Honorable Frank M. Jackson

Executive Secretary Teacher Retirement System of Texas Austin, Texas OpinionNO. ~~-600

Re:

Dear Mr. Jackson: Status of funds accruing to the Teacher Retirement System of Texas for the remainder of the fiscalyear 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 considerationas follows:

"1. Shouldmonies accruing to the respective funds of the Teacher Retirement System, particularly funds accruing to the interest fund thereof, for the remainder of this fiscalyear 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 depositedbe used by the System to
cover deficiencies in funds appropriated for administrative costs for the remainder of this fiscalyear without the necessity of further legislativeappropriation. In this connection, the aggregate expended for administrativecosts, 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 teachermembership fees plus a sum not to exceedHonorable Frank M. Jackson,page 2 (~~-600)

50# per memberwhich ma be transferred from the interest fund.

Your first question is expressly answeredby the final sentence,under I'Summary", in AttorneyGeneral's Opinionw-565 (1959),wherein it is stated:

"Fundshereafter accruing to each retirement system shouldbe deposited in such trust account."

Funds collectedby the TeacherRetirement System includemembership fees, income from investmentsand matching contributionspaid by teachermembers. These colleotfons togetherwith any other funds or monies collectedby the Teacher Retirement System for the remainder of this fiscal year and thereafter,unless the applicable statutesare 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 TeacherRetirement System. Included Is the Expense Fund from which all expenses of administrationand maintenancedare directed to be paid. No part of the Expense Fund comes from state tax sources. The fund is made up of the $2.00 annual membership fee paid by each teachermember with the further provision that if the aggregate of membership fees collected is insufficient to cover expenses of administration, the system'sBoard of Trustees shall transfer to the Expense Fund from the InterestFund an amount necessary to cover administrative costs but in no event shall the amount transferred exceed in any one year Fifty Cents ($ .50)per member of record as of August 

### 31 of thatyear. Hence, it is evident that the Legislature by general statute has placed a definite limit on the funds available to the TeacherRetirement System to cover administrative costs. This limit cannotunder any cfrcumstancesbe 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 fiscalyear should not be deposited In the State Treasury but shouldbe placed in a special trust account in theRonorable Frank H. Jackson, page 3 (~1-600)

hands of the State Treasurer. The funds so depositedmay be expended to supplementpresent Pegislativeappropriations for ~adminlstrativecosts of theRetirement System for the remainder of this fiscalyear without the necessity of legislative appropriation. This conclusionmust follow since Section 6 of ArticleVIII of the Constitutionof Texas, merely requires that funds deposited in the Treasury cannotbe expended or drawn from the Treasurywithout specificappropriation. This provision of the Constitution,, **by** its clear terms, applies only to fundswithin the Treasury and not to funds outside the Treasury. The expenditureof such funds, however, Is governed by the restrictions set out above. This means that the total costs of administrationand.maintenanceof the Retirement System for this fiscalyear must not exceed the aggregate of membership fees standing to the credit of the Expense Fund plus the transfer of a sum from the InterestFund to the Expense Fund not to exceedFifty Cents ($ .50)per member of record as of August 31, 1959, Your requestpoints out that these limitswill not be exceeded.

Your secondquestion, therefore, is ansuered in the affirmative.

Monies accruing to the respective funds of the Teacher Retirement System for the remainder of this fiscalyear and thereafter,unless the applicable statutesare'amended to provide otherwise, shouldbe deposited outside the Treasury In a special trust accountwith the State Treasurer as Custodian.

The funds so depositedmay be used by the Board of Trustees of the TeacherRetirement System, within the limits described, to supplement current legislativeappropriations for costs of administrationand maintenance.

Yours very truly,
WILL WILSON Attorney General of Texas

Lkonard Passmore Assistant

LP:rm:mgHonorable 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