,b,e Unemployment Compensation Fund *2 Mr. Ed Griaham - Page 2 (JR-3061
is not the propert:r of the state in any capacity, but is a trust fur,d to be held out of the State Treasury, but in tie hands of the State Treasurer as trustee, the benefit of a class of employees. . , . Id. at 580.
Also in 1941, this offim referred to the Supreme Court decision in Priedmaa v. American Surtrt:y Co. New York, in determining the designation of the unel&loyment fund as a trust fund and the admonition to establish a &patate fund to be held apart from all public money of this state differentiates this money from the general and special funds of the state. Attorney General Opinion O-3607 (1941).
Subsequent to act tstablishing the Unemployment Compensation Fund, the legislature, in 19#5!#, enacted a statutory provision relevant to the disposition of depoaL,tory interest. Article 2543d, V.T.C.S., provides. in pertinent part, ,thst
Section 1. received on account of time deposits moneys in funds and accounts in the charge of 1:he State Treasurer shall be allocated as follows: To each constitutional fund there shall be credited the pro rata portion of the interest rece:lved due to such fund. The remainder received, with the the exception that portion required by other statutes to be credited on a pro rata basis shall be credited to the protested tax paynenta. General Revenue Fund. The interest received shall be allocated on a monthly basis.
. . . .
Sec. 3: As to the proper interpretation and application of this Article. the State Treasurer is entitled to re:.y upon the opinion and advice of the Attorney General.
This office previously has determined the provision 2543d which directs that interest earned on money in funds in the charge of the State Treasurer be credited to the General Revenue Fund does apply to on trust funds which are not property of the state and which the State Treasurer holds as trustee out of the State Treasury. Opinions issued by this office consia- tently have determined that on such trust funds becomes part of the principal and part of the fund which generated the interest.
p.
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Rr. Ed Griaham - Page 3 (Jn-306)
See Attorney General Opinions JR-300 (1985); RR-82 (1979); H-1040 m77); M-468 (1969). Cf. Attorney General Opinions FM-338 (1981); H-1167 (1978).
The Supreme Court settled issue the Unemployment Compensation Fund is a trust fund out of the State Treasury benefit a class of emp:.oyeea. It is our opinion
earned on the Unemployment Compensation Fund should be deposited to General Revenue Funcl pursuant to article 2543d hut, instead, to the Uremployuent Compensation Fund.
SUMMARY earned on money in the Unemployment Compensation Fund established by 5221b-7, V.T.C.S.. should be the Unemployment Compensation Fund,
JIM MATTOX Attorney General Texas TOM GREEN
First Assistant Attorney General
DAVID R. RICHARDS
Executive Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Nancy Sutton
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Rick Gilpin, Chairman
Jon Bible
Colin Carl
Susan Garrison
Tony Guillory
Jim Moellinger
Jennifer Riggs
Nancy Sutton