Untitled Texas Attorney General Opinion

The Attorney General of Texas
Feb:mary18. 1986
JIM MATTOX
Attorney General
Suprms Court Buildin Mr. ClaytonT. Garrisou OpinionNo. 34-427
P. 0. BOX 12549 ExecutiveDirector
Austin, TX. 78711. 2549 EmployeesRetirementSystem Rc: Whether the par diem limita-
512/4752501
of Texas tions of section 4 of article
Telex 910/874-1357
Telecopier 51214750268
P. 0. Box 13207 of the General AppropriationsAct
Austin,Texas 787!1 apply to members of the Board
Trusteesof the EmployeesRetire-
144 Jackson. SUitS 7M) ment Systsm
Daiim.. TX. 752924509
214i742.Ba4
Dear Mr. Garrison:
4B24 Albda Ave., Suite 180 You ask vhethe:r the limitationscontainedin section4 of article
El Paso, TX. 799052793 V of the current GtcneralAppropriationsAct, Acts 1985, 69th Leg.,
91515333494 ch. 980, at 7761, apply to members of the Board of Trustees of the
Employees.,Retirement:Spstsm of Texas.
11 Texas. Sulls 799
..
..suston. TX. 77002-3111 In general. mambers of-the state boards and coamissious ire
7131223-5886 entitled to per dim pursuant to article6813f. V.T.C.S.,in coajunc-
tion,with the General AppropriationsAct. See Attorney General
Opinions JM-382 (1985); JM-152 (1984);Mu-388 (1981). Section 4
898 Broadway. Suite 312
Lubbock. TX. 794013479
articleV of the currentact provides:
SW74?-522.9
PER DIW OF BOARD OR COMMISSIONMWBRRS. As
authorirmlby Section 2 of Article 6813f. Texas
4309 N. Tenth, Suite B
McAllen. TX. 78501-1085
Revised Xvi1 StatutesAnnotated.the per diem of
5121082.4547 state board and com&sslon members shall consist
of (1) tlm amountsof compensatoryper diem at $30
per day; (2) actual expensesfor meals and lodging
200Maill Plaza.suite 400 a s luth+zed by this Act not to exceed the
San Antonio, l-X. 78205-2797
512/2254191
maximum amouat allowed as a deduction for state
legislatwts while avay from home during a
legislative session as established pursuant to
the Intemal Reveuue Code 26 U.S.C. Section
162(l)(l)(B)(ii); and (3) trausportatiou.In the
event the maximum amount allowed as a deduction
for staee legislatorspursuant to the Interual
Revenue Code as provided above is raised to au
emount above $100, the maximum -ut of the meals
sad lod$;lng portion of the per diem paid to board
and cormpilsslonmembers under this section shall
not exceed $100. (Emphasisadded).
p. 1957
. I
Mr. ClaytonT. Garrison- I'age2 (JM-427)
The first paragraph01'articleV providesthat
[tlhe provisions:setforth in this and all other
Articlesof this A.ctare limitatiousou the appro-
priationsmade irtthis Act. It is the purpose of
the Legislature :ia euacting this bill only to
appropriatefundo and to restrictand limit by its
provisionsthe amount and conditionsunder which
the appropriaticnscan be expended. (Emphasis
added).
This provisionreflects tk,econstitutionalprinciple that appropria-
tion bills shoulddeal only with appropriations of funds; a rider to a
general appropriationsbill caunot amend, modify, or repeal general
lav. See Tex. Coast. art. 1.11,635; Moore v. Sheppard,192 S.W.2d 550
(Tsx.1946); Coates v. W:``I. 613 S.W.2d 572 (Tex. Civ. App. -
Austin 1981, 110Vrit).
In light of these prov~isious
, and assumingwithout decidingthat
the board is a "stateboard"within article6813f and articleV of the
AppropriationsAct, you sugtgestthat section4 of article V does not
apply to the board membew because the funds from which the board
memhers' expenses are psid are not properly deamed "appropriated"
funds Within the meaningojiarticleV. We .agreewith your coaclusioa.
It has been suggestedthat, regardlessof whether the article V
limit applies directly tc these funds. the measure establishedin
articleV applies to the funds. Section25.208 of Title 1lOB provides
in subsection(a), as follows:
The board oji trustees shall compensate all
persons whom it maploys and shall pay all expenses
necessaryto operate the retirementsystemat rates
and in amountsapprovedby the board. Those rates
and amouutsmay sot exceed those paid for the same
or similarserrria-!
for the state. (Emphasisadded).
This provision appeara;to apply.to "all expenses necessary to
operate the retirement system." Expenses necessary to operate the
retiremeutsystem arguablyriaclude per diem for board members. Thus,
this section appears to limit the board to the article V limit
applicableto other state b'oardmembers. Section 25.208, houwer, IS
in SubchapterC of Chapter 25 of Title 1lOB. This subchapter,by its
title, deals with "Officer!%
and Employeesof [the]Board of Trustees."
In contrast,SubchapterA of chapter25 deals with the "Board of
Trustees." Section 25.006 of Subchapter A authorizes certain
trustaes, subject to appwval by tha whole Board of Trustees, to
receive compensationand all expensesnecessaryto the performanceof
their officialduties:
P. 1958
Mr. ClaytonT. Gerrisoa- P,kge3 (a-427)
(a) Ttusteeswho are coatributiagmembers of
the retirameat s:rstemserve without compensation
but are entitledto reimbursementfor all aeces-
sery expensesthM they incur in the performeace
of officlalboard (duties.
(b) Subject t:athe approval of the board of
trustees, truste!sswho are not contributing
members of the retirementsystemmey receive:
(1) compenaatioa;
and
(2) all nc:cessaryexpenses that they incur
in the perforsanceof officialboard duties.
Thus, if both section 25.006 and section 25.208 were to apply to
trustees, they would be in conflict. We do not believe that the
legislatureintendedthis result. Moreover, when the legislaturehas
limited or provided for something in one section of a statute and
excludedit in another,it should not be impliedwhere excluded. See
generally Smith v. Baldwia.~611 S.W.2d 611,616 (Tex. 1980). BecaK
the limit la section 25.208 does not appear in section 25.006, to
imply such a limit would u,lolatethfs well-settledrule of statutory
. construction.: :'.
The per diem authorizei.
by section25.006 of Title llOB, V.T.C.S.,
for board members is to be paid out of the "expense account"created
by section25.311 of Title 1lOB:
(a) The retiremeateystem mbell deposit in the
expeaseaccountmrtzmbershipfees, maey requiredto
be treaeferredto the accountuader Sectioa25.314
of this subtitle,ead any apprwrlatioae ude be
the legisleture121the eccouat.
(b) The retir~aasnt system shall uay from the
expanse account-admiaistratioacad meiatenaace
expenses of the-retirement systsm except those
expenses the vay;eat of which is provided for by
Se&m 25.2Oi(c)or 25.313(b) of-this subtitle;
(Pophasisadded);
Tbe sectioa 25.311 aarpeaselccouat coaeiste of 1) membership
fees, 2) money transferred,, pursuant to section 25.314(b).from the
interest account, which c'xlsists of earnings from the iavestmentof
the aseats of the Employetrs RetirementSystem. ead 3) eay appropria-
tioas mede by the legislatureto the account. Tbe interest account
includes earnings from inrestmeat of the system's assets. 125.310.
The assets of the systemincludeboth employeeend state coutributions
p. 1959
Mr. ClaytonT. Garrison- Pnjsa4 (JM-427)
to the system. See S525.Nll - 25.403. You suggest that the funds
administeredby G board,,includingthis expense'account,are not
properly deemed "appropria!:edfunds"vithin the meaning of article V
because they ara trwt funds. Bacausa the portion of the account
which consists of membershipfees and earnings on the iavestmentof
employee contributionsis wra than sufficientto cover the per diem
expanse in question,ve need not decide vhether all of the funds in
this expense account are "expropriatedfunds" within the maanlng of
articleV.
In Attorney General Opinion WW-565 (19591, this office decided
that certain funds adminiszaredby the Employees Retirement System
"may be expended. . . in accordancewith the general statutesper-
taining to the [system]vjthout prior specific appropriat%onsby the
Legislature." See also Attorney General Opinions m-276 (1980);
H-681 (1975); M-949 (1971). Attorney General Opinion VW-565 con-
sidered the scope of article VIII, section 6 of the Texas Constitu-
tion, a provision vhich prohibits the vithdraval of funds from the
state treasuryvithout a specificappropriation.Relying on Friedman
vi American Surety Compaq of Nev York, 151 S.W.2d 570. 579 (Tex.
1941). the opinion concluded that funds received by the Employees
RetirementSystem from menberahipfees and earnings from the invest-
ment of the system’s assets fall within an exceptionto these con-
. stitutionalprovisionsas "ttist"fun&. ..
The funds providedfo::in the EmployeesRetirementSystem Act, in
effect when Attorney Gewral Opinion WW-565 vas decided, vera
collectedunder statutoryj?r:ovisions which set the funds apart for the
specificpurposes for vhicb they vere collected;they could be used
for no other purposas. The opinionreasonedthat the funds became the
propertyof a public trust createdfor the benefitof the employeesof
the state - not the propextyof the state in its sovereigncapacity.
See generallyFriedmanv. American Surety Company of Nev Pork, m
Because the act governin(~the system did not contemplatethat the
funds vere to be deposited:Lnthe-statetreasury &,-in the general
revenue fund, but rather in a special trust fund held separatelyin
the state treasury. the constitutionalrequirementfor a specific
;;~f``lation for upendirurea did not apply. After this opinionwas
language vaa a,doptedin the Texas Constitution which
clariflidthat "[tlhe asae:ta of a [publicretirement]system are held
in trust for the benefit of &are and may not be diverted." Tu.
Conat. art. XVI, 567(a) (1).
We are avare that thl:Texas courts have held that an employee's
interestin such trust funds is subject to the right of the leglsla-
tura to amend the lavs on which the pensionsystems are founded. See.
a, City of Dallas v. T:~uawll,101 S.W.2d-1009.1013 (Tea. 1937);
Lack v. Lack, 584 S.W.2d &96,- (Tax. Civ. bpp. - Dallas 1979. vrit
ref'd n.r.e.); Cook v.~ @ployees Retirement System of Texas, 514
S.W.Zd 329. 331 (Tex. Civ, App. - Texarkana1974. vrit ref'd n.r.e.1.
p. 1960
Mr. ClaytonT. Garrison- Page 5 (J&427)
These cases,however. did not address articlaXVI. section 67, of the
Texas Constitution,vhich n'asadoptedby specialelectionin 1975. As
indicatad,subsection(a)(l)of section67 providesthat "[tlhe assets
of a system are held in trust for the benefit of members and may not
be diverted." It is unnecessaryto delve into this issue at this
time. because we do not address the right of an employee to trust
funds in a retirementsystem;we address only the scope of the term
"appropriatedfunds" under'article V of the currant Appropriations
Act.
Applying the rationale,of Opinion WI-565 to the case at hand
compels the conclusion that, because a general appropriation is
unnecessary for the axpendi.tureof these funds,limitationson general
appropriationsare inappli~ablato these constitutionaltrust funds.
Accordingly,va concludethat the expense fund establishedby section
25.311, from vhlch the members of the board of trusteesare to be paid
any per diem properly duo under Title llOB, is composed of trust
funds,not "appropriatedfunds"within the meaning of articleV of the
current General AppropriatLms Act to the extent that it consistsof
membership fees and interczston amployee contributions. Thus, the
limitationscontainedin s'wtion4 of articleV of the currentAppro-
priationsAct do not apply t:othe expenditureof such funds.
SUUMARY .
The portion of the expense fund establishedby
section 25.311 of Title 1lOB. from which the
members of the B'xrrdof Trustees of the Employees
RetirementSystaa of Texas are to be paid any par
diem properlydua them, is composedof funds held
in trust for the employees of the state to the
extent that it consists of membarehip fees and
interest on emILoyees' contributiona. Because
these are trust funds, rather than "appropriated
funds" within thlcmeaning of article V of the
current General AppropriationsAct, the limita-
tions contained. to section4 of articleV do not
apply to the per diem vhich may be due a board
member.
-$..m/#(&
MATTOX
AttorneyGeneralof Texas
JACK HIGBTObER
First AssistantAttorneyG,aneral
p. 1961
Mr. ClaytonT. Garrison- Page 6 (JM-427)
MART KELLER
ExecutiveAssistantAttorneyGeneral
ROBERT GRAT
SpecialAasistantAttorneyGeneral
RICK GILPIN
Chairman,OpinionCosuaittee!
Preparedby JenniferRiggs
AssistantAttorneyGeneral
p. 1962