I 

.’ 

T~~EATI-ORNEY GENERAL, 

OF??EXAS 

R-692 

PRICE DANIEL 

AULITIN II. -TEXAS 

*Trcx?NEY GENeRAL 

August 15, 1947 

Hon. 0. ii. Lloyd, Executive Secretary, 

Employees detirement System of Texas 

Post ~Office Box 791 

Auatin, Texas Opinion No. V-345 

de: Whether the Employees 

Hetirement System may 

employ an actuary as 

an independent contractor, who at the 

same time, is an actuary for another 

State Agency. 

Ubar Sir: 

Your letter to this Denartu:ent asked for an 

opinion as to wile,ther i#Z. John ;j; ,iudd, J;. :~a:{ be employed as an independent contractor to furnish actuarial services to the 

Texas. 

Emplo 

YOU disclose that K 

ees Retirement 3ystsm of 

r. liudd his at the present 

time serving,as a consulting actuary for the Teacher 

itetirement System of Texas. iie is carried on the pay 

roll of that Department as a part-time errployee. 

ilitll reference to whether Mr. Hudd, if employed, would ‘be an nemployeev or an “independent contractor,v the following information is obtained from 

correspondence furnished to us by you: Kr. Hudd maintains an independent business as a consulting actuary 

at 107 West 14th .Street in Austin. He retains a staff 

of emplo?:ees and furnishes 0~11 of his own office machines anil equipment. He is enpaged in actuarial ‘work 

as an independent .contractor for various insurance companies and pension systems. His work, with the Teacher 

detirement System .is that of furnishing actuarial services. ile was offerea a oosition as Assistant Directorand 

Actuary for the.Teacher hetirement jystem at $4800.00 

per year. In the alternative, he was offered $2500.00 

per year to be their consulting actuary. He ;‘lzc;q”,;d 

their latter offer and rejected the former. 

not occupy any desk space in any Teacher Retirement 

Systes office. He does not have any stated office 
Hon. 0. H. Lloyd - Page 2 v-345 

hours. me is free from tile control of the Teacher Retirement System with respect to the details of the manner of his work. 

There is considerable doubt as to whether or 

not Mr. Rudd is an vemployeen of the Teacher Retirement 

System, as distinguished from an “independent contractor”. But, assumin that he is an wemployeew of the 

Teacher Retirement E ystem, the recited facts clearly 

indicate that Mr. Rudd would be retained by the Rmployees Retirement System as an “independent contractoru 

rather than as an “employee”. 

In Opinion No. V-303, promulgated by this office on July 15, 1947, a co y of which Is herewith enclosed, it was held that a ! tate employee Is not prohibited by law from entering into and executing a contract, as an independent con$ractor, with another State 

agency where there was no incompatibility in such work, 

and where there was no failure to discharge his State 

duties. 

There is no incompatlblllty in furnishing actuarial services to both the Teacher Retirement System 

and the Employees Retirement System. There are no conflicts of interest; neither position is subordinate to 

~the other; neither is sntaFonistic to the other; neither has any Tower to appoint or remove any employee of 

the other; neither audits the books of the other; and 

neither exercises any supervision over the- other. 

Article XVI, Section 33, of the Texas Constitution provides: 

*The accounting officers of this State 

shall neither draw nor pay a warrant upon 

the treasury in favor of any person, for 

salary or c&t!:ensation as a;*ent, officer or 

appointce, ~110 110lds at the sari::: time any 

other ol’fice or vosit;on of horlor:ntrrs& 

or profit under this tate . . . 

phasis added) 

However, an independent contractor occupies 

neither an office nor position under the State. Ho is 

not an agent of the State. He is free to control the 

details of the work, and may work at such ilours a:; he 

may see fit; he is free to employ or diucharye assistants without consulting anyone connected with the State: 
, 

, 

Hon. G. H. Lloyd - Page 3 v-345 

and he would be responsible for his own torts and the 

torts of his employees. The Employees Retirement System is merely interested in the results of his work, 

to-wit, the actuarial tables and information to be furnished .by him. 

We, therefore, hold that Article XVI, Section 

33, of the Constitution is not aprlicahle in this situation, and that you may engage Fir. Kudd as a consulting 

actuary as an independent contractor. By accepting 

such contractj he,.wculd not jeopardize k-is 'part,;tinte 

position with tire ,l'eacher itetireuient &StStii, and the 

accounting officers of.this State would be justified in 

issuing warrants in his behalf for services rendered.to 

both departments. 

Srn&ARY 

The Employees. lietirement bystem of 

Tews may engage an actuary as an independent contractor'who,, at the same time, 

is an actuary for: another: state Depart-: 

ment, there being no incompatibility in 

such work, and there being no neglect of 

any State duties. 

Yours very truly, 

ATTORNEY GENERAL OF TEXAS 

e 

G&2%-u 

Joe H, Greenhill 

Executive Assistant 

APPROVED: 

JG@-&- FIRST ASSISTANT 

JRG:erc