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# The Attorney General of Texas February 21. 1986

Mr. Bruce Hineman Executive Secretary TeacherRetirement System of Texas 1001Trinltp Street Austin, Texas 787'01 OpinionNo. 34-429
Re: Whether section 35.4041,Title llOB, V.T.C.S., requires a school district to pay state retirement contributions on all compensation paid by the districtand creditable with the retirement system
DearMr. Einemen:
You have requestedan opinion on the followingquestion:

Does section 35.4041, Title llOB, V.T.C.S., require a school district to pay state retirement contributions for its employees entitled to a minimum salaryunder section 16.056 of the Education Code on all compensationpaid by the school district ;and

creditablewith the retirement system even if some of that compensation is paid for additiona work that is not within the duties of the posit:lonsubject to the statutoryminimum?
In order for a school district to receive financial support from the Foundation School Fund it must comply with certain requirements set by the legislztture.One requirement is that the school district mnat pay certain schooldistrict employeesat least theminimum salary establishedby the:legislature. Educ. Code 516.056. Section 16.056 sets out minimum salariesbased on job descriptionand on the experience and qualificationof the employee. The legislatur,e

has used that minimum salary scale as the basis for limiting the state's obligation to contribute to the Teacher Retirement System. Each fiscalyear the state is required to contribute to the TeacherRetirement Systeman amount equal to 8% percent of the aggregate annua'lcompensationof all members of the system during that fiscal year. V.T.C.S. Title llOB, Public Retirement Systems, 635.404(a) (1985 pamphlet). The provision you ask about, section 35.4041,puts a cap on the state's obligation to contribute on behalf of certainmembers:

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_ Mr. Bruce Hineman - Page 2 (a-f-429)

For members entitled to theminimum salary for certain school pNersonne1under Section 16.056, Education Code, the employing district shall pay the state's contribution on the portion of the member’ s salary that exceeds the statutory minimum.
V.T.C.S. Title llOB, Pub:.icRetirement Systems, 935.4041(a) (1985 pamphlet).
Your question deals %c:Lth the effect of that provision on the state's obligationto contl,ibute to the retirement systemon behalf of a school district employee who receives compensation from the school district for work for whj.chthe Education Code provides a minimum salary as well as for work that is not subject to the minimum salary scale. An example of such an employee would be a teacher who also works for the school district as a bus driver. Teachers are subject to the minimum salary provisions of the Education Code; bus driVers are not. See Educ. Code 516.056. Specifically, you ask whether a school districtmust pay an 85 percent contribution to the retirement system for any compensation such an employee receives from the school district other than the minimum salary established for one of his jobs, even if the extra compensation is for work that is not part of the duties of the position subject to theminimum salary scale. We do not think that the 1egisl;u:ureintended section 35.4041(a) of Title 1lOB to require school districts to pay the 8% percent contribution under such circumstances. Section 35.4041(a)requires a school district to pay the state's contribution for members entitled to a minimum salary "on the portion of the member’s salary tha,:exceeds the statutoryminimum." We think that the most reasonable reading of that language is that a school district is only obligatetlto make the 8% percent contribution for compensationan employeert,ceives as compensationfor a particular job that is in excess of the u,inimomsalary set for that job. The state would remain obligated tonake the 8% percent contributionfor compensationan employee receives forperforminga wholly separate job. The legislature enacted section 35.4041(a) as part of the education reform bill comcrclnly known as "House Bill No. 72." Acts 1984, 68th Leg., 2d C.S., &h. 28, art. 2, 119, at 343. Although the Bill File to House Bill No. 72 in the Legislative Reference Library does not reveal the legislature'spurpose in including the provision codified as section 35.4041(a) in that act,we think that at leastone purpose of section 35.4041l:a) was to prevent the state from using its resources to increase the gapbetween rich and poor schooldistricts.

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Mr. Bruce Hinemsn - Page 3 (JM-429)

The toequality in tk,eability of school districts to finance themselves has received much attention in recent years. See, e.g., San Antonio Independent !&ho01 District v. Rodriguez, 411 U.S. 1 --- (1973). Sy limiting the state's obligation to pay contributions to the TeacherRetirement Sys,:tm on salariesabove the statutoryminimum, the legislaturerequired s&o01 districtswho csn afford topay higher salaries to bear the entire cost of compensating school district personnel more generously than state law requires. Cne reason for concluding that a purpor,e of section 35.4041(a) was to promote equality in school district finances is that section 35.4041(s) 3s inapplicable to a school district if the district's tax rate iB 125percent or more of the statewideaverage tax rate. V.T.C.S. Title llOB, Public Retirement S:rstems,535.4041(h) (1985pamphlet). Thus, when a schooldistrict is .%bletopay high salariesbecause it imposes a high tax rate rather &an because it enjoys a good tax base, the statewill make contributLx;eon the extra compensation. Requiring schooldistricts tomake the 8% percent contributioncn compensati& paid to a teacher for moonlighting as a bus driver, however,would not further Iequality in school financing. Rather, it would discouriageschool d:istrictsfrom hiring teachers to do supplemental work. We cannot imagine that this was the legislature's intent. Both the language of section 35.4041(a) and the apparent purpose behind that section require us to construe that section as meaning that a school districtmuE,tpay the state's contributionon campsnsation it pays an employee fD.r a particular job that exceeds theminiu.um compensation set out for that job in section 16.056 of the Education Code.
SUMMARY

Section 35.4,)41(a)of Title llOB, V.T.C.S., m-s that a schooldistrictmost psy the state's

1. For example, as LDng as bus drivers work at least l/2 of a standardwork load, they sremembers of the TeacherRetirement System. See 16 T.A.C. 25.1, 25.2, 215.6. The state contributes to the retire

## ment system on behalf of all members. V.T.C.S. Title llOB, Public Retirement Systems, 535.404 (1985pamphlet). If the school district were required to pay, in effect, a 84 percent surcharge for bus drivers who are also teachers, it would make economic sense for the school district to hire 1~v.s drivers on whose behalf the state would pay the 8% percent contribution.

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contribution on compensation it pays an employer for a particular job that exceeds the minimum compensationset out for the job in section 16.056 of the Education Code.

JIM MATTOX Attorney General of Texas JACKBIGHTOWER FirstAssistantAttorney Gtacral
MARY KELLER ExecutiveAssistantAttormy General ROBERT GRAY SpecialAssistantAttorney G,eneral RICK GILPIN chainnan,Opinion committar: Preparedby SarahWoelk AssistantAttorney General

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