Case Information

*1 =‘D?EBcATIY)RNEY GENERAL OFTEXAS Honorable T. M. Trimble

First Assistant

State Superintendent of

public Instruction

Austin, Texas Opinion No. O-2838

Dear Sir: Re: Group Insurance for teachers in independent school districts and payment of premiums out of school funds.

In your letter of Ootober 17, 1940, you request our opinion in the following questions: response to

: "May the Board of Trustees of the Fort Worth Independent School District use local maintenance funds to pay the employer's part on a group life insurance premiun for the Fort Torth teachers?

"Could the Board of Trustees of an independent school district make provision for the payment of the employer's part of the premium of group life insurance of its teachers, if provision is made in the teachers* contracts whereby this premiws payment is a prt of the teachers' annual salaries?"

Y& are unable to find any statute which would authorize the trustws of the Fort Worth Independent School District to contract for or expend local maintenance funds to pay the employer's part of a group life insurance premium for the district's teachers. In the sbsence of such a statute, such funds may not be so expended.

This question is in all material respects the ssme as that considered by t'nis department in our Opinion No. O-2469, copy of rhich is attached hereto, and it was them held that public school funds could not lx used to pay for group insurance.

Your second question is answered in the negative for soveral reasons.

(1) Section 1 of Article 47G4a provides: *2 Bon. T. Y. Trhble, Page 2 (O-2838)

"Group Life Incuranco ic horoby deciarod to bc that fona of life inourance ocvoring not loss thnn twenty-five employees writton under a. policy issued to the employer, the premiws for which ictc bo paid by the employer or by the employer and employee joint- ly and insuring all of his employees, or all of any class or classes thereof determined by conditions pertaining to the employment, for smcunts of insurance based upon scme plan whioh will preclude individual selection, andfor the benefit of persons other than the employer; . . ."

It will be observed that group insuranae cannot under this statute bs had unless the school district pays its art of the premium.

If your second question is predicated upon the idea of paying the teachers a salary, and then requiring them to pay the school districtsI portion of the premiurm for the insurance, such procedure nould not bring the insurance under the above definition of group insurance for the reason that the teachers would, in faot, bs paying all of the premium; while the above statute requires the school district to pay a part of the same.

(2) If you intend by your second question to provide in the teachers' contracts to pay them so much money for salaries, provided a certain amount of same should be used to pay the school district's part of ths premium on group insurance, the plan would amount to nothing more than an evasion of cur ruling to the first question suhaittedr for the reason that you would still be doing indirectly what you cannot do directly. This principle is sustained by the'court of Civil Appeals at San Antonio in the case of Godson vs. Jones, 190 S.VL 2.53:

"Appellant was the principal of school Xo. 1, district No. 2, sndwas being paid the sum of $75 cut of the free school money of the state. About the same time of his employment as principal, he was also employed bythe trustees as janitor with a sal- ary of $50 a month. Vouchers were issued to appellant for his services as janitor, and the county ,superin- tendent, N. S. Jones, apprcved two of them before he went cut of office. He was succeeded by Xiss Eva Staickland, and she refused to apwove the seven remain- ing vouchers. The matter ~8s appealed to the county board of education, then to the state supcrtitendent, and finally to the state board of education; the last tw, mentioned sustaining the county superintendent. No special tax was levied by sohools 1 and 2, with whioh appellant was connected, but vere run on state money alone. Appellant performed services both as principal and janitor'for nine months, the time for which he was employed by the trustees. Yiss Strickland resigned *3 and was suooesded by appellee. The vouchers were not presented to her for approval.

"The court found that the contract with appel- lant, for his services as janitor was made to evade the terms of article 2780 and article 2781, Revised Statutes, whioh provide, among other things, that a teacher holding a first-grade certificate shall in no event reoeive more than $75 a month frcm the pub- lic free school fund. The court also found that a man named Tristan Ymldanado was also employed as janitor in the same school in which appellant was employed as principal and janitor, The law could not

be evaded in that way, and the vouchers granted by complaoent trustees were properly rejected by the county superintendent. It is a preposterous proposi- tion that a country school, or two country schools, would require the servioes of two janitors. Ve are oTthe opinionihat it was never intended that the principal of a school should be paid tvm salaries , cut of the public free school money.

"The first section of article 2772, Rev. Stats., which is cited by appellant, provides that the state and county available school funds shall be used ex- clusively for the payment of salaries ofteachers and superintendents and fees for taking the soholastic cansuo, and we fail to see what aid and comfort that gives a man who is endeavoring to obtain a part of the school fund for services as a janitor, vhen he has drawn for the same time pay as principal of the sohool. It is true that in the second section of the artiole cited it is provided that a surplus of such state fund may be used to pay janitors and for other enumerated purpopes, but not to increase the pay of teachers. The other articles snd decisions cited do not sustain the contention of appellant.

"The judgment is affirmed." In the case cited, the school trustees could not lawfully pay mere than $75.00 to the teacher as salary, and the tNStSeS undertook to give him additional money as janitor. The court held that it could not bs done.

In your situation you cannot legally pay for group insuranoe with your school funis, and in cur opinion you would be doing the ssme thing by providing in the contracts with the teachers that they bs required to paythe distriot's part of the premilrm of the group insurance.

(3) If the trustees should provide in their contracts dth the teachers that theymustn.~e a certain part of thbir salary to pay for premiums on insurance, it would seem that the amount of the so-called salary which was to be used for the payment of such premiums would still be public money and, therefore, not available for the purohase of insur- ante.

The Supreme Court of Unnesota, inthe case of State ox rel, Jennison vs. Rogers, reported in L.R.A. 58, page 663, involving a contract between trustees and teachers whereby a certain amount of the teachers' salaries was retained for-the purpose of creating a teachers' retirement fund, it MS held that the money so retained was still public money, and could not be so usedr

"The authority of the board is also questioned upon the ground that the money retained is in fact public money, and not the private funds of the teach) a-6. It does not seem ver- material whether the money so assigned bs considered public or private funds -- the result must be the some. But it is interesting to notice what the praotical effect is of carrying cut the plan outlined in the petition. If the entire salary had been paid to relator, and he had then voluntarily relin- quished or paid back 1 per cent thereof for the purposes expressed, it would clearly be private money; but 1 per cent never had been paid in fact, and it never vras con- templated that it should be. When the relator entered into the contract he surrendered avsolute control over that portion of his salary, and, in effect, entered'into a contract with the board that his salaly would bs 99 per cent of the amount nominally stated. So from this view of the case it appears to us that the money retain- ed nsvsr left the treasury, but remained publio money, and the board of education had no authority to divert it from the uses mentioned in the statute." This same case also holds that a contract between trustees and teachers, whereby the teachers are required to pay a certain amount of their salaries into a teachers' retirement fund could not be sustained on the ground that such plan would be in the interest of the schools, and the contract was declared to be ultra vires and void.

If a contract creating a teachers retirement fbnd oould not be sustained, then, in cur opinion, school trustees, in the absence of some statute authorizing the same, would not have the power to require in teachers' contracts that they carry insurance of any kind.

.

Until the Legislature has authorized the expenditure of school finds for the purchase of group life insurance, you are advised that it is cur opiniomthat such funds cannot be so used.

Yours very truly ATTORNEY GENFRAL OF TEXAS By /s/ Grover Sellers Grover Sellers First Assistant Enclosure

APPROVED DEC 18, 1940

/s/GERALD C. MA3iN APPROVED

ATTORNEY.GENSRAL OF TEXM Opinion Cqrrmittee : -. By Bm

Chairman THIS OPINION CONSIDZRED

Ali'D APPFJXED IN LXWl'ED

CONFERENCE