Court Opinion

ID: 4131167
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:12:43.778654+00
Date Added: 2024-06-11T14:26:53.068187
License: Public Domain

The Attorney              General     of Texas
                                                        Hewh 18. 1985
JIM MAllOX
Attorney General

supm       OolJrt   sulwng       Mr.ClaytonT. G6rrbon                        opinionno. m-300
 ‘. 0. Box 12545                 Eucutive Director
 rurwt. TX 75711.2545            prploycesRetiremew:System                   Re: Whether   the    Employees
51w75.2501
                                    of Tuu                                   RetirementSystem is entitled
Telex 2lw74lS7
 hcoplw 513l47bo2w               P. 0. Box 13207                             to depository intereat   on a
                                 Auotin* TexaB   787Ll.                      particularfuud under article
                                                                             6543d. V.T.C.S.

                                 Dear l4r.   Gerriwn:

                                       You request am.opinion from thie office conceroingthe dispoai-
                                 tion of deporitory.:lnterest  earned by an lccount held.by the atate
                                 treaeurer.ou .behalf of the Lav Rnforcemeut and Cuetodial Officer
                                 .SupplemutelRetircmmt Fund. .Thia account, deeignatedFund No. 977
                                 by the etete treaturer, is estebliehedes a pert of the Employees
                                 Retirement.Syrtem  cf Texas. a portion of whose esoete is credited to
                                 the fund. V.T.C.S. Title llOB, Public RetirementSystems, (25.306(7)
                                 (1985Pamphlet).

                                      Pou inform ue that while the fund retains the incoW derived from
w5 Bmwwy. wt. 312
Lubboak,lx.7wol34To
                                 iuvestnut made~owtridethe state treasury,it has not been credited
low7474225                       with the depositoryinterestearned by Pund No. 977. Accordingly,you
                                 lk vhether the fund-is entitled to mxh interest and, if so, whet
                                 ~uthod shouldbe wed to calculetepreviouslyeccumulatedInterestnot
43WN.lOll*r4SUluS
uanm,Tx.          75wl-lws
                                 creditedto Fund lo. 977.
 31-7
                                                 ..’
                                    .::
                                      & ~&&ory     provisionrelevant'tothe diapoaitior'ofdepository
                                 futerest.i8lrticlw2543d~~V.T.C.S..which provides the follcuing in
 aloualnRu4sLin.400              pertinentpart: i'
 5ulAnlonlo.Tx.~7
 512R25415l
                                                 Intertat~receive~on accouut of the    deposita
                                             of-moueya iu funds.and lc o u nte in the.charge of
 An 5eudolloAnnrr   ..                        the Stat11Treenurershallbe allocated,eefollavs:
 Afnmm(k Adlql5molqw               _~     'C To ,uch~-.constitotionelfund there .&all be
                                              credited:the pro tata portion oft the. inter&t
                                              received due to such ‘fund. The remeinder of the
                                            :.lnterertireceived; with the. exception of thnt'
                                 '~      .~ iportion-,wquired.by  other statutea'tobi ~creditkd
                                             :on a,.prwrata basis to protected tax pajmkntr.
                                             Au111 br. credited to the General Rweme Pund.
                                              Tha intweet received shell be allocated on e
                                             monthly basis.
                             .

                                                                  p. 1355
Mr. Cleytou T. Garrison- Ptrge2 (JR-300)

V.T.C.S. art. 2543d. il. This office   has deteruined ou nuuerous
occasiousthat in additionw the funds exeuptedabove, assets held in
the foru of A trust sre alw exempt frou the requirementsof article
2543d. See Attorney Gene181 Opinious RR-338 (1981); IN-82 (1979);
E-1040 cl-); n-468  (1969).

      The opinions just cited establish that in order to be charac-
terized as trust funds, the assets in question should reflect, auong
other things, (1) that they are aduinisteredby a trusteeor trustees,
(2) tbat the assets sre neither granted to the state in its sovereign
capacitynor collectedfor the general operationof state governmeat.
and (3) that they are to bezspent and invested for specific, limited
purposes and for the bemfit of A specific group of individuals.
Being in the ueture of a trust, such assets are eutitledto retain the
proceeds frou their investment. Attorney General Opinions MW-481
(1982); U-468 (1969). Cf. Attorney     General Opinion B-1243 (1972)
(interest earned in join~~uuds must be deposited into the general
revenue fund). The saue theory applies to interest earned ou tiue
depositsof these assete.   kttorneyGeneralOpiniou If-468(1969). SLe
Lauson v. BaRer, 220 S.U. 26'S,272 (Tex. Civ. App. - Austin 1920. writ
ref’d).   Accordingly, thqr are not ,subject to the provisions of
article 25436. Attorney Gencr~l OpinionsMl-82 (1979);Ii-1040(1977).

      In ours opinion, ths Lav Enforcement and Custodial Officer
Sappl-tal         Retirement    Puud is A trust fund entitled to retain
depositoryinterest. The retireuentfund is administeredby the board
of trustees of the EuployeosRetirementSystem. V.T.C.S. Title 1lOB.
Public RetirementSyntema, '125.101(1985 Pauphlet). This office has
previously deteruined that: the assets of the Euployees Retireuent
system, of uhich the retitement fund is A part, exe trust funds.
Attorney General Opinion UW-565 (1959). The retireueut fund is not
collected for. the general.operation of the state; rether, it is
AVAihblA Ody t0 PAY "supplemsntalretir-t             and death benefits to
lau enforcementAnd cuetodf,al       officers"and for "edministratiou of the
fuod.”.P.T.C.S:.TitlellO:B,w.              525.313(b);~'The method and form
of lnvestmmt of retirement fund assets are limited, see V.T.C.S.
Title 1lOB. m.            1125.103(c)end '25.302.and the proceeds of any
such investmentare expresslymade part ~of the retir-t            fund. See
V.T.C.S.I-.Title llOB, Sara.            125.313(a). These features iiK.
eufficient.      iu   oar view,   to, remove the .retiremsntfund from the
coverage,   :-of article 2543d,, The interest eerned on deposits of the
retirement~fund,therefore,         arot,be credited~to the retirementfund
itself end not depositedin the general rweuue fund.

     Your ,ucond inquiry~concernethe'propermethod of creditingthe
retirementfund for interel#tlerned in previousyears. We are unable
to giv~eAdvice AS to the specificaccountingmethod or tims intervals
tQ be -usedin cakulating 'pastinterest..The ansuer to this question
depends on ioformetion  act provided by your request -- a,      the
terms. duration,sod types Iofdeposits, appliuble rates of IntSrSSt.
etc.  We c*n 8tate *a e geueral matter. however. that the retirement

                                 p. 1356
.

    Mr.   Clayton    T. Gerriroo- Page 3         (JR-300)

    fund hAS exhibitedthe lfoleuentionedtrust  fund ChAYACtAYi6tiCS
                                                                  since
    its crention in 1979. St,e Acts 1979. 66th Leg., eh. 269, et 528
    (Meting foroer nrticle~~iSf-1. V.T.C.S.,lsteblishingLAW Enforcc-
    mt    And Curtodinl OffICC!:Suppleuentel Retireuent Fuod). Conre-
    quAAtlY* the retiremeot fund la entitled to credit for depository
    ioterestfrom that  date. Before the retireuentfund pay be’credited
    with this interest, however.   esrtain lioitations~  oo the use of
    trenouryfundsmst be coucidered.

         Article VIII, section 6 of the TexAr Constitutioo prohibits
    vithdreunl of funds from the stnte treneury in the Absence of
    legirlativel ppropriatioo. The TeXAs Supreue Court he8 held that
    fundr lrroueouslydeposite~l in the general revenue fund are oeverthe-
    less subjectto this couetltutionelliuitetionend uy oot be removed
    frou the trenruryuithout :lc!gisletive
                                         actlou. lienionv. Lockhnrt. 114
S.W.2d 216. 219 (Tex. 1938:l.s
                                 Accordingly.the legislntureuost make a
    specific Appropriation before AO~ ioterest erroneourlydeposited in
    the generalreveouefund my be returnedto the retirementfund.

                                         SUIIMARY

                       The tnr   tnforcement and Custodial Officer
                    SuppleuentalRetlcemeot Fund must be creditedfor
                    ioterest earned on deporits of the fund.    Any
                    interest previourly deposited in the geoeral
                    rwenue  fund uurt receive epecified legirlative
                    lpproprintion ba:Eore return to the retireueot
                    fund.

                                                    ~+tYJy-&
                                                                   MATTOI
                                                        Attorney   hOerA    of Texae

    TonGRan
    F%rrt Assistant       Attorney   General

    DAVID R. RICRARDS
    Executive       ASSiStAnt Attorney   CaoerAl

    RIa( GILPIR
    Chairman,OpioionColnittce

    Preparedby Rick Gilpin
    AsSiAtAntAttorney GeoerAl

                                            p.   1357
Mr. Claytoo t. Garrbou   - PASS 4   (Jn-300)

AFPsmm:
0PIn101 cmmxntP

Rick Gilpin, CIuirmm
JonBible
CollaCarl
suun&rriAon
Tar* m=-=Y
Jim Moellinger
Jmntfer  Uggs
IlAuy suttm

                               p. l358         .