. 

JIM MATTOX 

Attorney General 

Supreme Court Building 

P. 0. Box 12546 

Austin. TX. 76711. 2546 

5121475.2501 

Telex 9101674.1367 

Telecopier 512/475-0266 

714 Jackson, Suite 700 

Dallas. TX. 75202-4506 

2141742.6944 

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El Paso, TX. 79905-2793 

9151533.3464 

r‘ 

1001 Texas. Suite 700 

tto~ston, TX. 77002-3111 

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McAllen. TX. 76501-1665 

512,662.4547 

200 Main Plaza, Suite 400 

San Antonio. TX. 76205.2797 

5121225.4191 

An Equal Opportunity/ 

Affirmative Action Employer 

The Attorney General of Texas 

December 30, 1983 

Honorable Carl A. Parker 

Chairman 

Senate Education Committee 

Texas State Senate 

P. 0. Box 12068, Capitol Station 

Austin, Texas 78711 

Opinion No. JM-115 

Re: Obligation of state to 

fund university insurance 

premiums for employees 

Dear Senator Parker: 

You ask the following two questions concerning the "Texas State 

College and University Employees Uniform Insurance Benefits Act," 

article 3.50-3 of the Insurance Code: 

(1) Does the state have any obligation to 

provide the funds necessary in order for each 

university to provide the proper level of 

insurance coverage? Are those institutions who 

may not have the necessary unappropriated funds, 

and who are unable to find commercial insurance 

carriers willing to provide the minimum required 

coverage for the state's appropriation of $70 per 

employee, per month, entitled to the additiona~l 

funds needed to provide the required coverage? 

(2) In the event that the university is unable 

to provide its employees with the minimum coverage 

because of its financial inability to supplement 

the state appropriation, will university employees 

have a cause of action against the university, any 

of its officers, and/or the state of Texas? 

Article 3.50-3 of the Insurance Code requires state colleges and 

universities to provide employees with basic life, accident, and 

health insurance coverages 

at least equal to those commonly provided in 

private industry and those provided employees of 

other agencies of the State of Texas under the 

Texas Employees Uniform Group Insurance Benefits 

Act. 

Ins. Code art. 3.50-3, §2(b) (purpose clause). An administrative 

council established under the act determines basic coverage standards 

p. 485 
Honorable Carl A. Parker - Page 2(.X+115) 

that are at least equal to those provided in private industry and 

those provided employees of other state agencies. Sec. 4(a)(4)(A). 

The employer must make basic coverage available to each employee at no 

cost to the employee. Sec. 11. As your first question indicates, 

some universities are unabl~e to provide basic coverage from the 

state's appropriation of $70 per employee. Attorney General Opinion 

MW-215 (1980) determined that the university must pay any excess 

premium from non-appropriated funds, but you state that some 

universities lack sufficient non-appropriated funds. You state in 

your request letter that costs of health care vary considerably from 

one region of Texas to another. Two areas of high cost medical care, 

Houston and Beaumont/Port Arthur, also have higher rates of cancer 

than the state as a whole. You also state that some university 

employee groups are so small that a few large claims in one year can 

raise future premiums to a level exceeding the state appropriation. 

With this background in mind, we turn to your first question. In 

essence, you ask whether the legislature must appropriate a 'sufficient 

amount to fully fund premiums for the statutorily required basic 

coverage. 

The legislative power of Texas is vested in the Senate and the 

House. Tex. Const. art. III, 01. The legislature has full power and 

discretion to enact laws. subject only to limitations contained in the 

state and federal constitution. Watts v. Mann, 187 S.W.2d 917, 924 

(Tex. Civ. App. - Austin 1945, writ ref'd); Conley v. Daughters of the 

Republic, 156 S.W. 197 (Tex. 1913); Tuttle v. Wood, 35 S.W.2d 1061 

(Tex. Cl". App. - San Antonio 1930, writ ref'd). Funds in the 

treasury may be appropriated only by legislative action, E Tex. 

Const. art. VIII, $6; see generally Letter Advisory No. 132 (1977), 

and legislative discretion to appropriate funds is in fact limited by 

several constitutional provisions. See, e.g. arts. III, %%44. 49a. 

50; art. IV, 914; art. VIII, §6. 

Article 3.50-3 of the Insurance Code is a general law. and does 

not itself appropriate funds to carry out its purposes. Pickle v. 

Finley. 44 S.W. 480 (Tex. 1898). The legislature in enacting article 

3.50-3 could not thereby bind subsequent legislatures to make 

appropriations to carry out its purposes. See generally Watts v. 

Mann, supra at 924 (one legislature may not limit the power of a 

subsequent legislature to enact laws). Article 3.50-3 does not 

establish a constitutionally protected vested right in university 

employees to full payment of basic coverage from appropriated funds. 

We therefore conclude that the legislature has no obligation to 

appropriate the funds necessary for each university to provide the 

proper level of insurance coverage. Your first question is answered 

in the negative. 

You next ask whether university employees will have a cause of ? 

action against the university, its officers, or the state if the 

university is unable to provide them with basic coverage pursuant to 

p. 486 
Honorable Carl A. Parker - Page 3 ($4-115) 

section 11 of article 3.50-3. A "cause of action" is a fact or facts 

entitling one to institute and maintain an action which must be 

alleged and proved in order to obtain relief. A. H. Belo Corp. v. 

Blanton, 129 S.W.2d 619 (Tex. 1939). The violation of a right with 

consequent damage gives rise to a cause of action. Lotus Oil co. V. 

Spires, 240 S.W.2d 357 (Tex. Civ. App. - El Paso 1950, writ ref'd 

n.r.e.). 

Since we cannot investigate and resolve fact questions in the 

opinion process, we cannot say with certainty whether the employees of 

any university subject to article 3.50-3 have a cause of, action 

against an official or governmental entity for failure to provide 

insurance coverage. If university employees determine that the facts 

establish a cause of action they must seek legislative consent to 

bring a suit against the state, a state agency, or an official acting 

within his legally authorized area of discretion. Director of the 

Department of Agriculture and Environment v. Printing Industries 

Association of Texas, 600 S.W.2d 264 (Tex. 1980); Texas Technological 

College v. Fry 278 S.W.2d 480 (Tex. Civ. App. - Amarillo 1954, no 

writ); Walsh v.'University of Texas, 169 S.W.2d 993 (Tex. Civ. App. - 

El Paso 1942, writ ref'd). A litigant who wins a damages claim 

against the state must then seek payment from appropriated funds. 

S. & G.Construction Company v. Bullock, 545 S.W.2d 953 (Tex. 1977). 

If the facts show that a state officer has acted beyond his 

statutory capacity, the injured party may sue the official f.n his 

individual capacity, without legislative consent. Simmons v. Vinson, 

394 F.2d 732 (5th Cir. 1968) cert. denied 393 U.S. 968 (1968). Such a 

suit would not seek damages from the state, but from the personal 

funds of the officer. We reemphasize, however, that we have made no 

finding as to whether facts exist which would give rise to a cause of 

action against any person. 

SUMMARY 

The legislature does not have an obligation to 

fully fund insurance premiums necessary to pay 

basic coverage for university employees under 

article 3.50-3 of the Insurance Code. Whether 

university employees who do not receive minimum 

coverage have a cause of action against the state, 

the university, or university employees is a fact 

question which cannot be in the opinion 

process. 

Attorney General of Texas 

p. 487 
Honorable Carl A. Parker - Page 4 (3%115) 

TOM GREEN 

First Assistant Attorney General 

DAVID R. RICHARDS 

Executive Assistant Attorney General 

Prepared by Susan L. Garrison 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Rick Gilpin, Chairman 

Jon Bible 

David Brooks 

Colin Carl 

Susan Garrison 

Jim Moellinger 

Nancy Sutton 

p. 488