                 E              NET      GENERAL
                                 EXAS
                      AUBTIN.   TEXAS    "I

                         February 16, 1970



Honorable R. L. ~Coffman         Opinion No. M-581
Administrator
Texas Employment Commission      Re:    Whether TBxas Employment
Austin, Texas 78701                     Commission may insure its
                                        buildings against fire,
                                        flood; land other hazards
                                        with premiums f4r such
                                        insurance to be paid by the
                                        Comptroller from funds
                                        granted by the U.S. Depart-
                                        ment of Labor for such
Dear   Mr. Coffman:                     purposes.
            In your request for an opinion you state the following:
            "We have been advised by the Manpower
       Administration of the U. S. Department of Labor
       that we are being required to insure our build-
       ings. The Manpower Department's directive in this
       regard reads as follows:

           gr,t:~~v~~t~i~~a~~b~~~~h
           used to amortize the cost shall be
           insured against loss by fire, flood,
           tornado, or other causes. Granted
           funds may be used to pay the cost of
           such insurance. The amount of insurance
           should be the replacement cost of the
           building. licuever,where private
           financing is involved, granted funds
           may not be used for insurance protection
           since this is the responsibility of the
           lessbr o

                'As an alternative to the purchase
           of insurance from a private carrier,
           granted funds may be used~as contribu-
           tions to a State fund to which other
           State departments contribute on a pro


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Hon. R. L. Coffman,   Page 2 (M-581)

           rata share of coats incident to the
           administration of such fund, provided
           similar charges are made to other
           State departments.
                'Where the State agency is not
           amortizing the entire building,
           granted funds may be used for only
           the agency's pro rata share of the coat
           of insurance coverage.
                'Insurance coats will be
           included as maintenance and operation
           expense rather than in the total coat
           of the project to be amortized.'
          "We have not been insuring any of our buildings
     in the past because of the policy expressed in
     Senate Concurrent Resolution NO. 3 adopted by the
     Senate and Rouse August 24, 1921. We have been
     advised that the State Comptroller will not pay
     the premiums on such insurance in view of the
     prohibitions contained in Senate Concurrent Reso-
     lution No. 3, although Federally granted funds
     may be used far this purpose and classified as
     maintenance and operation expense. Accordinqly,
     our questions to you are as follows:
                "(1) Can the Texas Employment
           Commission insure its buildings for
           which Federally granted funds have
           been or are being used to amortize the
           coat of euch buildfnga against fire,
           flood, tornado, or other causes?
                "(2) If the above question is
           answered in the affirmative, can the
           State Comptroller of Public Accounts
           issue warrants from funds granted to
           the Texas Employment Commission for this
           purpose by the U. S. Department of
           Labor and charge same to maintenance and
           operation expense of the Texas Employ-
           ment Commission?'




                               -2760-
.   -




        Hon. R. L. Coffman, Page 3 (M-581)

                  Senate Concurrent Resolution No. 3, 37th Leg.
        2nd C.S. 1921, expressly provides that no insurance policy
        shall be taken out upon any of the public buildings of the
        State (with exceptions not applicable) and there are Attorney
        General Opinions holding that State warrants may not be
        issued for the payment of insurance premiums in the absence
        of specific appropriation for that purpose. See Attorney
        General Opinion No. C-193 (1963). However, the general
        appropriation bill for the 1970-71 biennium (Sec. 25
        of Art. V of House Bill No. 2, Acts 61at Leg. 2nd C.S.
        1969) provides as follows:
                  *Sec. 25. FEDERAL FUNDS APPROPRIATED FOR
             USE. All funds received from the United States
             Government by the agencies of the State named
             in this Act are hereby appropriated to such
             agencies for the purposes for which the Federal
             grant, allocation, aid, or payment was made,
             subject to the provisions of this Act..."

              Therefore, in so far as the questions under consideration
    are concerned, the policy of the State as expressed in Senate
    Concurrent Resolution No. 3 with reference to insuring those
    buildings required by Federal law to be insured has been changed
    by the 69th Legislature, and the quoted enactment expressly
    appropriates such funds for the designated use. Consequently,
    we answer both of your questions in the affirmative.
                               SUMMARY
                               -B--m--
                  The general appropriation bill for the
            1970-71 biennium authoriees the Texas Employment
            Commission to insure its buildings for which
            Federally granted funds have or are being used
            to amortize the costs of such buildings against
            fire,  flood, tornado or other causes, and the
            State Comptroller of Publia Accounts may legally
            issue warrants from funds granted to Texas
            Employment Conuniaaionfor that purpose by the
            U. S. Department of Labor and charge same to
            maintenance and operation expense of the Texas
            Employment Commission.        .A
                                      Ver#truly yours,



                                                  era1 of Texas


                                -2769-
Hon. R. L. Coffman, Page 4 (M-581)

Prepared by Jack Sparks
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Kerns Taylor, Chairman
W. E. Allen, Acting Co-Chairman
Wayne Rodgers
Jack Goodman
Pat Cain
John Reeves
MEADE F. GRIFFIN
Staff Legal Assistant
ALFRED WALKER
Executive Assistant
NOLA WRITE
First Assistant




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