Untitled Texas Attorney General Opinion ( 1953 )

Hon. Horace B. Houston, Jr ., Chairman
State Affairs Committee
House of Representatives
53rd Legislature
Austin, Texas
Opinion No. S- 19
Re: Constitutionality of, proposed
amendment to House Bill 346
authorizing Federal Social
Security coverage for county
or municipal employees en-
Dear Sir: gaged in proprietary functions.
We quote the following excerpt from your letter request-
ing the opinion of this office on the above captioned subject,
“The State Affairs Committee in the House of Repre-
sentatives is considering House Bill 346, which proposes
an amendment to House Bill 603, Chapter 500, Acts 52nd
Legislature, Regular Session, 1951.
“House Bill 603 excludes services performed in con-
nection with a proprietary function of the county ok munici-
pality. The proposed amendment, House Bill 346, likewise
excludes proprietary services. It has been proposed, how-
ever, that services performed in connection with proprie-
tary functions of the counties and municipalities be included
in the OASI coverage, and it has been suggested to the Com-
mittee that the proposed House Bill 346 be amended SO as to
take in such proprietary functions.
“Our question is: If House Bill 346 were amended and
enacted so as not to exclude services performed in connec-
tion with proprietary functions of the political subdivisions,
would the Law be constitutional?”
Attorney General’s Opinion V- 1198 (,195 1)) addressed
to Governor Allan Shivers, held that the provisions of House Bill
603 were constitutianal, We quote the following excerpt from pages
7 and 8 of that opinion,
Hon. Horace B. Houston, Jr., page 2 (S-19)
“Despite the fact that House Bill 603 contemplates
that participating counties and municipalities--not the
State--shall shoulder the financial burdens incident to
obtaining coverage for their officers and employees, it
is equally clear that the Federal Act requires the State
to be the responsible party to any agreement with the
Administrator for coverage for such officers and em-
ployees. Under the Federal Act the State is the only
party authorized to enter into agreements with the Ad-
ministrator, Sec. 218(a) (l), and to modify or terminate
such agreements, Sec. 218(c) (4) and 218(g). The State
must make the payments and reports required by the Act,
Sec. 218(e); and, in the event the State does not make the
payments provided for under the agreement at the time
said payments are due, six per cent interest will be add-
ed thereto until paid; and the amount due, plus such in-
terest, may, in the discretion of the Administrator, be
deducted from payments to the State under any other
provision of the Social Security Act, and shall be deem-
ed to have been paid to the State under such other pro-
vision. Sec. 218(j). [The sections referred to may be
found in 42 U.S.C.A., Sec. 418.1
“It must be conclusively presumed, of course,
that the Legislature was familiar with the provisions
of the Federal Act and that therefore it intended to au-
thorize the State Agency to enter into such agreements
with the l$ederal Security Administrator as are contem-
plated by the Federal Act.”
The opinion held that the Legislature could validly author-
ize a State Agency to enter into such agreements as were authorized
by Hous Bill 603 without violating the provisions of Section 50 of Ar-
ticle III e of the Texas Constitution since a limitation on the power of
the Legislature to lend or give the State’s credit does not apply to a
‘Section 50 of Article III of the Constitution of the State of
Texas reads as follows:
“The Legislature shall have no power to give or to
lend, or to authorize the giving or lending, of the credit
of the State in aid of, or to any person, association or cor-
poration, whether municipal or other, or to pledge the cre-
dit of the State in any manner whatsoever, for the payment
of the liabilities, present or prospective, of any individual,
association of individuals, municipal or other corporation
whatsoever. )(
! .
Hon. Horace B. Houston, Jr., page 3 (S-19) .
loan or gift of the State’s credit for State purposes. 59 C.J. 208, States,
Sec. 346; City of Aransas Pass V. Kezg, 112 Tex. 339, 247 S.W. 818,
820 (19231. The oninion Pointed out that counties are agencies of the
%te‘thr&gh whit-h the &ate discharges the duties of oiga&ed govern-
ment and that to the extent the State aids its counties in obtaining Cover-
age agreements under the Federal Act for their officers and employees
it is discharging a State obligation. Hence no question of lending the
State’s credit arises. Municipalities “have a two-fold character, one
governmental and the other private, and, insofar as their.;character is
governmental, they are agencies of the State and subject to state. con-
trol.” Yett v. Cook, 115 Tex. 205, 281 S.W. 837 (1926). The opinion
specifically notes that only such employees of municipalities as ‘are en-
gaged in governmental functions are eligible for coverage and concludes
that the State could as validly assume an obligation to aid municipalities
in the performance of their governmental functions as to aid counties in
the discharge of county functions;
It is apparent from the foregoing summary that House Bill
603 as originally enacted did not violate the provisions of Section 50 df
Article 11~1because- employees engaged in performing services in
connection with governmental functions, of the State were eligible for
coverage. If the Legislature should atteinpt .to authorize the’State to
lend or pledge its credit in behalf of political subdivisions seeking COV-
erage for employees engaged in performing services in connection with
proprietary functions of said subdivisions, we are of the opinion that
such an enactment would be unconstitutioxial.
SUMMARY
The proposed amendment to House Bill 346 which w&ld
authorize the State to enter into agreements with the Federal Govern-
ment.,for the purpose of extending Federal old-age and survivors insur-
ante coverage to those employees of political subdivi$ions of the State
who are engaged in performing services in connection with proprietary
functions of said subdivisions is unconstitutional. Tex. Const. Art. III,
Sec. 50.
APPROVED: Yours very truly,
W. Vi Geppert JOHN BEN SHEPPERD
Taxation Division Attorney General
Willis Gresham
Reviewer B#&f;?!~‘$$?, b
eel
Robert s. Trotti Assistant . ‘I
First Assistant
John Ben Shepperd
Attorney General