May 23, 1963

Mr. John S. Hovenga Executive Director Board of Regents State Teachers Colleges Box K, Capitol Stations Austin 11, Texas

Dear Mr. Hovenga: Opinion No.~C-83
Re: Whether the term "annuities" as used in Article 6228a-5,, Vernon's Civil Statutes,, embraces group annuities as well ,asindividual annuity'contracts. Should the board of regents of the institutions of higher learning hold the master contract in the name of the board of regents of the respective Institutions or should contractsbe lssued in the name of the annuitant only, even if the contract is classified as a group annuity. The questions submitted in your opinion request are as follows:

"(1) Does the term Iannuities as used in the statute referred to in the caption (Article 6228a-5,~ Vernon's Civil Statutes) embrace group annuities as well as 'individualannuity contracts? "(2) Shall the board of regents of the institutions of higher learninghold the master contract in the name of the board of regents of the respective institutionsof higher learning, or shall contracts be issued in the name of the annultant only, even if the contract is classified as a group annuity?" Article 6228a-5, Vernon's Civil Statutes, reads as follows:
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"LocalBoards of Education of the Public Schools of this state and the Go verningBoards of the state-supportedinstitutionsof higher education are hereby authorized to enter into agreementswith their employees for the purchase of annuities for their employeesas authorized in Section &03(b) of the InternalRevenue Code of 1954, as amended,."
In regard toyour first question,Article 6228a-5 Vernon's Civil Statutes, does not limit the term "annuitiesL to either group or individualannuities. However,Article 6228a-5 refers to Section 403(b) of the InternalRevenue Code. In Section &03(b) and the InternalRevenueRegulations for that Sectio'n and related Sections, no distinctionhas been drawn between group annuities and individualannuity contracts. Since the general term "annuities"has not been limited in either of these statutes, the Legislaturemust have intended the term to embraceboth group and Individualannuities. In the absence of evidence to the contrary, common terms used in an enactmentshould be given their commonmeaning. 1943) 429. 2 SutherlandStatutoryConstruction (3rdEd.

As toyour second question,Article 6228a-5 states that 'theboard may enter into agreementswith their employees for the purchase of annuities for their employees as "authorized in Sectionk03(bl,of the InternalRevenue Code of 1954, as amen& ed." (Emphasisadded). This evidences the intent that these il annuitieswould be set up in a manner in which they would be "taxsheltered" annuities under the InternalRevenue Code and Reguiations. The questionwhich you have posed to us +s one of mechanic: in the setting up of such a plan. In setting up your plan, you should dtscuss the detailswith representativesof the Internal Revenue Service and submit proposedplans to them for approval.

SUMMARY The term "annui.ties" as used in Article 6228a-5, Vernonls Civil Statutes, embracesgroup annuities as well as individual annuity contracts. Whether the annuity contract shouldbe held in the name of the Board of Regents of the schoolor in the name of the individual employees is a matter thatyou shoulddiscuss with the representatives of the Internal Revenue Service and submit plans to them for approval.

...4..;1:Mr. John S. Hovenga, Pa& 3 (C-83 )

Sincerely, WAGGONER CARR Attorney General

Assistant JGN:mkh APPROVED: OPINION COMMITTEE W. V. Geppert, Chairman James M. Strock Wayne Rogers Pat Bailey Ben Harrison APPROVED FOR THE ATTORNEY GENERAL BY: Stanton Stone

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