Can TxDOT transfer trust money from a state highway fund subaccount to a regional transportation authority?

TX AG Opinion GA-0687: Can TxDOT move trust toll funds to a regional authority?

Plain-English summary

The executive director of the Texas Department of Transportation asked whether money held in trust in a particular subaccount of the state highway fund could be transferred to a regional transportation authority, a fund outside the state treasury. The context: in November 2007 the North Texas Tollway Authority paid TxDOT about $3.2 billion under a comprehensive development agreement, which TxDOT determined was surplus toll revenue from the State Highway 121 project in Denton and Collin counties. TxDOT deposited it in an SH 121 subaccount of the state highway fund and had agreed with the Regional Transportation Council of the North Central Texas Council of Governments, the metropolitan planning organization for the Dallas-Fort Worth region, to assign that council responsibility for allocating the money, subject to the Texas Transportation Commission's concurrence.

The Attorney General focused on the statutory text. Section 228.012 requires TxDOT to create a separate state highway fund account for comprehensive-development-agreement payments and to hold the money in a subaccount in trust for the benefit of the region, and it may assign the responsibility for allocating the money to a metropolitan planning organization. A brief argued that because the council was assigned to allocate the money, it could also decide when to distribute it. The opinion disagreed, reasoning that "allocate" and "distribute" are not equivalent terms.

The opinion canvassed the dictionaries (which partly equate the two) but found the decisive evidence in the Transportation Code itself. One provision tells the department to "allocate the distribution" of funds, treating the words as distinct. Another, on the county and road district highway fund, has the comptroller "distribute" money that is then "allocated" among the counties. A repealed provision likewise used both words. These usages show the Legislature knows the difference, so by choosing "allocate" in section 228.012, it did not authorize a "distribution." The opinion concluded that section 228.012 does not authorize TxDOT to transfer the trust money in the subaccount to a regional transportation authority.

Currency note

This opinion was issued in 2008. 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 Transportation Code provisions on comprehensive development agreements, the state highway fund, and toll-revenue subaccounts have been amended substantially since 2008. Confirm the current statutes before relying on this analysis.

Who this opinion affected (as of 2008)

TxDOT and the Transportation Commission: The opinion concluded that section 228.012 did not authorize TxDOT to transfer the SH 121 trust funds out of the state highway fund subaccount to a regional transportation authority.

Metropolitan planning organizations: The opinion held that an MPO's assigned authority to "allocate" subaccount money did not include authority to direct a "distribution" of the funds.

Regional transportation authorities and the region: The opinion treated the money as held in trust for the benefit of the region within the state highway fund, not as funds that could be moved outside the treasury under section 228.012.

Common questions

Could TxDOT hand the toll money to a regional authority?
No. The opinion concluded section 228.012 does not authorize transferring the trust money in the subaccount to a regional transportation authority outside the state treasury.

What is the difference between "allocate" and "distribute" here?
The opinion read the Transportation Code as using the words distinctly, so the power to allocate (apportion or designate) does not include the power to distribute (pay out) the funds.

Where was the money supposed to stay?
In a subaccount of the state highway fund, held in trust for the benefit of the region, under sections 228.005 and 228.012.

Background and statutory framework

Section 228.005 requires comprehensive-development-agreement payments to be deposited in the state highway fund, and section 228.012 requires TxDOT to create a separate account and hold the money in a subaccount in trust for the region, with authority to assign allocation responsibility to a metropolitan planning organization (Tex. Transp. Code Ann. §§ 228.005, 228.012(a)-(b) (Vernon Supp. 2008)). The opinion distinguished "allocate" from "distribute," pointing to a provision directing the department to "allocate the distribution" of funds (id. § 228.0055(b) (Vernon Supp. 2008)) and to the county and road district highway fund provision under which the comptroller "distribute[s]" money "allocated among the counties" (id. § 256.002), as well as a repealed provision using both terms (Act of May 19, 1997, 75th Leg., R.S., ch. 588, § 5, 1997 Tex. Gen. Laws 2052, 2053, repealed by Act of June 1, 2003, 78th Leg., R.S., ch. 312, § 79(b), 2003 Tex. Gen. Laws 1310, 1330). A Montana decision recognized a like distinction between "allocation" and "appropriation" (State ex rel. Haynes v. District Court, 78 P.2d 937, 943 (Mont. 1938), cited in Tex. Att'y Gen. Letter Advisory No. 102 (1975)).

Citations

Statutes:

• Tex. Transp. Code Ann. §§ 228.005, 228.012(a)-(b) (Vernon Supp. 2008)
• Tex. Transp. Code Ann. § 228.0055(b) (Vernon Supp. 2008)
• Tex. Transp. Code Ann. § 256.002

Cases and opinions:

• State ex rel. Haynes v. District Court, 78 P.2d 937, 943 (Mont. 1938)
• Tex. Att'y Gen. Letter Advisory No. 102 (1975)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0687
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2008/ga0687.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

December 17, 2008

Mr. Amadeo Saenz, Jr., P.E.
Executive Director
Texas Department of Transportation
125 East Eleventh Street
Austin, Texas 78701-2483

Opinion No. GA-0687

Re: Whether monies held in trust in a certain subaccount of the state highway fund may be transferred to a regional transportation authority (RQ-0721-GA)

Dear Mr. Saenz:

You ask whether monies held in trust in a certain subaccount of the state highway fund may be transferred to a regional transportation authority, i.e., a fund outside the state treasury.[1]

You state that in November 2007, the North Texas Tollway Authority paid the Texas Department of Transportation ("TxDOT") approximately $3.2 billion under a comprehensive development agreement. See Request Letter at 1-2. TxDOT has determined that the payment "is surplus toll revenue" derived from "the State Highway 121 project in Denton and Collin counties." Id. Consistently with Transportation Code sections 228.005 and 228.012, we assume that TxDOT deposited the payment in a subaccount of the state highway fund for the State Highway 121 ("SH 121") project. See TEX. TRANSP. CODE ANN. §§ 228.005, .012 (Vernon Supp. 2008).

You also state that TxDOT "has entered into an agreement with the Regional Transportation Council (RTC) of the North Central Texas Council of Governments," which you indicate is the metropolitan planning organization for the Dallas-Fort Worth region. Request Letter at 2. That agreement "assigns the responsibility for allocating the money in the SH 121 subaccounts to the RTC, subject to the concurrence of the Texas Transportation Commission." Id.

Section 228.012 of the Transportation Code provides in relevant part:

(a) The department shall create a separate account in the state highway fund to hold payments received by the department under a comprehensive development agreement . . . .

(b) The department shall hold money in a subaccount in trust for the benefit of the region in which a project or system is located and may assign the responsibility for allocating money in a subaccount to a metropolitan planning organization in which the region is located. . . . .

TEX. TRANSP. CODE ANN. § 228.012(a)-(b) (Vernon Supp. 2008). These provisions clearly demonstrate that TxDOT is required to hold the funds in question "in a subaccount in trust for the benefit of the region." Id. And as we have noted, section 228.005 mandates the deposit of these funds "in the state highway fund." Id. § 228.005. A brief we have received argues that, because the RTC is assigned the responsibility to allocate the money, it may also determine the time at which that money shall be distributed.[2] But "allocate" and "distribute" are not equivalent terms.

No judicial decision of which we are aware recognizes the distinction between the terms "allocate" and "distribute."[3] One dictionary equates the two terms. See NEW OXFORD AMERICAN DICTIONARY 43 (2001) ("allocate" defined as "distribute . . . for a particular purpose"). Another standard dictionary, while including the meaning of "distribute according to a plan," also defines the term "allocate" to mean "set apart for a special purpose; designate." See AMERICAN HERITAGE DICTIONARY 48 (4th ed. 2000). The latter dictionary declares that the synonyms for "allocate" include the words "appropriate," "designate," and "earmark." Id.

Other portions of the Transportation Code, however, appear to recognize a distinction between the words "allocate" and "distribute." One provision states that "[t]he department shall allocate the distribution of funds to department districts in the region that are located in the boundaries of the metropolitan planning organization." TEX. TRANSP. CODE ANN. § 228.0055(b) (Vernon Supp. 2008) (emphasis added). Another provision of the code, relating to the distribution of the county and road district highway fund, is even more instructive:

(a) The comptroller shall distribute to the counties on or before October 15 of each year the money appropriated from the county and road district highway fund for that fiscal year.

(b) The money appropriated under Subsection (a) shall be allocated among the counties as follows: . . . .

Id. § 256.002 (emphasis added). Finally, a provision of the Transportation Code that was repealed in 2003, stated that "[o]f the money allocated under Section 456.022(1), the commission shall distribute: . . . ." Act of May 19, 1997, 75th Leg., R.S., ch. 588, § 5, 1997 Tex. Gen. Laws 2052, 2053, repealed by Act of June 1, 2003, 78th Leg., R.S., ch. 312, § 79(b), 2003 Tex. Gen. Laws 1310, 1330 (emphasis added). These statutes indicate that the Legislature knows the distinction between the words "allocate" and "distribute," and that, by its use of the term "allocate" in section 228.012 of the Transportation Code, it did not thereby intend to equate the word "allocate" with the word "distribute." Thus, while section 228.012(b) authorizes a metropolitan planning organization to "allocate" money in a subaccount of the state highway fund, that authority does not extend to a "distribution" of the funds.

We conclude that section 228.012 of the Transportation Code does not provide authority for the Texas Department of Transportation to transfer monies held in trust in a particular subaccount of the state highway fund to a regional transportation authority.

[Footnote 2: See Brief from Rider Scott, Strasburger & Price, LLP, on behalf of the North Central Texas Council of Governments, to Honorable Greg Abbott, Attorney General of Texas, at 3-4 (Aug. 8, 2008) (on file with the Opinion Committee).]

[Footnote 3: The highest court of another state has recognized the distinction between the words "allocation" and "appropriation." In State ex rel. Haynes v. District Court, 78 P.2d 937, 943 (Mont. 1938), the court said that the word "allocation" refers to an apportioning of funds, while the word "appropriation" refers to an authorization to spend those funds. That case was specifically cited by this office in Letter Advisory No. 102 (1975).]

SUMMARY

Section 228.012 of the Transportation Code does not provide authority for the Texas Department of Transportation to transfer monies held in trust in a particular subaccount of the state highway fund to a regional transportation authority.

Yours very truly,

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