Attorney General Opinion JM-0066

The Attorney General of Texas August 17, 1983 JIM MA-I’TOX Attorney General supreme Court Building P. 0. BOX 12546 Austin. TX. 76711- 2548 51214752501 Telex 91Of674.1367 Telecopier 5121475-0266 1607 Main Sl.. Suite 1400 Llallas. TX. 75201.4709 2141742a944 4624 A,ber,a AYe.. suite 160 El Paso. TX. 79905.2793 9151533-3484 0 1220 Dallas Ave.. Suite 202 Houston, TX. 77002.6986 7131650-0666 806 Broadway, Suite 312 L”bbcxk. TX. 79401.3479 8061747.5236 4309 N. Tenth. Suite S mAllen. TX. 76501-1665 5121662.4547 200 Main Plaza. Suite 400 sari Antonio. TX. 762052797 5121225.4191 An Equal OpportunItYi Affirmative Action Employer Honorable Ann Richards Texas S.tate Treasurer Treasury Department P. 0. Box 12608, Capitol Station Austin, Texas 78711 Dear Ms. Richards: Opinion No. .IMG6 Re: Whether the State Treasurer may use a wire transfer system to transfer and collect funds within the treasury You have requested our opinion as to whether the State Treasurer may use a wire transfer system to remit and collect funds within the treasury. The funds are placed in state depository banks and the State Treasurer wishes to remove funds from one such bank and remit them to another. We answer your inquiry in the affirmative. In answering the issue of using the wire transfer system to transfer funds within the treasury it is important to note that although there are adequate constitutional and statutory provisions that guide the State Treasurer in withdrawing funds from the state treasury, there are no provisions which address the movement of funds within the treasury. See Tex. Const. art. VIII, §6; V.T.C.S. art. 4371. These funds are Gsted by the treasurer and are available for appropriation and expenditure by the legislature. V.T.C.S. art. 2525, (amended by S.B. No. 100, Acts 1983, 68th Leg. ch. at ); V.T.C.S. art. 4371. Since article VIII, section 6 of the Texas Constitution prohibits these funds from leaving the treasury, it is important to recognize that a transfer of treasury funds from one depository bank to another does not cause the funds to be "drawn from the Treasury." The Court of Civil Appeals has stated the following: We are also of the opinion that there is no diversion of the state's funds by the depositing thereof in banks under this act, in the sense that they are withdrawn from the treasury, in violation of the Constitution. By the terms of the act it is plain that the state's funds, while placed in a depository, are still under the custody and control of the Legislature, and are directly subject to the orders and drafts of the treasurer in the payment of the state's obligation. In other words, they are not out of the official p. 282 Honorable Ann Richards - Page 2 (~~-66) custody and control of the treasurer, and cannot in any proper sense be said to have been drawn from the treasury. Lawson v. Baker, 220 S.W. 260, 271 (Tex. Civ. App. - Austin 1920, writ ref'd). Therefore, since the funds are still within the "control" of the treasurer, the use of a wire transfer system as a management tool for the administration of these funds does not violate any constitutional or statutory provisions. It is acceptable for the treasurer to use a wire transfer system, instead of the historically used draft system, in the administration of these funds. Using a wire transfer system to collect funds within the treasury is controlled by article 2535, V.T.C.S., which states, in pertinent part, the following: All remittances to the Treasurer made by the State Depositories, or any person or persons 3 be in cash by registered and insured letter; by post office money order; express money order of any company authorized to do business in Texas, or by any bank draft on any bank in the following cities: Dallas, Fort Worth, Waco, Houston, Austin, Galveston, and San Antonio. The liability of any State Depository or person sending the same shall not cease until the said money is actually received by the Treasurer. (Emphasis added). Article 2535 provides that the remittances to the treasurer "may" be made in the ways expressed by the statute. The statute, by using the word "may" instead of "shall" or "must," does not limit the treasurer to the stated methods of collection. See, e.g., 53 Tex. Jur.Zd Statutes 516 and cited authorities. In State v. Hatcher, 52 S.W.Zd 794, 797 (Tex. Civ. App. - Austin 1932), rev'd on other grounds, 81 S.W.Zd 499 (Tex. 1935). the court found that this language in the statute gave the remitter the right to remit in these authorized forms and required the treasurer to accept these forms of remittance. Additionally, the court found that [tlhese restrictions in the forms of remittances were no doubt for the convenience of the treasurer, and clearly, we think, no duty was imposed upon him to accept remittances in any other form. It is important to note that the court did not find that these authorized forms of remittance were exhaustive or that other forms of remittance were prohibited. Therefore, it is our opinion that these statutory restrictions in the forms of remittance are minimum p. 283 . . Honorable Ann Richards - Page 3 (JM-66) restrictions imposed on the treasurer which do not prohibit the wire transfer system of collection. We note that your question is presented in general terms, and we offer no opinion as to the validity of particular transactions. SUMMARY The Texas State Treasurer may use a wire transfer system to transfer abd collect funds within the treasury. LLJkfl* JIM MATTOX I Attorney General of Texas TOM GREEN First Assistant Attorney General DAVID R. RICHARDS Executive Assistant Attorney General Prepared by Rick Gilpin Assistant Attorney General APPROVED: OPINION COMMITTEE Susan L. Garrison, Chairman Colin Carl Rick Gilpin Deborah Hersberg Jim Moellinger Nancy Sutton p. 284