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 712&?23-58ea

808 Broadway, Suite 312 Lubbock, TX. 79401.3479 808,747.5238

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.GlpitolStation Austin,Texas 7:3711 Ue: Whether awards to state employees under the State EmployeeIncentive

ProgramcontravenearticleIII, section44, of the Texas Constitution
Dear Ms. Richards:
You request legal advice on implementingthe 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 EmployeeInclentive Commission, The statutecreates the

consisting

of the state auditor, the comptroller,

,rlle treasurer,

the administrators

of variousagencies 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 employeerecommendations 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 adoptionof employeerecommendations. 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. Benefitsthat cannot be computed or intangible savings maybe recognizedby a nonmonetary

certiiicate

of appreciation. Id. Section2(e) states the formulafor compuzing the amount of a bonu=warded under the program: (e) An employeewhose recommendation results in a net annual savings, or increasein 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

p. 2097Honorable 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 monetaryawards authorized by article 6252-28,

V.T.C.S.,

are constitutional

under articleIII. section44 of the Texas Constitution. Article III, section44 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 compensationto .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-existinglaw.
. . . (Emphasis

added).
You are concerned about the constitutional prohibition against granting

extra coupensatior, to an officerafter 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 performingthe duties of his state anployusnt, as demonstrated

by the exclusi,ans

found in section6 of the statute: (a) Each full-time state employee is eligible to participate

ir. the programexceptan employee: (1) who has authority to implement the recommendation

being made;

. . . . (3) whose job descriptionincludes responeibilitpfor cost analysis, efficiency

analysis, savings iuplemcntation, or other related programswithin ibe euployee's agency; (4) involveid

in, or who has access to, agency resear,ch

and developmentprograms, if that informationis 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 statuteinsteadadds a new term to an eligible

person'semployment relationship

with the state, enablingan employee

to receivecompensation 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 claimsbased on the recommendation.inclu~ding patent claims, copyright claims, trademark

claims,and other:

analogousclaims. 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 serviceaward pins and certificates as compensation

for longevity

of serviceand 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 currentapproFriation8 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 becausethe awardsare based on the lengthof the employee'sservice, it does not follow that the awards are 'additional compensation'

in payment for past serviceafter such service has been performed. It !.e within the discretionof the Legislature

to dd?termine

that a state employeeis
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 compensateemployees for valuable suggestions pursuant to article 6252-28,V.T.C.S., without violatingarticle III, section 44 of the Texas Constitution.
We will deal with you:: secondand third questions together. You ask whether funds have been appropriatedto the State Employees Incmtive Commission for the 1986-1987

bienniumto make awards. If no funds are appropriatedta 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. 2099Honorable Ann W. Richards- Page 4 (JM-459)

of the commission

to state employees based on the recommendation of the commission. Article6252-28.

V.T.C.!;.,

providesin part: Sec. 2.
. . . (b) From fund% appropriated for this purpose, mission may grant the State Employes Incentive Car awards to eligi6le state emnlovees who make recommendations

i%at reduce state expenditures, increasestate revenues, or Improvethe qualityof state services.

. . . . Sec. 4. (a) The commission shall develop policies and orgakizeprocedures to implement a statewide

progrsm:to

reward state employees in the mannerprovedby thisAct for employeerecommendations 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 requestand receiveaid and assistancefrom the governor's office, the Texas Advisory Commisstion on IntergovernmentalRelations, 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 employeeparticipation in the program; (2) obtain an impartial evaluation of each proposed

employee

recommandation; (3) promote rhe Implementationof adopted recommendations

by the agency; (4) monitor the cost savings and other benefitsthat result from the implementation of an employee

recommendation;

p. 2100t 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-agencyaward ceremonies

to recognizeagency employees who are grantedawardsunder this Act. (b) The agency coordinator shall maka the initial determination of the eligibilityof an employee recoxmeldation or of an agency employee who makes a recommendation.An employeewho 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 IncentiveCommissionfor 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). Section4(d) of article6252-28, V.T.C.S., does not, in our opinion,c'onstitute an appropriation

of gifts to the commission. It authorizes .lthe commission

to receivegifts which have bean appropriated

by the lsgislature, and earmarkssuch 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 includesa rider which appropriates "bequestsand gifts of money to state agenciesnamed 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 commissioncontributions received under the authority set out in section 4(d). See generally V.T.C.S. art. 4393-1, %§4.001-4.004 (StateFunds Reform Act). Based on our review of the current

Appropriatixls

Act, the commission has not received

an appropriationto 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 EmployeesIncentive Commission. Stated another way, you ask whether another agency may use its donated funds to finance the awards the commission

decidesto make.
In our opinion,

anotherstate agency may not use donatedfunds to make awards on behalf of the State Employee'sIncentiveCommission. As alreadypointed out, g:Lfts to state agenciesare appropriated by the following

rider:
Sec. 19. ACCEPTANCEOF 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 designatedby 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 atatutorvauthorltv.

. - _ - shall be deposited into the State Treasury and shall be expenddz in accordancewith the provisions of this A-$. (Emphasis added).
Acts 1985, 69th Lag., ch. 9130, art. V, 119. This provislou does not authorizeagencies to accept gifts; it merely appropriates gifts to agenciesauthorized by genmal law to accept them. AttorneyGeneral OpinionsH-1180 (1978); H-X!0 (1973);O-4681 (1942). An agency with generallaw authority to acclept

giftsmay accept only those giftsmade for purposes which reasousbly relate to its statutory purposes. Attorney

GeneralOpinions

MW-373 (1981);

H-120 (1973). The quotedAppropriatjons Act rider providesthat gifts received by au agency must be expended in accordance with the Appropriations Act. They may therefore bo used only for the purposesauthorized 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 appropriatedfunds 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 inquiredabout is not precisely a transferof funds,but it 1s very similar in effect to a transferof appropriated

funds from anotherstate agency to the commission. Article III, sectiontilt of the Texas Constitution prohibitsthe appropriation

of money fmm the Treasury unless pre-existing law authorizesthe appropriation.Austin Natioaal Bank v. Sheppard,71 S.W.2d 242 (Tex. 1934). Article 6252-28, V.T.C.S., authorizesan appropristion

to the commission

for awardsunder 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 commissionto provide for effective implementation

of the incentive

program,and each state agencyhas an agency coordinator

with some responsibility for the functioning of the programwithin 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 appropria

### tion to any agency other than the commission to financethe awards to state employees. We are unaware of another state agencywith general law authority

to m&s awards to employees chosenby the State Employee Incentive Commission. Std.te agmcies have some authority to make awards as additionalcomptmsation 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. 2102Honorable Ann W. Richards- Page 7 (JM-459)

commission

with authoriry '10

make awards to employees of any and all stateagencies. 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 receivesoorooriatious under the State Emulovees Incentive

Program.
_. _ . . and the commission may not transferthis authority to anotheragency; See Moody v. Texas Water C~mlmission, 373 S.W.2d 793 (Tex.Civ. App. - GLn 1963,

writ ref'dn.r,e.)(governmantal powersmust be exercised by body delegated

by law and cannot

be delegated

to others).
SUMMARY The monetary awards authorizedfor 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

bienniumto 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

Generalof Texas JACK HIGHTOWER FirstAssistant

Attorney

Gf:neral
MARY KELLER Executive

Assistant

Attornc:y

General
ROBERTGRAY Special

Assistant

Attorney

G~eneral
RICK GILPIN chai-, opinioncommittee: Prepared

by SusanL. Garrir,aa Assistant

Attorney

General

p. 2103