October 14, 1968

Honorable Harry B. Kelton Director, Texas National Guard Armory Board West Austin Station Austin, Texas 78703

Dear Mr. Kelton: OpinionNo. M-289

Re: Merit increases for Armory Board employees and construction of House Bill No. 5, Acts of 60th Legislature, ArticleV,~Section 1, and Article 6252, V.C.S.

Your request for an op tion: inion poses the following ques-

"Shouldone or more of the employees on a local fund payroll be given a one stepmerit increase effective September lst, 1968 and later in the year the payroll is transferred for payment from our GeneralRevenue appropriation for classified salarypositions, can the State Comptroller legallyapprove the salaries for payment at the step two rate of the Classification Salary Scheduleprovided suchmerit increases conform to the provisions ArticleV, Section 1, paragraph a, sub-paragraph (2) of House Bill No. 5, Acts of the 60th Legislature, First Called Session, 1968 and Article 6252 Revised Civil Statutes of Texas?"
Subdivision (2) of Section 1 of ArticleV of the current AppropriationAct relating to merit salary increasesprovides:

"(2) MERIT SALARY INCREASES. During the fiscalyear beginning September 1, 1968, in addition to other salary increasesauthorized in this Section, agency administratorsmay,grant merit salary increases to selected employees whose performance or productivity is consistently above that normally expected or required. Suchmerit increases shallbe subject to the following restrictions:

-1404-Ron. Harry B. Kelton, Page 2 (M-289)

"(a) The source of funds shallbe only the items of appropriations in this Act for 'MeritSalary Increases',except as otherwise authorizedbelow. The maximummonthly expenditure formerit salary increases shall be onetwelfth of the total appropriation for that item."(b) No employeemay receivemore than two one-step increases from funds appropriated formerit salary increasesduring the fiscal year beginning September 1, 1968.
"(c) For agencies financed from more than one fund, the oost ofmerit increases shallbe allocated to each fund in the sameproportion as regular payrolls bear to such funds. "(d) Where a specific line item appropriation Is not provided formerit salary increases, agencies are authorized to allocate not more than 1.7s of the fiscal 1969 budget for classifiedpositions,providedhowever that any merit salary increases so granted shall be subject to the provisions of thzs section related to merit salary increases. Regular full-time salaried employees of the Texas National Guard Armory Board hold classifiedpositionsunder the provisions of Article 6252-11,Vernon's Civil Statutes, unless the employees have been excluded from such PositionClassification Plan by executive order of the Governor or by direction of the Legislature. Article 6252-11, Section~2. Thus itwas held in Attorney General Opinion WW-1095 (1961) that the PositionClassification Plan did not apply to the Finance Commissionand the Banking and Savings and Loan Departments for the reason that their employees were excludedby direction of the Legislature :by virtue of the provisions of Article 342-112,Vernon's Civil Statutes. Likewise it was held in Attorney GeneralOpinion WW-1222 (1961) that the employees of the Texas State Board of Plumbing Examiners were excluded from the PositionClassification Planby direction of the Legislatureby virtue of the provisions of Article 6243-101, Sets. 5 and 7, Vernon's Civil Statutes.

In view of the provisions of Article 6252-11, whether a regular full-time salariedemployee is in a classified or unclassifiedposition is not made dependent upon the source from which his salary is paid, but rather ismade dependent upon

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-Hon. Harry B. Kelton, page 3 (M-289)

whether such employee has been excluded from the PositionClassification Planby executive order of the Governor or by direction of the Legislature. The fact that an employee is paid from funds outside the Treasury during part of a fiscal year and paid from funds in the State Treasury during another part of the fiscal year will not affect the salaryrate to be paid such employee if such employeeduring suchperiod of time remains in a classified position.

In answer to your questionyou are advised that when such employees are later transferred on the payroll for the purposes of their salarybeing paid from funds in the State Treasury, they are to receive salariesat the rate provided for in the Position Classification Schedule;and the Comptrollermay legally approvemerit salary increaseswhich oonform to the provisions of Subdivision (2) of Section 1 of ArticleV of the current General AppropriationAct relating to merit salary increases.

SUMMARY
The fact that an employee is paid ,from~ funds outside the Treasury during part of a fiscalyear and paid from funds in the State Treasury during another part of the fiscal year will not affect the salary rate to be paid such employee if such employee during suchperiod of time remains in a classifiedposition. Vfitruly yours,

Preparedby John Reeves AssistantAttorney General

APPROVED: OPINION COMMITTEE
Hawthorne Phillips,Chairman Kerns Taylor, Co-Chairman Steve Hollahan Robert Darden Malcom Smith Z. T. Fortescue

A. J. CARUBBI, JR. Executive Assistant -1406-