Honorable Frank M. Jackson 

Executive Secretary 

Teacher Retirement System of Texas 

Austin, Texas 

Opinion NO. ~~-600 

Re: 

Dear Mr. Jackson: 

Status of funds accruing to the Teacher 

Retirement System of 

Texas for the remainder 

of the fiscal year ending August 31, 1959, and 

the availability of such 

funds to pay administrative costs of the Teacher 

Retirement System. 

Your request for an opinion submits two (2) questions for our consideration as follows: 

"1. Should monies accruing to the 

respective funds of the Teacher Retirement 

System, particularly funds accruing to the 

interest fund thereof, for the remainder of 

this fiscal year ending August 31, 1959, be 

deposited In a special trust account in the 

custody of the State Treasurer or should same 

be deposited in the State Treasury. 

"2 . If such funds are properly deposited 

in the special trust account may any portion of 

the funds so deposited be used by the System to 

cover deficiencies in funds appropriated for 

administrative costs for the remainder of this 

fiscal year without the necessity of further 

legislative appropriation. In this connection, 

the aggregate expended for administrative costs, 

including appropriated funds plus the supplementary funds from the trust account, would not 

exceed the total authorized for administrative 

costs by general statute. (The total of 

teacher membership fees plus a sum not to exceed 
Honorable Frank M. Jackson, page 2 (~~-600) 

50# per member which ma be transferred 

from the interest fund. 

Your first question is expressly answered by the 

final sentence, under I'Summary", in Attorney General's 

Opinion w-565 (1959), wherein it is stated: 

"Funds hereafter accruing to each 

retirement system should be deposited in 

such trust account." 

Funds collected by the Teacher Retirement System 

include membership fees, income from investments and matching contributions paid by teacher members. These colleotfons 

together with any other funds or monies collected by the 

Teacher Retirement System for the remainder of this fiscal 

year and thereafter, unless the applicable statutes are amended 

to provide otherwise, should be placed in the hands of the 

State Treasurer, as custodian, and not in the Treasury. 

Section 10 of Article 2922-1, Vernon's Texas Civil 

Statutes, provides for the creation of the various funds of 

the Teacher Retirement System. Included Is the Expense Fund 

from which all expenses of administration and maintenance dare 

directed to be paid. No part of the Expense Fund comes from 

state tax sources. The fund is made up of the $2.00 annual 

membership fee paid by each teacher member with the further 

provision that if the aggregate of membership fees collected 

is insufficient to cover expenses of administration, the 

system's Board of Trustees shall transfer to the Expense Fund 

from the Interest Fund an amount necessary to cover administrative costs but in no event shall the amount transferred exceed 

in any one year Fifty Cents ($ .50) per member of record as of 

August 31 of that year. Hence, it is evident that the Legislature by general statute has placed a definite limit on the 

funds available to the Teacher Retirement System to cover 

administrative costs. This limit cannot under any cfrcumstances be exceeded and It is immaterial in so far as this 

limitation is concerned, whether the funds expended come from 

the Treasury or from the trust account In the hands of the 

Treasurer as Custodian. 

As we have pointed out, monies properly collected 

for the credit of the Expense Fund and Interest Fund, as 

well as other funds of the Retirement System, for the remainder 

of this fiscal year should not be deposited In the State 

Treasury but should be placed in a special trust account in the 
Ronorable Frank H. Jackson, page 3 (~1-600) 

hands of the State Treasurer. The funds so deposited may be 

expended to supplement present Pegislative appropriations for 

~adminlstrative costs of the Retirement System for the remainder of this fiscal year without the necessity of legislative appropriation. This conclusion must follow since Section 

6 of Article VIII of the Constitution of Texas, merely requires 

that funds deposited in the Treasury cannot be expended or 

drawn from the Treasury without specific appropriation. This 

provision of the Constitution,, by its clear terms, applies only 

to funds within the Treasury and not to funds outside the 

Treasury. The expenditure of such funds, however, Is governed 

by the restrictions set out above. This means that the total 

costs of administration and.maintenance of the Retirement 

System for this fiscal year must not exceed the aggregate of 

membership fees standing to the credit of the Expense Fund 

plus the transfer of a sum from the Interest Fund to the Expense Fund not to exceed Fifty Cents ($ .50) per member of 

record as of August 31, 1959, Your request points out that 

these limits will not be exceeded. 

Your second question, therefore, is ansuered in the 

affirmative. 

Monies accruing to the respective funds of the 

Teacher Retirement System for the remainder of 

this fiscal year and thereafter, unless the applicable statutes are'amended to provide otherwise, should be deposited outside the Treasury 

In a special trust account with the State 

Treasurer as Custodian. 

The funds so deposited may be used by the Board 

of Trustees of the Teacher Retirement System, 

within the limits described, to supplement current legislative appropriations for costs of 

administration and maintenance. 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

Lkonard Passmore 

Assistant 

LP:rm:mg 
Honorable Frank M. Jackson, page 4 (~~-600) 

APPROVED: 

OPINION C~OMMITTEE 

Geo. P. Blackburn 

Richard 0. Jones 

J. Milton Richardson 

Marvin H. Brown, Jr. 

Robert T. Lewis : 

David R. Thomas 

REVIEWED FOR TRE ATTORNEY GENERAL 

BY: W. B. Geppert