September 2, 1955

Honorable John H. Winters ExecutiveDirector OpinionNo. s-172

State Department of PubliaWelfare Rc: Eligibility of emplogAustin, Texas ees of State institutions of higher learning for Social Security Dear Mr. Wintersr coverage.

You have requested an opinion on the following questions:

"1.Are the employees (Includingthose subject to the Teacher Retirement System) of the University of Texas and ,theother State administered institutions of higher learning eligible for Social Security aoverage under the definitionas set out in Section 1 Subsection (c) of House Bill No. 666, Chapter 4&, Acts of the 54th Legislature,and, therefore,must be mandatorily includedalong with other eligible State employees?

"2

. Are the employees (includingthose subject to the Teacher Retirement System) of the University of Texas and other State administered Institutions of higher learning eligible for Social Security coverageunder the terms of Sections 1 and 2 of House Bill No. 709, Chapter 501, Acts of the 54th Legislature?

"3

. Are the employees (excludingthose subject to the TeacherRetirement System) of the University of Texas and the other State administered institutions of higher learning eligible for Social Security coverageunder the terms of Sections 1 and 2 of House Bill No. 7097

"4

. If your opinion or ruling to question number 2 is affirmative, then is there a specific appropriation for the matching contrlbutillrller? If so, Is such appropriationprovided for InHouse Bill No. 6661Hon. John H. Winters, page 2 (S-172)

“5

. If, in your opinion, the University of Texas and other State administered institutionsof higher learning are not instrumentalitiesof the State and are not juristicentities, and therefore do not come under provisions of House Bill No. 709; and if in your opinion they are not State institutions in the usual meaning, then would their employees (excludingthose subject to the TeacherRetirement S stem) come under the provisions of House Bill No. 6l6 for mandatory coverage?"

House Bill 666 authorizes the State Department of PublicWelfare to enter into agreementswith the Secretary of Health, EducationandWelfare to obtain Federal old-age and survivors insurance (hereinaftercalled OASI) coverage for State employees. Section 1, Subsection (c) of House Bill 666 defines the term "Stateemployee' as follows:

"(c) The term 'Stateemployee' in addition to itsusual meaning shall include elective and appointlve officials of the State, but shallnot include those persons rendering services in positions, the compensation for which Is on a fee basis. ,The term 'StateEmployee' shallnot includeany employees in position subject to the TeachersRetirement System except those employedby State departments, State agencies, and State institutionsas construed in their usual meaning."

Section 6 of House Bill 666 provides for the collection of contributions. It makes provision for deduction of the employees'part from the employees' compensationand for allocation and appropriationof funds for payment of the State's part of the contribution for employeeswho are subject to coverage under the provisions of the bill.

House Bill 709 amends Sections 1 and & of Chapter 500, Acts of the 52nd Legislature,Regular Session, 1951 (Article 695g,Vernon's Civil Statutes),which allows political subdivisions to negotiate for OASI coverage for their employees. Section 1 of the bill adds a new subdivision to Section 1 of Article 695% so as to extend the definition of "political subdivision as follows:

"(h) The term 'politicalsubdivision' Includes
an instrumentalityof the State, of one or more of its political subdivisions,or of the State and one or more of its political subdivisions,but only if such instrumentalityis a juristicentitywhich is.

Hon. John H. Winters, page 3(S-172))~.'

legally separate and dl5t~inc'c from the State or subdivisionand'onlg if its- employees are not by virtue of their relation to sush juristicentity employees of the.

State or 5mbdlvision." .~, L;,,,y/

'/ ,i ,, ,,

Section 4Section 2 of the bill adde the followingprovision to

of Article 695gt

"

. . Any instrumentalityof the State, for which dkeot appropriationsare made by the Legislature,may aontributsto then old-age and survivor's insurance programof the Federal @overnment for employees coveredby Chapter 470, Acts, 1937, Forty-fifth Legislature,Regular Session, and amendments thereto, only suah funds
as are speoificallgappropriated therefor."
Chapter 470 referred to above is the act establishing the Teacher Retirement of Texas (Artlale2922-1,V.C.S.).

It is obvious from an analysis of the provisions of these twobills that State Institutionsof higher learning cannot be included inboth bills. If these Institutionsare instrumentalitiesof the State within the definition contained in House Bill 709; their employe,es necessarily are not aoveredby House Bill 666, since one of the conditions for coverage under House Bill 709 is that the employeesnot be "employeesof the State" and House Bill 666 applies only to State employees. On the other hand, if these Institutionsare not legal entities separate and distinct from the State, the logical conclusion would be that their employees ar5 State employees and that House Bill 666 was lntended~ to apply to them.

House Bill 666 does not contain a basic definition for the term "Stateemployee." It sets out aertain classes of persons who are includedand certain alasses who are excluded, and it presupposes that when modifiedby ~theseinclusionsand exclusions the term shallhave,its%sual meaning”; but It does not attempt to clarify what ,thzi usual meaning is in terms of the departments'

and agentdee whose'employeesare aonsidered to be State employees. However,we are aided In this respectby the Federal Social Security Law, 'whichauthorizes contracts for coverage of State employees who are performing servic nection with a governmental (nonproprietary)funatlon f8 in cononly if

The operation of institutionsof higher educationby the State is~agovernmental funution& Raineg v. Malone, 141 S.W.2d 713 (Tex.Clv.App.1940)..

Hon. John H. Winters, page 4 (S-172)

the contract applies to all departmentsand agencies of the State which are not separate legal entities. Under Federal law the State mayexolude certain classes of employees within these departments and agencies,but'it may not exclude the department or agency as such. Thus, House Bill 666 conforms to Federal law only if the over-allmeaning of "Stateemployee" without the enumeratedmodifications includesemployees of the State institutionsof higher learning if these institutions
are not separate legal entities. In the absence of proof to the contrary, itmust be assumed that the term was not intended to have a more restrictedmeaning than would be permittedunder the Federal law, for otherwise the enactment of House Bill 666 would have been an idle gesture.

Undoubtedly the State institutionsof higher learning
are instrumentalitiesof the State in the broad sense that they
are the means throughwhich the State carries on one of the functions of government. However, they are included inHouse Bill 709 only if they meet the conditions (1) that they are separateand distinct juristicentitles and (2) that their employees are not employees of the State. It is our opinion that they do not meet either of these conditions.

There is no definitive criterion for determining whether an instrumentalityis a separate legal entity. An instrumentalitywhich is created as a corporatebody or as a "bodypolitic and corporate" ordinarilywould be considered to have a legal existence separate from the State, although it might still possess some of the attributes of the State's sovereignty. It does not follow that an instrumentalitywhich is not expressly created as a corporatebody could not constitute
a separate juristicentity,but the law establishing it would have to imply its separate existencebefore it shouldbe treated
as such. That the legal status of an Institutionof higher learning depends on the status ascribed to itby State law is illustrated in Ramsey v. Hamilton, 181 Ga. 365, 182 S.W.392,398 (19%). In some States these institutionsare organizedas bodies corporate and are regarded as independent legal entities. State ex rel. Black v. StateBoard of Education, 33 Idaho 415, 196 Pac. 201 )* Fanning v. University of Minnesota, 183 Mlnn. 222, 236 N.W. 2iFiG31) In other States, they are not legal entities. Ramses

v. Hamilton, supra; State v. McMillan, 12 N.D. 280, 96 N.W. 310, 31b (1903).

The institutionsof higher learning in this State are not corporatebodies, and the courts have never treated them
as seuarate entities. The organizationand powers of the governingboards of the various institutionsare sufficiently similar that their status in this respect is no different from that ofHon. John H. Winters, page 5 (S-172)

the University of Texas. The relation of theUniversity to the State is exemplified in the following cases.

In Group No. Cne Oil Corporationv. Baas, 38 B.2d 680, 684 (W.D.Tex.1930,rev'don other grounds, 141 F.2d 4831, it is stated!

"Theuniversity isnot a corporation. Its affairs are directed and controlled exclusively by the state. The title to what is commonly called university lands is in the State. Appropriations for maintenance and operation are regularly made by the Legislature. The university is in fact and in law a branch of the state government." Rainey v. bialone,141 S.W.2d 713 (Tex.Civ.App.l940), held that the Regents of theUniversity are vofficersof the State" and that the Board is the "headof a department of the State Government."

InWalsh v. University of Texas, 169 S.W.2d 993 (Tex. Civ.App.1942,errorref.),we find this language:

"TheUniversity and the Board of Regents are institutionsof the State, and neither has any existence independentof the State.

. . . Property belonging to the University of Texas is the property of the State. York v. Alley, Tex.Civ.App., 25 S.W.2d 193, writ refused."

In our opinion, these holdings foreclose any contention that the State institutionsof higher learninghave any existence separate from the State itself. We are further of the opinion that employees of these institutionsare employees of the State, The purpose of adding this second condition is obscure. If the instrumentalityhas no existence separate from the State, it would seem to follow that under ordinary conditions of employment its employeeswould be employees of the State. However, the fact that this second conditionwas added inHouse Bill 709 suggests that the conversewould not be true; that employees of a separate entity would not as a necessary consequencebe outside the class of "employeesof the State but stillmight be considered State employees for the purpose of OASI coveragee If this provision appeared in a statute for coverage of State employees as well as employees of separate instrumentalities and the statute contained a comprehensivedefinition of the term vhich included the employees of some instrumentalitieswhich
were separate entities, we would think that its purposewas merelyHon. JohnH. Winters,page 6 (S-172)

to emphasize that instrumentalitieswere to have the authority to make separate agreements only if their employeeswould not bs covered under an a reement for coverage of State employees generally. If House Bill 6 6 csontained such a definition,we would conclude % that the samemeaning was,intended in House Bill 709, since the statutes are in oar1materia. But House Bill 666 does not assist in arriving at the intendedmeaning, and we must conclude that the term is to be construed in the manner inwhich it is commonlyused and understoodby the Legislature in other connections.

In numerous places in the general provisions of the biennial appropriationacts the Legislatureuses the term 'employees of the State or oomparable terms to include employees of the institutions of higher learning. Section 62 of ArticleXVI of the Constitution authorizes the creation of a retirement fund for the "appointiveofficers and employees of the State." The employees of the institutionsof higher education are ineligiblefor membership in the Employees Retirement System of Texas, created pursuant to this constitutional, authorization,only because they are subject to the Teacher Retirement System and the State laws do not permit membership inboth systems. Before the Teacher Retirement System
was extended to includeauxiliary employees of educational institutions, itwas conceded that these employeeswere eligible for membership in the EmployeesRetirement System because of their status as "employeesof the State." It is our belief that the term
as generallyused by the Legislaturewould be taken to include employees of these institutionsunless a oontrary intentionwas clearly shown.

Sinoe these institutionsare not instrumentalitiesas defined in Seation 1 of Bouse Bill 709,your second and third questions are answered in the negative. We need not answer your fourth question,as the restriction in Section 2 of House Bill 709 applies only to instrumentalitieswhich are within the dsfinition in Section 1 of the bill. Even if itwere construed to apply to other instrumentalities,the speaific appropriation for these institutions would be found in House Bill 666, under the conclusionwe have reached in answer to your first question as hereinafter discussed.

As already indicated, it is our opinion that the employees of these institutionsare included in the general term "State employee" inHouse Bill 666, sinoe the institutionsare not separate legal entities. The remaining question is whether the employees who are in positions subject to the Teacher Retirement System are excluded,under the provisionwhich states that the term shall not include employees in positions subjeot to the Teacher Retirement System "exceptthose employedby State departments, State Agencies, and State institutionsas construed in their usual meaning.Hon. John H. Winters, page 7 (S-172)

Without evidence that the usual meaning as intended in House Bill 666 was otherwise,we must conclude that the meaning usually given the terms by the Legislature and the courts was that intendedby the bill. The courts have held that the institutions of higher learningare State institutionsand departments of the State government. Rainey v. Malone, supra;Walsh v. University of Texas, supra;Mumme v. Marrs, 120 Tex. 383, 40 S.W.2d
Throughout the statutespertaining to iheir establishment, 31 (1931); Cochran v. Cavanaugh, 252 Sfir.284 (Tex.Civ.App.1~92~).

collection of fees and the administration of funds collectedby them, we find them referred to as institutions,State educational institutions,and institutionsof higher education. Title 49, Chaps. 2 - Pa, V. C. S. Article 608, V. C. S., which places in the Board of Control the authority to contract for printing,binding, and stationery for the State departments, institutionsand boards except such work as may be done at the various educational and eleemosynary institutions, includes contracts for the institutions of higher learning. Att'y. Cen. Op. 0-5283 (1943). In the biennial appropriationacts they are referred to as State institutionsof higher education, State institutions,educational institutions,and agencies of higher education.

The hospitals and special schoolsunder the control of the Board for State Hospitals and Special Schools and certain agenciesunder the jurisdictionof the State Board of Education and the State Derjartment of PublicWelfare are also referred to
as "institutions in the statutes,and were formerly knownunder the official designation of "eleemosynaryinstitutions"until changedby the Legislature in 1949. Arts. 3174, 3174a, 3174b,
v. c. s. The schoolsunder the jurisdictionof theYouth Develooment Councilwere formerly referred to in the appropriation acts
as "reformatoryinstitutions"and are sometimes known as "correctional institutions." Each of these agencies is an institution of a specialized character, justas the institutionsof higher learning are of a specializedcharacter. We cannot say that the usual meaning does not include institutionsof higher learning with any more reason than we could say that it does not include eleemosynary institutions.

In answer to your first and fifth questions,we hold that the employees of these institutions,including those subject to the Teacher Retirement System, under House Bill 666. are eligible for OASI coverage

It might be ur ed that this construction of the last sentence in Subsection ?c) renders it meaningless and unnecessary in that therewould be no State employees subject to the Teacher Retirement System who would be excluded. A similar contentionmight be made with respect to the provision in SectionHon..John H. Winters, page 8 (S&172)

2 of Rouse Bill 709. 13C',fex.

433, 110 S.W.26 96 1937)#we need not indulge in any

To r?se language inHurt v. Cooper, speculation on what agencies or instrumentalities,if any, come within the terms of these provisions. However, these and other provisions in thebills raise ambiguitieswhich would justify
a considerationof their legislativehistory to clarify the lntent of the Legislature in enacting them. But the legislative history as revealed in the official records throwsno light on the agencies to which they were intended to apply,

We have been seriouslyhampered in our study of these questionsby the lack of a record of committee hearings and deliberationsand debates in the Legislature. There are strong indications from extraneous sources that the sponsors of House Bill 709 believed and represented to the Legislature that it applied to the institutionsof higher learning; that the sponsors of House Bill 666 believed and represented to the Legislature that it excluded employees of the institutionsof higher learningwho were subject to the Teacher Retirement System; and that the Legislature enacted the bills in the belief that itwould not be possible for the employees of these institutionswho
were coveredby the Teacher Retirement System to be included in any contract for Social Security coverageuntil the Legislature took further action to appropriatemoney for payment of the contributions. In this connection, the adoption of Senate Joint Resolution 5, Senate Bill 290, and Senate ConcurrentResolution 78 form a part of thebackground necessary to an understanding of what may have been the legislative intentwith respect to the coverage of employees subject to the Teacher Retirement System.

If these surmiseswere borne out by legislativerecords and reports, the conclusionswe have reached on some of the questions would be different. But we have not felt at liberty to be influencedby information from souraeswhich a oourt would refuse to consider if these questionswere before it. It is our belief, from a review of the decisions of this State and elsewhere, that the courts of Texas would not allow evidence of opinions and statements of members of the Legislatureand third persons outside the official records of the Legislature to show a legislative intent at variance with the languageused in the enactments. example,Wiseman v. Madison Cadillac Co., 191 Ark.102 1007 (1935);Security Feed & Seed Co. v. Lee, 138 Fla

### 1,

869 (1939);Ocean Forest Co. v. Woodside 184 S.C.428

### 11 C$P;7!za;;ay v. Bushfield, 69 s D 2 6 N W.2d 1 (1943);City P State, 198Wash. 682;1zP'F'.2d.826(1939‘ Ameriaan Automobile Ins. CO,, 248 Wis, 347, 21 N.W.2d a2 C.J.S.. Statutes. Se 'd ‘0. .3
); Pa ke v. 72m ; -- cs. 3549355,356. On the basis of the language employed-and the legislativehistory of thebills as shownby the officialrecords, we are unable to reach any other answers than the
ones we have given.Hon. John H. Winters, page 9 (S-172)

SUMMARY

State institutionsof higher learning are State institutions in the usual meaning of that term, and their employees are State employees. Therefore, employees of these institutions,including employees in positions subject to the TeacherRetirement System, are eligible for Federal old-age and survivors insuranceil Social Security) coverageunder House Bill 6 6, Chapter 467, Acts of the 54th Legislature,which provides for coverage of State employees.

~lheState Institutionsof higher learning are not juristicentitieswhich are separate and distinct from the State, and their employees are not eligible,for Social Security ooverageunder Article 6958, Vernon's Civil Statutes, as amendedby House Bill 709, Chapter 501, Acts of the 54th Legislature,whioh authorizes Social Security coverage agreements for certain instrumentalitiesof the State and of Its political subdivisions.

APPROVED: Yours very truly,

Marietta M®or Payne JOHNBEN SHEPPERD Reviewer AttorneyGeneral

Davis Cirant Reviewer 

# BY

Will D. Davis Special Reviewer Assistant

John Atohison Acting First Assistant

JohnBen Shepperd Attorney General
MKW/rt