1 

c. 

JIM MATTOX 

Attorney General 

Supreme Court Building 

P. 0. BOX 12548 

Austin. TX. 78711. 2549 

51214752501 

Telex 9101874.1387 

Telecopier 51Z475-0288 

714 Jackson, Suite 700 

Dallas, TX. 752024506 

2141742-8944 

4824 Alberta Ave.. Suite 180 

El Paso, TX. 799052793 

915/533-3484 

1001 Texas, Suite 700 

Houston, TX. 77002.3111 

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808 Broadway, Suite 312 

Lubbock, TX. 79401.3479 

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4309 N. Tenth, Suite B 

McAllen. TX. 78501-1885 

5121682.4547 

2w MaIn Plaza, suite 400 

San Antonio, TX. 782012797 

51212254191 

An Equal Opportunity/ 

Affirmative Action Employer 

The Attorney General of Texas 

March 28, 1986 

Honorable Ann W. Xchards 

Treasurer of the 'state of Texas 

Opinion No. m-459 

P. 0. Box 12608. Glpitol Station 

Austin, Texas 7:3711 

Ue: Whether awards to state 

employees under the State 

Employee Incentive Program contravene article III, section 44, 

of the Texas Constitution 

Dear Ms. Richards: 

You request legal advice on implementing the State Employee 

Incentive Program, which was created by article 6252-28, V.T.C.S. 

See Acts 1985, 69th Leg., ch. 873, at 6421. 

State Employee Inclentive Commission, 

The statute creates the 

consisting of the state auditor, 

the comptroller, ,rlle treasurer, the administrators of various agencies 

and three members of the public. Section 4 of article 6252-28, 

V.T.C.S.. provide:3 in part: 

The ~commission shall develop policies and 

organize procedures to implement a statewide 

program to reward state employees in the manner 

provided by this Act for employee recommendations 

that reduce. state expenditures, increase state 

reventm3 !, or improve the quality of state 

service:r.. 

Sec. 4(a). Other provisions establish procedures for the submission, 

evaluation, and adoption of employee recommendations. V.T.C.S. art. 

6252-28, 097-10. The commission may grant a monetary bonus to an 

employee whose suggestion is implemented if it produces savings that 

can be computed u:iing a cost-benefit analysis. Id. 92. Benefits that 

cannot be computed or intangible savings maybe recognized by a 

nonmonetary certiiicate of appreciation. Id. Section 2(e) states the 

formula for compuzing the amount of a bonu=warded under the program: 

(e) An employee whose recommendation results 

in a net annual savings, or increase in revenues, 

of $100 or more is eligible for a bonus of 10 

percent of the net savings, or revenue increase, 

up to a maximum award of $5,000. An employee 

whose ::trcommendation results in a net annual 

savings, or increase in revenues, of less than 

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Honorable Ano W. Richards - 'Page 2 (JM-459) 

I 

. 

I 

$100 is not eligible for a bonus but is eligible 

for a certificate of appreciation. 

You first ask whether the monetary awards authorized by article 

6252-28, V.T.C.S., are constitutional under article III. section 44 of 

the Texas Constitution. 

Article III, section 44 of the constitution provides: 

The Legislature shall provide by law for the 

cosmensation of arL officers, servants, agents and 

public contractors . . . but-shall not- g rant - extra 

compensation to .z*y officer, agent, servant. or 

Public contractor+ after such public service shall 

have been performed or contract entered into, for 

the performance of the same; nor grant, by appropriation or otherrise, any amount of money out of 

the Treasury of tGc State, to any individual, on a 

claim, real or pritended, when the same shall not 

have been provide? for by pre-existing law. . . . 

(Emphasis added). 

You are concerned about the constitutional prohibition against 

granting extra coupensatior, to an officer after the services have been 

performed. 

Article III, section 44, does not prohibit the payment of 

benefits to employees as en element of compensation or a tern of 

employment. & Byrd v. City of D;E8::6 $.$ ::t6J,T.'". 1928); 

Attornev General Ouinions H-1303 Article 

6252-28, V.T.C.S., 'does not permit an.&ployee to receive extra 

compensation for performing the duties of his state anployusnt, as 

demonstrated by the exclusi,ans found in section 6 of the statute: 

(a) Each full-time state employee is eligible 

to participate ir. the program except an employee: 

(1) who has authority to implement the 

recommendation being made; 

. . . . 

(3) whose job description includes responeibilitp for cost analysis, efficiency analysis, 

savings iuplemcntation, or other related programs within ibe euployee's agency; 

(4) involveid in, or who has access to, 

agency resear,ch and development programs, if 

that information is used as the basis of the 

recosmendation; or 

p. 2098 
, Honorable Ann W. Richards - Page 3 (J&459) 

(5) whose job description includes 

developing the type of change in the agency 

administratior. that is recommended by the 

recommandstior. . . . 

V.T.C.S. art. 6252-28, 56. The statute instead adds a new term to an 

eligible person's employment relationship with the state, enabling an 

employee to receive compensation for performing intellectual work that 

is beyond the scope of his employment responsibilities and that has a 

concrete monetary value to the state. Merely by submitting a 

recommendation, an employel: assigns to the state all claims based on 

the recommendation. inclu~ding patent claims, copyright claims, 

trademark claims, and other: analogous claims. V.T.C.S. art. 6252-28, 

IlO( Thus, the state may receive some consideration from 

participants in the State Employees Incentive Program whose 

suggestions are not implemented. 

Attorney General 0p::nion WW-790 (1960) determined that an 

employee awards program of the State Highway Commission did not 

violate article III, secizion 44 of the Texas Constitution. The 

Appropriations Act authorized the Highway Department to give employees 

service award pins and certificates as compensation for longevity of 

service and safety award pins and certificates for safe operation of 

state equipment. Acts 195'):, 56th Leg:, 3d~C.S., ch. 23, at 590; see 

also Acts 1985, 69th Leg.. ch. 980, art. 

vision in current approFriation8 act). 

V, 511, at 7768 (simi~ 

The opinion determined that 

article III, section 44 of the constitution did not prohibit the 

awards, stating as follows: 

Just because the awards are based on the length of 

the employee's service, it does not follow that 

the awards are 'additional compensation' in payment for past service after such service has been 

performed. It !.e within the discretion of the 

Legislature to dd?termine that a state employee is 

more valuable to the State today because of his 

uperience gained by long and faithful past performance. 

Attorney General Opinion WW-790 (1960); see also Attorney General 

Opinion H-336 (1974). In our opinion, the legislature may also 

compensate employees for valuable suggestions pursuant to article 

6252-28, V.T.C.S., without violating article III, section 44 of the 

Texas Constitution. 

We will deal with you:: second and third questions together. You 

ask whether funds have been appropriated to the State Employees 

Incmtive Commission for the 1986-1987 biennium to make awards. If no 

funds are appropriated ta make awards under the State Employee 

Incentive Program, you wish to know whether a state agency, which has 

the authority to accept donations or gifts , may make awards on behalf 

p. 2099 
Honorable Ann W. Richards - Page 4 (JM-459) 

of the commission to state employees based on the recommendation of 

the commission. 

Article 6252-28. V.T.C.!;., provides in part: 

Sec. 2. . . . 

(b) From fund% appropriated for this purpose, 

the State Employes Incentive Car mission may grant 

awards to eligi6le state emnlovees who make 

recommendations i%at reduce state expenditures, 

increase state revenues, or Improve the quality of 

state services. 

. . . . 

Sec. 4. (a) The commission shall develop 

policies and orgakize procedures to implement a 

statewide progrsm:to reward state employees in the 

manner proved by this Act for employee recommendations that red& state exuenditures. increase 

state revenues, or improve <he quality of state 

services. 

. . . . 

Cd) The coam~lssion may accept contributions 

and/or assistan@ from private institutions and 

organizations, and may request and receive aid and 

assistance from the governor's office, the Texas 

Advisory Commisstion on Intergovernmental Relations, and other state agencies so as to provide 

for an effective kmplementation of this Act. 

Sec. 5. (a) each state sgency shall designate 

an agency coord:i;ator. The agency coordinator 

shall: 

(1) promote ~lgency employee participation in 

the program; 

(2) obtain an impartial evaluation of each 

proposed employee recommandation; 

(3) promote rhe Implementation of adopted 

recommendations by the agency; 

(4) monitor the cost savings and other 

benefits that result from the implementation of an 

employee recommendation; 

p. 2100 
t 

Honorable Ann W. Richards -' Page 5 (34-459) 

(5) file rc7orts with the commission as 

required by the rules of the commission; and 

(6) arrange and conduct intra-agency award 

ceremonies to recognize agency employees who are 

granted awards under this Act. 

(b) The agency coordinator shall maka the 

initial determination of the eligibility of an 

employee recoxmeldation or of an agency employee 

who makes a recommendation. An employee who is 

aggrieved by the ~eligibility determination of the 

agency coordinatD:r may request a redetermination 

by the commission. (Emphasis added). 

We are unable to find any appropriation expressly made to the 

State Employees Incentive Commission for the 1986-1987 biennium for 

any purpose. See Acts 1981i, 69th Leg., ch. 980, at 7496-7499 (recapitulation of appropriations made to axecutive and administrative 

departments and agencies). Section 4(d) of article 6252-28, V.T.C.S., 

does not, in our opinion, c'onstitute an appropriation of gifts to the 

commission. It authorizes .lthe commission to receive gifts which have 

bean appropriated by the lsgislature, and earmarks such gifts for the 

commission's use. See TM, Const. art. VIII, 56; National Biscuit 

Company v. State, 13z.W.21~ 687 (Tex. 1940). The Appropriations Act 

includes a rider which appropriates "bequests and gifts of money to 

state agencies named in t,h.is Act" to the agency designated by the 

grantor. Acts 1985, 69th !Ieg., ch. 980, art. V, 519, at 7776. Since 

the commission is not named in the Appropriations Act, the rider does 

not appropriate to the commission contributions received under the 

authority set out in section 4(d). See generally V.T.C.S. art. 

4393-1, %§4.001-4.004 (State Funds Reform Act). Based on our review 

of the current Appropriatixls Act, the commission has not received an 

appropriation to fund the awards authorized by article 6252-28, 

V.T.C.S. 

As we understand your third question, you wish to know whether 

another state agency with authority to accept donations may use 

donated funds to make awards to state employees on behalf of the State 

Employees Incentive Commission. Stated another way, you ask whether 

another agency may use its donated funds to finance the awards the 

commission decides to make. 

In our opinion, another state agency may not use donated funds to 

make awards on behalf of the State Employee's Incentive Commission. 

As already pointed out, g:Lfts to state agencies are appropriated by 

the following rider: 

Sec. 19. ACCEPTANCE OF GIFTS OF MONEY. All 

bequests and gifts of money to state agencies 

named in this Ac,t are hereby appropriated to the 

p. 2101 
: 

Honorable Ann W. Richards - !?age 6 (JM-459) 

agency designated by the grantor and for such 

purposes as the grantor may specify, subject to 

the following: 

(1) All such bequests and gffts of money, 

unless exewuted 1;;~ . sueclfic - atatutorv authorltv. _ - 

shall be deposited into the State Treasury and 

shall be expenddz in accordance with the provisions of this A-$. (Emphasis added). 

Acts 1985, 69th Lag., ch. 9130, art. V, 119. This provislou does not 

authorize agencies to accept gifts; it merely appropriates gifts to 

agencies authorized by genmal law to accept them. Attorney General 

Opinions H-1180 (1978); H-X!0 (1973); O-4681 (1942). An agency with 

general law authority to acclept gifts may accept only those gifts made 

for purposes which reasousbly relate to its statutory purposes. 

Attorney General Opinions MW-373 (1981); H-120 (1973). 

The quoted Appropriatjons Act rider provides that gifts received 

by au agency must be expended in accordance with the Appropriations 

Act. They may therefore bo used only for the purposes authorized by 

items of appropriation to th,at ageucy. See Tex. Const. art. VIII, 16; 

National Biscuit Company v. State, 135 S.W.2d 687 (Tex. 1940). 

Moreover, donated funds a;? also subject to su appropriations act 

rider which prohibits the transfer of appropriated funds from one 

ageucy to another unless the transfer Is specifically authorized by 

the Appropriations Act. Acts 1985, 69th Leg., ch. 980, art. V, 563, 

at 7792. The arrangewent 'you have inquired about is not precisely a 

transfer of funds, but it 1s very similar in effect to a transfer of 

appropriated funds from another state agency to the commission. 

Article III, section tilt of the Texas Constitution prohibits the 

appropriation of money fmm the Treasury unless pre-existing law 

authorizes the appropriation. Austin Natioaal Bank v. Sheppard, 71 

S.W.2d 242 (Tex. 1934). Article 6252-28, V.T.C.S., authorizes an 

appropristion to the commission for awards under the incentive program 

it administers; the commis3:Lon may grant awards "[flrom funds appropriated for this purpose. . . ." V.T.C.S. art. 6252-28. 52(b). Other 

state agencies may assist the commission to provide for effective 

implementation of the incentive program, and each state agency has an 

agency coordinator with some responsibility for the functioning of the 

program within his agency. Set V.T.C.S. art. 6252-28, 5$4(d). 5, 7. 

Article 6252-28, V.T.C.S., does not, however, authorize an appropriation to any agency other than the commission to finance the awards to 

state employees. We are unaware of another state agency with general 

law authority to m&s awards to employees chosen by the State Employee 

Incentive Commission. Std.te agmcies have some authority to make 

awards as additional comptmsation to their own employees, sea Acts 

1985, 69th Leg., ch. 980, art. V, $11, at 7768; Attorney-&era1 

Opinion WW-790 (1960), but we do not know of an agency other than the 

p. 2102 
Honorable Ann W. Richards - Page 7 (JM-459) 

commission with authoriry '10 make awards to employees of any and all 

state agencies. 

Administrative agencies have only those powers expressly conferred on them by statute , and those necessarily implied from express 

powers. Railroad Commiss~.on of Texas v. Red Arrow Freight Lines, 

Inc., 96 S.W.Zd 735 (Tex. Eiv. App. - Austin 1936, writ ref'd). The 

legislature has expressly conferred upon the commission the authority 

to receive soorooriatious _. _ under the State Emulovees . . Incentive Program. 

and the commission may not transfer this authority to another agency; 

See Moody v. Texas Water C~mlmission, 373 S.W.2d 793 (Tex. Civ. App. - 

GLn 1963, writ ref'd n.r,e.)(governmantal powers must be exercised 

by body delegated by law and cannot be delegated to others). 

SUMMARY 

The monetary awards authorized for the State 

Employees Incentive Program by article 6252-28, 

V.T.C.S., do not ,violate article III, section 44 

of the Texas Conistitution. No funds have been 

appropriated to the State Employees Incentive 

Commission for t1,e 1986-1987 biennium to make such 

awards. Another state agency may not spend 

donated funds to finance awards made by the 

commission to sta,te employees. 

.+?.JZh 

MATTOX 

Attorney General of Texas 

JACK HIGHTOWER 

First Assistant Attorney Gf:neral 

MARY KELLER 

Executive Assistant Attornc:y General 

ROBERT GRAY 

Special Assistant Attorney G~eneral 

RICK GILPIN 

chai-, opinion committee: 

Prepared by Susan L. Garrir,aa 

Assistant Attorney General 

p. 2103