                               The Attorney        General of Texas
                                              February 21. 1986
JIM MAl-TOX
AttorneyGeneral


Supreme Court Bullding         Mr. Bruce Hineman                  Opinion No.   34-429
P. 0. BOX 12546                Executive Secretary
Austl”.
     TX.76711-
            2542               Teacher Retirement System          Re: Whether section 35.4041, Title
512l4752501                                                       llOB, V.T.C.S., requires a school
                                  of Texas
Telex  910/674.1367
                                                                  district to pay state retirement
Telecopier   5121475-0266
                               1001 Trinltp Street
                               Austin, Texas   787'01             contributions on all compensation
                                                                  paid by the district and creditable
714 Jackson. Suite 700                                            with the retirement system
Dallas. TX. 75202.4506
2141742-6944
                               Dear Mr. Einemen:

4624 Alberta Ave.. SUile 160       You have requested an opinion on the following question:
El Paso, TX. 79905.2793
915/533.3464                               Does section 35.4041, Title llOB, V.T.C.S.,
                                        require a school district to pay state retirement
1W1 Texas. Suite 700
                                        contributions for its employees entitled to a
“o~.c.ton, TX. 77002.3111               minimum salary under section 16.056 of the Educa-
71312235666                             tion Code on all compensation paid by the school
                                        district ;andcreditable with the retirement system
                                        even if some of that compensation is paid for
606 Broadway, Suite 312
Lubbock, TX. 794013479
                                        additiona work that   is not within the duties of
6061747-5236                            the posit:lonsubject to the statutory minimum?

                                    In order for a school district to receive financial support from
4309 N. Tenth, Suite B
                               the Foundation School Fund it must comply with certain requirements
McAllen, TX. 76501-1665
512/532-4547                   set by the legislztture. One requirement is that the school district
                               mnat pay certain school district employees at least the minimum salary
                               established by the: legislature. Educ. Code 516.056. Section 16.056
 200 Main Plaza, Suite 400     sets out minimum salaries based on job description and on the experi-
 San Antonio. TX. 762052797
                               ence and qualification of the employee.
 512l2254191

                                    The legislatur,ehas used that minimum salary scale as the basis
 An Equal OpportUnitYi         for limiting the state's obligation to contribute to the Teacher
 Afiirmaiive Action Employer   Retirement System. Each fiscal year the state is required to contri-
                               bute to the Teacher Retirement System an amount equal to 8% percent of
                               the aggregate annua'lcompensation of all members of the system during
                               that fiscal year. V.T.C.S. Title llOB, Public Retirement Systems,
                               635.404(a) (1985 pamphlet). The provision you ask about, section
                               35.4041, puts a cap on the state's obligation to contribute on behalf
                               of certain members:




                                                       p. 1967
                                                                         ‘_




Mr. Bruce Hineman - Page 2   (a-f-429)




             For members entitled to the minimum salary for
          certain school pNersonne1 under Section 16.056,
          Education Code, the employing district shall pay
          the state's contribution on the portion of the
          member’ s salary that exceeds the statutory
          minimum.

V.T.C.S. Title   llOB, Pub:.ic Retirement Systems, 935.4041(a) (1985
pamphlet).

     Your question deals %c:Lththe effect of that provision on the
state's obligation to contl,ibuteto the retirement system on behalf of
a school district employee who receives compensation from the school
district for work for whj.ch the Education Code provides a minimum
salary as well as for work that is not subject to the minimum salary
scale. An example of such an employee would be a teacher who also
works for the school district as a bus driver. Teachers are subject
to the minimum salary provisions of the Education Code; bus driVers
are not. See Educ. Code 516.056. Specifically, you ask whether a
school district must pay an 85 percent contribution to the retirement
system for any compensation such an employee receives from the school
district other than the minimum salary established for one of his
jobs, even if the extra compensation is for work that is not part of
the duties of the position subject to the minimum salary scale. We do
not think that the 1egisl;u:ureintended section 35.4041(a) of Title
1lOB to require school districts to pay the 8% percent contribution
under such circumstances.

     Section 35.4041(a) requires a school district to pay the state's
contribution for members entitled to a minimum salary "on the portion
of the member’s salary tha,:exceeds the statutory minimum." We think
that the most reasonable reading of that language is that a school
district is only obligatetl to make the 8% percent contribution for
compensation an employee rt,ceivesas compensation for a particular job
that is in excess of the u,inimom salary set for that job. The state
would remain obligated to nake the 8% percent contribution for compen-
sation an employee receives for performing a wholly separate job.

     The legislature enacted section 35.4041(a) as part of the
education reform bill comcrclnly known as "House Bill No. 72." Acts
1984, 68th Leg., 2d C.S., &h. 28, art. 2, 119, at 343. Although the
Bill File to House Bill No. 72 in the Legislative Reference Library
does not reveal the legislature's purpose in including the provision
codified as section 35.4041(a) in that act, we think that at least one
purpose of section 35.4041l:a)was to prevent the state from using its
resources to increase the gap between rich and poor school districts.




                                 p. 1968
. ..


       Mr. Bruce Hinemsn - Page 3    (JM-429)




            The toequality in tk,e ability of school districts to finance
       themselves has received much attention in recent years. See, e.g.,
       San Antonio Independent !&ho01 District
       ---                                        v. Rodriguez, 411 U.S. 1
       (1973). Sy limiting the state's obligation to pay contributions to
       the Teacher Retirement Sys,:tmon salaries above the statutory minimum,
       the legislature required s&o01 districts who csn afford to pay higher
       salaries to bear the entire cost of compensating school district
       personnel more generously than state law requires. Cne reason for
       concluding that a purpor,e of section 35.4041(a) was to promote
       equality in school district finances is that section 35.4041(s) 3s
       inapplicable to a school district if the district's tax rate iB
       125 percent or more of the statewide average tax rate. V.T.C.S. Title
       llOB, Public Retirement S:rstems,535.4041(h) (1985 pamphlet). Thus,
       when a school district is .%bleto pay high salaries because it imposes
       a high tax rate rather &an because it enjoys a good tax base, the
       state will make contributLx;e on the extra compensation.

            Requiring school districts to make the 8% percent contribution cn
       compensati& paid to a teacher for moonlighting as a bus driver,
       however, would not further Iequalityin school financing. Rather, it
       would discouriageschool d:istrictsfrom hiring teachers to do supple-
       mental work.    We cannot imagine that this was the legislature's
       intent.

            Both the language of section 35.4041(a) and the apparent purpose
       behind that section require us to construe that section as meaning
       that a school district muE,tpay the state's contribution on campsnsa-
       tion it pays an employee fD.ra particular job that exceeds the miniu.um
       compensation set out for that job in section 16.056 of the Education
       Code.

                                      SUMMARY

                       Section 35.4,)41(a) of Title llOB, V.T.C.S.,
                 m-s      that a school district most psy the state's




            1. For example, as LDng as bus drivers work at least l/2 of a
       standard work load, they sre members of the Teacher Retirement System.
       See 16 T.A.C. 25.1, 25.2, 215.6. The state contributes to the retire-
       mentsystem on behalf of all members. V.T.C.S. Title llOB, Public
       Retirement Systems, 535.404 (1985 pamphlet). If the school district
       were required to pay, in effect, a 84 percent surcharge for bus
       drivers who are also teachers,  it would make economic sense for the
       school district to hire 1~v.sdrivers on whose behalf the state would
       pay the 8% percent contribution.


                                          p. 1969
Mr. Bruce Elineman- Page 4    (JM-429)




          contribution on compensation it pays an employer
          for a particular job that exceeds the minimum
          compensation set out for the job in section 16.056
          of the Education Code.




                                         JIM     MATTOX
                                         Attorney General of Texas

JACK BIGHTOWER
First Assistant Attorney Gtacral

MARY KELLER
Executive Assistant Attormy    General

ROBERT GRAY
Special Assistant Attorney G,eneral

RICK GILPIN
chainnan, Opinion committar:

Prepared by Sarah Woelk
Assistant Attorney General




                                   p. 1970
