Case Information

*1 OFFICE OF THE ATTORNEY GENERAL OF TEXAS

AUSTIN

February 17, 1939 lion. J. IL McDonald, Cd86iOner

Departillmt of Agrioll1tulv

Aunt&n, Tour

urmant to tha pro- 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- funotlonlng of the marketing agraemOnt

ad into under the Toxam Citrus Marketing Aot be 80 reported to the Gtatr Ccanptrollsr an& dsposited.in the 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 ot the amended Marketing Agreement regulating provisiona the handling of citrus fruit grown In Cameron, Eldalgo and Uillacy Counties between the handlers of citrus fruit In this ares and the Commlsslonsr of Agrleulturs of the Stats of Texas.

Sootlon S ot the Marketing Aot sonstltutss the authority and power of the Commfsslonsr of Agrlcul- turs for sntsring Into a Cltrus~Markstlng Agreement. It reads as follows:

Vubjeot to the provisions of this Aot; the Commlsslonsr Is hereby authorized and sm- powered to execute marketing agreements and to lssus lloenssa under this Act to persons engaged in transaotlona or Intrastate oommsros wlthln the areas of this Stats in the markst- Ing, proossalng; packing, shipping, handling distributing or citrus iNitS."

Section 0 (1) of the Marketing Aot provides for the crsitlon of *an admlnlatratlvs coa@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) Proriding ror the sslsotlon by the CommissIonor, or a method for the sslsctlon by the Commlsslonsr, of an admlnlstratlvs com- mittee or oommlttdss and defining their powera and duti0s.m

Ssotion 0 (1) of the Aot further defines and limits the powers ai such admninlstratlvs oomnlttes, to- wit:

(a) To admlnlstsrlng suoh llosnse In ao- cordanos with its terms and provisions;

(b) To making rules and regulations to the terms and provlslons oi suoh effectuate license; *3 Eon. J. IL irrcDonsld, February 17, 1939, Pegs 5.

(.o) To rsoslvlng, lnveatlgatlng and rsport- ing to the Coamiaslonsr aomplalnta of vlolatlona or auoh llosnsa;

(d) To rscaamtendlng to the Commlaolonor amsndmsnta to auoh llasnas;

(01 To oollsotlng from sash handler a fee or l aasaamsnt rspreasntlng his prop rata aharo of ouch oatlmgtsd expdnesa, Lncludlng sxpenasa incurred In hearings held on, and In the oxsou- .tlon of l uah marketing agrssnmnt, aa the Com- mlaalonsr, after the autiasion to him by auah l dmlnlatrative agsnoy or agencies 0r a proposed budget, find0 will probably bs required to oovar sxpsndlturaa naoaaaarily to bs Incurred by auoh~mgenay or agendaa, during any psrlod l pscilflad by him, for the amlntsnsnos and funotlonlng of l uoh agsncy or agencies; to rsuoaivlng, expending and aooountlng ror the funds r0 aollectsd, and to ret- to ouch hsndlsr hi8 pro rata ahars of any unexpended balances which the admlnlatrstlre sommlttss or oommlttes8, wlththe appkvsl of the Commiaalonsr, flnda am not 80 rsqulrsd;W

We are aonasrnsd wlth the aonatruotlon of the above quOt8d rub-heading ~(81 of Section 0 (1) of the A&.

It dsflnss the powers of ths dmlnlatratlva oonmlttee under the Marketing Aat, rslatlva to an daln- latmtlon or an operating fund. Hrat,, the aamulttss la authorized to aollsot from each handler of oltrua a re0 or,asasasmsnt rsprsssntlng that handlsrqa pro rata ahers or the estimated sxpsnee of admlnlatsrlug ths Karkstlng Agreement. The amount of assessment la baaed. upon a budget prepared by the oommlttea and approved by the Coamilsafonsr Agrioulturs for a rlsoal period by him. Said amount la to be dstermlned by dealgmtad t&s Cozamlasloner or Agrloulturs. said budget la dealgn- sd to ccivsr all sxpsndlturss whloh night nsosssarlly be lneurrsd by the oommlttss In admlnlatsrlng the terms and prwlalona of the Act.

Ssoondly, after aubmltting the budget to the Coanmlsslonsr of Agrloulturs and oollsotlng the aaaeaamsnt or fee deolded upon by ths Lhmniaaionsr, 16 the aamittsa -

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 proportionate share of any unexpended bal- ance of the administration fund, which the oommlttsa Cwnmlsaloner of Agriculture flnda 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 asasaamsnta levied by the Ccannla- l ionsr on the baala of the canmlttss~a own rscomasnda- tion; 2nd.,'to sxpsnd ouch funds and give sn acoountlng; and, 3rd.. to return to the handlers any balance mloh the oommlttss and 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, xtanalvs aontml over the operating fund 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 Commleslousr of Agrlculturs rr0m time to tlnks. It reads an follows:

-AAny funds oollsatsd by the admlnlstra- tire agsncy from the levying of auah Sees and asaseamsnta shall be used forth8 purpose set forth In the marketing agreement or license under which It wss oollsctsd. A full and aom- plate racord thereof shall be kspt to which the Commissioner may hars'accsss at any time, and a report of the aotlrltlsa and 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 Commissioner of Agriculture, after exsmlnlng the proposed budget aubmltted to him by the administrative committee has the right to set the fee or sssssamsnt to be levied; that he hsa the right to approve *5 Hon. J. 11. M?Donald, Psbruary 1.7, 1939, Page 3.

the unaxpendad balance ab the admlnlatratlon fund to be dlvlded among the lundlera on a pro rata basis; and that he has the right to have l oceaa to the reuorda of the oom.lttee at any time and reoelve a report on the ~~;~eand disposition of funds by the l &&xlatmtlve

Sootion 17 of the Marketing Act so&orb upon the Commiaaioner of Agrioulture l ddltlonal rights and powers in respect to the flnanoea of the l dmlnlatratlva aamalttee. It provider as follows:.

(I . . . The Ccmmla6loner ahall thereafter exact and require, by requlaltlon on the appropriate l dmlnlatratlvs committee sr aommlttaaa, aharged with the oollaotlon sf funds for expanses under ouch mr ketily l g mamant, that auoh o omdttae or acamlttesa solleot, report, and pay wer monthly to the Ccaamlaaloner the amount ~decamd nsoeaaary and aufflclent, and raquialtloned from auoh l drinlstmtlva amanittee aorenitteaa by the Caumlaedoner, to defray the aotual expenses of the Commlsalomr to be lnourrsd during the subsequent month in the admlnlatmtlon and enforcement of any auoh narketing agreement or lloenae, under ouch rules and ra(pllatlona as ha may pmaorlbs.’

We oonatrue said prmlalon to men that the Carepiaalonsr oS Agticulture la entitled to reoelve from the adminlatrati on fund any auoh amount of money as he oalaulates la nscsaaary and auSSloient to aover ouch aotual l xpenaea 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 admlnlatsring the Marketing ‘ngraamant.

It gives him the authority to requlaltlon the administrative oaPmittea, uhlah has aontrol war the operating run6 to supply him with au& l x Pense moneY.

The l.mguage cf Seotlon 17 deelgnatea “the otual UPOne or the Conrmiasioner . . . ln the a&alnlatmtion and en- Soroamentw of the Marketing Agreement as the datemining amoUnt oS the raqulaltlon funds.

Hon. J. B. McDonald, February 17, 1939, &is 6.

'The aeoond paragraph Of Seatlon 17 deals rith aunusued, anexpended and unrequlaitlonsd aaseasmsnta~ In the r0ii0ting bmgi~g8:

‘gut all monaya aolleotad from asaeas- Rents, or othsrwlae, lmpoaed;under thla Act and under msrketlng agreements executed In ~*usnCs thereof,'or liaenaea ia6aued thsre- under, by the admlnlstmtlve odttes or 0oarmnitteea created urdsr this Act, not re- qUlaltlons6 by the Camulaalonsc for a&nlnla'trs- tire l xpwaes as herslnbetore provided In this Section, shall renaln In the custody of such admlnlatratlvs coanalttes or aonohittssa~untll the 0108s 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, unexpended and unrequlsltloned aaaeairmsnt or asaessmsnta.~

Conetxulng Sections 8 (1) (8) and 17 Of the Act together, It la apparent that the operating fund conposed of aaeeaamsnta or tees levied on the jnndlera by the a&zlnlstratlve ooormittss la aubjsot to three uses.

(1) It la aub)ct to be raqulaltloned on a monthly baa18 by the Commlaslonsr oi for an amount neusssary to cover Agriculture 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 authorized ax- pendlturea of the aommittss 1 Section 8 (1). (a) 1 charged with the adnlnlstrstion of 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 operating fund, 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,asloner of Agrlaulture from 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 oredltsd are hereby l pproprlatad for use of eald Corqdssloner to be expended In accordance with lsw ln aarry- %ng out the ~provlalona hsraof.W Seotlon 18 (X) requires the bommlaslonsr of Agrloulture to *submit quarterly to the admlnlatratlvs l genoy umisr eaoh msrkstlng agreemsnt or license a aomplete statement of reeslpta and expenditures in aonneotlon rith the admlnlatratlon of each marketing agreement or license during the querter.w

It la our opinion that the lsglalatlve ln- tent behind the Act wss that both the Commlaalonsr of Agriaulture and the a&lnlatratlve agenay, oreatsd under the a@irksting agreemsnt, be authorlaed and mpowersd to make neoeaaary l xpsndlturea aonnected 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 Commlaalon6r upon the xpsndlturea of the oom- mlttee and an accounting by ths Commissioner of Agriculture to the admlnlatratlve aonmlttee of hle receipts and expenditures. Since the Commlsslonsr af Agriculture la a public offlolal and a State orri08~, the Act requires that moneys expsndsd by him be reported to the Ccmptroller and deposited In the Stats Treasury. The aommlttee, being a prl- vats organization set up by a voluntary agreement, Is by authority of the Act a auatodian of the operating fund and may make axpendlturea of same without converting said 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 requlsltionsd by the Commissioner for l dmlniatretiV8 axpsnaes . . . shall remain In the ouatody of such Qnlnistrstlve commlttss . . . a

Thla applies not only to that portion of the unrequIaltlonsd funds 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 properly administering the tonne and provision6 of the agreement.

The provlalona of the mrkstlng agresmsnt entered intc by the Commlsalonsr of Agriculture and 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 admInlatrstlve agenoles ln the r0iiaring language:

*A Crooners Induatry CommIttee and a Shippers Marketing CommIttee are hereby established which shall admlnlatsr the ferns and provisions of this agresmsnt as hare- Inafter 8peOlflcally provided, 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 Commlaalonsr and.ths producers and handlers: (b) to furnish the CommIssIonor auoh available InSormstlon as 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 Groirera Industry Committee to be audited by one or more osrtlrled pub110 aooountanta at least once for eaoh orop year and at uah other time as the Growers Industry Committee demo neoeasary or as the Canmlsslonsr may request, and to ills wlth the ~~aalonsr coplea of all audit yports made;

(0) to make .auch aatlamtss Or the total Crop8 oS fruit including the grads and alas 6latrIbutlon ther8o.S as msy be deemed mceaaarg by said sommlttee In connection dth the administration of Articles IV and V hereof, or as may be prsaoribsd by the Commissioner.

(f) to psrionn auah duties In connection with the aiLnlnlstrstlon of ths Tsxsa Citrus Xarketlng Act aa may from tlms to time, be aa- signed to It by the Commlasioner.R

Section 6 oS~ArtIcls 2 deqla with +m.ud8.R It states: *All funds received by the &owera Industry CcmmIttes, pursuant to any provisions OS this agreement shall be used aolsly for the purposes herein apecIfled and shall be aooountsd for In ths Sollwlng msnnsr:

(1) The ComaIaslonsr IMP, 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 receipts and dlaburaemsnts and deliver all property end funds In his hands, together with all books and records in his possssslon to hIa aucosssor In office, and shall execute such aaslgu- msnta and other instruments as msy be nscssea.rjr or appropriate to vsat ln auah auocsssor full title to all of the property, funds and claims vested In ouch mambsr pursuant to this agrssmsnt.a *10 Hon. J. X. YoDonsld, February 17, 1939, Page 10.

The lmpllaatlon throughout aald aectiona la that the Growers Industry Ccmualttee ht?iE full power to rake b diabursen~nta from the operating fund uhlch lt haa aollectsd dl which rsmalns In Its austoUy.

Article 1x1 of the amended Marketing Agreement covers wexpenass and asseagPsnts.~

Seotlon 1 OS Artlole III provides that: Vhs Growers Industry Committee la authorized to inour.auoh expenses as the Gommlssloner may find t0 be necessary to oarry out the functions OS both aommlttssa unasr this agreement during the de8lgnsted fiscal period. The funds to aovsr ouch expenses shall be aoquirsd by the levying of aaasasrmnts upon handlers as hsrslnafter pro- vided.*

&Id section conSorme wlth tha requirements OS Seotlon 8 (1) (a) OS the Act which authorizes the oammittss to rake axpsndlturss on the basis of a budget submitted to the Commlaslonsr of Agriculture for a 8psolSlsd period.

Gsotlona 2, 3, 4, 5 and 6 of Article III provide for acmputatlon 0r rate OS asas8amsnt, payment 0r same by handler, a proportionate refund, 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 conclusion thst the Act requires that only ouch money8 is plight be rsqulaltloned by the COUimlSslOnSr Of Agriculture for the purposes of defraying axpsn8sa lnourrsd by himself and his department in administering the provlslons OS the Act be reported to the State Comptroller and de)oalted in the Stats Trsaaury.'

It la our opinion that the admlnlstratlvs oommlttes .la legally authorized and empowered to msks necessary and aufflclsnt expenditures and ths Sunda whloh It uses for operating expenses may, under authority of the Act, remain In its custody, only the unexpended and 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, Aesistant Attorney General, dellvsrsd November 3, 1937 inrorar a8 it holds that @tha oommittee have no authority to expend any money 80 oolleotad rospt by paying that amount over to the Commissioner of Agrloulturs, vrhioh has been ra- quleitloned by 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’ORNEY GENERAl OF-TEXAS BY Di& Stout Aesietant DS:ob

APPROVED:

ATTORNW GENERAL OF TEXAS