Court Opinion

ID: 4131846
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:20:13.639794+00
Date Added: 2024-06-11T14:33:31.377799
License: Public Domain

The Attorney                  General of Texas
                                             August        4,    1980

MARK WHITE
Attorney General

                   Honorable Kenneth II. Ashworth                   Opinion No. MW-215
                   Coordinating Board
                   Texas College and University System             Re: Implementation       of the Texas
                   P. 0. Box 12788, Capitol Station                State    College     and    University
                   Austin, Texas 78711                             Employees       Uniform      Insurance
                                                                   Benefits Act, Ins. Code art. 3.50-3.

                   Dear Commissioner     Ashworth:

                            You ask several questions   concerning the Texas State College and
                   University   Employees Uniform Insurance Benefits program created      by the
                   provisions of article 3.50-3 of the Insurance Code. You first ask whether the
                   institutions   of higher   education   in Texas are required   to adopt and
                   implement a program of insurance premium payments for retired employees.

                         Article 3.51-5 of the Insurance Code, enacted in 1975, provides that the
                   “costs of group life and health insurance premiums to persons retired under
                   the Teacher    Retirement   Act, who at the time of their retirement          were
                   employed by . . . a Texas senior college or university . . . shall be fully paid
                   from the funds of such . . . institution. . . .‘I Article 3.50-3 of the Insurance
                   Code enacted in 1977, states that one of its purposes is

                               Sec. 2(f)   to recognize the long and faithful service
                               and dedication    of employees     of the Texas state
                               colleges and universities    and to encourage  them to
                               remain in service until eligible for retirement      by
                               providing health insurance and other group insurance
                               benefits for such employees;

                   Institutions     covered by the Act are required to “contribute    monthly to the
                   cost of each insured employee’s coverage. . . .‘I Ins. Code art. 3.50-3, § 12.
                   The Act &fines          “employee ” to include employees    who retire under the
                   Teachers Retirement         System of Texas or the Optional Retirement     Program
                   established      by articles 51.351 - 51358 of the Texas Education      Code.    Ins.
                    Code art. 3.50-3, SS 3(a)(2), (4).        In our opinion, article  3.50-3 clearly
                   requires     state agencies      of higher education to implement    a program of
                   insurance premium payments for retired employees.

                                                      P.   686
Honorable    Kenneth    H. Ashworth       -     Page Two      (Mw-215 1

         You next ask whether the institutions         of higher education   have authority    to use
institutional   line item appropriations     for other items to support the program for retired
employees.      Section 4b of article IV of the General Appropriations        Act for 1979-81 states
that “insurance       premiums    where authorized        by law . . . may be purchased          from
appropriated     funds.” Section 4d states that ” ‘General Operating Expenses’ as used in the
medical and dental institutions       shall include . . . insurance premiums   where authorized     by
law. . . .‘I Section 5 provides that, with the approval of the governing board, “transfers
may be made between the items of appropriations              for the general academic institutions”
regardless    of whether    the items are general revenue or local funds.           In our opinion,
 institutions  may transfer appropriation        items to pay for insurance premiums for retired
employees as permitted       by article IV, sections 4b, 4d, and 5 of the General Appropriations
Act.

        You next ask whether article 3.50-3 of the Insurance Code obligates junior college
districts to implement       a program of insurance premium payments for retired employees.
Article 3.50-3 defines “employees” to include persons who have retired from junior college
teaching.    Sec. 3(A). Article 3.51-5 of the Insurance Code does not require junior colleges
to pay insurance      premiums      for retired    employees.       However, its provisions are to be
construed    in harmony with the more recently              enacted    article 3.50-3, which is clearly
applicable to retired junior college employees.            See Goldman v. State, 277 S.W.Zd 217 (Tex.
Civ. App. - Amarillo 1954, writ ref’d n.r.e.) (statutes in pari materia must be harmonized);
see also Attorney General Opinion H-1114 (1978). A question has arisen as to whether the
state may control funds of a junior college district other than appropriated                    funds. Junior
college districts are oolitical subdivisions of the state.             Attornev General Ooinion M-707
(197Oj; see Shepherd vl San Jacinto Junior College Dist., 363 S.W.2”d 742 (Tex. ‘1963); King’s
Estate v. School Trustees         of Willacy County, 33 S.W.Zd 783 (Tex. Civ. App. - San
Antonio 1930, writ ref’d).         They are established         pursuant     to statutes     enacted     by the
legislature.   See Educ. Code ch.-130. In order to receive state appropriations,                     they must
comply “with3         existing laws, rules, and regulations           governing     the establishment        and
maintenance     of public junior colleges. . . . ‘I Educ. Code S 130.003(b)(3). They acquire local
funds pursuant      to state law.      See Tex. Const. art. VII, S 3; Educ. Code § 130.121 (tax
assessment).    There is ample precedent        for legislative control of local junior college funds.
Educ. Code 5 130.084; see Educ. Code S 20.48; Attorney General Opinion MW-38 (19791. Of
course, particular    fundzay       be earmarked       for special purposes.     See Educ. Code S 130.123
(revenue bonds for acquisition         of facilities).      However, we find%            general prohibition
against legislation    which would alter or control the expenditure              of nonappropriated        funds
by junior colleges.

       Your next question      is as follows:

              If the cost of the premium payment per employee               for the basic
              coverage(s) prescribed      under Article 3.50-3 of the Insurance Code
              exceeds    the per employee        amount appropriated     in the General
              Appropriations     Act     for the purpose        of insurance     premium
              payments,    do the institutions    have an obligation to pay the portion
              of the premium        that     exceeds   the amount     appropriated     per
              employee and included in the General Appropriations          Act? If so, do

                                                  P.    667
.   .

    Honorable     Kenneth      H. Ashworth       -     Page Three          (MW-215)

                   the institutions  have the authority  to use funds included in other
                   line item appropriations  in view of Section [25] of Article IV of the
                   General Appropriations   Act?

    Section    11 of article   3.50-3 provides       in part:

                   From the first day of employment,    each active full-time employee
                   who has not waived basic coverage or selected optional coverages
                   shall be protected    by a basic plan of insurance          coverage
                   automatically.  The premium for such coverage shall not exceed
                   the amount of the employer contribution.   . . .

    In our opinion, this provision contemplates    a basic coverage that will be fully funded by
    the employer contribution.    Section 12 requires that institutions    and agencies covered by
    the Act “shall contribute   monthly to the cost of each insured employee’s coverage no less
    than the amount appropriated      therefor  by the legislature   in the General Appropriations
    Act. . . .” Section 25 of article IV of the current Appropriations        Act provides that the
    state’s contribution  for employee premiums      on group life, health, and accident    policies
    should not exceed $35 per month in fiscal 1980 and $40 per month in fiscal 1981.

           General legislation       enacting or repealing a statute may not be included in a general
    appropriation     bill. Tex. Const. art. III, S 35; Moore v. Sheppard, 192 S.W.Zd 559 (Tex.
    1946); Conley v. Daughters of the Republic of Texas, 151 S.W. 877 (Tex. Civ. App. - San
    Antonio     1912), aff’d, 156 S.W. 197 (Tex. 1913). In order to be valid, riders to the
    Appropriations     Act must be related to and germane to the act. Jessen Associates, Inc. v.
    Bullock, 531 S.W.Zd 593 (Tex. 1975). If we construe section 25 to limit the permissible
    contribution    under section 12 of article 3.50-3 to an amount less than the premium for the
    basic plan required by section 11, it will be inconsistent            with those provisions of general
     law, and therefore      an invalid attempt     to enact general law in the general appropriations
    act. Statutes are to be construed to render them constitutional                 and valid where possible.
    Hamrick      v. Simpler,      95 S.W.Zd 357 (Tex. 1936).         Section 25 can be constitutionally
    construed     as a limitation      on the expenditure     of appropriated      funds.   Thus, institutions
    receiving     funds in article        IV of the General        Appropriations     Act may spend from
    appropriated     funds no more than $35 per employee premium per month in 1980 and no
    more than $40 per employee premium per month in 1981. Since section 12 of article 3.50-3
    authorizes     covered institutions        and agencies    to contribute      monthly “no less than the
    amount appropriated          therefor    by the legislature ‘I they may contribute         more than the
    amounts appropriated.           (Emphasis added).     Since section 11 requires the premium for the
    basic plan to be fully funded from the employer contribution,               it obligates the employer t0
    pay the excess over the amount appropriated.                 However, since section 25 of article IV
    limits    the expenditure         of appropriated       funds,   the excess        must   be paid       from
    nonappropriated       funds.

              You finally ask whether institutions    must contribute  to the premium payment of
        employees paid from nonappropriated     funds an amount equal to the premium contribution
        for employees included in line item appropriations.    You also inquire about the source of
        such premium payments.   Section 12 of article 3.50-3 provides in part:

                                                                P.   688
                                                                                                 .     .

Honorable    Kenneth     H. Ashworth   - Page Four         (NW-215)

                 Each institution  and agency covered under the provisions of this
              Act shall contribute   monthly to the cost of each insured employee’s
              coverage    . . . as determined    by the governing      board of the
              institution   in its respective   official operating   budget,    if the
              employees     are compensated    from funds appropriated        by such
              budgets rather than by the General Appropriations    Act. . . .

This provision gives the governing board some discretion as to the amount of premium and
the sources within its operating       budget.   Sections 4b and d of Article IV of the General
Appropriations     Act permit payment        of “insurance premiums      where authorized    by law”
without limiting this benefit to persons compensated         by appropriated   funds. We therefore
believe the governing board may use either appropriated           or nonappropriated    funds to pay
insurance    premiums   of employees      compensated     by nonappiopriated    funds, for example
auxiliary employees.     If appropriated    funds are used, the limitations   of premium payments
found in section 25 of article IV will be applicable.        Of course, the monthly contribution
must be large enough to fund the premium for the basic plan to which each employee is
entitled under section 1L

                                          SUMMARY

             Article 3.50-3 requires institutions    of higher education      in Texas,
             including junior colleges, to fund insurance       premiums for retired
             employees.      They may use appropriated       funds for that purpose
             pursuant    to sections 4b, 4d, and 5 of article IV of the General
             Appropriations    Act, and subject to the limitations   on dollar amount
             in section 25. If the cost of the premium payments for the basic
             coverage prescribed     under section 11 of article 3.50-3 exceeds the
             per employee amount appropriated      for that purpose, the institution
             must pay the additional amount.

                                                   ve$u&%&

                                                       MARK            WHITE
                                                       Attorney       General of Texas

JOHN W. FAINTER, JR.
First Assistant Attorney General

Prepared    by Susan Garrison
Assistant   Attorney General

APPROVED:
OPINION COMMlTTEE

C. Robert Heath,       Chairman
Martha Allan
David B. Brooks
Susan Garrison
William G. Reid

                                              P.     689