What can a Texas state agency do if a court ruling forces it to spend more than the Legislature budgeted?

Plain-English summary

The Chair of the Texas House Committee on Pensions asked the AG a procedural question: if a court recognizes a new constitutional right and complying with the ruling forces a state agency to spend more than the Legislature appropriated, what is the agency supposed to do? The example in the request was extending state employee benefits to same-sex spouses after the U.S. Supreme Court's decision in Obergefell v. Hodges.

The AG did not weigh in on marriage law itself. The opinion also noted that the retirement and university systems that had already extended benefits told the AG they did not expect to need money beyond their current appropriations. So the opinion answered only the budgeting mechanics for a hypothetical shortfall.

The AG pointed to two sets of tools in the Government Code. First, chapter 401, subchapter D, lets an executive-branch agency appeal to the Governor for an emergency appropriation, for a purpose that already had a specific appropriation; if the Governor certifies an emergency to the Comptroller and no other money is available, the Governor may spend the emergency appropriation. Second, chapter 317 lets the Governor and the Legislative Budget Board, acting together when the Legislature is not in session, approve a transfer of appropriations to an agency that asks for one.

The AG stopped there. Whether either tool is actually available to a given agency, the AG said, depends on that agency's own fiscal circumstances and factual determinations that are not within the purview of an attorney general opinion. The opinion is a list of statutory options, not a ruling that any particular agency must or may use any particular one.

Currency note

This opinion was issued in 2016. 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 Government Code appropriations and budget-execution provisions described here may have been amended since 2016, and the same-sex marriage legal landscape referenced in the request reflects the law as it stood in 2016, so confirm current law before relying on these specifics.

What the opinion meant for those who asked

The House Committee on Pensions and the Legislature (as the opinion described it): The opinion described two statutory routes for an agency facing an unexpected funding shortfall, a Governor's emergency appropriation under chapter 401 and a Governor and Legislative Budget Board transfer of appropriations under chapter 317, and described the choice among them as a fact-specific question outside an attorney general opinion.

State agencies facing a funding shortfall (as the opinion described it): The opinion described an agency as able to consider these fiscal-emergency mechanisms, while noting that the retirement and university systems involved did not anticipate needing funds beyond those appropriated for the current biennium.

Common questions

Did this opinion decide whether Texas must give benefits to same-sex spouses?
No. The AG addressed only the funding procedure for an agency that runs short of appropriated money and did not opine on the marriage question that framed the request.

What can a Texas state agency do if a court ruling makes it spend more than its budget?
The AG concluded the agency may consider the fiscal-emergency tools in the Government Code, including a Governor's emergency appropriation under chapter 401 and a Governor and Legislative Budget Board transfer under chapter 317.

How does the Governor's emergency appropriation work?
The AG described chapter 401, subchapter D, as allowing an executive-branch agency to appeal to the Governor for an emergency appropriation for a purpose with a prior specific appropriation; if the Governor certifies an emergency to the Comptroller and no other money is available, the Governor may spend the emergency appropriation.

Can appropriations be moved between agencies when the Legislature is not meeting?
The AG noted that chapter 317 lets the Governor and the Legislative Budget Board, acting jointly when the Legislature is not in session, adopt an order transferring appropriations to an agency that proposes one.

Did the AG say which procedure an agency should use?
No. The AG said whether and to what extent any procedure is available depends on the agency's individual fiscal circumstances and factual determinations not within the purview of an attorney general opinion.

Background and statutory framework

The opinion arose from a request about the procedure a state agency should follow when complying with a court ruling requires more state money than was appropriated, using post-Obergefell same-sex spouse benefits as the example (Obergefell v. Hodges, 135 S. Ct. 2584 (2015)). A footnote noted a permanent injunction against enforcing the Texas constitutional and statutory definition of marriage (Deleon v. Perry, No. 5:13-cv-00982-OLG (W.D. Tex. July 7, 2015)). The AG did not address the marriage question and confined the opinion to appropriations procedure.

The AG identified two mechanisms. Chapter 401, subchapter D, of the Government Code allows an executive-branch agency to seek an emergency appropriation from the Governor for a purpose with a prior specific appropriation; if the Governor certifies an emergency to the Comptroller and no other money is available, the Governor may spend emergency appropriations (Tex. Gov't Code §§ 401.061, 401.062, 401.063, 401.065). Chapter 317 authorizes the Governor and the Legislative Budget Board, acting jointly when the Legislature is not in session, to change appropriations, including by transferring appropriations to an agency that proposes the change (Tex. Gov't Code §§ 317.003, 317.005). The AG concluded that whether and to what extent any of these procedures is available to a particular agency depends on the agency's individual fiscal circumstances and factual determinations outside the purview of an attorney general opinion.

Citations

Statutory provisions:

• Tex. Gov't Code § 401.061 (emergency appropriation by the Governor for purposes with prior specific appropriations)
• Tex. Gov't Code § 401.062 (Governor's certification of an emergency to the Comptroller)
• Tex. Gov't Code § 401.063 (Comptroller's determination whether other money is available)
• Tex. Gov't Code § 401.065 (authority to spend emergency appropriations)
• Tex. Gov't Code § 317.003 (proposal for transfer of appropriations to an agency)
• Tex. Gov't Code § 317.005 (order changing an appropriation if Governor and Board agree)

Cases:

• Obergefell v. Hodges, 135 S. Ct. 2584 (2015)
• Deleon v. Perry, No. 5:13-cv-00982-OLG (W.D. Tex. July 7, 2015)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0058
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2016/kp0058.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

January 25, 2016

The Honorable Dan Flynn Opinion No. KP-0058
Chair, Committee on Pensions
Texas House of Representatives Re: Proper procedure for a state agency
Post Office Box 2910 when a court recognizes a new constitutional
Austin, Texas 78768-2910 right and compliance with the ruling requires
additional state funds (RQ-0039-KP)

Dear Representative Flynn:

You ask for an opinion regarding the status of "current law pertaining to marriage in Texas," focusing specifically on "what procedure a state agency should follow if the U.S. or Texas Supreme Court recognizes a new constitutional right and compliance with that ruling requires the expenditure of additional state funds." [1] The example you provided was the granting of state benefits to same-sex spouses after the U.S. Supreme Court's decision in Obergefell v. Hodges, 135 S. Ct. 2584 (2015); Request Letter at 7-8; Supp. Request Letter at 1.

You note that the Teacher Retirement System, the University of Texas System, the Texas A&M University System, and the Employees Retirement System have implemented policies to extend state benefits to same-sex couples. [2] Request Letter at 7. In briefing submitted to this office, all of these entities have indicated that they do not anticipate needing state funds in excess of those appropriated for the current biennium. [3] If compliance with Obergefell requires additional state funds, however, you ask what procedure should be followed. Supp. Request Letter at 1.

When a state agency faces a shortage of appropriated funds due to an unexpected occurrence, the agency may consider which statutory procedures are available to address fiscal emergencies. For example, as you note in your request, a state agency in the executive branch could appeal to the Governor for use of an emergency appropriation pursuant to chapter 401, subchapter D, of the Government Code to obtain additional funding for "purposes for which specific other appropriations previously have been made." TEX. GOV'T CODE § 401.061(4); see id. §§ 401.061-.065. If the Governor decided that an emergency existed and certified such emergency to the Comptroller, the Comptroller could then determine whether money other than the Governor's emergency appropriations was available. Id. §§ 401.062(a)-(b), .063(a). Thus, if no other money was available to enable the agency to fulfill its obligations, the Governor would then be authorized to spend emergency appropriations made pursuant to section 401.061. Id. § 401.065. Alternatively, chapter 317 of the Government Code authorizes the Governor and the Legislative Budget Board ("Board"), acting jointly, to make certain changes to appropriations when the Legislature is not in session. Id. §§ 317.001-.011. A state agency could appeal to either entity to make a proposal "for the transfer of appropriations" to the agency. Id. § 317.003(b). If the Governor and Board agree, the proposing entity may adopt an order changing the appropriation in the manner proposed. Id. § 317.005. Whether and to what extent a statutory procedure is available to a state agency facing a shortage of funds will depend on the individual fiscal circumstances of the agency and factual determinations that are not within the purview of an attorney general opinion.

SUMMARY

When a state agency faces a shortage of appropriated funds due to an unexpected occurrence, the agency may consider statutory mechanisms that may be available to address fiscal emergencies, including those found in chapters 317 and 401 of the Government Code.

Very truly yours,

KEN PAXTON
Attorney General of Texas

CHARLES E. ROY
First Assistant Attorney General

BRANTLEY STARR
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

[1] Letter from Honorable Dan Flynn, Chair, House Comm. on Pensions, to Honorable Ken Paxton, Tex. Att'y Gen. at 1 (July 16, 2015) ("Request Letter"); Letter from Honorable Dan Flynn, Chairman, House Comm. on Pensions, to Honorable Ken Paxton, Tex. Att'y Gen. at 1 (July 24, 2015) ("Supp. Request Letter"), https://www.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs.

[2] Multiple statutes require state agencies to extend rights and benefits to eligible individuals' spouses. A permanent injunction exists that prohibits enforcement of the Texas constitutional provision and statutes defining marriage as the union of one man and one woman. Deleon v. Perry, No. 5:13-cv-00982-OLG (W.D. Tex. July 7, 2015) (Final Judgment).

[3] See Letter from Paula A. Jones, Gen. Counsel, Emps. Ret. Sys. of Tex. at 11 (Aug. 26, 2015) (stating that although Obergefell will increase the number of participants receiving insurance coverage, "the increase is not currently expected to increase enrollment by a large enough number of people to require state funds in excess of those currently available to ERS to provide such dependent insurance coverage"); Letter from Carolina de Onis, Gen. Counsel, & Wm. Clarke Howard, Ass't Gen. Counsel, Teacher Ret. Sys. of Tex. at 4 (Aug. 28, 2015) (stating that "preliminary analysis conducted by actuaries to the Pension and TRS-Care [indicates] the recognition of same-sex spouses will have no measurable impact on the funded status or funding requirements of either the Pension or TRS-Care"); Letter from Daniel H. Sharphom, Vice Chancellor & Gen. Counsel, Univ. of Tex. Sys. at 7 (Aug. 28, 2015) ("UT System does not require additional state funds for these benefits at this time."); Letter from Ray Bonilla, Gen. Counsel, Tex. A&M Univ. Sys. at 2 (Aug. 28, 2015) ("the A&M System has not or will not expend funds from the state treasury beyond those appropriated by the Legislature") (all letters on file with the Op. Comm.).