Honorable Marvin Hall, Commissioner             Opfnion No;‘+2243
,Board of Insurance Co-Lssioners                Re: Refunds to the appropriation
Austin, Texas                                        for traveling expenses of,the
                                                     Insurance Department.
Dear Sir:

         : We have your ;letter of rune 12, 1940. requesting an opirilon of
this department   upon the questlou stated below.   The statement of facts
contained in LOUT letter is as follows:

            “Article   4898 of the R. C. S. 1925 provides     as.follows:

            “‘Art. 4898.     ACTING FIRE MARSHAL.            - If for any
     reason the State Fire Marshal is unable to make any required
     investigation    in person, he may designate the fire marshal of
     such city or town or some other suitable person to act for him;
     and such personso         designated shall have the. same ,authority as
     is herein giv~en the State’Fire’Marshal          with referen,ce to~the par-
      ticular matter to be investigated        by him, and shaDreceive        such
      compensation     for his services     as the State Insurance Commls,-
      don may allow.        If the investigation   of a fire is made at the
      request of a* insurance company, or at the request of a policy-
     holder sustaining loss, or at the request of the mayor, town
      clerk or chief of the fire department of any city, village or town
      in which the fire occurred,       then the expenses of the Fire Mar-
     ,shal, clerical    expense,s. witnesses     and officers’ fees incident
      and necessary      to such investigation    shall be paid by such in-
      surance company, or such policyholder            of such city.or town as
      the case may be, otherwise the expenses of such investigation
      are to be paid as party of the exp,enses of-the State Insurance
      Comn-ussion.      The party or parties,      company or companies,
      reauestinn such investieation,        shall before such investigation
      is comme’;lced deposit &th the State Insurance CommlsGion                 an
      amount of money in the judgment of said Commission                sufficient
      to defray the expenses of said Fir,e Marshal in conducting such
      investigation.’

          “In an effort to comply with .therequirements         of this article,     we
  have been ~~sing,~~~~u~st~~ti~lly’. ,thi foliowing procedure:

           “When an inves,tigation is requested’by  any person who is
  r,equired to pay for same; one of our salaried.investlgatosS  is
  assigned to make the investigation.    He renders invoice to the
  company or pe.ngon involved, in the name of the Board of Insurance
Honorable    Marvin   Hall,   page 2 (O-2243)




  Commissioners,    for the amount of traveling expenses actually in-
  curred.  The investigator  shows these expenses on his regular monthly
  expense account and is paid by State Warrant drawn against our travel-
  ing expense appropriation.   The company or person billed for the ex-
  pense of the investigation remits to the Board and the funds thus re-
  ceived are deposited in the State Treasury   as a refund to our traveling
  expense appropriation.

          “The Comptroller   has raised         a question a.s to the legality of
  this procedure as a result of a rider         on the General Appropriation     Bill
  which reads in part as follows:

           “‘Traveling Expense.   (a) It is provided that no expenditure
     shall be made for traveling expenses by any department of this
     State in excess of the amount of money itemized herein for said
     purpose.    This provision shall be applicable whether the item
     for traveling expenses is to be paid out of the appropriation   from
     the General Fund, from fees, receipts or special funds collected
     by virtue of certain laws of this State, or from other funds (ex-
     clusive of Fede~ral funds) available for use by a department.‘”

            Upon these facts    you ask the following     question:

           “Is the procedure which we have been following permissible
  and may we treat funds recovered        from the companies    or pers:ons
  for investigations,     as provided in Article 4898, as refunds to our
  appropriation    for traveling expense and expend these recovered
  funds from our travel appropriation        during fiscal year in which
                       ‘”
  they are earned?

            It is to betobse’rved   that under the provisions     of Article 4898, if
‘the investigation   of a fire is made at the request of an insurance company,
 a policyholder    sustaining loss, or the mayor, town clerk or chief .of the fire
 department of any city, village or town in which the fire occurred,            the ex-
 penses of the Fire Marshal,       clerical  expenses,   witnesses   and officers’ fees
 incident and necessary      to the investigation   are not ‘to be regarded as part of
 the expenses of the State Insurance Commission,           but are to be paid by the
 insurance company, the policyholder,         or the city or town, asp the case may
 be; that in other instances,     the expenses of the investigation      are to be paid
 as part of the expenses of the State Insurance Commission.

           The statutes clearly contemplate     that before an investigation   is
commenced     at the instance and request of an insurance c~ompany, a policy-
holder sustaining loss, the mayor, town clerk or chief of the fire department
of any city, villag~e or town, that there shall be deposited with the State In-
surance Commission       an amount of money sufficient to defray the expenses
incurred in conducting the investigation.     It is not contemplated   that this
shall be deposited in the Treasury,    but rather that it be devoted directly to
the paymentof     the expenses involved.   Since the statute is clear to this
effect, its mandate should be complied with. -However,        through error in
Lonorable    Marvin   Hall,   page 3 (O-2243)




interpreting  the statute heretofore,     the procedure followed as indicated in
your letter has been pursued, without requiring a prior deposit of,money
sufficient to defray t’he expenses,     and the expenses have been erroneously
paid out of th:, appropriation    made to your department by me Legislature.
This mistake can and should be corrected by depositing to the credit of
your appropriation     an amount collected from the person or company re-
questing the fnvestigation    sufficient to reimburse     your traveling   expense
appropriation    for the amount erroneously      regarded as chargeable      thereto.
This procedure does not result in a violation of the provisions          of the
traveling expense rider appended to Senate Bill 427, Acts of the 46th
Legislature.,   It does not result in an expenditure for traveling expenses by
your department in excess of the amount of money itemized in the appro-
priation bill for that purpose, but merely insures that the full amount of
money appropriated by the Legislature         for traveling expenses for your
department shall be applied to the purposes for which it was intended to
be available.

                                                Yours    very   truly,

                                         ATTORNEYGENEMLOFTEXAS




                                         By     /s/     R. W. Fairchild
                                                        R. W. Fairchild
                                                              Assistant

RWF:GO:hp

APPROVED      JULY    1, 1940                                      APPROVED
                                                                   Opinion
/s/ Gerald   C. Mann                                               Committee
ATTORNEY      GENERAL         OF TEXAS
                                                                   By/s/BWB
                                                                        Chairman
