Opinion No.

The Honorable Jimmy Jeffress State Representative P.O. Box 1695 Crossett, AR 71635

Dear Representative Jeffress:

You have requested an Attorney General opinion in response to the following question:

If a school teacher's salary is reduced due to his service as a member of the House of Representatives, may a school district pay the necessary employer contribution to the Arkansas Teacher Retirement System?

It is my opinion that state law requires that the employers contribution in such situations are to be made from the Public School Fund.

This issue is currently governed by A.C.A. § 24-7-605,¹ which states in pertinent part:

(1)(A)(i) Any member of the Senate or House of Representatives of the General Assembly who is a member of the Arkansas Teacher Retirement System shall be eligible, upon application, to receive credited service in the system for his full contract salary in the event that a cut in pay is required by the school district during his attendance at regular or extraordinary sessions of the General Assembly or during his attendance at meetings of regular or special committees of the General Assembly during the interim.

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(B) The member shall receive credited service upon payment by him of the necessary member contribution and upon appropriation from the Public School Fund of the necessary employer contribution for the amount of the salary reduction during periods of attending regular or extraordinary sessions of the General

Assembly or sessions of legislative committees.

A.C.A. § 24-7-605.

The language of this statute is couched in mandatory terms. That is, the statute uses the word "shall." The Arkansas Supreme Court has held that the legislature's use of the term "shall," as opposed to "may," indicates a legislative intent that the statute be mandatory, rather than discretionary. See, e.g., Campbell v. State, 311 Ark. 641, 846 S.W.2d 639 (1993); Chrisco v. Sun Industries, 304 Ark. 227, 800 S.W.2d 717 (1990). The term "shall," as used in A.C.A. § 24-7-605 appears to apply both to the phrase "upon payment by him . . ." and to the phrase "upon appropriation from the Public School Fund." Thus, appropriation from the Public School Fund seems to be mandatory in order for the member to receive credited service, under the language of the statute.

I therefore conclude that in a situation where a school teacher's salary is reduced due to his service as a member of the House of Representatives, the employer contribution to the Arkansas Teacher Retirement System must be made from the Public School Fund.

Assistant Attorney General Suzanne Antley prepared the foregoing opinion, which I hereby approve.

Sincerely,

MARK PRYOR Attorney General

MP:SBA/cyh

¹ As you note in your request, Act 906 of 1999 (which has not yet gone into effect) is also relevant to this issue. Act 906 of 1999 does not mention the source from which the employer's contribution must be paid. Rather, the Act simply states that the employer's contribution (as well as the employee's) must be received by the system. Act 906 of 1999 states in pertinent part:

If a person employed in a public school district of this state has received an actual salary reduced below the contract salary due to military service or other government service, the Arkansas Teacher Retirement System shall compute retirement benefits based upon the contract salary and not the reduced salary resulting from the military service or other government service, provided, the system receives the employee and employer contributions in effect at the time service is rendered, plus interest, on the difference between the actual salary and the contract salary.

Acts 1999, No. 906, § 1. As previously noted, Act 906 has not yet gone into effect.