Honorable T. 0. ,Walton,

President Agricdtutial

and Mechanical

Collegeof Texas CollegeStation,

Texas Dear Dr. Walton: opinion No. 

### o-2469 Re: Is the Board of Directors of the Agricultural

and Mechanical Collegeempowered

to pay any part of the premiums on a policy of group life insurance covering the dployees from studentfee funds, local funds, or other institutional

funds under the jurisdiction

of the Board - and related question?
We beg to acknowledge receiptof your letter of June 

### 5, 1940, requesting an opinionfrom this department, such letter

being as follows,

to-wit: "On or aboutApril 1, 1931, the Southwestern Life Insurance Company,

of Dallas,

Texas, issuedto the Agricultural and Mechanical College its policy of Group Insurance, insuring

the full-time employees(employees either on a nine months or twelvemonthsbasis) of the Collegeagainstdeath and total and permanentdisability. The insurance has been in full force since that date, and employees

have been required to carry the insurance as a part of their contract.

* * * "Underthe plan of insurance, the cost of premiums was paid jointly by the insured

employees

and the College,

the insuredemployeespaying approximately seven-eighths

of the premiums

and the College

paying approximately one-eighth. The proportionate part of the premiums paid by the College was and is made from unassignedlocal funds;that is, from funds of the College not appropriated

out of the State Treasury and not designated

to be used for any particular purpose.* * * "The Board.

of Directors

gave the matter carefulconsideration when the plan was established and it was their jud&ment f&at the benefitto the CnlJ.ege& fmpra~eoed~.f#Xale of the staffwould be worth much more ths&the cost k-the institution.The judgment of the Board in this respect has been amply substantiated by our experience

under the plan. The total cost to the Collegehas averaged

between$3.00 and $4.00 per insured employee

per year, cHonorable

T. 0. Walton,Page 2 (C-2469)

and we have considered this as being in the nature of a small supplement to the salaryand permlsaible under the appropriation act. "We would appreciate it, therefore,

if you would informus on the following

points: "1. Is the Board of Directors of the A. & M. Collegeempowered to pay any part of the premiums on a policy of Group Life Insurance covering

the employees

from studentfee funde, local,fundr, or other institutional

funds under the jurlediction of the Board7 "2. If this cannot be dons, can the Board legally pay its part of the premiumsfrom the Group Insurance Premiums

Revolving

Account made up as outlined above of refunds

ma& by the Insurance Company under the participating featureof the policy and held in trust for the insured

employees?" SectionI(a) of House Bill No. 255, the Appropriation Act for Institutions of Higher Learningfor the current biennium,

declare8: "Thatall balance8in the institutional funds of the several State institutions

named in this Act, at the close of the fiscal year endingAugust 

### 31, 1939, including balancesin their revolving funds at that time, and the entire incor to said funds during each of the two fiscalyears endingAugust 

### 31,~ 1940, and August 

### 31, 1941, which are not otherwise appropriated

for either or both of said fiscalyears, are herebyappropriated for the support, maintenance, operation

and improvement

of said State institutionsduringeach of the said fiscalyears respectively."
In Opinion

No, 

### O-1661,

construing

Chapter144,Acts 45th Legislature -- the General

Appropriation

Bill -- with respectto balancesin institutional funds, we held that such fundsmay not be used to pay a part of the premiums for grouphospitalization end life insurance

policiescovering

faculty

members and for their benefit.

The same rule, upon the same reasoning, applies

to your inquiry. These institutional funds have been appropriated for the support,

maintenance, operation

and improvement

of the respective

State institutions. We there said: "There is no just relation between the insurance to protect students

traveling

in connection

with the activities of the institution that would justify the paymentof premiums therefor. Such insurance

is not reasonably

necessary,

nor do we think it la even proper as an incident to the maintenance of the institution."
Your first question, therefore,

is answeredin the negative. Pxm-thermore,

the Board is not authorized to pay any part of the premiums under consideration from the group insurance premiums

revolving

accountHonorable T. 0. Walton,Page 

### 3 (O-2469)

refunded

to the Board under the insurance plan. Theee refundstake the place and occupythe status of the fund6 originally used -- wrongfully, as we are holding it to have been -- by the Board In purchasing such insurance. Of course,

we are not considering the matter from the standpoint of business

policy, such a8 might guide an individual in the conductof hie own affairs,

but on the contrary, we are coneidering it solelyfrom the standpoint of legislative authority

in the Board to make the purchase of such insuranceout of the public institutional funds.
Your second question is therefore

likewise

answeredin the negative.
We have answered

your questions

broadlyas you have statedthem. Of course,

nothing

we have said should be construed

as to excludethe use of funds for such group insurance properly

belonging

individually

to sn employee as a beneficiary

of such fund,where the employee beneficiary

consents

to such use. It is his individual money and therefore not within the rule we have discussed

above. Neither shouldour answerbe construed so as to preventa supplementing of an employee's salaryout of the funds and in the menner specifically providedfor in subsection (2) of the General

Provisions

attached

to House Bill No. 255 -- Regular Session, 

### 46thLegislature

for Institutions

of Higher Learning. Very truly yours APPROVED

JUL g, 

### 1940 /s/ GlennR. Lewis ACTINGA!il'OREEY

GENERAL OF TEEAS OS-MR-LM ATPORNEYGENERALOFTEEAS

By /a/ Ocie Speer

Ocie Speer Assistant

THIS OPINION CONSIDERED

AND APPROVEDIN LIMITED CONFEREECE