IEE ,~TTBRNEY GENERAL 

AUSTIN. TICXAS 7S711 

March 15, 1972 

Hon. Everett L. Anshutz Opinion No. M- 1098 

Executive Secretary 

Employees Retirement System Re: Eligibility of retired 

of Texas judges to receive the 

Box 12337, Capitol Station benefit of limited 

Austin, Texas state participation in 

the payment of ineurance 

premiums under State 

group insurance programs, 

Bear Mr. Anschutz: and related question? 

You ask whether the Employees Retirement System may 

expend certain appropriated state funds to pay premiums 

under state group insurance programs for retired judges, 

and if you may, then from what funds the disbursments 

should be made? 

You Inform us that the State Comptroller has questioned 

your authority to make these payments and that he relies 

upon Attorney General's Opinion No. M-1052(1972). 

Our answer to your first question is 'Yes". Our answer 

to your second question is that the dlsbursments should be 

made from Fund 952 under the conditions stated in this 

opinion. 

We consider your 

1) Whether 

first question. We must determine, 

"all member retirees" for whom ceftain 

group Insurance is authorized by Sec. 9B of 

Article 6228a2includes "elective and appointive 

officials of the state" named In Articles 3.50 

and 3.51 of the Insurance Code;3 

1. 

1 This Sec. gB reads as follows: "The Board of Trustees 

shall adopt Rules and Regulations,, to be effective no 

-5356- 
Hon. Everett L. Anshutz, page 2 (M-1098) 

2) Whether this last named class of officials 

includes retired judges; and 

3) Whether the appropriation to pay group insurance 

"for retired employees and officials" made by 

Sec. 3 of Article V of the current General 

Appropriation Act4covers retired judges. 

later than January 1, 1972, providing for the payment of 

not less than one-half ~(1/2) the premium cost of Group 

Life and Health Coverage for all member retirees. 

Premium costs shall be paid from the funds of the agency 

or department from which the member retired, and shall - 

be based on rates not to exceed rates charged members 

of the Group Insurance Plan of department or agency 

from which the member retired. The State of Texas shall 

pay each year In equal monthly installments into the 

State Accumulation Fund an amount required to pay 

insurance premiums of the retirees. The State Board of 

Trustees shall certify annually to the Comptroller of 

Public Accounts and to the State Treasurer the amount 

so ascertained." (Emphasis added). Acts 1971, 62nd 

m3.7 p.1361, ch.359, Sec. 11, eff. Sept. 1, 1971. 

2A11 references to Articles are to Vernon's Civil 

Statutes unless otherwise stated. 

3Art. 3.50 and 3.51 of the Insurance Code each provides 

in part, that, 

,t 

. . . 

"The term employees as used herein in addition 

to its usual meaning shall Include elective and 

appointive officials of the state." Art.3.50 

Sec. 1(3)(d); Art. 3.51, Sec.l(aS. (Rmphasis'Added) 

This Identical provision was added to each of these 

Articles by Acts 1969, 61st. Leg., R.S., p.1371, ch.414, 

eff. Sept. 1, 1969. 

4 

Acts 62nd Leg., 1971, R.S., S.B.11, as amended by S.B.7 

1st C.S., 62nd Leg., 1971, at p. V-33 (p.3794 of the 

-5357- 
Hon. Everett L. Anshutz, page 3 (M-1098) 

Your request for our opinion states, in part: 

"As administrating agency for both (the Employees 

Retirement System and the Judicial Retirement 

System) Retirement Systems, as well as the new 

insurance program for “all member retirees”, we 

are of the opinion that retired judges are eligible 

for participation in such group insurance plans 

and that the Fmployees Retirement System of Texas 

has the authority, as well as administrative 

obligation, to administer such participation under 

Articles 3.50 and 3.51 of the Texas Insurance Code, 

official bound Vol. of the Session Laws). The relevant 

portion of this Article V, Sec. 3 reads as follows: 

"In each Instance in which an operating fund 

or account is created by the provisions of 

this Act, the responsible officials of the 

State are authorized to transfer Into such 

operating fund or account sufficient moneys 

from local funds and Federal grants of funds 

to pay proportionally the costs of matching 

State employees retirement contributions, the 

State's share of Old Age and Survivors Insurance 

and the proportionate cost of premiums of policies 

containing Croup Life, Health, Hospital, Surgical, 

and/or Medical Expense Insurance for retired 

employees and officials. Payment by the State 

?rom the designated funds on Group Insurance 

policy or policies for retired employees shall 

be limited to the amount of payment authorized 

for active employees. Notwithstanding any 

other provisions of this Act, any department 

or agency for which funds in this Act are 

appropriated shall make such transfers of funds 

as are necessary, except from those funds 

appropriated for personal services, to pay 

premiums for Insurance for retired employees 

and officials as author'lzed in this Act." 

(ed) 

-5358- 
Hon. Everett L. Anshutz, page 4 (M-1098) 

Section 9B of Article 6228a VCS and Articles III 

and V of the General Appropriation Act, 62nd 

Legislature, Regular Session." 

The term "la11 member retirees" in Article 6228a, Sec. 

9B is ambiguous. The Board of Trustees of the Employees 

Retirement System administers both the constitutional retirement systems un er 

!! 

consideration: the Employees Re irement 

System of Texas and the Judicial Retirement System. 8 That 

Board, pursuant to the express authority in Article 6228a 

and pursuant to Articles 3.50 and 3.51 of the Insurance Code, 

has included retired judges within the Insurance coverage 

authorized for "retired employees and officials" for which 

monies have been provided in Article V, Sec. 37of the current 

General Appropriation Act. Our opinion is that your interpretation is reasonable and entitled to be niven material 

weight. We follow that interpretation. 

Storage Co., 

Ta&y Moving & 

Inc. v. Railroad Commission, 359 S.W.2d 62 

(Tex.Civ.App. 1962, aff. 367 S.W.2d 322f. A.B.Frank Co. 

v. Iatham, 190 S.W.2d 7 9 (Tex.Civ.App. i945, aff 14 

30 193 S.W.2d 671 

s::: 17:. 

; 53 Tex. Jur. 2d 259-263; Stztutes, 

Our opinion is that the insurance program for both 

state employees and "elective and appointive officials of the 

state" while they are active (Art.3.50 and 3.51, Ins.Code) 

and the insurance program provided for these persons upon and 

during their retirement (Art.6228a, Sec. gB), each are programs 

distinct and wholly separate from the constitutional retirement programs for these persons. 

'2;;. XVI, Sec. 62(a), Tex. Const., and Art. 6228a, Sec. 

6 Art. V, Sec. 1 (a), Tex, Const,, and Art. 6228b, Sec. 8. 

7See footnote 4, supra. 

-5359- 
Hon. Pverett L. Anshutz, page 5 (M-1098) 

The Employees Retirement System of Texae was designated 

by the Legislature in Article 6228a, Sec. 9B, to administer 

the insurance program for all state employee retirees under 

that Article. Retired Judges are included within "retired 

employees and officials' designated in Article V, Sec. 3 of 

the General Appropriation Act. This is a duty imposed by the 

Legislature upon this administrative agency In addition to 

the duty of administering the constitutional retirement 

programs for both retired state employees and retired judges. 

It is the only state agency which maintains records for 

retirement payment benefit 8 on both these classes of persons. 

It is the sole agency which administers all payments and 

benefits to retired judges. 

The funds for payment of these insurance premiums 

are appropriated specifically for that purpose out of the 

General Revenue Fund direct y to the Employees Retirement 

System. This appropriation B reads as follows: 

"EMPLOYEES RETIREMENT SYSTEM AND JUDICIAL 

RETIREMENT ADMINISTRATION 

State Contributions, Employees 

Retirement and insurance 

O%%??iL %k%e%venue Fund $10,066,431 

. . ' (Emphasis Added). 

The general cost of administration of the Employees Retirement 

System is from wholly separate funds. Article 6228a, Sec. 7A 

and 7C and Subsection 5 of Sec. 8; Atty. Genl. Opinion No. 

ww35(1959). 

8 The current General Appropriation Act (See note 4, supra) 

in its Art.111, p.55 (p.3554 of official bound vol.) as 

amended by Art. V, Sec. 60, 

3851, of official bound vol. 

p: V-54 (Art.V, Sec.58, p. 

-5360- 
Hon. Everett L. Anshutz, page 6 (M-1098) 

The fact Is clear that those "elective and appointive 

officials of the state" who are covered by Articles 3.50 and 

3.51 of the Insurance Codegare, for all purposes of the 

Insurance authorized by these Articles, "state employees" 

in every respect as 

respect (i.e. 

any other state employee. In this 

of being authorized to be covered by the 

identical same insurance coverage as other state employees) 

and to this extent, they are, when they retire, "member 

retirees" within contemplation of Article 6228a, Sec. gB 

and thus authorized to be covered by the retirement insurance 

authorized by that Article. 

The insurance coverage authorized by Section 9B of 

Article 6228a is clearly and wholly outside of, and has no 

connection with, the constitutional retirement systems for 

those state employees defined by Article 6228a, Section 10 

as members of the Employees Retirement System of Texas and 

those justices and judges who are members of the Judicial 

Retirement System who are named In Article 6228b. This Sec. 

9B gives no indication of excluding any person classified 

under Articles 3.50 and 3.51 as a state employee. Our opinion 

is that retired judges are within contemplation of this 

Sec. 9B the same as other retired state employees. 

The classes of persons named at the outset of Articles 

3.50 and 3.51 are not restricted to, but are more inclusive 

than, those members of the Employee 8 

in Article 6228a, Sections 1C and 3. 

Retirement System named 

The term "elective 

and appointlve officials of the state" is not qualified in 

any manner. The same session of the Legislature which 

added this term to these two Articles also enacted Section 

3Bl of Article 6228a. This Section expressly excludes from 

membership in the Employees Retirement System, 

. . . any elective official in the Judicial, 

Education, District, or County, of the State 

of Texas other than those expressed eligible as 

provided herein." 

'See footnote 3, supra. 

-5361- 
, 

Hon. Everett L. Anshutz, page 7 (M-1098) 

The intent of the Legislature to distinguish between 

elective judges who are not eligible for membership in the 

Employees Retirement System but who are within the Insurance 

coverage of Articles 3.50 and 3.51 seems clear. Garrett v. 

Mercantile Natl. Bank at Dallas, 140 Tex. 394, 168 S W d 

Et;qLf31. Wrbht v. B-eter, r 45 Tex. 142, 196 S.W.2d.g2 

Further, we believe that the Legislature intended that 

these two Articles, when considered In connection with Article 

6228a, Sec. 9B, are to be given a construction which would 

authorize active judges, whether elective or appointive, to 

be covered by this insurance and was not to bar them from 

coverage upon their becomln retired judges. Attorney General's 

Opinion No. M-919 (wWb+W. 

Our prior Opinion No. M-1052(1972) Is distinguished 

from our present holding. The holding in that Opinion 

considered only an employee-retiree of the Texas Education 

AgencylQho was not In any way subject to the jurisdiction 

of State Employees Retirement System after retirement. 

That Opinion correctly held that he was not covered to any 

extent by Article 6228a, Sec. 9B. 

The question now before u* qrelates to a state officialretiree who, by the express terms of Articles 3.50 and 3.52 

of the Insurance Code, is to be treated as a state employee 

and therefore Is ,expressly authorized to be covered by 

loMany persons employed by the Texas Education Agency, 

an agency of the State, are ineligible for membership 

in the Employees Retirement System. Instead, they may 

become members of the Teacher Retirement System. 

Sec. 3.02 and 3.03, Texas Education Code. 

-5362- 
Hon. Everett L. Anshutz, page 8 (M-1098) 

both Articles 3.50 and 3.51 and also by Article 6228a, Section 

9B as a "member retiree" eligible to participate in the group 

insurance plan administered by the Employees Retirement 

Syetem of Texas. 

2. 

In answer to your second question, it is our conclusion 

that the actual payment 

from "Fund 952," 

to insurance carriers should be made 

which the Legislature has dzslgnated in 

Article 6228a to serve as an operating" or clearing" 

account into which appropriations from all funds for that 

purpose will first have been deposited. 

In the current General Appropriation Act:' under the 

major heading "Eknployees Retirement System and Judicial 

Retirement Administration," we find the first item of 

expenditure entitled "State Contributions, Employees Retirement and insurance premiums estlmated".12 (Emphasis 

Added). The estimated total for this item is the sum of 

four estimated amounts to be derived from several sources, 

the first one being the General Revenue Fund. Bach of the 

sub-items consists of commingled estimated amounts for 

more than a single purpose. We note that Sec. 8A2(a) and 

Sec. 9B of Article 6228a require the Employees Retirement 

System annually to determine separately the exact amounts 

required for matching retirement contributions and insurance 

premiums. By these sections the Legislature has prohibited 

any use of retirement trust funds for payment of insurance 

premiums. 

It appears to us that the sub-item, "Out of the General 

Revenue Fund," is the proper and only source for matching 

retirement contributions made by all employees paid from 

the General Revenue Fund regardlerof where employed. In 

1lSee general citation in note 4, supra, 

12See footnote 8, supra 

-5363- 
l 

Hon. Everett L. Anshutz, page 9 (M-1098) 

like manner, it 

proper and only 

follows that the same sub-item is also the 

source to be used In payment of all Insurance 

premiums payable on behalf of "all member retire= whose 

salaries prior to retirement were paid from the General 

Revenue Fund. Furthermore, all such matching for Highway 

Department employees and all-%zurance premiums payable on 

behalf of "all member retirees” who retired from the 

Highway Department are to be obtained from the sub-item 

“Out of the Highway Fund." This principle, as applied 

to Judicial officers who become "retirees" Is further reinforced by the fact that their retirement compensation 

payments are made from the General Revenue Fund. The fact 

that all monies for premium payments are first put in Fund 

952 and that payments to insurance carriers are made out 

of Fund 952 is simply a matter of procedural and accounting 

convenience and is of no other legal significance. No 

payments are made until after sufficient deposits for this 

specific purpose are made. Separate accounts are maintained 

to insure that no State matching for retirement purposes 

shall be used to pay insurance premiums. 

-SUMMARYRetired judges are eligible to receive the 

benefit of limited State participation in the 

payment of insurance premiums under State group 

insurance programs. Art. 6228a, Sec. 9B, V.C.S., 

Art. 3.50 and 3.51, Ins. Code, and Art. V, Sec. 

3, current General Appropriation Act. 

Disbursements to insurance carriers may be 

made out of Fund 952 after the required amounts 

have been deposited therein from the General 

Fund Appropriation for "insurance premiums" under 

the major heading "Employees Retirement System 

and Judicial Retirement Administration." 

truly yours, 

-5364- 
Hon. Everett L. Anshutz, page 10 (M-1098) 

Prepared by W. E. Allen 

Assistant Attorney General 

APPROVED: 

OPINION COI@UZTTEE 

Kerna Taylor, Chairman 

James Broadhurst 

J. C. Davis 

Arthur Sandlln 

Roger Tyler 

SAMUEL D. PICDANIEL 

Staff Legal Assistant 

ALFRED WALKER 

Executive Assistant 

NOLA WHITE 

First Assistant 

-5365-