# The Attorney General of Texas
Dezmber 31, 1985 JIM MATTOX Attorney General

Supreme Cowl Building P. 0. Box 12548 Austin, TX. 78711. 2548 512!475-2501 Telex 910/874-1367 Telecopier 512/4750266

714 Jackson. Suite 700 Oallas. TX. 752ON506 214I742.8944

4824 Alberta Ave.. Suite 164 El Paso, TX. 79905-2793 91515333484

1001 Texas, Suite 700 Houston, TX. 77002.3111 7131223-5886

4309 N. Tenth, Suite B McAllen, TX. 78501-1685 512/682-4547

200 Main Plaza, Suite 400 San Antonio, TX. 782052797 51212254191

An Equal Opportunity/ Affirmative Action Employer Mr. Marvin J. Titmm ExecutiveDirector Texas SurplusProllerty Agency P. 0. Box 8120 SanAntonio,Texas; 78208 OpinionNo. JM-417
Re: Whether the Texas Surplus Property Agency is subject to section 35.405 of Title llOB, which requiresreimbursementto the general revenue fund for state retirementcontributions
DearMr. Titsman:
You ask whether the Texas Surplus Property Agency must pay reimbursement to the general revenue fund for state retirement contributionspursuant to 35.405 of Title llOB, V.T.C.S., because it receives donatiors of property from the federal government. We conclude that the provisions of section 35.405 do not apply to the Texas SurplusPropertyAgency in the situationyou describe. Section 35.4C5provides that

(a) If an employer applies for money provided by the United States, an agency of the United States, or a privately sponsored source, and if any of the money will pay part or all of an employee,'ssalary, the employer shall apply for any legs,lly

availablemoney to pay state contributions rr,quired

by Section 35.404 or 36.201 of this subtitle. (b) When an employer receivesmoney for state contribr,tions

from an applicationmade in accordance with Subsection l(a) of this section, the employer shall immediately send the money to the retirement system for deposit in the general revenue fund of the state treasury. Cc) Monthly, employers shall report to the retirement system in a form prescribed by the system: (1) thename of each employeepaid inwhole or part from a grant;

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(2) the s#>urce

of the grant; (3) the amount of the employee's salary paid from the Srant; (4) the amount of themoney providedby the grant for staz contributionsfor the employee; and(5) any other information the retirement system determkxs is necessary to enforce this section. (d) The retirementsystemmay: (1) require from employers reports of applications Em money; (2) require evidence that the applications include requests for funds available to pay state contrit~utionsto the retirement system for employeespaid from the grant:and (3) exami:lethe records of any employer to determine compliance with this section and rulespromulg;%ted under it. (e) A person conunits an offense if the person is an administrr.tor of an employer and knowingly fails to complywith this section. (f) An offense under Subsection (e) of this section is a Claljs Cmisdemeanor. (g) An employerwho fails to comply with this sectionmay not, after the failure, apply for or spend any money from a federal or private grant. The retirement ;qrstemshall report alleged noncompliance to t.keattorney general, the state treasurer, the Legislative Budget Board, the comptroller of public accounts, and the governor. The attorney general shall bring a writ of mandamus against the employer to compel compliance with this section..
We consider initially the meaning of section 35.405. The Texas SupremeCourthas stated t&at the dominant rule to be observed in the construction of statutes i:ato give effect to the intention of the legislature and that, generally, the intent and meaning .isobtained primarily from the language of a statute. See City of Sherman v. -

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Public Utility Commission of Texas, 643 S.W.2d 681, 684 (Tex. 1983). See also Seayv. gall, 677?.W.2d 19, 25 (Tex. 1984). Also, thewords employed in a statute are ordinarily given their plain meaning. V.T.C.S. art. 10;Attorney (General OpinionH-193 (1974). Section 35.405 of Title 1lOB is intended to be a recodification, without substantive change, of chapter 3, section 3.63 of the Texas Education Code which originallywas enactedby Bouse Bill No. 2083 of the Sixty-sixthLegislature in 1979. The specific languagethroughout the section in question refers to money provided from federal or private source* for emplcyees' salaries and to money provided by a grant for the state contributions to the retirement system for employeespaid from a grant. The bill analysis to House Bill No. 2083 prepared for the House Committeeon Public Education,on filewith the LegislativeReferenceLibrary,describes that sectionof thebill as a new section to the Texas EducationCode “to provide for the collection of federal grant money fcr the state's contribution to [the Teacher Retirement System]." Furt,ber,it is well established that penal acts and statutes imposing a penalty must be strictly construed. See 535.405(e), (f), (g); &z v. American Liberty Pipe Line Co., 172 S.W.2d 972, 974 (Tex. 1943); State v. Duke, 137 S.W. 654, 662 (Tex. 1911).
We conclude that tt,elegislature intended section 35.405 to require reimbursement to 1:h.e general revenue fund for Teacher Retirement contributions on salaries that are paid from money provided by grants from the United States, an agency of the United States, or a privately sponsored source. It is our opinion that the Surplus PropertyAgency normallydo,es not receive suchmoney. The Federal Property and Administrative Service Act of 1949, as amended, provides that surpluspersonalpropertyunder the control of an executiveagency of the!federal governmentmay be transferred to a state agency which is designated by state law as the agency responsiblefor the fair and equitabledistributionof the property in accordance with the provisions of the act. See 40 U.S.C. 5484(j). Section 484(j)(4)(D) allow:3the state agency to assess and collect service charges from participating recipients to cover costs of the state agency's activities. The federal act requires such charges to be based on servicesperformedby the stateagency. The Texas Legislature created and designated the Texas Surplus Property Agency as the si:ateagency for the purpose of the Federal Property and Administrative ServicesAct of 1949. See V.T.C.S. art. 6252-6b. 54. Its primary function is the acquisition,warehousing, and distributionof surplus federalpersonalproperty to entities that qualifyunder the federalact. The SurplusPropertyAgencymay assess service charges for such acquisition,warehousing, and distribution, which are deposited in the Service Charge Trust Fund that is not part of the StateTreasury. The receipts from such chargesare authorized,

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as needed, for the operation of the agency. See art. 6252-6b. %4, - subsets. (1). cm). The operating funds from which the Surplus Property Agency pays the salaries of its employees are generated by the agency's charges for the acquisition and r~~distributionof federal surplus property. The federal government's donations of surplus property generates activity that results in payment of employees' salaries and the state's liability for r,etirement contributions. The salaries, however, are not paid from the donations but from charges paid by units of local or state gt,vernmentthat participate in the program. Such chargesare not money from federal or private grants. Hence, we conclude that section 35.405 of Title 1lOB does not require the Texas Surplus Property Agency to reimburse the general revenue fund for state~retirementcontributkns unless salaries are paid by the agency from direct grants of money to the agency from federal or private sources. SUMMARY

Section 35.4X of Title 1lOB. V.T.C.S., requires reimbur,sementto the state's general revenue fund for state retirement contributions that occur on salariespaid frommoney providedby federal or private grants. The funds from which the Texas surplus Property Agency Pays the salariesof its tnlployees are generatedby charges to the recipientr; of federal surplusproperty that the agency acquires and distributes. Since such charges are not money from federal or private grants, the reinbursement requirement of section 35.405 does not ,~pplyto the normal operations of the Texas SurplusPropertyAgency.
Very trulyyou 

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AL JIM MATTOX Attorney General of Texas JACKHIGBTOWER FirstAssistantAttorney Goneral
MARY KELLER ExecutiveAssistantAttorney General ROBERT GRAY SpecialAssistantAttorney General

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. .

RICK GILPIN Chairman,Opinion Comitte~z Preparedby Nancy Sutton AssistantAttorney General

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