## E AYTORNEY GENERAL OF %kXAS

Honorable G. C. Franklin OpinionNo. M-325 Vice-President for Business Affairs Re: Are the benefits of a Midwestern University retirement trust, esWichita Falls, Texas 76308 tablished for the benefit of the President of Midwestern University, to be regarded as salary supplementation under the terms of Section 24f,Article IV, House Bill 5, Acto of the 60th Legislature,First Called Session, 1968 (GeneralAppropriations Dear Mr. Franklin: Act)?

The text of your recent letter,requesting the opinion of this office on the above captioned question, is as follows:

"Is the President of Midwestern University authorized to receive a $1,500 salary increase in the fiscalyear beginning September 1, 1968, as provided under Sec. 24.f. of the Special Provisions Relatingonly to StateAgencies of Higher Education, House Bill Number 5, as Enacted by the First Called Session of Sixtieth Legislatureof the State of Texas, inview of the fact that a retirement trust is provided for his benefit? A copy of the RetirementTrust is attached for your review."
House Bill 5, Acts of the 60th Legislature,First Called Session, 1968, to which your inquiry is directed, contains the appropriations for the fiscalyear beginning September 1, 1968, and ending August 31, 1969. Section 24f of Article IV (SpecialProvisions Relating only to StateAgencies of Higher Education)provides:

'ThePresidentsof Tarleton State College, PrairieView A. and M. College, Texas A&I University, Texas SouthernUniversity,Midwestern

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Hon. G. C. Franklin, page 2 (M-325)

University, Pan American College, East Texas StateUniversity, Sam Houston State College, Southwest Texas State College,West Texas State University, Stephen F. Austin State College, Sul Ross State Colleae and Anaelo State Colleae

(Emphasisadded.)
Your question is whether a retirement trust, established for the benefit of the President of MidwesternUniversity, constitutes such a salary supplementationasto render the President of Midwestern University ineligible to receive the $1,500 appropriationprovided for by the bill; The copy of the trust agreement attached to your letterprovides, in part, as follows:

"1

. MidwesternUniversityFoundation, Inc. (hereinafterreferred to as 'FOUNDATION')a nonprofit organization, is desirous of providing funds to disburse to Travis A. White, President of Midwestern University,upon his retirement as an inducement for him to remain in his capacity as President until such time as he retires." (Emphasisadded.) "2o Foundation shall from,time to time pay over funds to a RetirementTrust,which funds shall be distributed according to the termshereinafter set forth. n3.

. . . "4. Foundation as grantor Of said Trust, has made a contributionto said Trust and shall make contributions in the futureuntil the date

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of retirement of Travis A. White in not less than $2,500.00per annum. an amount

*

. . . . "Section 1.0: There is hereby created a retirement fund

. . . for the exclusivebenefit of Travis A. White, and if not to Travis A. White, then to the contingentbeneficiarieshereinafter named.

II

. . . * "Section 3.0: Distribution shallbe made as follows: "Section 3.01: When TravisA. White reaches the normal retirementdate or when he retires voluntarily or is retired by MidwesternUniversity at an earlier date, he shallbe entitled to receive all corpus and undistributed income of the Trust.

dies shall"Section 3.02: In the event Travis A. White prior to retirementdate, the Trust Estate continue to be held IN TRUST, and the Trustee in its sole and absolutediscretionmay make distribution of either income or corpus to or for the benefit of EvalynM. White, wife of Travis A. White. "Section 3.03: Upon the death of Evalyn M. White, all corpus and undistributed income shall be paid over to MidwesternUniversity Foundation, Inc., or its successor, and if it be not in existence, then to MidwesternUniversity, or its successor."
It is the opinions of this office, after an examination of the trust agreement, that such agreementdoes establish a trust fund. In order for the trust fund to render the President of MidwesternUniversity ineligible to receive the $1,500 appropriationallowed by Section 24f. Article IV of the Appropriations Bill, the trust agreementwould have to provide for salary supplementation. What benefits to an individual might constitute salary supplementationdepend simplyupon how restricted or expanded a definition is given to the term.

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Hon. G. C. Franklin, page 4 (M-325)

The cardinal rule of legislative interpretationis that, where a statute is open tomore than one interpretation, that interpretationwhich will give meaning to the intent of the Legislature shall be followed. As directed bySection 54 of Article V of the AppropriationsAct, it is, therefore, the duty~ of the Attorney General to declarewhat was the int@nt of the Legislature in using the,term "salary supplementation"in the instantprovision.

The purpose of creahing the trust, as~stated in the instrument, is to provide a reward to the President,designed as an "inducement for him to remain in his capacity as President until such time as he retires." Similar benefits,wereconsidered in Attorney General's Opinion M-138 (1967),wherein it is held that the expenditureof state' funds to pay premiums~ on insurance contracts concerning State'!employees is not extra.compensation to such employees, but,, being prospective, is in the,nature of an inducement for rewarding faithfulpublic service.

As there appears nb indication that the Legislature considers the contributionsof a universitypresident less significant,or less worthy of reward for faithfulpublic service, than those of other state employees; and as it appears that the trust instrumentunder considerationwould not give rise to a conflict of interest situation, it is the opinion of the Attorney General thatwhat constitutes "salary supplementation"should be viewed in an ordinary, limited sense in this instance.

"Salary",in tm above sense, is defined as a fixed periodical compensation,; paid at regular intervals, for services rendered in the course of one's employment. It contemplates funds to be paid regularly and to be presently available to, or under the actual or constructive control of, the person employed. 38 Words and Phrases 45 et seq., under "Salary",Blacks Law Dictionary, Fourth Edition,p. 1503,under "Salary". Given its ordinarymeaning, "supplement"is defined as an addition to something, already organized or set apart. 40A Words and Phrases 361 et seq. Employing the well settledmaxim of statutory construction for the determinationof legislative intent,noscitur a sociis,we hold that where themeaning of the word is doubtful, Ttm be construed in light of the words used in association with it. 53 Tex.Jur.Zd 221, "Statutes", 5154. Thus, a supplement to salarywould be, in the instant case, a benefit received by the President in approximately the samemanner, and for approximately the same reasons, as his salary.

It is clear, from reading the trust agreement, that

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Hon. G. C. Franklin,page 5 (M-325)

resent1 available to the use or ~~~~;'~frn~~~"P:~sf~~~~,~ some undetermined sum is prospectivelyavailable at some future,undetermineddate. The funds paid into the trust are paid periodically, to the extent that a contributionwill be made each year, on no ascertainable schedule,but there is no provision for periodicity in their disbursement. The sums contributedare fixed only as to a minimum amount to be deposited, so that it can never be definitely foreseenwhat amountwiil be contributed in a year, or what amountwill ultimatelybe available for disbursement.

Thus, it is the opinion of~the Attorney General, that contributions to the retirement trust; established for the benefit of the President of MidwesternUniversity, are not to be deemed supplemental to his salary;nor is the existence of a retirement trust to be regarded as a salary supplement;nor shall any funds which the Presidentmight ultimately receive from the trustbe considered salary supplement. Consequently, the trust agreement in question shall in no way preclude payment to the President of Midwestern Universityof the $1,500 appropriationgranted by Section 24f, Article IV of the AppropriationsBill.
SUMMARY The establishmentof a retirement trust for the benefit of the President of MidwesternUniversity, and the existence of and contributions to said trust, does not constitutea supplement to the salary of said person, so that such a trust does not act to render the President of Midwestern University ineligible to receive the benefits of Section 24f, Article IV, House Bill 5, Acts of the 60th Legislature,First Called Session, 1968 (GeneralAppropriationsAct).

Preparedby Bill Corbusier AssistantAttorney General

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APPROVED: OPINION COMMITTEE
Kerns Taylor, Chairman Sam Kelley James Quick Tom Fortescue Richard Chote
RAWTHOPNE PHILLIPS Staff Legal Assistant

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