Case Information
*1 The Attorney General of Texas Feb:mary 18. 1986 JIM MATTOX
Attorney General Mr. Clayton T. Garrisou Opinion No. 34-427
Suprms Court Buildin Executive Director P. 0. BOX 12549 Employees Retirement System Austin, TX. 78711. 2549 Rc: Whether the par diem limita- 512/4752501 of Texas tions of section 4 of article Telex 910/874-1357 P. 0. Box 13207 of the General Appropriations Act Telecopier 51214750268 Austin, Texas 787!1 apply to members of the Board
Trustees of the Employees Retire- 144 Jackson. SUitS 7M) ment Systsm Daiim.. TX. 752924509 214i742.Ba4
Dear Mr. Garrison: You ask vhethe:r the limitations contained in section 4 of article 4B24 Albda Ave., Suite 180 V of the current Gtcneral Appropriations Acts 1985, 69th Leg., El Paso, TX. 799052793 [91515333494] ch. 980, at 7761, apply to members of the Board of Trustees of
Employees. ,Retirement: Spstsm of Texas. . . 11 Texas. Sulls 799 In general. mambers of-the state boards and coamissious ire ..suston. TX. 77002-3111 entitled to per dim pursuant to article 6813f. V.T.C.S., in coajunc- 7131223-5886 tion, with the General Appropriations Act. See Attorney General Opinions JM-382 (1985); JM-152 (1984); Mu-388 (1981). Section 4 898 Broadway. Suite 312 article V of the current act provides: Lubbock. TX. 794013479 SW74?-522.9 PER DIW OF BOARD OR COMMISSION MWBRRS. As authorirml by Section 2 Article 6813f. Texas 4309 N. Tenth, Suite B Revised Xvi1 Statutes Annotated. per diem of McAllen. TX. 78501-1085 state board and com&sslon members shall consist 5121082.4547 of (1) tlm amounts compensatory per diem at $30 per day; (2) actual expenses for meals and lodging 200 Maill Plaza. suite 400 as l uth+zed by this Act not to exceed the San Antonio, l-X. 78205-2797 maximum amouat allowed as a deduction for state 512/2254191 legislatwts while avay home during a
legislative session as established pursuant to Intemal Reveuue Code 26 U.S.C. Section 162(l)(l)(B)(ii); and (3) trausportatiou. In the maximum amount allowed as a deduction event staee legislators pursuant 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 cormpilsslon members under this section shall not exceed $100. (Emphasis added). I
Mr. Clayton T. Garrison - I'age 2 (JM-427)
The first paragraph 01' article V provides that [tlhe provisions :set forth in this and all other Articles of this A.ct are limitatious ou the appro- priations made irtthis Act. It is the purpose of the Legislature :ia euacting this bill only to appropriate fundo and to restrict and limit by its provisions the amount and conditions under which the appropriaticns can be expended. (Emphasis added).
This provision reflects tk,e constitutional principle that appropria- tion bills should deal only with appropriations of funds; a rider a general appropriations bill 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, 110 Vrit).
In light of these prov~isious , and assuming without deciding that the board is a "state board" within article 6813f and article V Appropriations Act, you sugtgest that section 4 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 meaning oji article V. We .agree with your coaclusioa.
It has been suggested that, regardless of whether the article V limit applies directly tc these funds. the measure established in article V applies to the funds. Section 25.208 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 necessary to operate retirement system at rates and in amounts approved by the board. Those rates and amouuts may sot exceed those paid for the same or similar serrria-! for the state. (Emphasis added).
This provision appeara; to apply.to "all expenses necessary to operate the retirement system." Expenses necessary to operate the retiremeut system arguably riaclude per diem board members. Thus, this section appears to limit the board to article V limit applicable to other state b'oard members. Section 25.208, houwer, IS in Subchapter C of Chapter 25 of Title 1lOB. This subchapter, by its title, deals with "Officer!% and Employees [the] Board of Trustees."
In contrast, Subchapter A of chapter 25 deals with "Board of Trustees." Section 25.006 of Subchapter A authorizes certain trustaes, subject to appwval by tha whole Board of Trustees, to receive compensation and all expenses necessary to the performance of their official duties:
P. 1958
Mr. Clayton T. Gerrisoa - P,kge 3 (a-427)
(a) Ttustees who are coatributiag members of the retirameat s:rstem serve without compensation but entitled to reimbursement all aeces- sery expenses thM they incur in the performeace of off iclal board (duties.
(b) Subject t:a the approval of the board of trustees, truste!ss who are not contributing members of the retirement system mey receive: (1) compenaatioa; and
(2) all nc:cessary expenses that they incur in the perforsance of official board 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 the legislature intended this result. Moreover, when the legislature has limited or provided for something in one section of a statute and excluded it in another, it should not be implied where 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,lolate thfs well-settled rule of statutory : '. construction. :
The per diem authorizei. by section 25.006 of Title llOB, V.T.C.S., for board members is to be paid out of the "expense account" created by section 25.311 of Title 1lOB:
(a) The retiremeat eystem mbell deposit in the expease account mrtzmbership fees, maey required to be treaeferred the account uader Sectioa 25.314 of this subtitle, ead any apprwrlatioae ude be the legisleture 121 the eccouat.
(b) The retir~aasnt system shall uay from the expanse account-admiaistratioa cad 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; (Pophasis added) ;
Tbe sectioa 25.311 aarpease l ccouat coaeiste of 1) membership fees, 2) money transferred,, pursuant to section 25.314(b). from interest account, which c'xlsists earnings from iavestment of the aseats of the Employetrs Retirement System. ead 3) eay appropria- tioas mede by the legislature to account. Tbe interest account includes earnings inrestmeat of the system's assets. 125.310. The assets system include both employee end state coutributions *4 Mr. Clayton T. Garrison - Pnjsa 4 (JM-427)
to the system. See S525.Nll - 25.403. You suggest that the funds administered by G board,, including this expense 'account, are not properly deemed "appropria!:ed funds" vithin the meaning of article V because they ara trwt funds. Bacausa the portion of the account which consists of membership fees and earnings on the iavestment of employee contributions is wra than sufficient to cover the per diem expanse in question, ve need not decide vhether all of the funds in this expense account are "expropriated funds" within the maanlng of article V.
In Attorney General Opinion WW-565 (19591, this office decided that certain funds adminiszared by the Employees Retirement System "may be expended . . . in accordance with the general statutes per- taining to the [system] vjthout prior specific appropriat%ons by the Legislature." See also Attorney General Opinions m-276 (1980); H-681 (1975); M-949 (1971). Attorney General Opinion VW-565 con- sidered scope of article VIII, section 6 of the Texas Constitu- tion , a provision vhich prohibits the vithdraval of funds state treasury vithout a specific appropriation. 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 Retirement System from menberahip fees and earnings from the invest- ment of the system’s assets fall within an exception to these con- stitutional provisions as "ttist" fun&. . .
The funds provided fo:: in the Employees Retirement System in effect when Attorney Gewral Opinion WW-565 vas decided, vera collected under statutory j?r:ovisions which set the funds apart for the specific purposes for vhicb they vere collected; they could be used for no other purposas. The opinion reasoned that the funds became the property of a public trust created for the benefit of the employees of the state - not the propexty the state in its sovereign capacity. See generally Friedman v. American Surety Company of Nev Pork, m Because the act governin(~the system did not contemplate that the funds vere to be deposited :Ln the-state treasury &,-in the general revenue fund, but rather in a special trust fund held separately in the state treasury. the constitutional requirement for a specific ;;~f~~lation upendirurea did not apply. After this opinion was
language vaa a,dopted in the Texas Constitution which clariflid "[tlhe asae:ta a [public retirement] system held in trust for 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 interest in such trust funds is subject to the right of the leglsla- tura amend the lavs on which the pension systems 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. - Texarkana 1974. vrit ref'd n.r.e.1.
p. 1960
Mr. Clayton T. Garrison - Page 5 (J&427)
These cases, however. did not address articla XVI. section 67, of the Texas Constitution, vhich n'as adopted by special election in 1975. As indicatad, subsection (a)(l) of section 67 provides that "[tlhe assets of a system are held in trust for the benefit of members and may not be diverted." It is unnecessary to delve into this issue at this time. because we do not address the right of an employee to trust funds in a retirement system; we address only the scope of the term "appropriated funds" 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.ture of these funds, limitations on general appropriations are inappli~abla to these constitutional trust funds. Accordingly, va conclude that the expense fund established by section 25.311, from vhlch the members of the board of trustees are to be paid any per diem properly duo under Title llOB, is composed of trust funds, not "appropriated funds" within the meaning article V of the current General AppropriatLms Act to the extent it consists of membership fees and interczst on amployee contributions. Thus, the limitations contained in s'wtion 4 of article V of the current Appro- priations Act do not apply t:o the expenditure of such funds.
SUUMARY The portion of the expense fund established by section 25.311 of Title 1lOB. from which the members of the B'xrrd of Trustees of the Employees Retirement Systaa of Texas to be paid any par diem properly dua them, is composed of 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 thlc meaning of article V of the current General Appropriations the limita- tions contained. to section 4 article V do not apply to the per diem vhich may be due a board member.
-$..m/#(&
MATTOX Attorney General of Texas JACK HIGBTObER
First Assistant Attorney G,aneral
Mr. Clayton T. Garrison - Page 6 (JM-427)
MART KELLER
Executive Assistant Attorney General
ROBERT GRAT
Special Aasistant Attorney General
RICK GILPIN
Chairman, Opinion Cosuaittee!
Prepared by Jennifer Riggs
Assistant Attorney General