Can the Texas Legislature use a budget rider to move a state agency's duties to another agency, and can that agency's staff work without pay?

Texas AG Opinion JM-1018: Can a Budget Rider Move a State Board's Duties to Another Agency?

Plain-English summary

The State Rural Medical Education Board found itself in a strange position. The Legislature had tucked a line into the state budget saying it was the Legislature's intent to move the board's operations and responsibilities over to the Coordinating Board of the Texas College and University System. The Rural Medical Education Board did not want to go. It refused to sign an interagency contract with the Coordinating Board and kept operating out of unused space in a state office building, with an acting director who had been working without pay since September 1, 1988, helped by his unpaid wife. The board's chairman asked the Attorney General two things: is that budget rider even valid, and is it legal for the staff to keep working for free?

On the first question, the Attorney General said the rider was unconstitutional. The board is not an ordinary agency the Legislature can shuffle around at will; it exists because article III, section 50a of the Texas Constitution requires a State Medical Education Board. A budget rider has a narrow job. It can detail, limit, or restrict how appropriated money is spent, and nothing more. This rider did none of that. Instead it tried to reorganize an agency, which is general legislation, and article III, section 35 of the Constitution forbids stuffing general legislation into a general appropriations act. So the rider was void and had no effect. It could not force the board to sign an interagency contract or even to try to.

On the second question, the Attorney General said the unpaid service was fine. There is a general rule that state agencies cannot accept donations, because money can only be spent when the Legislature authorizes it (article III, section 44). But donating labor is different from donating money. Accepting volunteer services does not spend any state funds, so the usual "you need specific authorization to accept a gift" concern does not apply. The board can only hire people within the limits of the funds it actually has, which means it cannot promise to pay more than that. The flip side protects the state: if employees agree to serve without salary, neither they nor their heirs can later turn around and bill the state for the value of the work they volunteered.

Currency note

This opinion was issued in 1989. 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.

The constitutional rules this opinion turned on (article III, section 35's bar on general legislation in an appropriations act, and section 44's requirement of legislative authorization for state expenditures) remain in the Texas Constitution. The agencies themselves have changed: the Coordinating Board, Texas College and University System is now the Texas Higher Education Coordinating Board, and the statutory framework for rural medical education has been revised since 1989. Anyone dealing with a modern appropriations-rider or agency-transfer question should check the current constitutional case law and the current statutes rather than rely on the specific article and agency names used here.

Who this opinion affected (as of 1989)

The State Rural Medical Education Board: The opinion confirmed the budget rider could not force it to hand its duties to the Coordinating Board, and that its staff could keep working without pay.

The Legislature and budget writers: The opinion was a reminder that reorganizing or effectively terminating an agency has to be done by real legislation, not a rider, and that trying to do it in the appropriations act makes the rider void.

State employees serving without pay: The opinion told them (and their heirs) that agreeing to serve without salary means no later claim against the state for the value of the work.

Common questions

Can the Legislature transfer a state agency's duties through a budget rider?
Not a constitutionally created agency, and not in this way. A rider may only detail, limit, or restrict the use of appropriated funds. A rider that reorganizes an agency is general legislation, which article III, section 35 of the Texas Constitution forbids in a general appropriations act, so it is void.

What made this board different from an ordinary agency?
It was created under article III, section 50a of the Texas Constitution. As the opinion noted, only a properly ratified constitutional amendment can alter a constitutional provision, so the Legislature could not effectively terminate the board by rider.

Is it legal for state employees to work without pay?
Yes. Accepting voluntary services does not spend state funds, so the rule requiring legislative authorization to accept donations does not bar it. Duly appointed employees may agree to serve without salary.

If they work for free, can they later sue the state for their wages?
No. The board can only employ staff within the limits of available funds, so it cannot bind the state to pay more. Employees who agree to serve without salary, and their heirs and legatees, cannot later claim the value of their services from the state.

Background and statutory framework

The Legislature created the board pursuant to article III, section 50a of the Texas Constitution, which requires the Legislature to create a State Medical Education Board and fund a State Medical Education Fund to provide grants, loans, or scholarships to students who agree to practice in the rural areas of the state. The enabling legislation is article 4498c, V.T.C.S. The rider at issue appeared in the General Appropriations Act, Acts 1987, 70th Legislature, 2d Called Session, chapter 78, article III, at 725, and stated the Legislature's intent that the board's operations and responsibilities be transferred to the Coordinating Board, Texas College and University System.

Article III, section 35 of the Texas Constitution prohibits enacting general legislation in a general appropriations act (Moore v. Sheppard, 192 S.W.2d 559, 561-62 (Tex. 1946)). Consistent with prior opinions, a rider to a general appropriations bill may only detail, limit, or restrict the use of funds (Attorney General Opinions MW-585 (1982); WW-389 (1981); RW-51 (1979); V-1254, V-1253 (1951)). The Attorney General concluded the rider here neither appropriated funds nor restricted the use of funds appropriated elsewhere; it was a general directive in derogation of the constitutional and statutory framework for the board, so it constituted general legislation, violated article III, section 35, and was void. As an invalid provision it could not require the board to enter into an interagency contract with the Coordinating Board or even to make an effort to do so. The opinion added, in a footnote, that because the board's existence, nature, and duties are prescribed in the Constitution, only a properly ratified constitutional amendment could alter those provisions.

On the unpaid-service question, state law generally forbids state agencies to accept donations of money and property because expenditures may be made only pursuant to legislative authorization (Tex. Const. art. III, section 44; Attorney General Opinion JM-459 (1986) and the cases cited there). But accepting voluntary services does not involve the expenditure of state funds, so the absence of a specific authorization to accept the donation of services is of no consequence (Attorney General Opinion H-1318 (1978)). The board is authorized to employ a director and other employees only "within the limits of funds made available for such purposes" (V.T.C.S. art. 4498c, section 5(f)), so it can in no case bind the state to pay more than the funds available while the appointments are in effect (Pickle v. Finley, 44 S.W. 480 (Tex. 1898)). Accordingly, if the board continues to accept the services of the employees it has appointed, those employees, or their heirs and legatees, may not assert a claim against the state for the value of their services (Morrison v. City of Fort Worth, 155 S.W.2d 908 (Tex. 1941); Broom v. Tyler County Commissioners Court, 560 S.W.2d 435 (Tex. Civ. App.-Beaumont 1977, writ ref'd n.r.e.)). The opinion noted it did not address any issue of potential agency liability for the acts of volunteers.

Citations

Constitutional and statutory authority:

• Tex. Const. art. III, § 50a (State Medical Education Board and Fund); art. III, § 35 (no general legislation in a general appropriations act); art. III, § 44 (expenditures only pursuant to legislative authorization)
• Tex. Rev. Civ. Stat. art. 4498c, § 5(f) (board may employ staff only within available funds); enabling legislation for article III, § 50a
• General Appropriations Act, Acts 1987, 70th Leg., 2d C.S., ch. 78, art. III, at 725 (the challenged rider)

Cases:

• Moore v. Sheppard, 192 S.W.2d 559, 561-62 (Tex. 1946) (bar on general legislation in an appropriations act)
• Pickle v. Finley, 44 S.W. 480 (Tex. 1898) (state not bound beyond available funds)
• Morrison v. City of Fort Worth, 155 S.W.2d 908 (Tex. 1941) (no claim for voluntarily donated services)
• Broom v. Tyler County Commissioners Court, 560 S.W.2d 435 (Tex. Civ. App.-Beaumont 1977, writ ref'd n.r.e.)

Related opinions:

• Attorney General Opinions MW-585 (1982), WW-389 (1981), RW-51 (1979), V-1254, V-1253 (1951), JM-459 (1986), H-1318 (1978)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1018
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1989/jm1018.pdf

Original opinion text

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

February 17, 1989

Sam A. Nixon, M.D.
Chairman
State Rural Medical Education Board
P.O. Box 12663
Austin, Texas 78711

Opinion No. JM-1018

Re: Validity of a rider transferring duties from the State Rural Medical Education Board to the Coordinating Board (RQ-1612)

Dear Dr. Nixon:

The legislature created the Texas Medical Education Board pursuant to article III, section 50a, of the Texas Constitution. That article provides:

The Legislature shall create a State Medical Education Board to be composed of not more than six (6) members whose qualifications, duties and terms of office shall be prescribed by law. The Legislature shall also establish a State Medical Education Fund and make adequate appropriations therefor to be used by the State Medical Education Board to provide grants, loans or scholarships to students desiring to study medicine and agreeing to practice in the rural areas of this State, upon such terms and conditions as shall be prescribed by law. The term 'rural areas' as used in this Section shall be defined by law.

Tex. Const. art. III, § 50a. The enabling legislation for this amendment may be found in article 4498c, V.T.C.S.

You note that a rider in the General Appropriations Act for the 1988-89 Biennium states that it "is the intent of the Legislature that the operations and responsibilities of the State Rural Medical Education Board be transferred to the Coordinating Board, Texas College and University System." General Appropriations Act, Acts 1987, 70th Leg., 2d C.S., ch. 78, art. III, at 725.

You relate that the Rural Medical Education Board

has declined to enter into an interagency contract with the Coordinating Board and has instead continued operations in unused space in an existing state office building. The . . . Acting Director has been serving without pay since September 1, 1988, and has been relying on the unpaid assistance of his wife, in order to keep the affairs of the Board current. Both persons have been properly appointed. Necessary expenditures are being made from the appropriate budget line items and no debt is being incurred.

In light of these circumstances, you ask two questions:

(1) Whether rider No. 3 [to the appropriation for the Rural Medical Education Board in the General Appropriations Act] is valid, given that it appears to be general legislation contained in an appropriations act in violation of the unity-of-subject clause of article III, section 35 of the Texas Constitution, and given that it may be a de facto termination by the Legislature of an agency created by the Texas Constitution; and

(2) Whether the unpaid service of the duly appointed employees of the Board is in violation of any law.

Article III, section 35, of the Texas Constitution prohibits the enactment of general legislation in a general appropriations act. Moore v. Sheppard, 192 S.W.2d 559, 561-62 (Tex. 1946). A rider to a general appropriations bill may only "detail, limit, or restrict the use of funds." Attorney General Opinions MW-585 (1982); WW-389 (1981); RW-51 (1979); V-1254, V-1253 (1951).

In our opinion, the rider at issue here is unconstitutional. It does not appropriate funds, nor does it detail, limit, or restrict the use of funds appropriated elsewhere. Rather it is a general directive in derogation of the constitutional and statutory directive concerning the affairs of the Rural Medical Education Board. Because the rider constitutes general legislation, it is violative of article III, section 35, of the Texas Constitution, and hence, void and of no effect. See Attorney General Opinion MW-585 (1982) (rider on cooperation between Board of Barber Examiners and Cosmetology Commission). As an invalid provision, it cannot require the Rural Medical Education Board to take any action, either to enter into an interagency contract with the Coordinating Board or to make an effort to do so.[1]

State law forbids state agencies to accept donations of money and property because expenditures may be made only pursuant to authorization by the legislature. Tex. Const. art. III, § 44. See generally Attorney General Opinion JM-459 (1986) and the cases cited therein. The acceptance of voluntary services does not involve the expenditure of state funds.[2] The absence of a specific authorization to accept the donation of services hence is of no consequence. See Attorney General Opinion H-1318 (1978).

The board is authorized to employ a director and other employees only "within the limits of funds made available for such purposes." See V.T.C.S. art. 4498c, § 5(f). The board thus in no case can bind the state to pay more than the funds available during the time the appointments are in effect. See Pickle v. Finley, 44 S.W. 480 (Tex. 1898). Accordingly, if the Rural Medical Education Board continues to accept the services of the employees which it has appointed, then the employees, or their heirs and legatees, may not assert a claim against the state for the value of their services. See generally Morrison v. City of Fort Worth, 155 S.W.2d 908 (Tex. 1941); see also Broom v. Tyler County Commissioners Court, 560 S.W.2d 435 (Tex. Civ. App. - Beaumont 1977, writ ref'd n.r.e.).

1. The existence, nature, and duties of the Rural Medical Education Board are prescribed in the Texas Constitution, and it is axiomatic that only a properly ratified constitutional amendment may alter the existing constitutional provision.

2. We do not here address any issue of potential agency liability for the acts of volunteers.

SUMMARY

The functions and duties of the Texas Rural Medical Education Board may not be transferred to the Coordinating Board, Texas College and University System, by means of a rider to the General Appropriations Act. Tex. Const. art. III, § 35. The Rural Medical Education Board may accept a donation of services from employees appointed to positions by the board who agree to serve without salary.

Very truly yours,

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by D. R. Bustion, II
Assistant Attorney General