Untitled Texas Attorney General Opinion ( 1940 )

Honorable Marvin Hall, Commissioner Opfnion No;‘+2243 ,Board of Insurance Co-Lssioners Re: Refunds to the appropriation Austin, Texas for traveling expenses of,the Insurance Department. Dear Sir: : We have your ;letter of rune 12, 1940. requesting an opirilon of this department upon the questlou stated below. The statement of facts contained in LOUT letter is as follows: “Article 4898 of the R. C. S. 1925 provides as.follows: “‘Art. 4898. ACTING FIRE MARSHAL. - If for any reason the State Fire Marshal is unable to make any required investigation in person, he may designate the fire marshal of such city or town or some other suitable person to act for him; and such personso designated shall have the. same ,authority as is herein giv~en the State’Fire’Marshal with referen,ce to~the par- ticular matter to be investigated by him, and shaDreceive such compensation for his services as the State Insurance Commls,- don may allow. If the investigation of a fire is made at the request of a* insurance company, or at the request of a policy- holder sustaining loss, or at the request of the mayor, town clerk or chief of the fire department of any city, village or town in which the fire occurred, then the expenses of the Fire Mar- ,shal, clerical expense,s. witnesses and officers’ fees incident and necessary to such investigation shall be paid by such in- surance company, or such policyholder of such city.or town as the case may be, otherwise the expenses of such investigation are to be paid as party of the exp,enses of-the State Insurance Comn-ussion. The party or parties, company or companies, reauestinn such investieation, shall before such investigation is comme’;lced deposit &th the State Insurance CommlsGion an amount of money in the judgment of said Commission sufficient to defray the expenses of said Fir,e Marshal in conducting such investigation.’ “In an effort to comply with .therequirements of this article, we have been ~~sing,~~~~u~st~~ti~lly’. ,thi foliowing procedure: “When an inves,tigation is requested’by any person who is r,equired to pay for same; one of our salaried.investlgatosS is assigned to make the investigation. He renders invoice to the company or pe.ngon involved, in the name of the Board of Insurance Honorable Marvin Hall, page 2 (O-2243) Commissioners, for the amount of traveling expenses actually in- curred. The investigator shows these expenses on his regular monthly expense account and is paid by State Warrant drawn against our travel- ing expense appropriation. The company or person billed for the ex- pense of the investigation remits to the Board and the funds thus re- ceived are deposited in the State Treasury as a refund to our traveling expense appropriation. “The Comptroller has raised a question a.s to the legality of this procedure as a result of a rider on the General Appropriation Bill which reads in part as follows: “‘Traveling Expense. (a) It is provided that no expenditure shall be made for traveling expenses by any department of this State in excess of the amount of money itemized herein for said purpose. This provision shall be applicable whether the item for traveling expenses is to be paid out of the appropriation from the General Fund, from fees, receipts or special funds collected by virtue of certain laws of this State, or from other funds (ex- clusive of Fede~ral funds) available for use by a department.‘” Upon these facts you ask the following question: “Is the procedure which we have been following permissible and may we treat funds recovered from the companies or pers:ons for investigations, as provided in Article 4898, as refunds to our appropriation for traveling expense and expend these recovered funds from our travel appropriation during fiscal year in which ‘” they are earned? It is to betobse’rved that under the provisions of Article 4898, if ‘the investigation of a fire is made at the request of an insurance company, a policyholder sustaining loss, or the mayor, town clerk or chief .of the fire department of any city, village or town in which the fire occurred, the ex- penses of the Fire Marshal, clerical expenses, witnesses and officers’ fees incident and necessary to the investigation are not ‘to be regarded as part of the expenses of the State Insurance Commission, but are to be paid by the insurance company, the policyholder, or the city or town, asp the case may be; that in other instances, the expenses of the investigation are to be paid as part of the expenses of the State Insurance Commission. The statutes clearly contemplate that before an investigation is commenced at the instance and request of an insurance c~ompany, a policy- holder sustaining loss, the mayor, town clerk or chief of the fire department of any city, villag~e or town, that there shall be deposited with the State In- surance Commission an amount of money sufficient to defray the expenses incurred in conducting the investigation. It is not contemplated that this shall be deposited in the Treasury, but rather that it be devoted directly to the paymentof the expenses involved. Since the statute is clear to this effect, its mandate should be complied with. -However, through error in Lonorable Marvin Hall, page 3 (O-2243) interpreting the statute heretofore, the procedure followed as indicated in your letter has been pursued, without requiring a prior deposit of,money sufficient to defray t’he expenses, and the expenses have been erroneously paid out of th:, appropriation made to your department by me Legislature. This mistake can and should be corrected by depositing to the credit of your appropriation an amount collected from the person or company re- questing the fnvestigation sufficient to reimburse your traveling expense appropriation for the amount erroneously regarded as chargeable thereto. This procedure does not result in a violation of the provisions of the traveling expense rider appended to Senate Bill 427, Acts of the 46th Legislature., It does not result in an expenditure for traveling expenses by your department in excess of the amount of money itemized in the appro- priation bill for that purpose, but merely insures that the full amount of money appropriated by the Legislature for traveling expenses for your department shall be applied to the purposes for which it was intended to be available. Yours very truly, ATTORNEYGENEMLOFTEXAS By /s/ R. W. Fairchild R. W. Fairchild Assistant RWF:GO:hp APPROVED JULY 1, 1940 APPROVED Opinion /s/ Gerald C. Mann Committee ATTORNEY GENERAL OF TEXAS By/s/BWB Chairman