TBXEATILTORNEY GENEOF 7I3cKAs

January 24~,

1961 ;: HonorableHenry Wade Dlst'lctAttorney Records Building Dallas 2, Texas

DearMr. Wade: O$$ion No. W-986 Ret Does the B6ard of Managers of the Dallas County Hospltal District have legal authnrlty,through an estabZlshed employee retirement program, to enter into a con- ,tract with a mutual life lnsurance company to purchase life annuity ir+@ance policies on employeeswho have attained retirementage an? related ques- ~'tlon. We have received your lett&'of December 21, 1960 en- ; t closingyour opinion, No. 60-19, in which the Sollowlng questions are set forth:

“1. Does the Board of Managens:'oS the Dallas ., County Hospital District have legal authorlty, through an establishedemployee retirement program, to enter'lntoa contractwith a mutual life insurance company to purchase life annuity lrisuriance

policies .onemployeeswho have attained retirement .age.".

“ 2. IS your answer to Question, 1 1s In the afflrmatlve, and assuming that the Board has legal authority to purahase ,agroup life Insurance policy for %ts employees,your opinion Is respectfully

requested as.to whether this Board has,

authority to pu&hase a group life lnsuranctpolicy Srom a muRpla1 life Insurance company. The answers to QuesHons 1 and 2 may be Sound ln.Attorney @neraJ'a Opinion No. O-924 wherein the Sollowlng language Is used?

"We; therefore, feel-it Incumbentupon us to overrule conferenqe:aplnlon Noi 2880, Inasmuch as the express!language of our appellate courts In the cases quoted, written since the above numbered conferenceopinion, clearlyHonorable Henry Wade, Page 2 (W-986)

Indicate the opinion of the,learnedJudge8 to be that polltlcalaubdfvfslonecannot legelly purchase ineurancefrom mutual companiesbecause of Section 52 of Article III OS our Conatitutlon. We have been uiiable to perceive any possible dlstin&Ion In law betweenmutual tire Insurance and mutual employ&w 'llabfllty or Workmen'sCompeneatlon IneuranaeInsofar 88 the Conetitutlonal ~vlolon~ are agpllcable.:~ and, f'urthert

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"Mter care-1 and'&auat%ve Investigation o? a11 availableauthorltlc'a., we are of~opinfon and you are reepectfully advleed that DalUe .' Gounty cannot.

legally purtire Inmaranae In mutual Sire or casualtyeompanles; that suah purchase would Involve.taklng membershIpIn or beaomlrig a QtockholderIn such corporation,aQQoaIatlonor company in dire&t violationof the provialonaot the Texas Constitution." !Phe above quotQd ianguageand the.resultof this opinionwas-fbuatalned in 1942 by the Supreme Co&t of T&U, which heldthat the Auf&In IhdgpendentSchool DIrtrIot aould not purchase a poller from a mutual inauranae corpor8tIon and thi Court declared that the part oS Artiale 486Oa-8, Vernon ’ s 01~11 Statutes,providingSor purchatle OS muttaal~.I~~~ce by a polItI&ilsubdIvIsIon wao unconstltutlonal"In violatoonof dectioti

52 OS ArtPcld III oS the Texas Constitution'. then City of Austin.

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’ the roregolng, we agree with ycgr able opinion; evehold U&both Qaertloaa1 and.2 should be ‘answered in the.nega-

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The 80m-d 0r ha4pr 0r thQ Dali IbePftalDI&rIot, a polIt.ical eubdI%% b OS the State of Texas, may not enter Into a oontractto purchare iiri or retirement

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Honorable Henry Wade, Page 3 (w-986)

insurance fr0m.a mutual dnsurance company. Seatlon 52, Article III, Texas .Con8tltutlOn. Your8 very truly, WILL WILSOW AttorneyGeneral of Texae

Robert L. Armstrong Assistant RLA:hmc '.: APPROVED: OPINION coMMITTEFi W. V. Geppert, Chalrman John L, Estes Rll@y Eugene Fletcher Elmer McVey REVIEWXDFORTBBATTORNEYGBNHUL BY: Morgan Neabltt

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