JIM MATTOX Attorney General

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# The Attorney General of Texas

Feb:mary18. 1986

Mr. ClaytonT. Garrisou Executive

Director Employees

Retirement

System of Texas P. 0. Box 13207 Austin,Texas 787!1 OpinionNo. 34-427

Rc: Whether the par diem limitations of section 4 of article of the GeneralAppropriations Act apply to members of the Board Trusteesof the EmployeesRetirement Systsm

Dear Mr. Garrison:

You ask vhethe:r the limitations contained

in section4 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 currentact provides:

PER DIW OF BOARD OR COMMISSIONMWBRRS. 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 amountsof 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 establishedpursuant 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. ClaytonT. Garrison - I'age 2 (JM-427)

The firstparagraph 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 irtthisAct. It is the purpose of the Legislature :ia euacting this bill only to appropriate

fundo and to restrict and limitby its provisionsthe amount and conditions under which the appropriaticns can be expended. (Emphasis added).

This provisionreflects tk,e constitutional

principle that appropriation bills shoulddeal 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 theseprov~isious , and assuming

without decidingthat the board is a "stateboard"within article6813f and article V **of** the Appropriations

Act, you sugtgest

that section4 of articleV does not apply to the board membew because the funds from which the board memhers' expenses are psid are not properly deamed "appropriated" fundsWithin the meaningoji article

V. We .agree

with your coaclusioa.

It has been suggested that, regardless

of whether the articleV limit applies directly tc these funds. the measure establishedin article

V applies to the funds. Section 25.208of Title 1lOBprovides in subsection(a), as follows:

The board oji trustees shall compensate all personswhom it maploysand shallpay all expenses necessary

to operatethe retirement system**at** rates and in amountsapproved by the **board. Those**  rates and amouuts

may sot exceed thosepaid for the same or similarserrria-! 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

systemarguablyriaclude 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 chapter25 dealswith the "Board of Trustees." Section 25.006 of Subchapter A authorizes certain trustaes, subject to appwval by tha whole Board of Trustees, to receivecompensation and all expenses

necessary

to the performance of their official

duties:

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

(a) Ttusteeswho are coatributiag members of the retirameat s:rstem serve without compensation but are entitledto reimbursement for all aecessery expensesthM they incur in the performeace of off iclal board (duties.
(b) Subject t:athe approval of the board of trustees, truste!ss who are not contributing membersof the retirement systemmey 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

intendedthis result. Moreover, when the legislature has limited or provided for something in one section of a statute and excludedit in another,it shouldnot 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 section25.006 of Title llOB,V.T.C.S., for board members is to be paid out of the "expenseaccount"created by section25.311 of Title 1lOB:

(a) The retiremeat eystem mbell deposit in the expeaseaccount

mrtzmbership

fees,maey requiredto be treaeferred to **the** accountuader 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 expensesthe 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 lccouat 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 interestaccount includesearnings from **inrestmeat** of the system's assets. 125.310. The assets **of** the systeminclude both employee

end state coutributions

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

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

administered

by G board,,

includingthis expense 'account, are not properly deemed "appropria!:ed funds"vithin the meaning of articleV because they ara trwt funds. Bacausa the portion **of** the account which consistsof membershipfees 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 EmployeesRetirement System "may be expended

. . . in accordance with the general statutespertaining to the [system] vjthout prior specificappropriat%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 provisionvhich 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 menberahipfees and earnings from the investment of the system ’s assets fall within an exceptionto these constitutional

provisions

as "ttist"fun&.

.

. The fundsprovidedfo:: in the Employees

Retirement

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

under statutory

j?r:ovisions

which set the funds apart for the specificpurposes for vhicb they vere collected; they could be used for no otherpurposas. The opinionreasoned that the fundsbecame the property

of a public trust createdfor the benefitof 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 fundsvere to be deposited:Ln the-state

treasury &,-in the general
revenue fund, but rather in a special trust fund held separatelyin the state treasury. the constitutional requirementfor a specific ;;~f~~lation for upendirurea did not apply. After this opinion was language vaa a,doptedin the Texas Constitution which clariflid

that "[tlhe asae:ta of a [publicretirement] 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 interestin such trust funds is subject to the right of the leglslatura to amend the lavs on which the pensionsystems 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. - Texarkana1974.vrit ref'd n.r.e.1.

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

These cases,however.did not addressarticla XVI. section 67, of the Texas Constitution, vhich n'as

adopted

by special

electionin 1975. As indicatad,

subsection(a)(l)of section67 providesthat "[tlhe assets of a system are held in trust for the benefit of members and may not be diverted." It is unnecessaryto delve into this issue at this time. because we do not address the right of an employee to trust funds in a retirementsystem;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 concludethat the expense fund established by section 25.311, fromvhlch 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 meaningof article V of the currentGeneralAppropriatLms Act to the extent that it consistsof membership fees and interczst on amployee contributions. Thus, the limitations

containedin s'wtion4 of article V of the currentAppropriations

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 Trusteesof the Employees Retirement

Systaa of Texas **are** to be paid **any** par diem properlydua 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 section4 **of** articleV do **not** apply to the per diem vhich may be due a board member. 

# -$..m/#(&

MATTOX Attorney

Generalof Texas

JACK HIGBTObER First Assistant

Attorney

G,aneral

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

MART KELLER Executive

Assistant

AttorneyGeneral

ROBERT GRAT Special

Aasistant

Attorney

General

RICK GILPIN Chairman,

OpinionCosuaittee!
Prepared

by Jennifer

Riggs Assistant

Attorney

General

p. 1962