AGO 2003-05.

• Case Date: June 17, 2003
• Court: Indiana

Indiana Attorney General Opinions 2003. AGO 2003-05. June 17, 2003OPINION NO. 2003-5The Honorable Tim Berry Treasurer of State Indianapolis, Indiana 46204 Re: Withdrawal from Principal of Common School FundDear Treasurer Berry: This letter responds to your request for an advisory opinion on the duties and responsibilities of your office as they relate to the retroactive application of House Enrolled Act 1001, (Public Law 224-2003). In your letter dated May 5, 2003 you stated:

Section 115 [of the Act] directs me to transfer $25 million out of the Common School Fund, back to the Abandoned Property Fund, and then into the General Fund, even though Article 8 of the Constitution appears to prohibit any transfers out of the Common School Fund for any purpose. Although authorized by HB 1001 to make these transfers, I am reluctant to do so in light of the directives contained in the Constitution without your assurance that the transfers would be lawful.

It is our opinion that to the extent that Section 115(b) of House Enrolled Act 1001, (Public Law 224-2003) requires the Treasurer to diminish the principal of the Common School Fund, it violates Article 8 of the Indiana Constitution. Factual Background According to your letter, on January 30, 2003, the State's Abandoned Property Fund had a balance in excess of $500,000.00. On that date, the Office of the Treasurer transferred twenty-five million dollars ($25,000,000) from the Abandoned Property Fund to the Common School Fund. This transfer was authorized by Indiana Code 32-34-1-34, which provides, in pertinent part:

(b) If the balance of the principal of the abandoned property fund established by [IC 32-34-1-33] exceeds five hundred thousand dollars ($500,000), the treasurer of state may, and at least once each fiscal year shall, transfer to the common school fund of the state the balance of the principal of the abandoned property fund that exceeds five hundred thousand dollars ($500,000).

The January transfer was the first and only transfer during the current fiscal year. Subsequently the General Assembly passed, and the Governor signed, the budget bill for the biennium 2003-2005, House Enrolled Act 1001 (Public Law 224-2003). Section 115 provides, in its entirety:

(a) Notwithstanding IC 32-34-1-34, the treasurer of state shall transfer on:

(1) June 30, 2003;

(2) June 30, 2004; and (3) June 30, 2005; any balance (excluding amounts needed to fund appropriations to the attorney general for personal services and other operating expenses for the unclaimed property program) in the abandoned property fund that exceeds five hundred thousand dollars ($500,000) to the state general fund. (b) After June 30, 2002, and before July 1, 2005, the treasurer of state may not transfer any amount in the abandoned property fund to the common school fund. If any money was transferred before June 30, 2003, in a manner that is inconsistent with this subsection, the treasurer of state shall take the necessary action to restore the money to the abandoned property fund and transfer...