Court Opinion

ID: 4134342
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:49:03.912275+00
Date Added: 2024-06-11T14:15:33.504582
License: Public Domain

E AYTORNEY               GENERAL
                         OF     %kXAS

Honorable G. C. Franklin            Opinion No. M-325
Vice-President for Business
   Affairs                          Re:   Are the benefits of a
Midwestern University                     retirement trust, es-
Wichita Falls, Texas 76308                tablished for the benefit
                                          of the President of Mid-
                                          western University, to be
                                          regarded as salary supple-
                                          mentation under the terms
                                          of Section 24f, Article IV,
                                          House Bill 5, Acto of the
                                          60th Legislature, First
                                          Called Session, 1968
                                          (General Appropriations
Dear Mr. Franklin:                        Act)?
         The text of your recent letter , requesting the opinion
of this office on the above captioned question, is as follows:
         "Is the President of Midwestern University
    authorized to receive a $1,500 salary increase
    in the fiscal year beginning September 1, 1968,
    as provided under Sec. 24.f. of the Special Pro-
    visions Relating only to State Agencies of Higher
    Education, House Bill Number 5, as Enacted by the
    First Called Session of Sixtieth Legislature of
    the State of Texas, in view of the fact that a
    retirement trust is provided for his benefit? A
    copy of the Retirement Trust is attached for your
    review."
         House Bill 5, Acts of the 60th Legislature, First
Called Session, 1968, to which your inquiry is directed, con-
tains the appropriations for the fiscal year beginning September
1, 1968, and ending August 31, 1969. Section 24f of Article IV
(Special Provisions Relating only to State Agencies of Higher
Education) provides:
         'The Presidents of Tarleton State College,
    Prairie View A. and M. College, Texas A&I Univer-
    sity, Texas Southern University, Midwestern

                              - 1593-
                                                 -     c

Hon. G. C. Franklin, page 2 (M-325)

    University, Pan American College, East Texas
    State University, Sam Houston State College,
    Southwest Texas State College, West Texas State
    University, Stephen F. Austin State College,
    Sul Ross State Colleae and Anaelo State Colleae

    (Emphasis added.)
         Your question is whether a retirement trust, established
for the benefit of the President of Midwestern University, consti-
tutes such a salary supplementation asto render the President
of Midwestern University ineligible to receive the $1,500 ap-
propriation provided for by the bill; The copy of the trust
agreement attached to your letter provides, in part, as follows:
        "1 . Midwestern University Foundation, Inc.
   (hereinafter referred to as 'FOUNDATION') a non-
   profit organization, is desirous of providing
   funds to disburse to Travis A. White, President
   of Midwestern University, upon his retirement as
   an inducement for him to remain in his capacity
   as President until such time as he retires."
   (Emphasis added.)
        "2o Foundation shall from,time to time pay
   over funds to a Retirement Trust, which funds
   shall be distributed according to the terms here-
   inafter set forth.
         n3.   . . .
        "4. Foundation as grantor Of said Trust,
   has made a contribution to said Trust and shall
   make contributions in the future until the date

                           -1594-
Hon. G. C. Franklin, page 3 (M-325)

   of retirement of Travis A. White in an amount
   not less than $2,500.00 per annum.
         *. . . .

        "Section 1.0: There is hereby created a
   retirement fund . . . for the exclusive benefit
   of Travis A. White, and if not to Travis A. White,
   then to the contingent beneficiaries hereinafter
   named.
         II
              .   .   .   *

         "Section 3.0:        Distribution shall be made as
    follows:
        "Section 3.01: When Travis A. White reaches
   the normal retirement date or when he retires
   voluntarily or is retired by Midwestern University
   at an earlier date, he shall be entitled to re-
   ceive all corpus and undistributed income of the
   Trust.
        "Section 3.02: In the event Travis A. White
   dies prior to retirement date, the Trust Estate
   shall continue to be held IN TRUST, and the
   Trustee in its sole and absolute discretion may
   make distribution of either income or corpus to
   or for the benefit of Evalyn M. White, wife of
   Travis A. White.
        "Section 3.03: Upon the death of Evalyn M.
   White, all corpus and undistributed income shall
   be paid over to Midwestern University Foundation,
   Inc., or its successor, and if it be not in
   existence, then to Midwestern University, or its
   successor."
         It is the opinionsof this office, after an examina-
tion of the trust agreement, that such agreement does establish
a trust fund. In order for the trust fund to render the
President of Midwestern University ineligible to receive the
$1,500 appropriation allowed by Section 24f. Article IV of the
Appropriations Bill, the trust agreement would have to provide
for salary supplementation. What benefits to an individual
might constitute salary supplementation depend simply upon how
restricted or expanded a definition is given to the term.

                                 - 1595-
                                                 -   ./

Hon. G. C. Franklin, page 4 (M-325)

         The cardinal rule of legislative interpretation is
that, where a statute is open to more than one interpretation,
that interpretation which will give meaning to the intent of the
Legislature shall be followed. As directed by Section 54 of
Article V of the Appropriations Act, it is, therefore, the duty~
of the Attorney General to declare what was the int@nt of the
Legislature in using the,term "salary supplementation" in the
instant provision.
         The purpose of creahing the trust, as~stated in the
instrument, is to provide a reward to the President, designed
as an "inducement for him to remain in his capacity as President
until such time as he retires." Similar benefits,were considered
in Attorney General's Opinion M-138 (1967), wherein it is held
that the expenditure of state'funds to pay premiums~on insurance
contracts concerning State'!employeesis not extra.compensation
to such employees, but,,being prospective, is in the,nature of
an inducement for rewarding faithful public service.
         As there appears nb indication that the Legislature
considers the contributions of a university president less
significant, or less worthy of reward for faithful public serv-
ice, than those of other state employees; and as it appears that
the trust instrument under consideration would not give rise to
a conflict of interest situation, it is the opinion of the Attorney
General that what constitutes "salary supplementation" should be
viewed in an ordinary, limited sense in this instance.
         "Salary", in tm above sense, is defined as a fixed
periodical compensation,;paid at regular intervals, for services
rendered in the course of one's employment. It contemplates
funds to be paid regularly and to be presently available to, or
under the actual or constructive control of, the person employed.
38 Words and Phrases 45 et seq., under "Salary", Blacks Law
Dictionary, Fourth Edition, p. 1503, under "Salary". Given its
ordinary meaning, "supplement" is defined as an addition to some-
thing, already organized or set apart. 40A Words and Phrases
361 et seq. Employing the well settled maxim of statutory con-
struction for the determination of legislative intent, noscitur
a sociis, we hold that where the meaning of the word is doubtful,
Ttm      be construed in light of the words used in association
with it. 53 Tex.Jur.Zd 221, "Statutes", 5154. Thus, a supple-
ment to salary would be, in the instant case, a benefit received
by the President in approximately the same manner, and for approxi-
mately the same reasons, as his salary.
         It is clear, from reading the trust agreement, that

                           -   1596-
    -.   -

Hon. G. C. Franklin, page 5 (M-325)

                          resent1 available to the use or
~~~~;'~frn~~~"P:~sf~~~~,~          some undetermined sum is
     prospectively available at some future, undetermined date.
The funds paid into the trust are paid periodically, to the
extent that a contribution will be made each year, on no ascer-
tainable schedule, but there is no provision for periodicity
in their disbursement. The sums contributed are fixed only as to
a minimum amount to be deposited, so that it can never be definite-
ly foreseen what amount wiil be contributed in a year, or what
amount will ultimately be available for disbursement.
         Thus, it is the opinion of~the Attorney General, that
contributions to the retirement trust; established for the benefit
of the President of Midwestern University, are not to be deemed
supplemental to his salary; nor is the existence of a retirement
trust to be regarded as a salary supplement; nor shall any funds
which the President might ultimately receive from the trust be
considered salary supplement. Consequently, the trust agreement
in question shall in no way preclude payment to the President
of Midwestern University of the $1,500 appropriation granted
by Section 24f, Article IV of the Appropriations Bill.
                         SUMMARY
         The establishment of a retirement trust for
    the benefit of the President of Midwestern Uni-
    versity, and the existence of and contributions
    to said trust, does not constitute a supplement to
    the salary of said person, so that such a trust
    does not act to render the President of Mid-
    western University ineligible to receive the
    benefits of Section 24f, Article IV, House Bill
    5, Acts of the 60th Legislature, First Called
    Session, 1968 (General Appropriations Act).

Prepared by Bill Corbusier
Assistant Attorney General

                             -1597-
Hon. G. C. Franklin, page 6 (M-325)

APPROVED:
OPINION COMMITTEE
Kerns Taylor, Chairman
Sam Kelley
James Quick
Tom Fortescue
Richard Chote
RAWTHOPNE PHILLIPS
Staff Legal Assistant

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