                       The Attorney               General of Texas

MARK WHITE                                    May 6,   1981
Attorney General

                   Honorable Ray Farabee, Chairman              Opinion No.       W-333
                   Senate Committee on State
                     Affairs                                    Re: Constitutionality of C.S.H.B.
                   Austin, Texas 78711                          889 concerning direct &posit of
                                                                payroll warrants by magnetic tape
                   Honorable Gerald Hill, Chairman              transfer service
                   Committee on Elections
                   House of Representatives
                   Austin, Texas 78711

                   Dear Senator Farabee and Representative       Hill:

                        You have requested our opinion regarding the mnstitutionality        of
                   House Bill 889, presently pending in the 67th Legislature.    The bill would
                   amend article 43444 V.T.C.S., by adding the following provision:

                              Notwithstanding the provisions of any other statute,
                              the Comptroller of Public Accounts may establish and
                              operate an electronic ftmds transfer system only to
                              transfer    employees       gross    state     salaries   less
                              deductions specifically authorized by state or federal
                              law or reimbursement for travel and subsistence of
                              employees or [payment?] to state contractual payees
                              to satisfy state contracts directly into their accounts
                              in financial institutions.        An employee or state
                              contractual     payee must request           in writing to
                              participate   in any electronic ftmds transfer system
                              established and operated by the Comptroller of Public
                              Accounts     A single transfer may contain payments to
                              mutiple payees without the necessity               of issuing
                              individual warrants for each payee. The Comptroller
                              shall establish     procedures     for administering       the
                              system and may use the services of financial institu-
                              tions, automated       clearinghouses      and the federal
                              government.     The use of electronic ftmds transfer or
                              any other payment means does not create any rights
                              that would not have been created had an individual
                              state warrant been used as the payment medium. The
                              State Treasurer may not make a payment of a state
                              employee’s salary before the last working day of the
                              payroll period.

                                                  p. 1079
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                                                                                                     ,


        Honorable Ray Farabee
        Honorable Gerald Hill
        Page Two @I+3331




        The state treasurer contends that this proposal, if enacted, would contravene   article 4,
        section 23, and article 3, sections 50 and 51 of the Texas Constitution.

              In Attorney General Opinion MW-213 (1980), we said that, while existing law
        permitted the comptroller, at an employee’s instruction, to transfer the employee’s pay
        warrant directly to his designated bank, there was no statutory authority for the
        comptroller to issue to a bank a pey warrant covering multiple employees or to issue
        warrants solely by means of magnetic tape. House Bill 889 furnishes such authority.

               Article 4, section 23 of the Texas Constitution merely establishes the office of
        state treasurer and directs that he “perform such duties as are or may be required by
        law.” No duties of the treasurer are specified in the constitution, and, in our opinion,
        the legislature is at liberty to reasonably determine the scope of his duties. The
        provision of the bill directing the comptroller to “establish procedures for administer-
        ing the system” merely makes it his duty to conform the use of electronic “warrants”
        as nearly as may be possible to the statutory requirements governing the issuance and
        control of paper warrants. The existing statutes flsnish sufficient standards to guide
        his discretion. The sentence prohibiting the State Treasurer from making a payment of
        a state employee’s salary before the last working day of the payroll period is
        confirmation    that the bill does not attempt to change the traditional role of that
        constitutional   officer.  No payment may be ma& from the treasury except at his
        direction.

               Article 3, section 50 of the constitution prohibits the legislature from lending or
        pledging the credit of the state for the liability of any individual, corporation or
        association.   Article 3, section 51 prohibits the grant of public finds to an individual,
        corporation or association.     In our view, neither of these provisions is subverted by
        House Bill 889.         See Attorney    General Opinions MW-55 0979); H-74 (1973).
        Accordingly, it is otii$nion       that House Bill 889, if enacted, would be upheld as
        constitutional as against the objections raised.

                                             SUMMARY

                       House Bill 889, presently pending in the 67th Legislature,
                   does not contravene article 4, section 23 or article 3, section 50
                   or 51 of the Texas Constitution.

                                                  A*



                                                       Attorney General of Texas



                                                  p.   1080
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                 Honorable Ray Farabee
                 Honorable Gerald Hill
                 Page Three    (rw-333)




                 JOHN W. FAINTER, JR.
                 First Assistant Attorney General

                 RICHARD E. GRAY III
                 Executive Assistant Attorney General

                 Prepared by Ride Gilpin
                 Assistant Attorney General

                 APPROVED:
                 OPINION COMMlTTEE

                 Susan L. Garrison, Chairman
                 Jon Bible
                 Rick Gilpin
                 Jim Moellinger
                 Thomas M. Pollan




                                                        p. 1081
