### 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 insuranceprograms, Bear Mr. Anschutz: and related question?
You ask whether the Employees Retirement Systemmay expend certainappropriated state funds to pay premiums under state group insuranceprograms for retired judges, and if youmay, then from what funds the disbursments should be made?
You Inform us that the State Comptrollerhas questioned your authority to make these payments and that he relies upon Attorney General'sOpinion 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 consideryour 1) Whether first question. We must determine,

"allmember retirees" for whom ceftain group Insurance is authorized by Sec. 9B of Article 6228a2includes "electiveand appointive officials of the state" named In Articles 3.50 and 3.51 of the Insurance Code;3 1.

1This Sec. gB reads as follows: "TheBoard of Trustees shall adopt Rules and Regulations,, to be effectiveno

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

2) Whether this last named class of officials includes retired judges;and 

### 3) Whether the appropriationto pay group insurance "forretired employeesand officials"made by Sec. 

### 3of ArticleV of the current General AppropriationAct4covers 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 ratesnot to exceed rates chargedmembers of the Group Insurance Plan of department or agency from which the member retired. The State of Texas shall pay each year In equalmonthly installments into the StateAccumulationFund an amount required to pay insurancepremiums of the retirees. The State Board of Trustees shall certify annually to the Comptrollerof PublicAccounts and to the State Treasurer the amount so ascertained." (Emphasisadded). 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 employeesas used herein in addition to its usualmeaning 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 Identicalprovisionwas 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 amendedby S.B.7 1st C.S., 62nd Leg., 1971, at p. V-33 (p.3794of the

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### 3 (M-1098)

Your request for our opinion states, in part:

"Asadministratingagency for both (theEmployees Retirement System and the Judicial Retirement System) Retirement Systems, as well as the new insuranceprogram for “allmember retirees”,we are of the opinion that retired judges are eligible for participation in such group insuranceplans 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 

### 3.51of 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 createdby the provisionsof thisAct, the responsibleofficials of the State are authorized to transfer Into such operating fund or account sufficientmoneys 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. Notwithstandingany other provisions of thisAct, any department or agency for which funds in this Act are appropriated shallmake such transfersof 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)

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Section 9B of Article 6228a VCS and Articles III and V of the GeneralAppropriationAct, 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 administersboth the constitutionalretirement 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 judgeswithin the Insurance coverage authorized for "retiredemployeesand officials" for which monies have been provided in Article V, Sec. 37of the current GeneralAppropriationAct. Our opinion is that your interpretation is reasonableand 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 insuranceprogram for both state employeesand "electiveand appointiveofficials of the state" while they are active (Art.3.50and 3.51, Ins.Code) and the insuranceprogram provided for thesepersons upon and during their retirement (Art.6228a,Sec. gB), each are programs distinct and wholly separate from the constitutionalretirement 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 insuranceprogram for all state employee retirees under that Article. Retired Judges are includedwithin "retired employeesand officials'designated in ArticleV, Sec. 3 of the GeneralAppropriationAct. This is a duty imposedby the Legislatureupon this administrativeagency In addition to the duty of administering the constitutionalretirement programs for both retired state employees and retired judges. It is the only state agency which maintains records for retirementpayment 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 insurancepremiums are appropriated specifically for that purpose out of the GeneralRevenue Fund direct y to the Employees Retirement System. B

This appropriationreads as follows:
"EMPLOYEESRETIREMENT SYSTEM AND JUDICIAL RETIREMENTADMINISTRATION
State Contributions,Employees Retirementand insurance O%%??iL %k%e%venue Fund $10,066,431

. .' (EmphasisAdded). The general cost of administrationof 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).

8The current GeneralAppropriationAct (Seenote 4, supra) in its Art.111,p.55 (p.3554of official bound vol.) as amended by Art. V, Sec. 60, 3851, of official bound vol. p: V-54 (Art.V,Sec.58, p.

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The fact Is clear that those "electiveand appointive officials of the state" who are coveredby Articles 3.50 and 3.51 of the Insurance Codegare, for all purposes of the Insuranceauthorized by these Articles, "stateemployees" in every respect as respect (i.e. any other state employee. In this

of being authorized to be coveredby the identical same insurance coverage as other state employees) and to this extent, they are, when they retire, "member retirees"within contemplationof Article 6228a, Sec. gB and thus authorized to be coveredby the retirement insurance authorizedby that Article. The insurance coverageauthorizedby Section 9B of Article 6228a is clearly and wholly outside of, and has no connectionwith, the constitutionalretirement systems for those state employeesdefinedby Article 6228a, Section 10 as members of the Employees Retirement System of Texas and those justices and judgeswho are members of the Judicial Retirement System who are named In Article 6228b. This Sec. 9B gives no indicationof excluding any person classified under Articles 3.50 and 3.51 as a state employee. Our opinion is that retired judgesare within contemplationof 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, thosemembers of the Employee8 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 Legislaturewhich added this term to these two Articles also enacted Section 3Bl of Article 6228a. This Section expressly excludes from membership in the Employees RetirementSystem,

. . .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.

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

The intent of the Legislatureto distinguishbetween elective judgeswho are not eligible formembership in the Employees Retirement System but who are within the Insurance coverage of Articles 3.50 and 3.51 seems clear. Garrettv. Mercantile Natl. Bank at Dallas, 140 Tex. 394, 168 S W d Et;qLf31. Wrbht v. B-eter, r45 Tex. 142, 196 S.W.2d.g2

Further, we believe that the Legislature intended that these two Articles,when considered In connectionwith Article 6228a, Sec. 9B, are to be given a constructionwhich 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 consideredonly an employee-retireeof the Texas Education AgencylQhowas not In any way subject to the jurisdiction of State Employees Retirement System after retirement. That Opinion correctlyheld that he was not covered to any extent by Article 6228a, Sec. 9B. The question now before u* q relates to a state officialretireewho, 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 coveredby

loMany persons employed by the Texas EducationAgency, an agency of the State, are ineligible formembership in the EmployeesRetirement System. Instead, they may becomemembers of the Teacher Retirement System. Sec. 3.02 and 3.03, Texas Education Code.

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both Articles 3.50 and 3.51 and also by Article 6228a, Section 9B as a "memberretiree" eligible to participate in the group insuranceplan administeredby 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 Legislaturehas 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 GeneralAppropriationAct:' under the major heading "Eknployees Retirement System and Judicial RetirementAdministration,"we find the first item of expenditure entitled "StateContributions,EmployeesRetirement and insurancepremiums 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 GeneralRevenue Fund. Bach of the sub-items consists of commingledestimated amounts for more than a single purpose. We note that Sec. 8A2(a) and Sec. 9B of Article 6228a require the EmployeesRetirement System annually to determine separately the exact amounts required formatching retirement contributionsand insurance premiums. By these sections the Legislaturehas prohibited any use of retirement trust funds for payment of insurance premiums.
It appears to us that the sub-item, "Outof the General Revenue Fund," is the proper and only source for matching retirement contributionsmade by all employeespaid from the General Revenue Fund regardlerof where employed. In

1lSee general citation in note 4, supra, 12See footnote 8, supra

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

likemanner, 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 "allmember retire= whose salariesprior to retirementwere paid from the General Revenue Fund. Furthermore,all suchmatching for Highway Department employeesand all-%zurance premiumspayable on behalf of "allmember retirees”who retired from the Highway Departmentare to be obtained from the sub-item “Out of the Highway Fund." This principle, as applied to Judicial officers who become "retirees"Is further reinforcedby the fact that their retirement compensation payments are made from the GeneralRevenue Fund. The fact that all monies for premiumpayments are firstput in Fund 952 and that payments to insurance carriers are made out of Fund 952 is simply a matter of proceduraland accounting convenience and is of no other legal significance. No payments are made until after sufficientdeposits for this specificpurpose are made. Separate accounts are maintained to insure that no Statematching for retirementpurposes shall be used to pay insurancepremiums.
-SUMMARYRetired judges are eligible to receive the benefit of limited State participation in the payment of insurancepremiums under State group insuranceprograms. Art. 6228a, Sec. 9B, V.C.S., Art. 3.50 and 3.51, Ins. Code, and Art. V, Sec. 3, current GeneralAppropriationAct. Disbursements to insurance carriersmay be made out of Fund 952 after the required amounts have been deposited therein from the General Fund Appropriation for "insurancepremiums" under themajor heading "EmployeesRetirement System and Judicial RetirementAdministration." truly yours,

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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 ExecutiveAssistant
NOLA WHITE First Assistant

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