Court Opinion

ID: 4134529
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:51:26.880529+00
Date Added: 2024-06-11T14:35:08.072889
License: Public Domain

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Honorable Robert S’.Calve&        ,Opinion   Noo, M-138
Comptroller of’Public Accounts
State Capitol Building             Ret Whether a policy for group
Austin, ,Texas                     life insurance coverlng,employees
                                   of the Comptroller’s Department,
                                   executed prior .to the effective
                                   date of Senate Bill 294, Acts
                                   of the 6Qth Zegialrture,    Regular
                                   Session, Chapter 437, authorizes
                                   the Comptroller“ t.6 ma,ke pr~emium
                                   payments therefor from State funds,
Dear Mr 0 Calvert:                 and certain ‘relatedquestions.
         Reference is made to your letter in which you request
an opinion from this office as to’the captioned matter. We,quote
from your letter, in part, as follows:
          ,,. “I am the policyholder of a ‘group policy    ~~. .
         covering employees of my department, such con-
         tract being made~prfor to the effective  ‘date ?P   ”
         Senate Bill 294, Acts of the 60th Legislature.
              “(1)   Does this,contract permit me to maka
                     premium payment.8from State funds, or
                     must a new contract be obtained before
                     payments can be made?
              ‘(2)   Zs group 1%f8 insuTanC8 elltgiblefor
                     premium payments by the state?
              8(31,.,Arye,,funds appropriated to ‘me for the
  ‘:
  I .. .:. ,,,~   ~,’operatlon of th s department for the
  ‘,            6 fisca) year ending August 31, 1968,
   :                 available for the payment of insuraW3
                     prcaiums?
..‘.,    ..$ll%h’reference
                         to question number (1 , you are advised
 that State funda may be utilized as,wntribut      for premium
         ,’     ‘,
                                   ),,
                                                                              .   3

                Honorable Robert~S..,
                                    Calvert,:page 2,(M- 138)             .,
                                                                                       ?
,..,,
   .,y
                payments .under,jroslr'present'gr~~~.
                                                   insurance.contrait. ',
                                                                        .Senate,'
                'Bill~294 Acts,of ,the'69th :Legi~slatur~e,~~~~Rsgular
                                                                 .Session,.I$$   :"~~'
                                                                                     :~~
                 Chapter &37,-,:Pages:::lOO7,
                                         Its,*
                                            devoid .,of'~,
                                                      any '1'anguagt:'which
                                                                          would? '~,
                 require 'a~
                           departmental head~to..ex.ecut:e
                                                        a~,new.gro~p,pcQ$+con-        ,’
                 tract for the purpose of making,premlum peg?aents,there,for"from
                 state.funds.
                                     ~.
                          The an&war to question ~~ber'(2),ire.~in.th8:.gffi~T.::,.
                tive.~ ,The caption of .SenateBill ,294'providesas follows:     '~'~
                                                                                  ~'

                               "AR:ACT'ampndlng Paragraph (b)',.of
                                                                 Subsection '.
                        ~'&3) Of Sectionlof   Article,3050 of the~Insuranc8,
                           ode and amending Subsection(a) of Section 1 of
 .~~.                    .Article 3.51 of th8~InsUranC8 Code,to pein&t th8       '~
.:                        expenditure of stat8 fund,sto paysall nor any par-   "
                          tiOn of tht~.p.remiums
                                               for Certain group~.insurance
                          contracts'coverln& employees of the state;.. .~."
                         With relation to the expenditurc,of,state funds for
                      life pOliCy premiums;'Senate Bill,2g&ar@ndQd,Paragraph
                    Subsection (3) of Section.1, Article 3.50, 'by striking the
  .~       "
                               ~"Thepremium for the policg'shall be paid
                          by~the policyholder~wholly'from funds contribu-
                          ted.by the in,suredemployees?,
                                                        .~ ~~.   .~.,
               ',and inserting in 'lieu.,the&f the following:,
                                     premium it& the.pol+cy may be paid
                               '.'?!be
                           in whol~eorln part,fromfunds contributed ,by
                           the,policyholder or in whole or inpart'from
                           ,fundscont,ributedby~the insured employees."
                Subsection (3~),,
                                Section l,,/Article3*5O’bf the~Insurance Code              ,.
                provides Sn part:                             .~
      .i
                              '((3), A policy ls$Ged tb: 0’D’~
                                                             ; any aaso-              ..~
                                                                                      :
                         ciation~of state employees . D a and any de-
                        ..,partmentof~the state government which employer
                         or association shall be deeme~tthe',pollcyholder.
                         to insure the ~employeesho D *, .'

,.:

                  .,, 'I                ~.~'.-
           :

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                       Honorable Robert s..calvert, page 3 (M- 138)                I,            ‘..

                       From the foregolrigit is,apparent ~that state funds may be used
                       as contributions.toward group life premium payments when the
                       employer is the policyholder.
                                    Lothas been heretofore held by this offlde that a state
                           agency may contribute state funds in payment of the premiums ,of,
                           group insurance covering its employees under the p.rovih$onaof
                           Subsection (a) of Section 1 of Article 3.51, ‘of the Insurance
                           Code, as amended by Senate Bill 294, Acts of the 60th Legisla-’
                           ture e Such is a public governmental purpose benefltting the
                           state a Opinion by the Justices, 30 So. 2d 14 (Ala.Sup.1947 ;
                                                              ?&.M:291,20. p.421 (19211;
                                                                  658, 251 S.W. 46 (1923 ;
                                                             42 Cal. App..2d,40.9,108 ib 2d
                                                                                ,’    ,.
                            We are in agreement with the reasoning of the Supreme
                   Couri of Hisslsslppl in Mayor and Alderman of City of Vicksburg
                   v. Crichlow, 196 Miss, 239 lb Smy~               whereln the
                   statute concernina benefit; to ao&mental     emDlouee8 was UD-
                  ,held as not gratl;ties and as not extra compensation, but -
                   being prospective ,lt serves ,abeneficient and useful govern-
                  mental function in Its propensfty for stimulating and’renardtig
                   faithful public servic,esV
                                    The same reasoning would hav,eapplication $0 the gxpendi-
                           ture of’state finds to pay.prem$wns on insurance ccktracts con-
                           cerning ‘state employees 1
                                Question number (3) as posed ln’your letter, “Are funds
                       appropriated to me for the operation of this deptitment for the
                       fiscal year ending August 31, 1968, available for the payment
                       of insurance premiums?” is also answered .ln the affirmative.
                   Of course , you are aware that Senate Rill 15, Acts of’
          the 60th Zegislature, Regular Session, 1967, which is.the-
‘7
4         Appropriation Bill for the fiscal year September 1, 1967, to’
          August 31, 1968,.contains no specific appropriation for the
          Comptroller of Public Accounts to make premlum~payments in whole
         ,or in part, on group insurance contracts asp authorized by Senate
        ” Bill 294. In our opinion no specific appropriation is requfred.
                                    In Senate Bill 15, p* IZf-33, the following appropria-
                           t$on has been made for the Comptroller of Publ&c Accounts:
                                                                                    :    *
                       .
                 ,.~                                                               ,,~
                                                                   ‘.,‘,
 ( ..
            I,
                           1
.~:

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        .                                                            I       ,,,         .   .
    Honorable Robert S. Calvert, page 4 (M- 138)

                                       "For the year ending'August 31>‘&8     ,.~..
                    ”
                        .   .   e

                  1115. Consumable supplies and,
             materials, current and recurring
             operating expense, and capital
                                                  Z,
                                                         $1,846,340”
             outlay ~~....~e.~e*.........*.....es~....~~.,
             It is noted that on page v-34 of Senate Bill 15 the
    Legislature placed certain limitationson the use of the expense
    funds as reflected in item number 15 as shown above. These
    limitations are, in part, as follows:
             "Section 11.           LIMITATIOES ON USE OF OTREI'EXPERSE
                                          FOR m      S-S      AWD WAC%%
                  "Funds appropriated in Articles I, II, .and
             III of this Act, or for the Central Education
             Agency.in Article IV of this Act, in items design-   ,:~
             nated for consumable supplies and materials,
             current and recurring operating expense or capital
             outlay shall be expended only for items set out
             in the Comptroller's Manual of Accounts, Expendi-
.            ture Classification, effective November 1, 1965;
             as.~amend,ed,
                         and numbered from.lO.to.19'for,.!'.don~~,~..:.
             sumable supplies and materials", 20 through 28
             for "current and recurring operating expense,"
             and 60 through 69 for "capital outlay". It is
             further provided that such terms shall not include
             expenditures for personal services including
             salaries and wages, unless the langua e of those
             items explicitly authorizes such use.if
              An examination of the Manual of kckounts, State of
     Texas, Comptroller of Public Accounts, reflects on page 4-25
     under Current or Recurring Operating Expense, Expenditure Code
    'number 027, in part, the following:
             n027                           IRSUl&ECE AND BOND PREMIUMS
                    Authority:                     Legislative Appropriation
                                                                               ,
                    Purpose:                       To .recordpayment of in-
                                                   surance and surety bond,
                                                   premiums.

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    .    .

                                                             1
3onorable Robert S. Calveat, page ,5 (W- 138)
                                 ,.

         As was stated in Attorney General's Opinion.130.j
wi,f-888
       (1960):
               "The house and utilities to be.furnished    s
          the business manager are not a part of his salary.
         .They are.something in addition thereto,,..... .
          That is to say, they are Incident to the position       j
          of businoss,manager, something gained from the
          employment above and beyond the salary or wages
          for services rendered. Therefore, the rental
          payments are 8 general operating expense,properly
          payable from Line Item 8 of the appropriation to
          the Denton State School."
         The reasoning of Attorney General's Opinion No. WW-888
appe,arsapplicable to our situation at hand. Insurance pre:
mium payments made on behalf of state employees with state
funds are not salaries or wages to that employee but are a
benefit to the employer. Therefore, in conjunction with
question number (3), you are advised that the payment of
group insurance premiums as authorized by Senate Bill 294 may
be paid frommoneysappropriated to your agency for the fiscal
year ending August 31, 1968, for operational expenses.
                           SUMMARY
                           -------
              Senate Bill 294 does not require the department
              head of a state agency to execute a new group
              policy contract before premium payments can be
              made with state funds wherein the department
              head is the policyholder of,a group policy
              contract, wh.ichwas executed prior to the ef-
              fective date of such bill.
              Senate Bill,294 authorizes the.use of state
              funds as pr@um    contributions on group life
              ,insurancekherein the employing agency is the
              policyholder.
              Moneys appropriated to the Comptroller of Public
              Accounts for the fiscal year ending August 31,
              1968, for "current and recurring operating ex-
              pense? .is available for the payment of insurance
              premiums,'as authorized by Senate Bill 294.

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                                                                    .

    Honorable Robert S. Calvert, page 6 (~-138)

                                              ,GEHERAL.OF TEXAS,
    Prepared by Ray McGregor
    Assistant Attorney General"
                                              .:
    APPROVED:
    OPINION COMMITTEE
    Hawthorne Phillips, Chairman
                                                        :
    Kerns Taylor, Co-Chairman
    Sam Kelley                                                 ‘.

    John Banks
    Roger Tyler
    Malcolm Quick
    John Reeves

c

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