Untitled Texas Attorney General Opinion ( 2004 )

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
August 5,2004
The Honorable Phil Ring Opinion No. GA-0227
Chair, Committee on Regulated Industry
Texas House of Representatives Re: Effect of newly adopted article XVI, section
Post Office Box 2910 66 of the Texas Constitution on certain municipal
Austin, Texas 78768-2910 employees who are required to accept medical
retirement (RQ-0183-GA)
Dear Representative King:
You ask about the effect of article XVI, section 66 of the Texas Constitution “on disability
benefits paid to [municipal] employees forced to retire due to an on-the-job injury.“’ Article XVI,
section 66 provides that particular benefits under certain local public retirement systems may not be
reduced or impaired.
Article XVI, section 67(c) of the Texas Constitution provides, in part, that the “legislature
shall provide by law for . . . the creation by any city . . . of a system of benefits for its officers and
employees.” TEX. CONST. art. XVI, 0 67(c)(l)(A). Section 810.001(a)(l) ofthe Government Code
addresses the establishment of public retirement systems and defines a “political entity’ as a
“municipality . . . that is created pursuant to state law and that is not an agency of the state.” TEX.
GOV’T CODE ANN. 0 ~SlO.OOl(a)(l) (V emon Supp. 2004) (Establishment of Public Retirement
System). A “public retirement system ” is defined as “a continuing, organized program or plan
(including a plan qualified under Section 401(a) of the Internal Revenue Code of 1986) of service
retirement, disability retirement, or death benefits for officers or employees of a political entity,”
with certain exceptions. Id. $ 8 10.001 (a)(2). Many municipalities establish retirement systems
under other statutes.*
‘Letter from Honorable Phil King, State Representative, Chairman, House Committee on Regulated Industry,
to Honorable Greg Abbott, Texas Attorney General (Feb. 8,2004) ( on file with Opinion Committee, also available at
http://www.oag.state.tx.us) [hereinafter Request Letter].
*See TEX. REV. Crv. STAT. ANN. art. 6243a-1 (Vernon Supp. 2004) (City Pensions); id. art. 6243b (Vernon
2003) (Firemen and Policemen Pension Fund in Cities of 500,000 to 600,000); id. art. 6243d:l (Vernon 2003)
(Policemen’s Relief and Retirement Fund); id. art. 6243e (Vernon Supp. 2004) (Texas Local Fire Fighters Retirement
Act); id. art. 6243e. 1 (Vernon 2003) (Firefighters Relief and Retirement Fund in Cities of 600,000 to 700,000); id. art.
6243e.2( 1) (Vernon Supp. 2004) (Firefighters ’ Relief and Retirement Fund in Municipalities of at least 1,600,OOO
Population); id. art. 6243e.3 (Vernon 2003) (Volunteer Fire Fighters ’ Relief and Retirement Fund); id. art. 62438-4
(continued...)
The Honorable Phil King - Page 2 (GA-0227)
It has been suggested to you that newly adopted article XVI, section 66 “prohibits a reduction
ofbenefits” when an employee is forced to retire because of medical reasons. Request Letter, supra
note 1, at 1. You state that this suggestion “was clearly not the intent of the legislation but may be
a consequence.” Id.
Article XVI, section 66 of the Texas Constitution protects certain benefits under certain
public retirement systems and provides, in relevant part, as follows:
(a) This section applies only to a public retirement system that
is not a statewide system and that provides service and disability
retirement benefits and death benefits to public officers and
employees.
(b) [This section does not apply to City of San Antonio].
(c) This section does not apply to benefits that, are:
(1) health benefits;
(2) life insurance benefits; or
(3) disability benefits that a retirement system
determines are no longerpayable under the terms of
the retirement system as those terms existed on the
date the retirement system began paying the disability
benefits.
(d) On or after the effective date of this section, a change in
service or disability retirement benefits or death benefits of a
retirement system may not reduce or otherwise impair benefits
accrued by a person if the person:
(1) could have terminated employment or has
terminated employment before the effective date of
the change; and
(2) would have been eligible for those
benefits, without accumulating additional service
under the retirement system, on any date on or after
*(...continued)
(Vernon Supp. 2004) (Police Officers Pension System in Certain Municipalities); id. art. 6243h (Vernon Supp. 2004)
(Municipal Pension System in Cities of 1,500,OOO or more); id. art. 6243j (Vernon 2003) (Police Officers Pension
System in Cities of 50,000 to 400,000); id. art. 6243n (Vernon Supp. 2004) (Municipal Retirement System in
Municipalities of 460,000 to 500,000).
The Honorable Phil King - Page 3 (GA-0227)
the effective date of the change had the change not
occurred.
(e) Benefits granted to a retiree or other annuitant before the
effective date of this section and in effect on that date may not be
reduced or otherwise impaired.
TEX. CONST. art. XVI, 9 66 (emphasis added).
“When interpreting our state constitution, we rely heavily on its literal text and must give
effect to its plain language. ” Doody v. Ameriquest Mortgage Co., 49 S.W.3d 342,344 (Tex. 2001)
(citing Stringer v. CendantMortgage Corp., 23 S.W.3d 353,355 (Tex. 2000); Republican Party of
Tex. v. Dietz, 940 S.W.2d 86,89 (Tex. 1997)). We strive to give constitutional provisions the effect
their makers and adopters intended. See Stringer, 23 S.W.3d at 355; City of El Paso v. El Paso
Cmty. CoZZ.Dist., 729 S.W.2d 296,298 (Tex. 1986). And we strive to avoid a construction that
renders any provision meaningless or inoperative. See Stringer, 23 S.W.3d at 355; Hanson v.
Jordan, 198 S.W.2d 262,263 (Tex. 1946). “Presuming that the language of the Texas Constitution
..
is carefully selected, ” a court construes “its words as they are generally understood.” SpradZin v.
Jim Walter Homes, Inc., 34 S.W.3d 578,580 (Tex. 2000) (citing City ofBeaumont v. Bouillion, 896
S.W.2d 143,148 (Tex. 1995)).
Your question requires us to construe article XVI, section 66(c)(3), particularly the meaning
of the phrase “terms of the retirement system. ” Under most of the statutes applicable to municipal
retirement systems, a local retirement board has the right to order a medical examination of any
person on disability retirement each year until the member reaches the normal retirement date, and
if a member fails or refuses to submit to an examination by a physician or physicians appointed by
the retirement board, disability benefits shall be discontinued. See TEX. REV. CIV. STAT. ANN. art.
6243g-4, 9 15(e) (Vernon Supp. 2004); id. art. 6243h, 9 13(g)-(h); id. art. 6243n, $ 8(h)-(j).
Disability benefits may also be discontinued when a person receiving disability is found to be
engaged in or is able to engage in substantial gainful employment. See id. art. 62438-4, $ 15(e); id.
art. 6243h, 9 13(g); id. art. 6243n, 5 8(i). These requirements are “terms” referred to in article XVI,
section 66(c)(3).
Article XVI, section 66(c)(3) plainly states that this section does not apply to “disability
benefits that a retirement system determines are no longer payable under the terms of the retirement
system as those terms existed on the date the retirement system began paying the disability benefits.”
TEX. CONST. art. XVI, 9 66(c)(3). Under its analysis of Amendment 15 (H.J.R. No. 54) for the
September 13,2003 election, the Texas Legislative Council accords with this view:
The amendment applies to public retirement systems of
political subdivisions, such as cities and counties, that provide
The Honorable Phil King - Page 4 (GA-0227)
benefits for their employees. Under the amendment, any reduction in
the retirement or death benefits that the retirement systems provide
cannot be applied retroactively to benefits that a person has accrued
or is entitled to receive before the date the reduction takes effect.
Further, it does not apply to disability benefits that a person has
previously received, but may no longer receive because the person no
longer qualifies as disabled under the terms of the retirement system.
TEXAS LEGISLATIVE COUNCIL, ANALYSES OF PROPOSED CONSTITUTIONAL AMENDMENTS,
SEPTEMBER13,2003, ELECTION 99 (July 2003) (emphasis added). See TEX. CONST. art. XVI,
9 W)W(d). W e conclude that the terms of a person’s disability retirement in effect when the
person began receiving disability payments continue even if the application of those terms reduces
or terminates disability benefits.
The Honorable Phil King - Page 5 (GA-0227)
SUMMARY
Article XVI, section 66 of the Texas Constitution, which
provides that particular benefits under certain local public retirement
systems may not be reduced or impaired, does not apply to “disability
benefits that a retirement system determines are no longer payable
under the terms of the retirement system as those terms existed on the
date the retirement systembeganpaying the disability benefits.” TEX.
CONST. art. XVI, 0 66(c)(3). The terms of a person’s disability
retirement plan in effect when the person began receiving disability
payments continue even when the application of those terms reduces
or terminates disability benefits.
Yours very truly,
BARRY R. MCBEE
First Assistant Attorney General
DON R. WILLETT
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
Rick Gilpin
Assistant Attorney General, Opinion Committee