Final answer:
Dedicated and nondedicated funds in Texas may both be restricted or nonrestricted, contrary to the belief that their status as dedicated directly correlates with their restricted nature. Option D is correct.
Step-by-step explanation:
The question regards the nature of dedicated/nondedicated revenue and restricted/nonrestricted funds in Texas. The correct answer is: Dedicated funds may be restricted or nonrestricted, and nondedicated funds may be restricted or nonrestricted.
This means that a fund's status as dedicated, meaning allocated for a specific purpose, does not automatically determine whether it is also restricted, which refers to its ability to be repurposed for other means.
Dedicated funds are those that are set aside for specific purposes, such as funds collected from a gasoline tax that are purposed for highway maintenance.
However, these funds can be either restricted or nonrestricted based on legislative or administrative decisions. The same applies to nondedicated funds, which are not initially earmarked for a specific use; they can also be restricted or nonrestricted, again based on decisions made by the governing authorities or the source of the funds.