Could the Texas State Treasurer use wire transfers to move money between state depository banks and collect money into the treasury?
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This page answers the general question as of 1983. Ezel answers yours: what it means for your facts, under current Texas law, with citations.
Texas AG Opinion JM-66: State Treasurer's Use of Wire Transfers
Plain-English summary
JM-66 concluded that the Texas State Treasurer could use a wire-transfer system both to move treasury funds between state depository banks and to collect funds into 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."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf"We answer your inquiry in the affirmative."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf
Moving money from one state depository to another did not draw it from the treasury because the money remained under the treasurer's custody and control. A wire system could therefore replace the historically used draft system as a management tool.
"[A] transfer of treasury funds from one depository bank to another does not cause the funds to be 'drawn from the Treasury.'"
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf"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."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf
For collections, the statute said remittances "may" use specified cash, money-order, and bank-draft forms. JM-66 treated those forms as minimum restrictions rather than an exhaustive list barring wires.
"The statute, by using the word 'may' instead of 'shall' or 'must,' does not limit the treasurer to the stated methods of collection."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf"[T]hese statutory restrictions in the forms of remittance are minimum restrictions imposed on the treasurer which do not prohibit the wire transfer system of collection."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf
Currency note
This opinion was issued in 1983. 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.
Common questions
Did moving funds between depository banks remove them from the treasury?
No. The funds stayed under legislative custody and the treasurer's control and remained directly subject to the treasurer's orders and drafts.
"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."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf"In other words, they are not out of the official custody and control of the treasurer, and cannot in any proper sense be said to have been drawn from the treasury."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf
Could wires replace treasury drafts for internal transfers?
Yes. JM-66 expressly approved the wire system as an alternative management method.
"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."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf
What remittance methods did the former statute identify?
It listed cash by registered and insured letter, post-office or express money orders, and bank drafts on banks in specified Texas cities.
"All remittances to the Treasurer made by the State Depositories, or any person or persons may 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."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf
Why was that list not exclusive?
JM-66 relied on the statute's use of "may" and observed that State v. Hatcher did not find that the listed methods exhausted all possible forms or prohibited others.
"The statute, by using the word 'may' instead of 'shall' or 'must,' does not limit the treasurer to the stated methods of collection."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf"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."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf
Did JM-66 approve every individual wire transaction?
No. The request was general, and the opinion declined to address the validity of particular transactions.
"We note that your question is presented in general terms, and we offer no opinion as to the validity of particular transactions."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf
Background and statutory framework
The treasurer wanted to remove funds from one state depository bank and remit them to another.
"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."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf
JM-66 distinguished statutes governing withdrawals from the treasury from the absence of provisions directly addressing movement within the treasury.
"[A]lthough 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."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf
The constitution prohibited treasury funds from leaving the treasury, while the funds remained available for legislative appropriation and expenditure.
"These funds are invested by the treasurer and are available for appropriation and expenditure by the legislature."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf
Holding
"The Texas State Treasurer may use a wire transfer system to transfer and collect funds within the treasury."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf
Citations and references
Constitutional and statutory provisions discussed by JM-66:
- "article VIII, section 6 of the Texas Constitution" Official PDF
- "article 4371, V.T.C.S." Official PDF
- "article 2525, V.T.C.S." Official PDF
- "article 2535, V.T.C.S." Official PDF
Cases cited by JM-66:
- "Lawson v. Baker, 220 S.W. 260, 271 (Tex. Civ. App. - Austin 1920, writ ref'd)" Official PDF
- "State v. Hatcher, 52 S.W.2d 794, 797 (Tex. Civ. App. - Austin 1932), rev'd on other grounds, 81 S.W.2d 499 (Tex. 1935)" Official PDF
Source
- Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0066
- Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0066.pdf
Original opinion text
Best-effort transcription from a scanned PDF. Minor errors may remain. The linked PDF is authoritative.
The Attorney General of Texas
JIM MATTOX
Attorney General
August 17, 1983
Honorable Ann Richards
Texas State Treasurer
Treasury Department
P. O. Box 12608, Capitol Station
Austin, Texas 78711
Opinion No. JM-66
Re: Whether the State Treasurer may use a wire transfer system to transfer and collect funds within the treasury
Dear Ms. Richards:
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 invested 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.); 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 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 may 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. 2d Statutes §16 and cited authorities. In State v. Hatcher, 52 S.W.2d 794, 797 (Tex. Civ. App. - Austin 1932), rev'd on other grounds, 81 S.W.2d 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
[T]hese 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 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 and collect funds within the treasury.
Very truly yours,
JIM MATTOX
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
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