Court Opinion

ID: 4132903
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:31:44.312599+00
Date Added: 2024-06-11T14:33:56.280106
License: Public Domain

December     16,   1974

The Honorable Ben Bynum                           Opinion No.   H-   475
Chairman,  Committee     on Insurance
House of Representatives                          Re:    Extent of the Comptroller’s
Austin, Texas                                            authority to regulate com-
                                                         panies participating  in the
                                                         State’s deferred   compensation
Dear    Representative   Bynum:                          plan.

     Your opinion request concerns the authority of the State Comptroller           to
issue a specific regulation pursuant to his duty to administer         the deferred
compensation    program for public employees       provided by Article 6252-3b,
V. T. C. S.  The statute authorizes     the use of deferred compensation      plans
whereby public employees       may defer part of their salaries     for purposes of
investment   in life insurance,    fixed or variable annuities,    or mutual funds.
V. T. C. S. art. 6252-3b.     5 1. Insofar as state employees     are concerned,
the Comptroller     of Public Accounts is authorized to venter into contracts
with employees     to defer a portion of their salaries   and to make the payment
of premiums     on the investment item purchased.       V. T. C. S. art. 6252-3b,
§ §2.   5.

    Section   1 of the statute authorizes   the investment    contract     itself:

               The state or any county, city, town, or other
          political subdivision may, by contract.     agree with
          any employee to defer, in whole or in part, any
          portion of that employee’s    compensation   and may
          subsequently,   with the consent of the employee,
          contract for, purchase,     or otherwise procure a
          fixed or variable life insurance or annuity contract
          or mutual fund contracts for the purpose of funding
          a deferred compensation     program for the employee,
          from any life underwriter     duly licensed  by this
          state who represents    an insurance company licensed
          to contract business in this state,

                                     p. 2164
The Honorable    Ben Bynum,     page 2     (H-475)

However,      the Comptroller    has promulgated the following requirement
which must be met by all life insurance companies and underwriters
participating    in the program:

        The Company represents        that it is a life    insurance
        company,     licensed for business in Texas and that the
        Company has in its possession         all licenses    or con-
        tracts at law required by law to offer for sale all of
        the contracts authorized for purchase under the
        Deferred Compensation        Plan and that each representa-
        tive of the Company contracting        state employees     for
        participation    in the plan will be licensed to sell and
        will counsel the state employee as to the benefits of,
        each type of investment      contract authorized.

     The Comptroller’s     regulation imposes additional material requirements
for participation   in the program beyond the requirements        specified by the
Legislature.     In our opinion, section 1 of Article 6252-3b clearly provides
that any duly licensed life underwriter      and any life insurance company
licensed to transact business in Texas can participate in the program.
The Comptroller      however,   has in effect ruled that many such duly licensed
underwriters    and companies     cannot participate   since they do not also hold
licenses   or contracts which would permit them to sell mutual funds.

     There is no authority expressly     granted to the Comptroller    in Article
6252-3b   to issue rules or regulations.    However,   section  3 of the  statute
provides that “[t]he administration    of the deferred compensation      program
shall be under the direction of the state ccanptroller    or his designee . - . .‘I
It is thus necessary    to determine whether the grant of authority in section 3
to administer    the program includes an implied power to issue the regulation
in question,

    A general rule of statutory construction,        stated in Terre11   v. Sparks,   135
S. W. 519, 521 (Tex. Sup. 1911) is that:

                                      p. 2165
The Honorable   Ben Bynum,    page 3        (H-475)

       Whenever a power is given by statute, everything
       necessary    to make it effectual    or requisite to
       attain the end is implied.     It is a well-established
       principle that statutes containing grants of power
       are to be construed so as to include the authority
       to do all things necessary    to accomplish     the object
       of the grant.    The grant of an express power carries
       with it by necessary    implication    every other power
       necessary    and proper to the execution of the power
       expressly   granted.    Where the law commands
       anything to be done, it authorizes      the performance
       of whatever may be necessary        for executing its
       commands.      (citing Sutherland on Statutory Construc-
       tion, 5 341)

See also Attorney   General   Opinion C-265         (1964).

    However,    the implied powers of an administrative          body to effectuate
the intent of a statute are limited.

       Although a statute conferring administrative
       authority will generally be liberally   construed,
       the agency must not go beyond the clear intent
       of the legislature.   It may not enlarge its powers
       by its owh orders,    or exercise   a power expressly
       conferred not upon it, but upon another agency or
       arm of government.       1 Tex. Jur. Zd, Administrative
       Law, § 6.

    In our opinion, the intent of the Legislature   in passing Article 6252-3b.
expressed   in unambiguous language and reflected in the committee        debates
of the House of Representatives,      was to allow any licensed life under-
writer who represents     an insurance company licensed to contract business
in Texas to participate    in the deferred compensation     plan program.    The
Comptroller’s    regulation clearly runs contrary    to this intent.

    In Ke1l.y v. Industrial Accident Board,           358 S. W. Zd 874, 876 (Tex. Civ.
APP. --Austin    1962, writ ref’d. ) the court        struck down an administrative
rule, saying:

                                       p.    2166
The Honorable     Ben Bynum,      page 4       (H-475)

         . . . the rules and regulations     . . . enacted by
        the administrative    body may not impose additional
        burdens,    conditions or restrictions    in excess of or
        inconsistent   with the statutory provisions.

See also Johnson v. Firemen’s           Insurance   Co.,   398 S. W. 2d 318 (Tew. Civ.
APP.    --Eastland    1965,  no  writ);  and Attorney    General  Opinion M-609A    (1970).
The Comptroller’s        regulation imposes an additional burden in excess of the
legislative    intent since it requires that the life underwriter       or insurance
company be licensed to provide all four types of deferred compensation                 plans,
and not just any one of the plans as the statute permits.

    A rule ~of an administrative    agency is void if it conflicts with the statute.
Teacher Retirement      System v. Duck-worth, 264 S. W. 2d 98 (Tex. Sup. 1954)
(adopting the opinionof     the Court of Civil Appeals in 260 S. W. 2d 632).
Since the Comptroller’s     regulation in this instance runs contrary     to the
intent of the statute in question and conflicts with the statutory require-
ments~ for participation   in the deferred compensation    program,    it is our
opinion that the regulation is void.

                             SUMMA          RY

             The regulation of the Comptroller     requiring a life
         underwriter   or insurance company to be licensed to
         provide life insurance,   annuities and mutual fund
         contracts in order to participate   in the deferred com-
        ‘pensation plan authorized by Article 6252-313,     V. T. C. S.,
         is void.

                                               Very   truly yours,

                                               Attorney   General    of Texas

                              irst Assistant

                                  I

C. ROBERT HEATH.           Chairman
Opinion Committee
                                       p.   2167