The Honorable K. D. Hall

County Attorney Refugio County County Courthouse Refugio, Texas 78377
Dear Mr. Hall: OpinionNo. H-963
Re: Pension plan for employeesof Refugio County Hospital.

You advise that Refugio County elected to participate in the statewideTexas County and District Retirement System, beginning January 1, 1968, shortly after the systemwas established in 1967 by article 6228g,V.T.C.S. At that time, the county hospital was leased to a private agency and its employeeswere not then county employees. Subsequently, the county undertook the operation of the hospital (which is governed by the provisions of Texas RevisedCivil Statutes, title 71, chapter 5) and all hospitalpersonnel became county employees.
The hospital employees have asked the county commissioners court to set up a separatepension system for them independent of the Texas County and District Retirement System. The Refugio County Commissioners Court has neither formally precluded hospital employees from becomingmembers of the statewide system, nor passed an order separately requiring them to becomemembers of the statewide system.
You ask:
Can the employees of a hospital owned and operated by the County of Refugio form their own pension plan, independentof the Texas County and District Retirement System.

. . .

p. 3186The' Honorable K. D. Hall - page 2 (H-903)

The Texas Constitution, article 16, section 67, empowers the Legislature to enact general laws establishing systems and programs of retirement and related death and disability benefits for public employees and officers', and it continues in effect those systems and programswhich existed at the time the constitutionalprovision was adopted in 1975, subject to the power of the Legislature to change them. Subsection (c)of the constitutionalprovision states in part:

(c) Local Retirement Systems (1) The legislature shallprovide by law for: (A) the creationby any city or county of a system of benefits for its officers and employees: (B) a statewide system of benefits for the officers and employees of counties or other political subdivisionsof the state in which counties or other political subdivisionsmay voluntarilyparticipate

. . . .

. . . . (2) Benefits under these systemsmust be reasonablyrelated to participant tenure and contributions.
The Texas County and DistrictRetirement System is a statewide system in which countiesmay voluntarilyparticipate

-- a systemwhich the constitutionalprovision continued in effect. Attorney General Opinion H-604 (1975). Subsection l(c) of section 3 of article 6228g states that a subdivision which once elects to participate in the Texas County and District Retirement Systemmay subsequentlyelect to discontinue enrollment of new members, but "shallnever discontinue as to any members." Subsection 2 of the same statutory section governs the participationof employees in the statewide system. In pertinent part, it says:

p. 3787The Honorable K. D. Hall - page 3 (H-903)

The membership of the System shall be composedas follows: (a) All persons who are employees of a participating subdivision on the effective date of its participation in the.System shall becomemembers of the System as of that date; provided,however, that this provision shall not apply to any of the followingpersons or groups of persons, to wit:

. . . . (2)Employees of any county hospitalwhich hospital is governed by the terms and provisions of Chapter 5, Title 71,Vernon's Texas Civil Statutes,where the commissionerscourt of the --

not included in the System, the commissioners courtmay thereafter elect to require such employeesto become members of the System, and such employees shall become members of the Systemat the date fixed by the order for their participation;the rights and obligationsof such employeesand of the county as employer of suchpersons shall be determined as if such countyhospital employees were employees of a separatesubdivision. (b)ti person not a member of this System, who becomesan employee for the first time of a participatingsubdivision after the effective date of participation of such subdivision, shall become a member of the System, upon the first day The monthfomwlng the date such person becomes an employee, provided he is then under the age of 60years but any suchperson who is then 60years or over shall not be eligible to become a memberof this System. (Emphasisadded).

p. 3788The Honorable K. D. Hall - page 4 (H-903)

The provis.ion

referring to hospital employees in subsection 2(a)(2)of section 3 was added in 1969. The legislativehistory of this amendmentmakes it clear that the Legislature intended to permit the commissioners court to originally excludehospital employees as a group from membership in the County and District Retirement System, but required affirmative action by the commissioners court in order to preclude such employees frommembership. House Bill No. 1131 of the 61st Legislature as introducedwould have excluded hospital employees frommembership "unless the commissioners court of the county elects to require the employees of any such hospital to becomemembers of the system." When the Senate considered the bill, it amended this provision with the language as it now appears in theAct, which clearly requires positive action in order to excludehospital employees from becomingmembers.
It would appear from the factsgiven us that the hospital employees automaticallybecame members of the statewide retirement systemwhen they became county employees, since the county did not originally take action to exclude them, nor did it subsequentlydiscontinue the enrollment of new members in the system. Cf. Attorney General OpinionM-520 (1969). While section 3,

subsection 2(a)(2)of article 6228g allows counties to originally exclude hospital employees from participation,we do not believe that itwas intended to modify the subsection l(c) prohibition against dropping members from the system. Thus, if hospital employees have become members of the Texas County and District Retirement system, theymust remainmembers.
In 1975, in anticipationof section 67, article 16 of the Constitution, the Legislature enacted article 62283, V.T.C.S., authorizinga county to create (andto contribute to) a retirement,disability and deathbenefit system for its appointive officers and employees if the county voters approve. The countymight elect to discontinue the enrollment of new county hospital employees under subsections l(c) and 2(a)(2)of section 3 of article 622851, and create an article 62283 local retirement system for new employees, but itmay not discontinuemembership in the statewide system of the

p. 3789. . .

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ThenHonorable K. D. Hall - page 5 (H-903)

current employeeswho are alreadymembers of the County and District Retirement System, even though the employees in question may desire not to participate in the system. See Attorney GeneralOpinion M-520 (1969). Moreover, thoseemployees who are members of the County and. District Retirement System may not receivemembership credit from another State or county retirement system for the same service. Tex
. Const. art. 16, S 67(a)(2).
SUMMARY Employees of a county hospital have automaticallybecomemembers of the Texas County and District Retirement Systemwhen they became county employees, if the countywas already a participant in the System and the county commissioners court took no action to exclude hospital employees originally fromparticipation in the System. Hospital employeeswho have becomemembers of the Systemmust remain members, and cannot receivemembership credit from another State or county retirement system for the same service.

-@PROVED:

-1 DAVID M/ QNDALL, FirstAssistant

Opinion Committee jwb P. 3790