    OFFICE   OF THE   ATTORNEY     GENERAL     OF TEXAS
                          AUSTIN

                                               February 17, 1939



lion.J. IL McDonald, Cd86iOner
Departillmtof Agrioll1tulv
Aunt&n, Tour




                                                  to tha pro-
                                             urmant
                                          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-




     funotlonlngof the marketing agraemOnt
     ad into under the Toxam Citrus Marketing  Aot
     be 80 reported to the Gtatr Ccanptrollsr an&
     dsposited.inthe 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
    provisiona  ot the amended Marketing Agreement regulating
    the handling of citrus fruit grown In Cameron, Eldalgo
    and Uillacy Counties between the handlers of citrus  fruit
    In this ares and the Commlsslonsrof Agrleulturs of the
    Stats of Texas.
              Sootlon S ot the Marketing Aot sonstltutss
    the authority and power of the Commfsslonsrof Agrlcul-
    turs for sntsring Into a Cltrus~MarkstlngAgreement. It
    reads as follows:
             Vubjeot to the provisions of this Aot;
        the CommlsslonsrIs hereby authorized and sm-
        powered to execute marketing agreementsand
        to lssus lloenssa under this Act to persons
        engaged in transaotlonaor Intrastateoommsros
        wlthln the areas of this Stats in the markst-
        Ing, proossalng;packing, shipping,handling
        or distributingor citrus iNitS."

              Section 0 (1) of the Marketing Aot provides
    for the crsitlon of *an admlnlatratlvscoa@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) Proridingror the sslsotlon by the
        CommissIonor,or a method for the sslsctlon
        by the Commlsslonsr,of an admlnlstratlvscom-
        mittee or oommlttdssand defining their powera
        and duti0s.m
              Ssotion 0 (1) of the Aot further defines and
    limits the powers ai such admninlstratlvsoomnlttes,to-
    wit:
              (a) To admlnlstsrlngsuoh llosnse In ao-
         cordanos with its terms and provisions;
              (b) To making rules and regulationsto
         effectuate the terms and provlslonsoi suoh
         license;


.
        Eon. J. IL irrcDonsld,
                            February 17, 1939, Pegs 5.


                     (.o)To rsoslvlng,lnveatlgatlngand rsport-
                ing to the Coamiaslonsraomplalntaof vlolatlona
                or auoh llosnsa;
                     (d) To rscaamtendlng
                                        to the Commlaolonor
                amsndmsntato auoh llasnas;
                       (01 To oollsotlngfrom sash handler a fee
                  or laasaamsntrspreasntlng  his proprata aharo
                  of ouch oatlmgtsd expdnesa, Lncludlngsxpenasa
                  incurred In hearings held on, and In the oxsou-
                .tlon  of luah marketingagrssnmnt,  aa the Com-
                 mlaalonsr,after the autiasion to him by auah
                 ldmlnlatrativeagsnoy or agencies 0r a proposed
                 budget, find0 will probably bs required to oovar
                 sxpsndlturaanaoaaaarilyto bs Incurred by
                 auoh~mgenayor agendaa, during any psrlod
                 lpscilflad by him, for the amlntsnsnosand
                 funotlonlngof luoh agsncy or agencies; to
                 rsuoaivlng, expendingand aooountlng ror the
                 funds r0 aollectsd,and to ret- to ouch hsndlsr
                 hi8 pro rata ahars of any unexpendedbalances
                 which the admlnlatrstlresommlttss or oommlttes8,
                 wlththe appkvsl of the Commiaalonsr,flnda
                 am not 80 rsqulrsd;W
                     We are aonasrnsdwlth the aonatruotlonof the
        above    quOt8d rub-heading~(81of Section 0 (1) of the A&.
                   It dsflnss the powers of ths ldmlnlatratlva
        oonmlttee under the Marketing Aat, rslatlva to an daln-
        latmtlon or an operatingfund. Hrat,, the aamulttss
        la authorized to aollsot from each handler of oltrua a
        re0 or,asasasmsntrsprsssntlngthat handlsrqa pro rata
        ahers or the estimated  sxpsnee of admlnlatsrlugths
        Karkstlng Agreement. The amount of assessment la baaed.
        upon a budget prepared by the oommlttea and approved by
        the Coamilsafonsr or Agrioulturs for a rlsoal period
        dealgmtad   by him. Said amount la to be dstermlned  by
        t&s Cozamlasloner or Agrloulturs. said budget la dealgn-
        sd to ccivsr all sxpsndltursswhloh night nsosssarllybe
        lneurrsd by the oommlttss In admlnlatsrlngthe terms and
        prwlalona of the Act.
                  Ssoondly, after aubmlttingthe budget to the
        Coanmlsslonsrof Agrloulturs and oollsotlng the aaaeaamsnt
        or fee deolded upon by ths Lhmniaaionsr, the aamittsa    16


-   .
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 proportionateshare of any unexpendedbal-
ance of the administrationfund, which the oommlttsa
or Cwnmlsalonerof Agricultureflnda 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 asasaamsntalevied by the Ccannla-
lio nsr on the baala of the canmlttss~aown rscomasnda-
tion; 2nd.,'to sxpsnd ouch funds and give sn acoountlng;
and, 3rd.. to return to the handlers any balance mloh
the oommlttssand 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,
lxtanalvs aontml over the operatingfund 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 Commleslousrof Agrlculturs
rr0m time to tlnks. It reads an follows:
           -AAnyfunds oollsatsdby the admlnlstra-
      tire agsncy from the levying of auah Sees and
      asaseamsntashall be used forth8 purpose set
      forth In the marketingagreement or license
      under which It wss oollsctsd. A full and aom-
      plate racord thereof shall be kspt to which
      the Commissionermay hars'accsssat any
      time, and a report of the aotlrltlsaand 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 Commissionerof Agriculture,after
exsmlnlngthe proposed budget aubmlttedto him by the
administrativecommittee has the right to set the fee or
sssssamsnt to be levied; that he hsa the right to approve
Hon. J. 11.M?Donald, Psbruary 1.7,1939, Page 3.


the unaxpendadbalance ab the admlnlatratlonfund to be
dlvlded among the lundlera on a pro rata basis; and
that he has the right to have loceaa to the reuorda of
the oom.ltteeat any time and reoelve a report on the
~~;~eand     dispositionof funds by the l&&xlatmtlve
         .
     Sootion 17 of the Marketing Act so&orb upon the
Commiaaionerof Agrioulturelddltlonal rights and powers
in respect to the flnanoea of the ldmlnlatratlvaaamalttee.
It provideras follows:.
           (I
            ... The Ccmmla6lonerahall thereafterexact
     and require, by requlaltlonon the appropriate
     ldmlnlatratlvscommittee sr aommlttaaa,aharged
     with the oollaotlon sf funds for expansesunder
     o uc hmr k etilylg m a ma nt,
                                 th a ta uo ho o mdtta eor
     acamlttesasolleot, report, and pay wer monthly
     to the Ccaamlaaloner  the amount ~decamd nsoeaaary
     and aufflclent,and raquialtlonedfrom auoh
     ldrinlstmtlva amanitteeor aorenitteaa       by the
     Caumlaedoner,to defray the aotual expenses
     of the Commlsalomr to be lnourrsd during the
     subsequentmonth in the admlnlatmtlon and
     enforcementof any auoh narketing agreement or
     lloenae, under ouch rules and ra(pllatlona     as
     ha may pmaorlbs.’
           We oonatrue said prmlalon to men that the
 CarepiaalonsroS Agticulture la entitled to reoelve from
 the adminlatration fund any auoh amount of money as he
 oalaulatesla nscsaaary and auSSloientto aover ouch
 aotual lxpenaea 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 admlnlatsringthe Marketing
‘ngraamant.
          It gives him the authorityto requlaltlonthe
administrativeoaPmittea,uhlah has aontrol war the
operating run6 to supply him with au& lx P ensemoneY.
The l.mguage cf Seotlon 17 deelgnatea“the lotual UPOne
or the Conrmiasioner... ln the a&alnlatmtion and en-
Soroamentw of the Marketing Agreement as the datemining
amoUnt oS the raqulaltlonfunds.
 Hon. J. B. McDonald, February 17, 1939, &is 6.


         'The aeoond paragraph Of Seatlon 17 deals rith
 aunusued,  anexpendedand unrequlaitlonsdaaseasmsnta~
 In the r0ii0ting bmgi~g8:
           ‘gut all monaya aolleotad from asaeas-
      Rents, or othsrwlae,lmpoaed;underthla Act
      and under msrketlng agreementsexecuted In
      ~*usnCs thereof,'orliaenaea ia6aued thsre-
      under, by the admlnlstmtlve odttes       or
      0oarmnitteea created urdsr this Act, not re-
      qUlaltlons6by the Camulaalonscfor a&nlnla'trs-
      tire lx p wa es as herslnbetoreprovided In this
      Section, shall renaln In the custody of such
      admlnlatratlvscoanalttes   or aonohittssa~untll
      the 0108s or 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, unexpendedand unrequlsltloned
      aaaeairmsnt  or asaessmsnta.~

           ConetxulngSections 8 (1) (8) and 17 Of the Act
together, It la apparent that the operatingfund conposed
of aaeeaamsnta or tees levied on the jnndlera by the
a&zlnlstratlveooormittssla aubjsot to three uses.
            (1) It la aub)ct to be raqulaltloned
     on a monthly baa18 by the Commlaslonsroi
     Agriculture   for an amount neusssary to cover
     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 authorizedax-
      pendlturea of the aommittss 1 Section 8 (1). (a) 1
      chargedwith the adnlnlstrstionof 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 operatingfund, 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,aslonerof Agrlaulturefrom 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 oredltsdare hereby
    lpproprlatadfor use of eald Corqdsslonerto
    be expended In accordancewith lsw ln aarry-
    %ng out the ~provlalonahsraof.W
          Seotlon 18 (X) requires the bommlaslonsrof
Agrloultureto *submit quarterly to the admlnlatratlvs
lgenoy umisr eaoh msrkstlng agreemsnt or license a
aomplete statement of reeslpta and expendituresin
aonneotlonrith the admlnlatratlonof each marketing
agreement or license during the querter.w
          It la our opinion that the lsglalatlveln-
tent behind the Act wss that both the Commlaalonsr
of Agriaultureand the a&lnlatratlve agenay,
oreatsd under the a@irkstingagreemsnt,be authorlaed
and mpowersd to make neoeaaary lxpsndltureaaonnected
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 Commlaalon6rupon the lxpsndltureaof the oom-
mlttee and an accountingby ths Commissionerof
Agricultureto the admlnlatratlveaonmlttee of hle
receipts and expenditures. Since the Commlsslonsr
af Agriculturela a public offlolal and a State
orri08~, the Act requires that moneys expsndsd by
him be reported to the Ccmptrollerand deposited
In the Stats Treasury. The aommlttee,being a prl-
vats organizationset up by a voluntary agreement,
Is by authority of the Act a auatodian of the
operatingfund and may make axpendltureaof same
without convertingsaid 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 requlsltionsdby the Commissionerfor
             ldmlnia tr etiV8axpsnaes ... shall remain In
             the ouatody of such lQnlnistrstlvecommlttss
             ... a
                  Thla applies not only to that portion of the
        unrequIaltlonsdfunds 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 properlyadministeringthe
        tonne and provision6of the agreement.
                  The provlalonaof the mrkstlng agresmsnt
        entered intc by the Commlsalonsrof Agricultureand
        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 admInlatrstlveagenoles ln
        the r0iiaring language:
                 *A CroonersInduatry CommIttee and a
            ShippersMarketing CommIttee are hereby
            establishedwhich shall admlnlatsr the ferns
            and provisions of this agresmsnt as hare-
            Inafter 8peOlflcallyprovided,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
            Commlaalonsrand.ths producersand handlers:
                 (b) to furnish the CommIssIonorauoh
            available InSormstlonas 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 GroireraIndustry
     Committee to be audited by one or more osrtlrled
     pub110 aooountantaat least once for eaoh orop
     year and at luah other time as the Growers
     Industry Committee demo neoeasary or as the
     Canmlsslonsrmay request, and to ills wlth the
     ~~aalonsr    coplea of all audit yports made;

         (0) to make .auchaatlamtss Or the total
     Crop8oS fruit including the grads and alas
    6latrIbutlonther8o.Sas msy be deemed mceaaarg
    by said sommlttee In connectiondth the
    administrationof Articles IV and V hereof,
    or as may be prsaoribsdby the Commissioner.
         (f) to psrionn auah duties In connection
    with the aiLnlnlstrstlonof ths Tsxsa Citrus
    Xarketlng Act aa may from tlms to time, be aa-
    signed to It by the Commlasioner.R
             Section 6 oS~ArtIcls2 deqla with +m.ud8.R   It states:
         *All funds received by the &owera Industry
    CcmmIttes,pursuant to any provisions OS this
    agreementshall be used aolsly for the purposes
    herein apecIfledand shall be aooountsd for In
    ths Sollwlng msnnsr:
         (1) The ComaIaslonsrIMP, 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 receiptsand dlaburaemsntsand deliver all
    propertyend funds In his hands, togetherwith
    all books and records in his possssslon to hIa
    aucosssor  In office, and shall execute such aaslgu-
    msnta and other instrumentsas msy be nscssea.rjr
    or appropriateto vsat ln auah auocsssor full title
    to all of the property, funds and claims vested In
    ouch mambsr pursuant to this agrssmsnt.a
      Hon. J. X. YoDonsld, February 17, 1939, Page 10.


                The lmpllaatlonthroughoutaald aectiona la
      that the Growers Industry Ccmualttee ht?iE full power to rake
      diabursen~nta from the operating
    b ldl which rsmalns In Its austoUy. fund   uhlch lt haa aollectsd
.
                Article 1x1 of the amended Marketing Agreement
      covers wexpenassand asseagPsnts.~
                 Seotlon 1 OS Artlole III provides that:
                Vhs Growers Industry Committee la authorized
           to inour.auohexpenses as the Gommlsslonermay
           find t0 be necessary to oarry out the functions
           OS both aommlttssaunasr this agreement during
           the de8lgnsted fiscal period.  The funds to aovsr
           ouch expenses shall be aoquirsd by the levying
           of aaasasrmntsupon handlers as hsrslnafterpro-
           vided.*
                &Id section conSorme wlth tha requirementsOS
      Seotlon 8 (1) (a) OS the Act which authorizesthe oammittss
      to rake axpsndltursson the basis of a budget submitted
      to the Commlaslonsrof Agriculturefor a 8psolSlsd period.
                Gsotlona 2, 3, 4, 5 and 6 of Article III provide
      for acmputatlon0r rate OS asas8amsnt, payment 0r same
      by handler, a proportionaterefund, 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 conclusionthst the Act requires that only ouch
      money8 is plightbe rsqulaltlonedby the COUimlSslOnSr  Of
      Agriculturefor the purposes of defraying axpsn8sa lnourrsd
      by himself and his departmentin administeringthe provlslons
      OS the Act be reported to the State Comptrollerand
      de)oalted in the Stats Trsaaury.'
                It la our opinion that the admlnlstratlvsoommlttes
      .la legally authorized and empowered to msks necessaryand
      aufflclsntexpendituresand ths Sunda whloh It uses for
      operating expensesmay, under authority of the Act, remain
      In its custody, only the unexpendedand 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,AesistantAttorney General, dellvsrsdNovember 3,
1937 inrorar    a8 it holds that @tha oommittee have no authority
to expend any money 80 oolleotadlrospt by paying that amount
over to the Commissionerof Agrloulturs,vrhiohhas been ra-
quleitlonedby 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’ORNEYGENERAl OF-TEXAS


                                  BY
                                                    Di& Stout
                                                     Aesietant

DS:ob
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