JIM MAl-TOX 

Attorney General 

Supreme Court Bullding 

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Austl”. TX. 76711- 2542 

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An Equal OpportUnitYi 

Afiirmaiive Action Employer 

The Attorney General of Texas 

February 21. 1986 

Mr. Bruce Hineman 

Executive Secretary 

Teacher Retirement System 

of Texas 

1001 Trinltp Street 

Austin, Texas 787'01 

Opinion No. 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 district and creditable 

with the retirement system 

Dear Mr. Einemen: 

You have requested an opinion on the following question: 

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 salary under section 16.056 of the Education Code on all compensation paid by the school 

district ;and creditable with the retirement system 

even if some of that compensation is paid for 

additiona work that is not within the duties of 

the posit:lon subject to the statutory minimum? 

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 school district employees at least the minimum salary 

established by the: legislature. Educ. Code 516.056. Section 16.056 

sets out minimum salaries based on job description and on the experience and qualification of 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 fiscal year the state is required to contribute to the Teacher Retirement System an amount equal to 8% percent of 

the aggregate annua'l compensation of 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 certain members: 

p. 1967 
‘_ 

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

For members entitled to the minimum salary for 

certain school pNersonne1 under 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:.ic Retirement Systems, 935.4041(a) (1985 

pamphlet). 

Your question deals %c:Lth the effect of that provision on the 

state's obligation to contl,ibute to the retirement system on behalf of 

a school district employee who receives compensation from the school 

district for work for whj.ch the 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 district must 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 the minimum salary scale. We do 

not think that the 1egisl;u:ure intended 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 statutory minimum." We think 

that the most reasonable reading of that language is that a school 

district is only obligatetl to make the 8% percent contribution for 

compensation an employee rt,ceives as compensation for a particular job 

that is in excess of the u,inimom salary set for that job. The state 

would remain obligated to nake the 8% percent contribution for compensation an employee receives for performing a 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's purpose in including the provision 

codified as section 35.4041(a) in that act, we think that at least one 

purpose of section 35.4041l:a) was to prevent the state from using its 

resources to increase the gap between rich and poor school districts. 

p. 1968 
. . . 

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

The toequality in tk,e ability 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 Teacher Retirement Sys,:tm on salaries above the statutory minimum, 

the legislature required s&o01 districts who csn afford to pay 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 

125 percent or more of the statewide average tax rate. V.T.C.S. Title 

llOB, Public Retirement S:rstems, 535.4041(h) (1985 pamphlet). Thus, 

when a school district is .%ble to pay high salaries because it imposes 

a high tax rate rather &an because it enjoys a good tax base, the 

state will make contributLx;e on the extra compensation. 

Requiring school districts to make the 8% percent contribution cn 

compensati& paid to a teacher for moonlighting as a bus driver, 

however, would not further Iequality in school financing. Rather, it 

would discouriage school d:istricts from 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 district muE,t pay the state's contribution on campsnsation it pays an employee fD.r a particular job that exceeds the miniu.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 school district most psy the state's 

1. For example, as LDng as bus drivers work at least l/2 of a 

standard work load, they sre members of the Teacher Retirement System. 

See 16 T.A.C. 25.1, 25.2, 215.6. The state contributes to the retirement system on behalf of all members. V.T.C.S. Title llOB, Public 

Retirement Systems, 535.404 (1985 pamphlet). 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. 

p. 1969 
Mr. Bruce Elineman - Page 4 (JM-429) 

contribution on compensation it pays an employer 

for a particular job that exceeds the minimum 

compensation set out for the job in section 16.056 

of the Education Code. 

JIM MATTOX 

Attorney General of Texas 

JACK BIGHTOWER 

First Assistant Attorney Gtacral 

MARY KELLER 

Executive Assistant Attormy General 

ROBERT GRAY 

Special Assistant Attorney G,eneral 

RICK GILPIN 

chainnan, Opinion committar: 

Prepared by Sarah Woelk 

Assistant Attorney General 

p. 1970