Is a Texas budget rider that moves money and staff from TxDOT to the new Department of Motor Vehicles a new appropriation?

TX AG Opinion GA-0776: Is the budget rider transferring funds from TxDOT to the new DMV an appropriation?

Plain-English summary

The chair of the Senate Jurisprudence Committee asked whether a particular budget rider was an "appropriation" or just instructions about how to use money appropriated elsewhere. The rider, section 17.30(b) in article IX of the 2010-2011 General Appropriations Act, sat in the part of the Act titled "Contingency and Other Provisions." It said that, if the Legislature created the Department of Motor Vehicles (through House Bill 300 or House Bill 3097 or similar legislation), and subject to Legislative Budget Board approval, TxDOT had to transfer to the new DMV all the funds and full-time-equivalent positions that had been appropriated to TxDOT for fiscal years 2010 and 2011 and were tied to the programs being moved (estimated at $103.7 million and 622 positions a year, plus up to 75 more support positions). House Bill 300 did not pass, but House Bill 3097 did, creating the DMV and moving a set of TxDOT programs to it as of November 1, 2009. So the contingency was met and the rider applied.

The Texas Supreme Court already had a test for this. In Jessen Associates, Inc. v. Bullock, the court explained that an "item of appropriation" means the setting aside or dedicating of funds for a specified purpose, which is different from language that qualifies or directs the use of funds appropriated elsewhere, or that is merely incidental to an appropriation. In Jessen itself, a rider that approved certain university construction projects was held not to be an item of appropriation, because the funds had been appropriated elsewhere in the Act and the rider only directed their use. The court also held that such a directing rider does not violate the single-subject rule for appropriations bills in article III, section 35, because it relates to and is germane to the appropriation of funds.

Applying that test, the opinion concluded section 17.30(b) does not itself set aside or dedicate funds to the DMV. The actual appropriation was made to TxDOT when the Act took effect on September 1, 2009. The rider then directed TxDOT to transfer those already-appropriated funds and positions to the DMV once the DMV existed, which happened on November 1, 2009. The Legislature's own words, transfer to the DMV all funds appropriated to TxDOT, signaled that it was directing the use of money appropriated to TxDOT elsewhere in the Act. So under the plain language and the Jessen test, a court would likely conclude the rider is not an appropriation to the DMV, but language directing the use of funds appropriated elsewhere.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

This opinion construes a rider in the 2010-2011 General Appropriations Act, which governed only that biennium. Later appropriations acts contain their own provisions. Confirm the current law before relying on anything below.

Who this opinion affected (as of 2010)

The Legislature, TxDOT, and the new DMV: The opinion told them that the rider moving funds and positions to the DMV was best read as directing the use of money already appropriated to TxDOT, not as a separate appropriation to the DMV.

The Comptroller and budget officials: The opinion gave the framework (the Jessen "item of appropriation" test) for classifying such transfer riders. A companion opinion issued the same day, GA-0777, used this conclusion when advising the Comptroller how to calculate the State Highway Fund trigger for the Rail Relocation and Improvement Fund.

Common questions

Did the rider give the DMV its own appropriation?
According to this opinion, probably not. A court would likely read it as directing TxDOT to transfer funds that were already appropriated to TxDOT, not as a new appropriation to the DMV.

What is the difference between an appropriation and a directing rider?
Under Jessen, an appropriation sets aside or dedicates funds for a specified purpose; a directing rider only qualifies or directs the use of funds that were appropriated elsewhere.

When did the money and positions actually move?
The appropriation was made to TxDOT when the Act took effect on September 1, 2009, and the programs, funds, and positions transferred to the DMV on November 1, 2009, under House Bill 3097.

Does a directing rider break the single-subject rule for budget bills?
No. The opinion noted that Jessen held such a rider relates to and is germane to the appropriation of funds, so it is permissible under article III, section 35.

Background and statutory framework

Section 17.30(b), in part 17 ("Contingency and Other Provisions") of article IX of the 2010-2011 General Appropriations Act, directed TxDOT, contingent on legislation creating the DMV and subject to Legislative Budget Board approval, to transfer to the DMV all funds and full-time-equivalent positions appropriated to TxDOT for fiscal years 2010 and 2011 that were associated with the transferred programs (General Appropriations Act, 81st Leg., R.S., ch. 1424, art. IX, pt. 17, 2009 Tex. Gen. Laws 4485, 5370). House Bill 3097, enacted as subtitle M, title 7 of the Transportation Code, created the DMV and moved TxDOT programs and positions to it as of November 1, 2009 (Act of May 23, 2009, 81st Leg., R.S., ch. 933, 2009 Tex. Gen. Laws 2485, 2485-2522).

Under the Texas Supreme Court's test, an "item of appropriation" contemplates setting aside or dedicating funds for a specified purpose, as distinguished from language that qualifies or directs the use of appropriated funds or is merely incidental to an appropriation (Jessen Assocs., Inc. v. Bullock, 531 S.W.2d 593, 596, 599-600 (Tex. 1975); Tex. Educ. Code Ann. § 61.058). The Jessen court also held a directing rider does not offend the single-subject rule because it relates to and is germane to the appropriation of funds (Tex. Const. art. III, § 35). Because the appropriation was made to TxDOT when the Act took effect on September 1, 2009, and section 17.30(b) directed TxDOT to transfer those funds and positions to the DMV once created, the opinion concluded a court would likely hold the rider is not an appropriation to the DMV, but language directing the use of funds appropriated elsewhere in the Act.

Citations

Statutes and enactments:

• General Appropriations Act, 81st Leg., R.S., ch. 1424, art. IX, pt. 17, 2009 Tex. Gen. Laws 4485, 5370
• Act of May 23, 2009, 81st Leg., R.S., ch. 933, 2009 Tex. Gen. Laws 2485, 2485-2522 (House Bill 3097)
• Tex. Const. art. III, § 35
• Tex. Educ. Code Ann. § 61.058

Cases:

• Jessen Assocs., Inc. v. Bullock, 531 S.W.2d 593 (Tex. 1975)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0776
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2010/ga0776.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

May 21, 2010

The Honorable Jeff Wentworth
Chair, Senate Jurisprudence Committee
Texas State Senate
Post Office Box 12068
Austin, Texas 78711-2068

Opinion No. GA-0776

Re: Whether the transfer of certain funds and positions from the Texas Department of Transportation to the Texas Department of Motor Vehicles in section 17.30(b), article IX of the 2010-2011 General Appropriations Act constitutes an appropriation (RQ-0838-GA)

Dear Senator Wentworth:

You ask whether the transfer of certain funds and positions from the Texas Department of Transportation ("TxDOT") to the Department of Motor Vehicles ("DMV") provided in section 17.30(b), article IX of the 2010-2011 General Appropriations Act (the "Act") "constitutes an 'appropriation' or is merely language directing and qualifying the use of funds appropriated elsewhere" in that Act.¹

Part 17 of article IX of the 2010-2011 General Appropriations Act, enacted by the Legislature during its 2009 regular session, is entitled "Contingency and Other Provisions." General Appropriations Act, 81st Leg., R.S., ch. 1424, art. IX, pt. 17, 2009 Tex. Gen. Laws 4485, 5370 (the "General Appropriations Act"). One of the enumerated contingency provisions is section 17.30(b), entitled "Contingency Appropriation for House Bill 300 or House Bill 3097." Id. § 17.30(b), at 5379. Section 17.30(b) reads as follows:

b. Contingent on the enactment of House Bill 300 or House Bill 3097, or similar legislation relating to the creation of the Department of Motor Vehicles and the transfer of certain programs to the Department of Motor Vehicles from the Department of Transportation, and subject to approval by the Legislative Budget Board, the Department of Transportation shall, in the time and manner prescribed by the legislation, transfer to the Department of Motor Vehicles all funds and full-time-equivalent (FTE) positions appropriated to the Department of Transportation for fiscal years 2010 and 2011 that are directly associated with the programs and responsibilities required to be transferred under the provisions of the legislation (estimated to be $103.7 million in All Funds and 622.0 FTEs each year) plus any additional FTE positions (not to exceed 75.0 FTEs) and associated funding for personnel that primarily support the programs to be transferred to the Department of Motor Vehicles. The Legislative Budget Board is authorized to resolve any disputes concerning the transfers identified in this rider.

Id.

While House Bill 300 did not become law, House Bill 3097 was enacted as subtitle M, title 7 of the Transportation Code. See Act of May 23, 2009, 81st Leg., R.S., ch. 933, 2009 Tex. Gen. Laws 2485, 2485-2522. Because under the terms of House Bill 3097, a number of TxDOT programs and positions were transferred to the newly-created DMV as of November 1, 2009, the contingency provided by section 17.30(b) occurred.² Id. §§ 6.01(a)-(c), 6.02(a), 6.03(a), at 2519-20. Thus, section 17.30(b) directs TxDOT to "transfer to the [DMV] all funds and full-time-equivalent (FTE) positions appropriated to [TxDOT] for fiscal years 2010 and 2011 that are directly associated with the programs and responsibilities required to be transferred under the provisions of the legislation . . . plus any additional FTE positions . . . and associated funding for personnel that primarily support the programs to be transferred to the [DMV]." General Appropriations Act, art. IX, § 17.30(b), at 5379 (emphasis added). You inquire whether the language of section 17.30(b) constitutes an appropriation. Request Letter at 1.

The Texas Supreme Court has articulated a test for determining when a provision in a general appropriations act constitutes an appropriation. In Jessen Associates, Inc. v. Bullock, the court considered whether a rider to the 1976-1977 General Appropriations Act that authorized the construction of certain enumerated projects without the consent of the Coordinating Board of the Texas College and University System was an "item of appropriation" subject to veto by the Governor. Jessen Assocs., Inc. v. Bullock, 531 S.W.2d 593, 596 (Tex. 1975). The rider permitted the board of regents of the University of Texas System, inter alia, "(1) to expend such amounts of its Permanent University Fund bond proceeds and/or other bond proceeds and such amounts of its other available moneys as may be necessary to fund one or more of the following projects either in whole or in part . . . : Alterations and Additions to Law School." Id. at 597.

After discussing prior judicial authority regarding the meaning of the term "item of appropriation," the Jessen court declared that the term "contemplates the setting aside or dedicating of funds for a specified purpose. This is to be distinguished from language which qualifies or directs the use of appropriated funds or which is merely incidental to an appropriation." Id. at 599. With respect to the rider in question, the court determined that the Legislature did not intend to appropriate or set aside funds:

When the rider is read in connection with the requirements of Section 61.058, Texas Education Code, its purpose becomes clear. What the Legislature intended was to give its approval to the enumerated projects, and thereby eliminate the need for approval by the Coordinating Board. There was no intent for the language of the rider to set aside funds for these projects, because such funds were appropriated elsewhere. The rider was intended merely to direct the use of those funds by giving express legislative approval to the projects specified.

Consequently, the rider cannot be construed as an "item of appropriation" as that term is used in the Constitution.

Id. at 600; see also id. at 599 ("Of special significance in determining the legislative intent in this case is the fact that the funds mentioned . . . are appropriated elsewhere in the General Appropriations Act.").

In Jessen, the Comptroller of Public Accounts argued that if the rider is not an item of appropriation, then it is general legislation in violation of article III, section 35 of the Texas Constitution.³ The court held that, although the rider did not itself appropriate funds, it was nonetheless valid because, "[i]n authorizing the expenditure of funds, it relates to the appropriation of funds. Likewise, it is germane to that subject. This subdivision merely directs the expenditure of appropriated funds, and is therefore permissible under Article III, Section 35, of the [Texas] Constitution." Id. at 601.

The Texas Supreme Court's opinion in Jessen is instructive in the situation you pose. Section 17.30(b) does not itself set aside or dedicate funds to the DMV. Rather, it directs TxDOT to transfer funds and positions to the DMV in the future, if and when the DMV is created: "the Department of Transportation shall . . . transfer to the Department of Motor Vehicles." General Appropriations Act, art. IX, § 17.30(b), at 5379. The actual appropriation in question was made to TxDOT upon the effective date of the Act, i.e., September 1, 2009. See General Appropriations Act, at 5444. As we have noted, the funds and positions addressed by House Bill 3097 did not transfer to the newly created DMV until November 1, 2009. Act of May 23, 2009, 81st Leg., R.S., ch. 933, § 6.01, 2009 Tex. Gen. Laws 2485, 2519-20. The Legislature's express use of the phrase "transfer to the Department of Motor Vehicles all funds . . . appropriated to [TxDOT]" suggests that, in enacting section 17.30(b), the Legislature was merely qualifying or directing the use of funds that it expressly appropriated to TxDOT elsewhere in the Act. General Appropriations Act, art. IX, § 17.30(b), at 5379 (emphasis added). Thus, under the plain language of section 17.30(b) and the test announced by the Texas Supreme Court in Jessen, a court would likely conclude that section 17.30(b) does not constitute an appropriation to the DMV. Rather, section 17.30(b) would likely be construed as language that merely directs the use of funds appropriated elsewhere in the 2010-2011 General Appropriations Act.⁴

[Footnote 1: Request Letter at 1 (available at http://www.texasattorneygeneral.gov).]

[Footnote 2: The Legislative Budget Board has given the requisite approval. See Letter from John O'Brien, Director, Legislative Budget Board, to Victor Vandergriff, Chairman of the Board, Texas Department of Motor Vehicles (Nov. 18, 2009) (on file with the Opinion Committee).]

[Footnote 3: Article III, section 35 of the Texas Constitution provides that "[n]o bill . . . shall contain more than one subject," and thus stands for the proposition that a general appropriations bill may not contain general legislation. See Jessen, 531 S.W.2d at 600; TEX. CONST. art. III, § 35. The appropriation of funds from the state treasury is considered a single subject for the purposes of article III, section 35. See Jessen, 531 S.W.2d at 600.]

[Footnote 4: In Attorney General Opinion MW-51, this office considered a rider to the appropriation for the Texas Department of Human Resources, which authorized and directed that department "to construct a state office building," described the total square footage of the building, and declared the "intent of the Legislature" that the building house certain state agencies, and the further intent that the Department of Mental Health and Mental Retardation transfer certain described property in Austin to the State Board of Control. Tex. Att'y Gen. Op. No. MW-51 (1979) at 3-4. The Attorney General declared that "[t]hese two paragraphs do not constitute an 'item' of appropriation under the test established in Jessen. They do not set aside or dedicate funds. Instead, the language directs and qualifies the use of funds appropriated elsewhere." Id. at 4.]

SUMMARY

A court would likely conclude that the transfer of certain funds and positions from the Texas Department of Transportation to the Texas Department of Motor Vehicles in section 17.30(b), article IX of the 2010-2011 General Appropriations Act does not constitute an appropriation to the Department of Motor Vehicles. Rather, section 17.30(b) would likely be construed as merely directing the use of funds appropriated to the Department of Transportation in another portion of the 2010-2011 General Appropriations Act.

Very truly yours,

GREG ABBOTT
Attorney General of Texas

ANDREW WEBER
First Assistant Attorney General

JONATHAN K. FRELS
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Rick Gilpin
Assistant Attorney General, Opinion Committee