# The Attorney General of Texas

December 31, 1982 MARK WHITE Attorney General

Supreme Court Building P. 0. Box 12548 Austin. TX. 78711. 2548 5121475-2501 Telex 9101874.1387 Telecopier 5121475-0286

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200 Main Plaza, Suite 400 San Antonio, TX. 76205.2797 5121225~4191

An Equal Opportunity/ Affirmative Action Employer Mr. Kenneth H. Ashworth Connnissioner CoordinatingBoard Texas College & University System 200 E. RiversideDrive Austin, Texas 78704 OpinionNo. MW-566

lk: Whether Senate Bill No. 118 of the Sixty-seventh Legislature applies to public communityjunior colleges

Dear Mr. Ashworth:

You ask two questions regarding Senate Bill No. 118 enacted by the Sixty-seventhLegislature. Acts 1981, 67th Leg., ch. 16, at 21. This bill, codifiedas article 6813e,V.T.C.S.,provides inpart:

sec. 2. A state governmental body may not make a deduction from the compensationpaid to an officer or employeewhose compensation is paid in full or in part from state funds unless the deduction is authorizedby law.

You first ask whether article 6813e applies to public community junior colleges.
This statute defines "state governmental body" in part as follows:
(1) a board, commission, department. office, or

other agency that is in the executive branch of state government and that was created by the constitutionor a statute of the state, including
an institution of higher education as defined by section 61.003, Texas Education Code, as amended....
Section 61.003 of the Texas Education Code defines "institution of higher education" to include "any public junior college." Article 6813e thereforeapplies to officers and employees of public cormunity junior collegeswhose compensationis paid in full or part from state funds.

You next ask whether article 6813e, V.T.C.S., prohibits deductions from the compensation of public community junior college officers or employees when the deduction is for personal savings or indebtednessand is forwardedto a creditunion orbank.

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The answer to your question depends on whether this kind of transaction involves "a deduction from the compensationpaid" to the officer or employee. "Deduction" is defined by the dictionary as "somethingthat is or may be subtracted,"for example,deductions from taxable income. Webster's New Collegiate Dictionary 293 (1980). We believe article6813e,V.T.C.S., applies to any amount subtracted from
an employee's paycheck representing take-home pay. Thus, article 6813e, V.T.C.S., would prohibit deductions from the compensation of public community junior college officers and employees when the deduction is forpersonal savingsor indebtednesstobe forwardedto a creditunion or bank.

A brief submittedto this office suggests thatarticle 6813edoes not apply to deductionswhich merely constitute a different form of payment to an employee, such as payment of a portion of his salary to his credit union account. However, there are currently on the books statutes which effectively offer a different form of payment to the employee. Article 6252-3b, V.T.C.S., allows public employees to participate in deferred compensationplans. Even though the employee will ultimately receive the money, the legislature considered it necessary to enact a statute authorizing state officers to defer an employee'scompensation.

The legislativehistory reveals some discussionof the deposit of
an entire paycheck in the employee's credit union account. senate Floor Tape 1, side 1, SenateBillNo. 118, 2d Reading. Feb. 23, 1981. However, the discussiondid not cover the transferof a portion of the employee's check to his savings account. The distinction between "deduction" and deposit of a paycheck in a financial institution is illustratedby section (3) of article 4344b.V.T.C.S., enactedby the
same legislaturewhich enacted article 6813e, V.T.C.S. This statute concerns the direct deposit of payroll warrants by magnetic tape transfer. SeeAttorneyGeneralOpinionsMW-333 (1981);MW-213 (1980). Article 4344bprovides inpart:

(3) Notwithstanding the provisions of any other statute, the Comptrollerof Public Accounts may establish and operate an electronic funds transfer system to transfer directly into their accounts in financial institutions onlv: (11

. , employees' gross state salaries less deductions specificallyauthorizedby state or federal law or reimbursement for travel and subsistence of employees and (ii) payments of annuitants by the Employees Retirement System of Texas or the Teacher Retirement System of Texas under either system's administrative jurisdiction. An authorized payee must request in writing to participate in any electronic funds transfer system establishedand operatedby the Comptroller of PublicAccounts. A single transfermay contain

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payments to multiple payees without the necessity of issuing individual warrants for each payee. The Comptroller shall establish procedures for administering the system and may use the services of financial institutions, automated clearinghouses, and the federal government. The
use of electronic funds transfer or any other payment means does not create any rights that would not have been created had an individual state warrant been used as the payment medium. The State Treasurer may not make payment of a state employee’s salary before the last working day of thepayrollperiod. (Emphasisadded).

Acts 1981, 67th Leg., ch. 253, at 632. Thus, the legislature authorized deposit of the employee’s salary less deductions specificallyauthorizedby law. We believe the transfer of a portion of the employee’s salary to his savings account would constitute a deductionwithin article 6813e.

You also ask whether section 2.07 of the Education Code provides authority for such salarydeductions. This statuteprovides in part:

(b) Any teacher’s or school employee’s assignment, pledge, or transfer of his salary or wages 68 security for indebtedness -- or any interest or part of his salary or wages -- then due or which may become due under an existing contract of employment shall be enforceable only under the followingconditions:

(1) Before or at the time of execution, delivery, or acceptance of an assignment, pledge, or transfer,written approvalmust be obtained from the employing authority or officer, and if the teacher or school employeeexecutingthe instrumentis employed by:

. . ..

(C) a college,university, or any other educational institution, approval of his assignment, pledge, or transfer must be obtained from the salary disbursement officer of the college, university, or other educational institution;
(2) Any assignment,pledge, or transfer must be in writing and acknowledged as

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required for the acknowledgementof deeds or other recorded instruments, and if executed by a marriedperson, itmust alsobe executed and acknowledged in a like manner by his or her spouse; however, the employer approving
an assignment,pledge, or transfer need not acknowledgeit; and
(3) An assignment,pledge, or transfer shall be enforceableonly to the extent that the indebtedness it secures is a valid and enforceableobligation.

The predecessor of this statute has been held to authorize salary deductions from teachers' salaries as security for indebtedness pursuant to the teacher's assignment of salary. Attorney General Opinions o-4033, O-3474 (1941); O-2141 (1940). See also Attorney General Opinion M-613 (1970). If an officer or employee has made an assignmentof salary for an indebtednessto a bank or creditunion,we believe section 2.07 would authorize salary deductions to pay that indebtedness. However. we do not believe section 2.07 authorizes deductions for the purpose of payments into the employee's savings account. Section 2.07 permits assignments as security for indebtedness, that is, to pay an obligation to a third party. Se.2 Trevino v. Trevino, 555 S.W.2d 792 (Tax. Civ. App. - Corpus Christi 1977,no writ) (definingdebt). Payment to the employee'sown account doesnot involvean obligationto a thirdparty.

SUMMARY
Public communityjunior collegesare subject to 6813e. V.T.C.S., which prohibits deductions from the compensationof public officers and employees unless authorized by law. Article 68131~~ applies to deductions for personal savings or indebtedness. Section 2.07 of the Texas Education Code authorizes deductions from the salaries of employees and officers of such institutions for indebtednessto be forwarded to a creditunion or bank, but does not authorize such deductions for personal savings.

MARK WHITE Attorney General of Texas I

JOHNW. FAINTER,JR. FirstAssistantAttorneyGeneral

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Mr. Kenneth H. Ashworth - Page 5 (MW-566)

RICHARD E. GRAY III ExecutiveAssistantAttorneyGeneral
Preparedby SusanL. Garrison AssistantAttorneyGeneral

APPROVED: OPINION COMMITTEE

SusanL. Garrison,Chairman Jon Bible Roxanne Caperton Rick Gilpin PatriciaHinojosa Jim Moellinger BruceYoungblood

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