Court Opinion

ID: 4133198
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:35:10.316027+00
Date Added: 2024-06-11T14:37:39.565114
License: Public Domain

OF     TEXAS

The Honorable    Philip G. Hoffman                     Opinion   No.   H-   180
President
University   of Houston                                Re:    Funds available     to
Houston,   Texas 77004                                        purchase    group
                                                              insurance    under
                                                              House Bill 139,
                                                              Article   V, 5 10, 63rd
Dear   President   Hoffman:                                   Legislature

        You have asked our opinion concerning         the extent to which the University
of Houston may expend funds appropriated         in Item 2 of its appropriation      or any
other item for payment of group insurance          premiums,     authorized  by $10 of
Article   V of the current Appropriations     Act,    “on behalf of those employees
of various   auxiliary  enterprises   of the University    of Houston who are being
paid from auxiliary     enterprise  funds and who are covered        by a University   group
policy or policies”?

        Your second question,   conditioned    upon a negative answer to the first,
asks   the effect this would have upon an employee      whose salary is paid partially
from    appropriated  funds and partially   from funds of the auxiliary enterprise.

        You note that the enterprises       about which you inquire are such as the
operation   of the University     Center (student union), the residence         dormitories,
the educational   television    station,   and various   research   grant programs.         You
state that employees      working    in these enterprises     customarily   are paid in whole
or in part with funds generated        from the operation     of the enterprise.

        The Constitution    of Texas requires,      as a prerequisite     to the appropriation
of any funds, the existence       of pre-existing    Law. Article     3, $44.    The pre-exist-
ing law authorizing     a state agency to purchase       group insurance     for the benefit of
its employees    is Article    3. 51 of the Insurance   Code, as amended in 1967 and 1969.
It provides,  in part:

                                        p.   820
                                                                               .       .

The Honorable      Philip   G.   Hoffman,    page      2   (H-180)

                        “Sec. 1. (a) The State of Texas and each of its
               political,    governmenta,         and administrative       subdivisions
               . . . and the governing           boards and authorities        of each
               state university.        . . are authorized       to procure     contracts
               with any insurance          company authorized         to do business in
               this state insuring        their respective      employees.       . . or
               any class or classes           thereof under a policy or policies
               of group health,       accident,      accidental    death and dismem-
               berment,      disability     income replacement          and hospital,
               surgical    and/or medical          expense insurance        or a group
               contract    providing      for annuities.     . . . The premium
               for the policy or contract           may be paid in whole or in
               part from funds contributed             by the employer       or in whole
               or in part from funds contributed              by the insured employees
               . . . .

                         “The term employees       as used herein in addition         to
               its usual meaning       shall include elective   and appointive
               officials    of the state.”

         The AppropriationsA,ct  for fiscal   1974 and 1975 (House            Bill   139, 63rd
Leg.),    provides  as part of $10 of Article    V (p. V-38):

                       “State departments        and agencies     covered   by this
               A,ct (Articles    I through VI) shall utilize       funds other than
               those for personal       services,    from any item which includes
               operating     expenses,    and shall use these funds to pay em-
               ployee premiums         on policies   containing     group life, health,
               accident,    accidental    death and di~smemberment,           disability
               income replacement         and hospital,     surgical    and/or medical
               expense insurance.        . . .‘I

        Item 2 of the appropriation    to the University    of Houston (Appropriations
Act, p. IV-60) includes     a sizeable   appropriation   for “Staff Group Insurance
Premiums.     ” There are a number of other items “other than those for personal
services”    which do include operating     expenses   and which would fit the language
of § 10 quoted above as items out of which premiums           might be paid.

                                            p.   821
   .      .

The Honorable      Philip   G. Hoffman,     page   3   (H-180)

       It therefore    appears    that there is ample statutory       authority    as well
as funds appropriated       for the payment of premiums           on group insurance
for employees      of the University.       The question     then is whether    those engaged
in the operations     which you have described         are or are not employees.         While
we do not have sufficient       information    to definitively    answer this question as
applied to particular     individuals,     we do cite you to some general          legal prin-
ciples to assist you in your determination           of “employee”      status.

        The “usual” meaning of “employee            ” is one who works for another,
usually for wages,      and usually below the executive          level.   See Webster’s
New International      Dictionary,     Third Edition.      Throughout    the statutes,      the
term “employee”       is variously    defined,     See, for example,      Article     6235a-1,
§ 3(4); A,rticle   6228g, § 2, Subsection       6; Article   8309, !j 1. It is said that the
crucial   test to determine     whether     one is on the one hand, an employee           or, on
the other,    an independent     contractor    is the right of the employer         to control
the details    of the manner of performing         the work.    Newspapers        Inc. v. Love,
380 S. W. 2d 582 (Tex.        1964). And see Attorney         General   Opinion H-94 (1973).

       In Northwestern      National   Life Insurance    Co. v. Black,       383 S. W. 2d
806 (Tex. Civ. App.,     Texarkana,      1964, err. ref’d.,   n. r. e.),   the question    before
the court was whether a decedent,to          whom a certificate      of group life insurance
had been issued,     was an employee       of the Board of Public      Utilities  of the City
of Texarkana,     Arkansas.      In the course of its opinion,      the court made various
statements    which, we believe,      should be of aid in answering         your question.     It
said:

                     “An employee      is one who works for        an employer;
              a person working      for a salary or a wage.         The word is
              applied to anyone so working,        but usually     only to clerks,
              workmen,    laborers,     etc.,  and  but rarely     to officers  of
              a government    or corporation.      . . .

                       “The relation     of employer    and employee      is contrac-
                tual . . . . It may be oral or written,          express    or implied
                . . . .   The   words   ‘
                                        servant’   and    ‘
                                                          employee’    are   in most
                cases practically     synon,ymous.       . . . Also the word
                ‘employee’    in its general   significance    is governed     by the

                                          p. 822
The Honorable       Philip   G. Hoffman,         page   4   (H-180)

                same rules whether a claim lies within the field of
                common law liability    or arises  out of the Workmen’s
                Compensation  Statutes.    . . .‘I (383 S. W. 2d at 809-
                810)

       The government   of the University    of Houston is vested in a Board                   of
Regents.   Education  Code,   $ 111.11, Vernon’s   Texas Civil Statutes.

        It is our opinion therefore           that the Board of Regents       of the University
of Houston has the authority            and the funds appropriated        to it to pay all or
part of the premiums           for group policies      for its employees,      as defined in
Article    3. 51 of the Insurance        Code to include elective       and appointive    officials.
Whether      or not a person is an employee             will depend primarily       upon whether
he has been employed            by the University      pursuant to a contract      of employment,
oral or written,         express    or implied,     and is subject to the control      of the
University     officials    as to the details of his work.        If some separate       entity
intervenes,      he may not be an employee.              However,    the mere fact that the
Board of Regents          may entrust to a separate         committee     or board the manage-
ment of a particular          affair and that that affair is financed        separately,    does
not remove      its employees        from the status of employees          of the University      so
long as the Universi,ty          Regents   retain the ultimate     right to control the details
of doing the work.          Exercise     of t.he right is merely     evidence    and is not deter-
minative.      Newspapers         Inc. v. Love,      supra.

       Our  answer to your first question     therefore    is that the University     of
Houston may expend funds of line 1t:em 2 of its appropriation            or other,   so
long as they are not funds appropriated      for personal     services    to purchase
group insurance   for employees    of various    auxiliary   enterprises     of the Uni-
versity if those employees   legally  qualify as employees        of the Universi,ty    as
we 11.

       Our answer   to the first       question     render.s   an answer    to your   second
question  unnecessary.

                                            p.    823
The Honorable   Philip   G. Hoffman,    page      5    (H-180)

                                SUMMARY

                    A state university     may expend funds for payment
            of group insurance      premiums      on behalf of employees   of
            various   of its auxiliary    enterprises    so long as they legally
            qualify as employees       of the University.

                                       Very    truly   yours,

APPROVED:
    r7, :
      \.

DAVID M. KENDALL,         Cha&tnan
Opinion Committee

                                       p.   824