You have requested that I determine whether appropriations for the Department of Defense should be made to the "military fund" created by O.C.G.A. § 38-2-170 and whether uncommitted appropriations should continue there at the end of the fiscal year without lapsing into the treasury. You have also asked whether "non-appropriated funds of the Department of Defense, (i.e., donations and rental fees)" must lapse into the treasury at the end of the fiscal year.

The present Code provides for the creation of the military fund as follows:

The General Assembly shall appropriate from time to time a sufficient sum of money . . . for the purpose of paying the expenses incident to carrying out [the Code chapter on "Military Affairs"]. All money so appropriated . . . shall continue and be kept in the state treasury as a separate fund to be known as the "military fund." None of the moneys placed in the military fund shall be converted into the general fund of the state treasury, and no part of the military fund shall be used for any purpose except as shall be authorized by law.

O.C.G.A. § 38-2-170.

The military fund was first authorized by Georgia Laws 1916, p. 158. Since that time, changes in the Georgia Constitution have imposed controls which prevent "continuing appropriations." In pertinent part, appropriations must lapse at the end of the fiscal year unless they are contractually committed; with the exception of motor fuel funds and other constitutionally excepted funds, appropriations may not "earmark" to any special purpose the proceeds of any particular tax or fund, and all "revenue collected from taxes, fees, and assessments for state purposes, as authorized by revenue measures enacted by the General Assembly, shall be paid into the general fund." Ga. Const. 1983, Art. VII, Sec. III, Para. II(a); Art. III, Sec. IX, Para. IV(c); and Art. III, Sec. IX, Para. VI(a); Gregory v. Hamilton, 215 Ga. 735 (1960).

These provisions of the Constitution do not prevent the designation of a "military fund" in the treasury as a bookkeeping means of identifying appropriations for military affairs. [The General Assembly may provide by general law for the fiscal management of the state. Ga. Const. 1983, Art. III, Sec. IX, Para. II(c).] However, the anti-earmarking provisions do prevent the creation of "continuing appropriations" as contemplated by Code Section 38-2-170. In this latter sense, in the words of your letter, this Code Section has become "obsolete" and may not prevent the lapse of state funds appropriated to the Department of Defense.

You also have asked whether "non-appropriated" donations and armory rentals lapse at the end of the fiscal year. Such funds are public funds and upon receipt must be processed and accounted for in the manner required of public funds generally. 1993 Op. Att'y Gen. 93-4. However, as a matter of prior determination, neither gifts in general nor armory rentals, in the case of the Department of Defense, are "revenue," which must be collected and paid into the treasury upon receipt. 1993 Op. Att'y Gen. 93-4 (armory rentals); 1977 Op. Att'y Gen. 77-77 (general discussion of treasury requirement inclusive of gifts).

Your present question assumes that not all of the subject receipts are spent or committed by written contract within a fiscal year. Further, your question is directed to the procedure at the end of each fiscal year whereby the State Auditor identifies and lapses remaining agency funds which have not been so spent or committed. It is my understanding from your request, and from conversations my staff has had with yours and the Office of Planning and Budget, that the general appropriations act does not "appropriate" any of the receipts which are the subject of your request. Whether the appropriations act could do this and what the effect would be on your question if it purported to do that I need not answer to respond to your immediate question. It is sufficient for present purposes to say that the Constitution and Budget Act only require the lapse of "appropriations." Ga. Const. 1983, Art. III, Sec. IX, Para. IV(c); O.C.G.A. § 45-12-89.

My conclusion does not prevent the deposit of uncommitted armory revenues into the treasury or in principle the deposit of gifts into the treasury, provided the deposit is consistent with the terms of the gift. [The Governor may "accept donations . . . for military purposes . . . under such conditions as the donor may designate." O.C.G.A. § 38-2-174.] In general, an agency may always deposit unneeded funds into the treasury. Compare 1987 Op. Att'y Gen. U87-19. For this reason any funds of this nature previously lapsed into the treasury must remain there.

Accordingly, it is my official opinion that appropriations of state funds to the Department of Defense which are not spent or contractually committed in writing lapse at the end of the fiscal year notwithstanding the provision for a continuing "military fund" in O.C.G.A. § 38-2-170. It is also my official opinion that non-appropriated donations to the Department of Defense and armory rentals do not lapse.

Prepared by:

JOHN B. BALLARD, JR.
Senior Assistant Attorney General