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Honorable Robert S. Calvert, OpinionNo. C-705 Comptroller of PublicAccQUntS Austin, Texas Re: Whether control of thebuilding and grounds purchased with Texas EmployeesRetirement System Trust funds is within the jurisdiction of the State Board of Control Dear Mr. Calvert: or the Retirement System.

By two letters to-this office,,one~ dated May 16, 1966, and the other dated May'l9, 1966,you have requested an opinion in regard to the aboye~mat~tgr.,VIe quote fromyour letters as follows: Letter of'~Mav ~16th. "The Texas EmployeesRetirement System, out of Trust funds (Article6228a R.C.S.) under the control of that agencyhas recently completed an officebuilding and it is now being occupiedby the retirement system.

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. . . . "Themanagement and control of the building and grounds necessarily,calls for the expenditure of funds from the State,"Treasuty.or the Trust fundswith the State Treasurer under the control of the retirement system, This expense raises the question as to~what agency shall supervise the maintenance and operation of thebuilding and grounds. "Pleaseadvise if the control of thebuilding and grounds is under the jurisdiction of the State Board of Control or the Retirement System?" -3403-Hon. Robert S. CalVert. Page 2 (C-705)

Letter of Mav 19th

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. . . . "Itwas furtherdiscussed at that time, in anticipation of accounts for repair and improvements of thebuilding and groundswhich could not be considered as a part of the original cost to submit toyou the question now in your office. The informationneededby me is to determinewhat approval shouldbe required for passing for payment bills covering the type in question: Employees Retirements

System, Board.of Control or both?" Article 622Sa;Section 2, Vernon's Civil Statutes, as amended, provides,finpart. as follows:

"A. The EmployeesRetirement System of Texasheretofore,

establishedunder the laws of this State is hereby eontinued in corporate existence . . .and the management and operation of said system from the effective date of thisAct shall be governedby the provisions of thisAct. "B. Said system shall continue tobe known as the EmployeesRetirement System of Texas, and by such name all **of** itsbusiness shallbe transacted, all of its funds invested, and all its cash. securities and other properties shallbe held. 81

. . . . "D. The Retirement System shallhave the powers and privileges of a corporation and shall have also the powers,, privilegesand immunities hereinafter conferred.-"~ Section 6 of Article 6228a. provides in part that: "1. The General Administration and responsibility for the operation of the Retirement System and formaking effective the provisions of theAct are hereby vested in **a** State Board of Trustees
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. . . . -3404-Hon. Robert S. Calvert, page 3 (C-705)

Section 7 of Article 6228a. provides that: "C. The Treasurer of the State of Texas shallbe the custodian of all bonds, securities, and funds. All payments from said funds shallbe made by him onwarrants drawnby the State Comptroller of PublicAccounts supported only upon vouchers signedby the Secretary of the Retirement System and the Chairman of the State Board of Trustees. A duly attested copy of a resolution of the State Board of Trusteesdesignating such persons shall be filedwith said Comptroller as his authority for issuing suchwarrants." Section 13 of Article 6228a provides, in part, as follows: I,

. . . All provisions of the law inconsistent with the provisions of thisAct are hereby repealed to the extent of such inconsistency
. . . ." The land and building in questionwere purchased pursuant to Senate Concurrent ResolutionNo. 17, Acts 59th Legislature,Regular Session 1965, page 1978,which contained, in part, the following:

"WHEREAS,The Board of Trustees of the Bmployees Retirement System of Texashas requested Legislative advice concerning the acquisition of suitable real property and the construction of an officebuilding for the System: and II

. . . . "WHEREAS,Under **the** provisions of the RetirementAct, funds are available to acquire both the land and thebuilding contemplatedby the Board of Trustees of the EmployeesRetirement System . . .: and "WBEREAS, Itwill not require any additional legislation other than this resolution for the Board of Trustees to acquire such land and con- -3405-Hon. Robert S. Calvert, page 4 (C-705)

struct a building for the EmployeesRetirement System tobe paid from the Expense Fund: now therefore,be it "RESOLVED,By the Senate of the State of Texas, the House of Representativesconcurring, that the Board of Trustees of the Employees Retirement System of the State of Texasbe authorized to purchase a,suitable site and to erect thereon a building adequate tohouse the employees and the files of such System; 1, I,

. . . . It is clear from those portions of Article 6228a quoted above that the Retirement System is a corporate entity. Section 2. B. of Article 6228a,quoted above, provides that all properties of the Retirement System shall be held in the name of the "Employees Retirement System:of~:Texas'?.

Article 622Sa~,places the administration of the Retirement System in thehands of the Board of Trustees, and the State Treasurer is made custodian,,,of,all bonds, securities, and funds belonging to the Retirement System. The statute provides that all payments from Retirement System funds under the custodianship of the State Treasurer shallbe made by the Treasurer on II

. . .warrants~drawnby the State Comptroller of PublicAccounts supported only upon vouchers signedbv the Secretary of the Retirement System and the-Chairmanof the State Board of Trustees." (Emphasisadded.)

Artiale 665,Vernon's Civil Statutes, provides, in part, that: "The State Board of Control shallhave charge and control of all public'buildings,grounds and property of the State, . . . and is chargedwith the responsibility to properly.care for and protect such property from damage, intrusion or improper usage . . . . And the Board shallbe authorized to provide for the allocation,of space in any of the publicbuildings to the departments of the State Government and for thg'yses authorizedby law to : ;3406-

,,. .

Hon. Robert S. Calvert, page 5 (C-705)

have and occupy space in the Statebuildings, and shallbe authorized to make any repairs to any such buildings or parts thereofnecessary to the serviceable accomodation of the uses to which suchbuildings or space thereinmay be allotted." If the building and grounds in question were held to be under the control of the Board of Control pursuant toArticle 665, thenby virtue of such holding, the Board of Control would be vested with the right to provide for the allocation of space in thebuilding to the various departments of the State government. Such an allocation of space for the use by other departments of the State governmentwould be inconsistentwith the legislative intent as manifested in Article 6228a and Senate Concurrent ResolutionNo. 17, cited above, andwould be in contravention of the trust nature of the property, as hereinafter discussed. This officeheld inAttorney General's OpinionWW-565 that the funds of the EmployeesRetirement System are the property of a trust created for thebenefit of a class of citizens of this State. OpinionWW-565 was based on the authority of Friedmanv. American Surety Co. of New York, 137 Tex. 149, 151 S.W.Zd 570 (1941)wherein the Supreme Court of Texaswas concerned with the status of the EmployeesCompensation Fund and the necessity for specific legislativeappropriationprior to the expenditure of certain monies belonging to the fund. In concluding that legislative appropriationwas not necessary, the Court stated:

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. . . the fund createdby theAct in its very inceptionbecomes the property of a trust created for thebenefit of a class of citizens of this State . . . . The taxes are levied and collected for such fund, and not for the State in its sovereign capacity." It necessarily follows that thebuilding and grounds in question having been acquiredwith trust funds, are impressed with the trust and remain trust property, subject to the management and control of the Board of Trustees of the Texas Employees Retirement System and do not fallwithin that category of property placed under the management of the State Board of Control -3407-- .

Hon. Robert S. Calvert, page 6 (C-705)

by Article 665. SUMMARY

Control ofbuilding and grounds purchased with Texas EmployeesRetirement System Trust funds iswithin the jurisdiction of the Board of Trustees of the Texas Retirement System. Payment of accounts formaintenance of and improvements to thebuilding and grounds of the Retirement System shouldbe made by the Treasurer out of the Texas EmployeesRetirement System Trust funds onwarrants drawnby the State Comptroller supported only upon vouchers signed by **the** Secretary of the Retirement System and the Chairman of the State Board of Trustees. Yours very truly, WAGGONER CARR Attorney General

By:-&=+ Lewis E. Berry, Jr. Assistant LEBjr:ra APPROVED: OPINION COMMITTEE W. V. Geppert, Chairman Paul Phy C. Daniel Jones, Jr. John Reeves W. 0. Shultz APPROVED FOR THEATTORNEY GENERAL BY: T. B. Wright **-3408-**