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             Hon. Dorsey B. Hardeman, Chairman
             State Affairs Committee
             Senate of the State of Texas
             Austin; Texas
                                       Opinion NO. ww 640
                                       Re: Constitutionality of H.B.
                                           5, 56th Leg., relating
                                           to certification from
                                           the Comptroller required
                                           by Art. III, Set; &a of
             Dear Senator Hardeman:        the Constitution.
                   In your letter of May 27, 1959, you advised that
             the Senate State Affairs Committee, 56th Legislature,
             First Called Session, has referred House Bill 5 to this
             office for an opinion on its constitutionality.
                   Section 1 of House Bill 5 provides as .follows:
                       “In preparing the financial state-
                   ments and certifications required by ,~:
                   Article III, Section 49a of the State
                   Constitution, the Comptroller of Public
                   Accounts shall report and consider an
                   estimate of the probable receipts and dis-
                   bursements as of August 3lst for the then
                   current fiscal year.
                       "The words 'probable receipts' shall
                   mean knd include all such moneys estimated
                   by the Comptroller to be received by the
                   State through August 31st of the then
                   current fiscal year; and his financial
                   statements shall show~the fund or funds
                   to which such receipts are to be credited.
                       "The words 'probable disbursements'
                   shall mean, and the Comptroller shall con-
                   sider and report under such term, only
                   those payments estimated to be made and
                   warrants which will be issued by the State
                   through August 31st of the then current
                   fiscal year.
                                                            .,



Hon. Dorsey B. Hardeman, page 2 (~-640)
      "In addition thereto, for the informa-
      tion of the Governor and the Legislature
      the Comptroller shall list other outstand-
      ing appropriations which may exist after
      the end of the then current fiscal year,
      but they shall not be deducted from the
      cash condition of the Treasury or the
      anticipatedexthe                 biennium
      for the purpose of certification. In esti-
      mating and certifying cash funds to be
      available for the next biennium, these
      outstanding but undlsbursed appropriations
      of each biennium shall be offset by the
      estimated total of outstanding but undis-
      bursed appropriations of the succeeding
      biennium.
          "It is the Legislative intent that the
      Comptroller's reports, estimates, and certi-
      fications of available funds In each instance
      shall be based upon the actual or estimated
      cash condition of the State Treasury and that
      outstanding and undisbursed appropriations
      at the end of each biennium shall be considered
      as probable disbursements of the succeeding
      biennium in the same manner that earned but
      uncollected income of a'current biennium is
      considered in probable receipts of the succeed-
      ing biennium. The provisions of this Act shall
      be immediately effective and the Comptroller
      shall revise his current report and estimates
      in accordance therewith." (Emphasis added)
      Section @a, Article III of the Texas ConStltutiOn,
provides in part as follows:
          "It shall be the duty of the Comptroller
      of Public Accounts In advance of each Regular
      Session of the Legislature to prepare and
      submit to the Governor and to the Legislature
      upon its convening a statement under oath
      showing fully the financial condition of the
      State Treasury at the close of the last fiscal
      period and -.~--
                 an estimate of the probable receipts
      and disbursements for the then--current fiscal
      ----There
      SYJ??E-       shall also be contained in said
      statement an itemized estimates of ~the anticipated
      FeEuxsed
      -. ~.--~       on the lawsenineffect      that
      will be received by-and for the State from
      aEou%-es    showing
      __~~_~I_ -.-.        the fund accounts to be
                        -.-..
      credited during the succeeding biennium and
Hon. Dorsey B. Hardeman, page 3 (~~-640)


      said statement shall contain such other
      information as may be required by law,
      Supplemental statements shall be sub-
      mitted at any Special Session of the
      Legislature and at such other times as
      may be necessary to show probable
      changes.
          "From and after January 1, 1945, save
      in the case of emergency and imperative
      public necessity and with a four-fifths
      vote of the total membership of each House,
      no appropriation in excess of the cash and
      anticipatedvenue    of the funds from which
      such aoorouriation is to be ma= shall be
      valid.‘*From and after January 1, 1945, no
      bill containing an appropriati~onshall beg
      considered as passed or be sent to then
      Governor for consideration until and unless
      the Comptroller of Public Accounts endorses     ~
      his certificate thereonshowing that the
      amount appropriated is within the amount
      estimated to be available in the affected
      funds. When the Comptroller finds an appro-
      priation bill exceeds the estimated revenue
      he shall endorse such finding thereon and
      return to the House in which same originated.
      Such information shall be immediately made
      known to both the House of Representatives
      and the Senate and the necessary steps shall
      be taken to bring such appropriation to
      within the revenue either by providing ad-
      ditional revenue or reducing the appropriation.
          "For the purpose of financing the out-
      standing'obligations of the General Revenue
      Fund of the State and placing its current
      accounts on a cash basis the Legislature of
      the State of Texas is hereby authorized to
      provide for the issuance, sale, and retire-
      ment of serial bonds, equal in principal
      to the total outstanding, valid and approved
      obligations owing by said fund on September
      1, 1943, provided such bonds shall not draw
      interest in excess of two (2) per cent per
      annum and shall mature within twenty (20)
      years from.date. Added Nov. 3, 1942.'
      (Emphasis added)
Hon. Dorsey B. Hardeman, page 4 (~~-640)


      From the foregoing it is seen that Section @a of
Article III requires of the Comptroller two different
types of duties. First, he is required to prepare for
the Governor and the Legislature a financial report of
the condition of the State Treasury and to prepare an
"estimate" which is to show the Information specified
in the Constitution, and other such matters as the
Legislature may require. Insofar as House Bill 5 is a
specification of the form and content of those reports,
it does not violate the Constitution. Certainly the
Legislature may require any information that it desires,
and it may require that information to be shown in any
manner that it desires, regardless of whether the
Comptroller believes such is necessary to an accurate
accounting procedure.
      Second, the Comptroller is to certify that the
amount appropriated in any bill~is within the amount
estimated to be available in the affected funds.
      The Comptroller's determination of the avail-
ability of funds appropriated is not required by the
Constitution to be based on his financial report of
the State Treasury prepared for the Governor and the
Legislature or his "estimate'. The word "estimated"
as used in connection with the certification to be
made by the Comptroller necessarily refers to a find-
ing or opinion of the Comptroller separate and apart
from the "estimate" ulhichis referred to in the first
paragraph of~Section @a.   That Yestimate" -- the docu-
ment prepared and published by the Comptroller at the
beginning of each legislative session -- relates to
the contemplated revenues to be received by the State
during the succeeding biennium under the statutes in
existence at the time the Legislature meets. The
Comptroller could not determine the availability of
subsequently appropriated funds based upon that "esti-
mate" alone, because it would not necessarily take all
anticipated disbursements into account, and would not
be based upon revenue and other bills passed at the
same legislative session before a bill containing an
appropriation was sent to him for certification. In
this connection, we point out that statutes may be
passed which affect the availability of funds to be
appropriated, but which are not revenue bills and
which do not contain an appropriation. (See Attorney
General's Opinions WW-102 (1957), and ~~-632 (1959),
copies of which are attached). The "estimate" pre-
pared for the Governor and the Legislature might not
.        ‘.
    ..




              Hon. Dorsey B. Hardeman, page 5 (~~-640)


              have taken such bills into account. Patently the
              question of availability demands a consideration by
              the Comptroller of facts which are not or may not
              be reflected in the pre-legislative session "estimate".
               I
                    Of course, the Comptroller of Public Accounts,
              in making his "estimate" as to the amount of money that
              will be available in the affected funds, in certifying
              an appropriation bill or returning it to the,House in
              which same originated, should by virtue of the mandate
              of Section @a of Article III of the Constitution, take
              into consideration every element that bears upon the
              amount of funds that will be available, Including an
              estimate of the amount of funds that will not be ex-
              pended under the appropriations for the present
              biennium, as well as an estimate of the amount of funds
              that will not be disbursed by virtue of appropriations
              made for the next biennium.
                    The Constitution does not expressly,provide whether
              the general accounting method should be on a cash or
              accrual basis, but there is some language in Section
              @a of Article III, Texas Constitution, which would
              seem to require the accounting to be on a cash basis.
              It is our opinion that the Legislature may direct the
              Comptroller to employ a cash accounting basis as sup-
              plemental to and inaid of the constitutional provisions
              and we do not pass upon whether the Legislature could
              require the use of an accrual accounting basis. In
              Hamilton v. Deland, 198 N.W. 843, the rule was stated
              as follows:
                    "While legislation may not be necessary to
                    effectuate the constitutional provision and
                    none may be validly enacted that Is In con-
                    flict with it, it does not follow that legis-
                    lation supplemental to and In aid of the con-
                    stitutional provision may not be enacted.
                    This, I think, is settled by the text-writers
                    and adjudicated cases."
              In support of this rule the Court quoted from Corpus Juris;
              Ruling Case Law and the 7th Edition of Cooley's Constitu-
              tional Limitations.
                                                            ..
                                                                 .-



Hon. Dorsey B. Rardeman, page 6 (W-640)


      H. B. No. 5 In effect Instructs the Comptroller
to use the cash accounting basis, as it provides that
outstanding appropriations which may exist after the
end of the then fiscal year should not be deducted
from the cash condition of the Treasury or the antlci-
pated revenue of the next biennium for the purpose of
certification. This we believe to be constitutional.
However, the bill now provides that the outstanding
but undisbursed appropriations of each biennium shall
be offset by the estimated total of outstanding but
undisbursed appropriations of the succeeding biennium.
This we believe to be unconstitutional.
      Reading Section &a of Article III from its four
corners, it is our opinion that this constitutlonal
provision contemplates that the Comptroller, in making
his estimate for certification of bills, use the cash
accounting method. The use of the underscored language
in the Constitutional Amendment, as quoted above,
strengthens our opinion that the amendment in question
contemplates that the accounting'.methodto be.employed
by the Comptroller In making his estimates should be on
the cash basis.
      In H; B. No. 5 It appears that the Legislature Is
estimating that the outstanding but undisbursed appro-
priations at the end of each biennium will be in the
same amounts as it states that one will offset the other.
However, Section &a of Article III of the Constitution
provides that the Comptroller will make the estimates.
Insofar as this bill attempts to make estimates it is
unconstitutional as a legislative invasion of the duties
of the Comptroller. However, if a severability clause
is added, the remainder of the bill will stand, as it
does not conflict with Section &a of Article III of
the Constitution but is supplemental to and In aid of
the Constitutional provisions.
      Other than the questions treated above, we find
no constitutional questions raised by House Bill 5.

                      SUMMARY
      House Bill No. 5 is a constitutional bill
      except Insofar as it attempts to make es-
      timates as to outstanding but undisbursed
      appropriations. For that reason as present-
Hon.   Dorsey 5. Hardeman, page 7 (IN-W-640)


        ly drafted it is unconstitutional. If
        a severability clause be added, the re-
        mainder will be effective, as the bill
        is complete and workable after eliminat-
        ing the unconstitutional provision.
                            Very truly yours
                            WILL WILSON
                            Attorney General of Texas




APPROVED:
OPINION COMMITTEE:
George P. Blackburn, Chairman
Martin DeStefano
Joe Osborn
Mrs. Marietta Payne
REVIEWED FOR THE ATTORNEY GENERAL
By: W. V. Geppert
