December 16, 1974 

The Honorable Ben Bynum 

Chairman, Committee on Insurance 

House of Representatives 

Austin, Texas 

Dear Representative Bynum: 

Opinion No. H- 475 

Re: Extent of the Comptroller’s 

authority to regulate companies participating in the 

State’s deferred compensation 

plan. 

Your opinion request concerns the authority of the State Comptroller to 

issue a specific regulation pursuant to his duty to administer the deferred 

compensation program for public employees provided by Article 6252-3b, 

V. T. C. S. The statute authorizes the use of deferred compensation plans 

whereby public employees may defer part of their salaries for purposes of 

investment in life insurance, fixed or variable annuities, or mutual funds. 

V. T. C. S. art. 6252-3b. 5 1. Insofar as state employees are concerned, 

the Comptroller of Public Accounts is authorized to venter into contracts 

with employees to defer a portion of their salaries and to make the payment 

of premiums on the investment item purchased. V. T. C. S. art. 6252-3b, 

§ §2. 5. 

Section 1 of the statute authorizes the investment contract itself: 

The state or any county, city, town, or other 

political subdivision may, by contract. agree with 

any employee to defer, in whole or in part, any 

portion of that employee’s compensation and may 

subsequently, with the consent of the employee, 

contract for, purchase, or otherwise procure a 

fixed or variable life insurance or annuity contract 

or mutual fund contracts for the purpose of funding 

a deferred compensation program for the employee, 

from any life underwriter duly licensed by this 

state who represents an insurance company licensed 

to contract business in this state, 

p. 2164 
The Honorable Ben Bynum, page 2 (H-475) 

However, the Comptroller has promulgated the following requirement 

which must be met by all life insurance companies and underwriters 

participating in the program: 

The Company represents that it is a life insurance 

company, licensed for business in Texas and that the 

Company has in its possession all licenses or contracts at law required by law to offer for sale all of 

the contracts authorized for purchase under the 

Deferred Compensation Plan and that each representative of the Company contracting state employees for 

participation in the plan will be licensed to sell and 

will counsel the state employee as to the benefits of, 

each type of investment contract authorized. 

The Comptroller’s regulation imposes additional material requirements 

for participation in the program beyond the requirements specified by the 

Legislature. In our opinion, section 1 of Article 6252-3b clearly provides 

that any duly licensed life underwriter and any life insurance company 

licensed to transact business in Texas can participate in the program. 

The Comptroller however, has in effect ruled that many such duly licensed 

underwriters and companies cannot participate since they do not also hold 

licenses or contracts which would permit them to sell mutual funds. 

There is no authority expressly granted to the Comptroller in Article 

6252-3b to issue rules or regulations. However, section 3 of the statute 

provides that “[t]he administration of the deferred compensation program 

shall be under the direction of the state ccanptroller or his designee . - . .‘I 

It is thus necessary to determine whether the grant of authority in section 3 

to administer the program includes an implied power to issue the regulation 

in question, 

A general rule of statutory construction, stated in Terre11 v. Sparks, 135 

S. W. 519, 521 (Tex. Sup. 1911) is that: 

p. 2165 
The Honorable Ben Bynum, page 3 (H-475) 

Whenever a power is given by statute, everything 

necessary to make it effectual or requisite to 

attain the end is implied. It is a well-established 

principle that statutes containing grants of power 

are to be construed so as to include the authority 

to do all things necessary to accomplish the object 

of the grant. The grant of an express power carries 

with it by necessary implication every other power 

necessary and proper to the execution of the power 

expressly granted. Where the law commands 

anything to be done, it authorizes the performance 

of whatever may be necessary for executing its 

commands. (citing Sutherland on Statutory Construction, 5 341) 

See also Attorney General Opinion C-265 (1964). 

However, the implied powers of an administrative body to effectuate 

the intent of a statute are limited. 

Although a statute conferring administrative 

authority will generally be liberally construed, 

the agency must not go beyond the clear intent 

of the legislature. It may not enlarge its powers 

by its owh orders, or exercise a power expressly 

conferred not upon it, but upon another agency or 

arm of government. 1 Tex. Jur. Zd, Administrative 

Law, § 6. 

In our opinion, the intent of the Legislature in passing Article 6252-3b. 

expressed in unambiguous language and reflected in the committee debates 

of the House of Representatives, was to allow any licensed life underwriter who represents an insurance company licensed to contract business 

in Texas to participate in the deferred compensation plan program. The 

Comptroller’s regulation clearly runs contrary to this intent. 

In Ke1l.y v. Industrial Accident Board, 358 S. W. Zd 874, 876 (Tex. Civ. 

APP. --Austin 1962, writ ref’d. ) the court struck down an administrative 

rule, saying: 

p. 2166 
The Honorable Ben Bynum, page 4 (H-475) 

. . . the rules and regulations . . . enacted by 

the administrative body may not impose additional 

burdens, conditions or restrictions in excess of or 

inconsistent with the statutory provisions. 

See also Johnson v. Firemen’s Insurance Co., 398 S. W. 2d 318 (Tew. Civ. 

APP. --Eastland 1965, no writ); and Attorney General Opinion M-609A (1970). 

The Comptroller’s regulation imposes an additional burden in excess of the 

legislative intent since it requires that the life underwriter or insurance 

company be licensed to provide all four types of deferred compensation plans, 

and not just any one of the plans as the statute permits. 

A rule ~of an administrative agency is void if it conflicts with the statute. 

Teacher Retirement System v. Duck-worth, 264 S. W. 2d 98 (Tex. Sup. 1954) 

(adopting the opinionof the Court of Civil Appeals in 260 S. W. 2d 632). 

Since the Comptroller’s regulation in this instance runs contrary to the 

intent of the statute in question and conflicts with the statutory requirements~ for participation in the deferred compensation program, it is our 

opinion that the regulation is void. 

SUMMA RY 

The regulation of the Comptroller requiring a life 

underwriter or insurance company to be licensed to 

provide life insurance, annuities and mutual fund 

contracts in order to participate in the deferred com- 

‘pensation plan authorized by Article 6252-313, V. T. C. S., 

is void. 

Very truly yours, 

Attorney General of Texas 

irst Assistant 

I 

C. ROBERT HEATH. Chairman 

Opinion Committee 

p. 2167