JIM MATTOX 

Attorney General 

Suprms Court Buildin 

P. 0. BOX 12549 

Austin, TX. 78711. 2549 

512/4752501 

Telex 910/874-1357 

Telecopier 51214750268 

144 Jackson. SUitS 7M) 

Daiim.. TX. 752924509 

214i742.Ba4 

4B24 Albda Ave., Suite 180 

El Paso, TX. 799052793 

91515333494 

11 Texas. Sulls 799 

..suston. TX. 77002-3111 

7131223-5886 

898 Broadway. Suite 312 

Lubbock. TX. 794013479 

SW74?-522.9 

4309 N. Tenth, Suite B 

McAllen. TX. 78501-1085 

5121082.4547 

200 Maill Plaza. suite 400 

San Antonio, l-X. 78205-2797 

512/2254191 

The Attorney General of Texas 

Feb:mary 18. 1986 

Mr. Clayton T. Garrisou 

Executive Director 

Employees Retirement System 

of Texas 

P. 0. Box 13207 

Austin, Texas 787!1 

Opinion No. 34-427 

Rc: Whether the par diem limitations of section 4 of article 

of the General Appropriations Act 

apply to members of the Board 

Trustees of the Employees Retirement Systsm 

Dear Mr. Garrison: 

You ask vhethe:r the limitations contained in section 4 of article 

V of the current Gtcneral Appropriations Act, Acts 1985, 69th Leg., 

ch. 980, at 7761, apply to members of the Board of Trustees of the 

Employees. ,Retirement: Spstsm of Texas. 

. 

In general. mambers of-the state boards and coamissious ire 

entitled to per dim pursuant to article 6813f. V.T.C.S., in coajunction, with the General Appropriations Act. See Attorney General 

Opinions JM-382 (1985); JM-152 (1984); Mu-388 (1981). Section 4 

article V of the current act provides: 

PER DIW OF BOARD OR COMMISSION MWBRRS. As 

authorirml by Section 2 of Article 6813f. Texas 

Revised Xvi1 Statutes Annotated. the per diem of 

state board and com&sslon members shall consist 

of (1) tlm amounts of compensatory per diem at $30 

per day; (2) actual expenses for meals and lodging 

a s l uth+zed by this Act not to exceed the 

maximum amouat allowed as a deduction for state 

legislatwts while avay from home during a 

legislative session as established pursuant to 

the Intemal Reveuue Code 26 U.S.C. Section 

162(l)(l)(B)(ii); and (3) trausportatiou. In the 

event the maximum amount allowed as a deduction 

for staee legislators pursuant to the Interual 

Revenue Code as provided above is raised to au 

emount above $100, the maximum -ut of the meals 

sad lod$;lng portion of the per diem paid to board 

and cormpilsslon members under this section shall 

not exceed $100. (Emphasis added). 

p. 1957 
. I 

Mr. Clayton T. Garrison - I'age 2 (JM-427) 

The first paragraph 01' article V provides that 

[tlhe provisions :set forth in this and all other 

Articles of this A.ct are limitatious ou the appropriations made irtthis Act. It is the purpose of 

the Legislature :ia euacting this bill only to 

appropriate fundo and to restrict and limit by its 

provisions the amount and conditions under which 

the appropriaticns can be expended. (Emphasis 

added). 

This provision reflects tk,e constitutional principle that appropriation bills should deal only with appropriations of funds; a rider to a 

general appropriations bill caunot amend, modify, or repeal general 

lav. See Tex. Coast. art. 1.11, 635; Moore v. 

(Tsx. 1946); 

Sheppard, 192 S.W.2d 550 

Coates v. W:~~I. 

Austin 1981, 110 Vrit). 

613 S.W.2d 572 (Tex. Civ. App. - 

In light of these prov~isious , and assuming without deciding that 

the board is a "state board" within article 6813f and article V of the 

Appropriations Act, you sugtgest that section 4 of article V does not 

apply to the board membew because the funds from which the board 

memhers' expenses are psid are not properly deamed "appropriated" 

funds Within the meaning oji article V. We .agree with your coaclusioa. 

It has been suggested that, regardless of whether the article V 

limit applies directly tc these funds. the measure established in 

article V applies to the funds. Section 25.208 of Title 1lOB provides 

in subsection (a), as follows: 

The board oji trustees shall compensate all 

persons whom it maploys and shall pay all expenses 

necessary to operate the retirement system at rates 

and in amounts approved by the board. Those rates 

and amouuts may sot exceed those paid for the same 

or similar serrria-! for the state. (Emphasis added). 

This provision appeara; to apply.to "all expenses necessary to 

operate the retirement system." Expenses necessary to operate the 

retiremeut system arguably riaclude per diem for board members. Thus, 

this section appears to limit the board to the article V limit 

applicable to other state b'oard members. Section 25.208, houwer, IS 

in Subchapter C of Chapter 25 of Title 1lOB. This subchapter, by its 

title, deals with "Officer!% and Employees of [the] Board of Trustees." 

In contrast, Subchapter A of chapter 25 deals with the "Board of 

Trustees." Section 25.006 of Subchapter A authorizes certain 

trustaes, subject to appwval by tha whole Board of Trustees, to 

receive compensation and all expenses necessary to the performance of 

their official duties: 

P. 1958 
Mr. Clayton T. Gerrisoa - P,kge 3 (a-427) 

(a) Ttustees who are coatributiag members of 

the retirameat s:rstem serve without compensation 

but are entitled to reimbursement for all aecessery expenses thM they incur in the performeace 

of off iclal board (duties. 

(b) Subject t:a the approval of the board of 

trustees, truste!ss who are not contributing 

members of the retirement system mey receive: 

(1) compenaatioa; and 

(2) all nc:cessary expenses that they incur 

in the perforsance of official board duties. 

Thus, if both section 25.006 and section 25.208 were to apply to 

trustees, they would be in conflict. We do not believe that the 

legislature intended this result. Moreover, when the legislature has 

limited or provided for something in one section of a statute and 

excluded it in another, it should not be implied where excluded. See 

generally Smith v. Baldwia.~ 611 S.W.2d 611,616 (Tex. 1980). BecaK 

the limit la section 25.208 does not appear in section 25.006, to 

imply such a limit would u,lolate thfs well-settled rule of statutory 

. construction. : : '. 

The per diem authorizei. by section 25.006 of Title llOB, V.T.C.S., 

for board members is to be paid out of the "expense account" created 

by section 25.311 of Title 1lOB: 

(a) The retiremeat eystem mbell deposit in the 

expease account mrtzmbership fees, maey required to 

be treaeferred to the account uader Sectioa 25.314 

of this subtitle, ead any apprwrlatioae ude be 

the legisleture 121 the eccouat. 

(b) The retir~aasnt system shall uay from the 

expanse account-admiaistratioa cad meiatenaace 

expenses of the- retirement systsm except those 

expenses the vay;eat of which is provided for by 

Se&m 25.2Oi(c) or 25.313(b) of-this subtitle; 

(Pophasis added) ; 

Tbe sectioa 25.311 aarpease l ccouat coaeiste of 1) membership 

fees, 2) money transferred,, pursuant to section 25.314(b). from the 

interest account, which c'xlsists of earnings from the iavestment of 

the aseats of the Employetrs Retirement System. ead 3) eay appropriatioas mede by the legislature to the account. Tbe interest account 

includes earnings from inrestmeat of the system's assets. 125.310. 

The assets of the system include both employee end state coutributions 

p. 1959 
Mr. Clayton T. Garrison - Pnjsa 4 (JM-427) 

. 

to the system. See S525.Nll - 25.403. You suggest that the funds 

administered by G board,, including this expense 'account, are not 

properly deemed "appropria!:ed funds" vithin the meaning of article V 

because they ara trwt funds. Bacausa the portion of the account 

which consists of membership fees and earnings on the iavestment of 

employee contributions is wra than sufficient to cover the per diem 

expanse in question, ve need not decide vhether all of the funds in 

this expense account are "expropriated funds" within the maanlng of 

article V. 

In Attorney General Opinion WW-565 (19591, this office decided 

that certain funds adminiszared by the Employees Retirement System 

"may be expended . . . in accordance with the general statutes pertaining to the [system] vjthout prior specific appropriat%ons by the 

Legislature." See also Attorney General Opinions m-276 (1980); 

H-681 (1975); M-949 (1971). Attorney General Opinion VW-565 considered the scope of article VIII, section 6 of the Texas Constitution , a provision vhich prohibits the vithdraval of funds from the 

state treasury vithout a specific appropriation. Relying on Friedman 

vi American Surety Compaq of Nev York, 151 S.W.2d 570. 579 (Tex. 

1941). the opinion concluded that funds received by the Employees 

Retirement System from menberahip fees and earnings from the investment of the system’s assets fall within an exception to these constitutional provisions as "ttist" fun&. . . 

The funds provided fo:: in the Employees Retirement System Act, in 

effect when Attorney Gewral Opinion WW-565 vas decided, vera 

collected under statutory j?r:ovisions which set the funds apart for the 

specific purposes for vhicb they vere collected; they could be used 

for no other purposas. The opinion reasoned that the funds became the 

property of a public trust created for the benefit of the employees of 

the state - not the propexty of the state in its sovereign capacity. 

See generally Friedman v. American Surety Company of Nev Pork, m 

Because the act governin(~the system did not contemplate that the 

funds vere to be deposited :Ln the-state treasury &,-in the general 

revenue fund, but rather in a special trust fund held separately in 

the state treasury. the constitutional requirement for a specific 

;;~f~~lation for upendirurea did not apply. After this opinion was 

language vaa a,dopted in the Texas Constitution which 

clariflid that "[tlhe asae:ta of a [public retirement] system are held 

in trust for the benefit of &are and may not be diverted." Tu. 

Conat. art. XVI, 567(a) (1). 

We are avare that thl: Texas courts have held that an employee's 

interest in such trust funds is subject to the right of the leglslatura to amend the lavs on which the pension systems are founded. See. 

a, City of Dallas v. T:~uawll, 101 S.W.2d-1009. 1013 (Tea. 1937); 

Lack v. Lack, 584 S.W.2d &96,- (Tax. Civ. bpp. - Dallas 1979. vrit 

ref'd n.r.e.); Cook v.~ @ployees Retirement System of Texas, 514 

S.W.Zd 329. 331 (Tex. Civ, App. - Texarkana 1974. vrit ref'd n.r.e.1. 

p. 1960 
Mr. Clayton T. Garrison - Page 5 (J&427) 

These cases, however. did not address articla XVI. section 67, of the 

Texas Constitution, vhich n'as adopted by special election in 1975. As 

indicatad, subsection (a)(l) of section 67 provides that "[tlhe assets 

of a system are held in trust for the benefit of members and may not 

be diverted." It is unnecessary to delve into this issue at this 

time. because we do not address the right of an employee to trust 

funds in a retirement system; we address only the scope of the term 

"appropriated funds" under' article V of the currant Appropriations 

Act. 

Applying the rationale, of Opinion WI-565 to the case at hand 

compels the conclusion that, because a general appropriation is 

unnecessary for the axpendi.ture of these funds, limitations on general 

appropriations are inappli~abla to these constitutional trust funds. 

Accordingly, va conclude that the expense fund established by section 

25.311, from vhlch the members of the board of trustees are to be paid 

any per diem properly duo under Title llOB, is composed of trust 

funds, not "appropriated funds" within the meaning of article V of the 

current General AppropriatLms Act to the extent that it consists of 

membership fees and interczst on amployee contributions. Thus, the 

limitations contained in s'wtion 4 of article V of the current Appropriations Act do not apply t:o the expenditure of such funds. 

SUUMARY . 

The portion of the expense fund established by 

section 25.311 of Title 1lOB. from which the 

members of the B'xrrd of Trustees of the Employees 

Retirement Systaa of Texas are to be paid any par 

diem properly dua them, is composed of funds held 

in trust for the employees of the state to the 

extent that it consists of membarehip fees and 

interest on emILoyees' contributiona. Because 

these are trust funds, rather than "appropriated 

funds" within thlc meaning of article V of the 

current General Appropriations Act, the limitations contained. to section 4 of article V do not 

apply to the per diem vhich may be due a board 

member. 

-$..m/#(& 

MATTOX 

Attorney General of Texas 

JACK HIGBTObER 

First Assistant Attorney G,aneral 

p. 1961 
Mr. Clayton T. Garrison - Page 6 (JM-427) 

MART KELLER 

Executive Assistant Attorney General 

ROBERT GRAT 

Special Aasistant Attorney General 

RICK GILPIN 

Chairman, Opinion Cosuaittee! 

Prepared by Jennifer Riggs 

Assistant Attorney General 

p. 1962