                                                                                                         n




                                              The Attorney   General of Texas

 JIM MATTOX                                            September 18, 1986
 Attorney General



 Supreme       Court Building           Mr. Vernon M. Arrell                    Opinion No. m-547
 P. 0. BOX 12548
 A,,-‘i^    V.    78711. 2548
                                        C0IllUlissi0ner
 _ ._,   _ -501                         Texas Rehsbilitaticn Commission         Re: Whether a state agency
 Telex    9101874.1367                  118 East Riverside Drive                may insure mail or freight in
 Telecopier      512/475-0266           Austin, Texas 787C4                     transit

 714 Jackson,    Suite 700
                                        Dear Mr. Arrell:
 Dallas,   TX. 752024506
 2141742-8944                                You ask whethe.c the Texas Rehabilitation Commission may insure
                                        freight or mail in transit. You explain that the commission has not
                                        done so in the past because of a number of attorney general opinions
 4624 Alberta       Ave., Suite   160
 El Paso, TX.       79905.2793
                                        that have said tI.at state agencies must have specific statutory
 9151533.3464                           authority to purchase insurance.

                                             This office has: issued opinions stating that state agencies may
+X81      Texas,    Suite 700           not purchase propel'tyinsurance without specific authority. An early
       ato”,     TX. 77002-3111
                                        opinion supported that holding on the basis that premiums on insurance
  I I 312235686
                                        policies could not be paid out of an appropriation for "contingent
                                        expenses" because such expenses were "fixed and expected" expenses
 806 Broadway.        Suite 312         that had to be speciEically provided for by the legislature. Attorney
 Lubbock.     TX,    794013479          General Opinion O-201 (1939); see also Attorney General Opinion O-184
 8081747-5238
                                        (1939). The opini'on also cited a Senate Concurrent Resolution
                                        expressing legislative intent that no insurance be taken out on public
 4309 N. Tenth,     Suite 6             buildings or theiT, contents. A number of ouinions have followed
 McAllen,     TX. 78501-1685            opinion-0-201. Sel!,e.g., Attorney General Opinions M-1257 (1972);
 512/682-4547                           M-753 (1970); O-8=-(1939).

 2M) Main Plaza, Suite 400                    This office has also issued opinions stating that state agencies
 San Antonio,  TX. 78205.2797           may   not purchase liability insurance without specific statutory
 5121225-4191                           authority. See, e.g:, Attorney General Opinions H-1318 (1978); H-742
                                        (1975); M-1257 (1972). The reasoning underlying those opinions is
 An Equal Opportunity/
                                        that, because the legislature    has specifically authorized various
                                        state    agencies   t:0 purchase   liability insurance in      certain
 Affirmative Action Employer
                                        circumstances, the legislature has indicated that state agencies may
                                        not purchase liabiltty insurance without such specific authorization.

                                             We do not think that it follows from these opinions that a state
                                        agency may not inswe mail or freight in transit. Agency heads are
                                        responsible for the care and safekeeping of state property possessed
                                        by their agencies. V.T.C.S. art. 610b, 88.03(a). Purchasing postal
                                        insurance or freigh.:insurance from the carrier to cover such property




                                                                  p. 2424
    Mr. Vernon M. Arrell - Page 2:   (JM-547)
.




    when it is in transit may be a reasonable means of caring for state
    property. In such circumstmces, insurance purchased to cover mail or
    freight in transit is, in effect, an additional cost of postage or
    transportation. Also, like postal expenses generally, expenditures
    for insuring mail and freiE,htare not "fixed and expected" expenses.
    See Attorney General 0pin:ton V-1423 (1952) ("contingent expenses"
    include postage).     Therefwe,  a state agency may spend money
    appropriated for contingent 'expensesor operating expenses for postal
    or freight insurance.

                                  SUMMARY

                 A state agency C.oesnot need specific authoriza-
              tion to insure ma:.1or freight in transit.




                                            JdJkbt
                                            Very truly yours
                                                   .


                                            JIM     MATTOX
                                            Attorney General of Texas

    JACK HIGHTOWER
    First Assistant Attorney General

    MARY KELLER
    Executive Assistant Attorney General

    RICK GILPIN
    Chairman, Opinion Committee

    Prepared by Sarah Woelk
    Assistant Attorney General




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