                 IEE ,~TTBRNEY               GENERAL


                       AUSTIN.   TICXAS     7S711


                             March    15,   1972



Hon. Everett L. Anshutz                      Opinion No. M- 1098
Executive Secretary
Employees Retirement System                  Re:    Eligibility of retired
        of Texas                                    judges to receive the
Box 12337, Capitol Station                          benefit of limited
Austin, Texas                                       state participation in
                                                    the payment of ineurance
                                                    premiums under State
                                                    group insurance programs,
Bear Mr. Anschutz:                                  and related question?
     You ask whether the Employees Retirement System may
expend certain appropriated state funds to pay premiums
under state group insurance programs for retired judges,
and if you may, then from what funds the disbursments
should be made?
     You Inform us that the State Comptroller has questioned
your authority to make these payments and that he relies
upon Attorney General's Opinion No. M-1052(1972).
     Our answer to your first question is 'Yes". Our answer
to your second question is that the dlsbursments should be
made from Fund 952 under the conditions stated in this
opinion.
                                      1.
     We consider your first question. We must determine,
            1)   Whether "all member retirees" for whom ceftain
                 group Insurance is authorized by Sec. 9B of
                 Article 6228a2includes "elective and appointive
                 officials of the state" named In Articles 3.50
                 and 3.51 of the Insurance Code;3


     1
         This Sec. gB reads as follows: "The Board of Trustees
         shall adopt Rules and Regulations,,to be effective no

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Hon. Everett L. Anshutz, page 2        (M-1098)


          2)   Whether this last named class of officials
               includes retired judges; and
          3) Whether the appropriation to pay group insurance
               "for retired employees and officials" made by
               Sec. 3 of Article V of the current General
               Appropriation Act4covers retired judges.


     later than January 1, 1972, providing for the payment of
     not less than one-half ~(1/2)the premium cost of Group
     Life and Health Coverage for all member retirees.
     Premium costs shall be paid from the funds of the agency
     or department from which the member retired, and shall -
     be based on rates not to exceed rates charged members
     of the Group Insurance Plan of department or agency
     from which the member retired. The State of Texas shall
     pay each year In equal monthly installments into the
     State Accumulation Fund an amount required to pay
     insurance premiums of the retirees. The State Board of
     Trustees shall certify annually to the Comptroller of
     Public Accounts and to the State Treasurer the amount
     so ascertained." (Emphasis added). Acts 1971, 62nd
     m3.7 p.1361, ch.359, Sec. 11, eff. Sept. 1, 1971.
     2A11 references to Articles are to Vernon's Civil
     Statutes unless otherwise stated.
     3Art. 3.50 and 3.51 of the Insurance Code each provides
     in part, that,
               ,t
                . . .
               "The term employees as used herein in addition
               to its usual meaning shall Include elective and
               appointive officials of the state." Art.3.50
               Sec. 1(3)(d); Art. 3.51, Sec.l(aS. (Rmphasis'Added)
     This Identical provision was added to each of these
     Articles by Acts 1969, 61st. Leg., R.S., p.1371, ch.414,
     eff. Sept. 1, 1969.
     4
      Acts 62nd Leg., 1971, R.S., S.B.11, as amended by S.B.7
     1st C.S., 62nd Leg., 1971, at p. V-33 (p.3794 of the



                              -5357-
Hon. Everett L. Anshutz, page   3        (M-1098)


     Your request for our opinion states, in part:
             "As administrating agency for both (the Employees
         Retirement System and the Judicial Retirement
         System) Retirement Systems, as well as the new
         insurance program for “all member retirees”, we
         are of the opinion that retired judges are eligible
         for participation in such group insurance plans
         and that the Fmployees Retirement System of Texas
         has the authority, as well as administrative
         obligation, to administer such participation under
         Articles 3.50 and 3.51of the Texas Insurance Code,


     official bound Vol. of the Session Laws). The relevant
portion of this Article V, Sec. 3 reads as follows:
           "In each Instance in which an operating fund
           or account is created by the provisions of
           this Act, the responsible officials of the
           State are authorized to transfer Into such
           operating fund or account sufficient moneys
           from local funds and Federal grants of funds
           to pay proportionally the costs of matching
           State employees retirement contributions, the
           State's share of Old Age and Survivors Insurance
           and the proportionate cost of premiums of policies
           containing Croup Life, Health, Hospital, Surgical,
           and/or Medical Expense Insurance for retired
           employees and officials. Payment by the State
           ?rom the designated funds on Group Insurance
           policy or policies for retired employees shall
           be limited to the amount of payment authorized
           for active employees. Notwithstanding any
           other provisions of this Act, any department
           or agency for which funds in this Act are
           appropriated shall make such transfers of funds
           as are necessary, except from those funds
           appropriated for personal services, to pay
           premiums for Insurance for retired employees
           and officials as author'lzedin this Act."
           (ed)




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Hon. Everett L. Anshutz, page 4         (M-1098)


          Section 9B of Article 6228a VCS and Articles III
          and V of the General Appropriation Act, 62nd
          Legislature, Regular Session."
     The term "la11member retirees" in Article 6228a, Sec.
9B is ambiguous. The Board of Trustees of the Employees
Retirement System administers both the constitutional retire-
ment systems un er consideration: the Employees Re irement
System of Texas!!and the Judicial Retirement System.8 That
Board, pursuant to the express authority in Article 6228a
and pursuant to Articles 3.50 and 3.51 of the Insurance Code,
has included retired judges within the Insurance coverage
authorized for "retired employees and officials" for which
monies have been provided in Article V, Sec. 37of the current
General Appropriation Act. Our opinion is that your inter-
pretation is reasonable and entitled to be niven material
weight. We follow that interpretation. Ta&y Moving &
Storage Co., Inc. v. Railroad Commission, 359 S.W.2d 62
(Tex.Civ.App. 1962, aff. 367 S.W.2d 322f. A.B.Frank Co.
v. Iatham, 190 S.W.2d 7 9 (Tex.Civ.App. i945, aff 14
     30 193 S.W.2d 671 ; 53 Tex. Jur. 2d 259-263; Stztutes,
s::: 17:.
     Our opinion is that the insurance program for both
state employees and "elective and appointive officials of the
state" while they are active (Art.3.50 and 3.51, Ins.Code)
and the insurance program provided for these persons upon and
during their retirement (Art.6228a, Sec. gB), each are programs
distinct and wholly separate from the constitutional retire-
ment programs for these persons.


     '2;;. XVI, Sec. 62(a), Tex.   Const., and Art. 6228a, Sec.

    6Art. V, Sec. 1 (a), Tex, Const,, and Art. 6228b, Sec. 8.

    7See footnote 4, supra.




                              -5359-
Hon. Pverett L. Anshutz, page 5           (M-1098)


     The Employees Retirement System of Texae was designated
by the Legislature in Article 6228a, Sec. 9B, to administer
the insurance program for all state employee retirees under
that Article. Retired Judges are included within "retired
employees and officials' designated in Article V, Sec. 3 of
the General Appropriation Act. This is a duty imposed by the
Legislature upon this administrative agency In addition to
the duty of administering the constitutional retirement
programs for both retired state employees and retired judges.
It is the only state agency which maintains records for
retirement payment benefit8 on both these classes of persons.
It is the sole agency which administers all payments and
benefits to retired judges.
     The funds for payment of these insurance premiums
are appropriated specifically for that purpose out of the
General Revenue Fund direct y to the Employees Retirement
System. This appropriationBreads as follows:
             "EMPLOYEES RETIREMENT SYSTEM AND JUDICIAL
              RETIREMENT ADMINISTRATION
             State Contributions, Employees
             Retirement and insurance
            O%%??iL    %k%e%venue        Fund   $10,066,431
              . .' (Emphasis Added).

The general cost of administration of the Employees Retirement
System is from wholly separate funds. Article 6228a, Sec. 7A
and 7C and Subsection 5 of Sec. 8; Atty. Genl. Opinion No.
ww35(1959).


     8
         The current General Appropriation Act (See note 4, supra)
         in its Art.111, p.55 (p.3554 of official bound vol.) as
         amended by Art. V, Sec. 60, p: V-54 (Art.V, Sec.58, p.
         3851, of official bound vol.




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Hon. Everett L. Anshutz, page 6        (M-1098)


     The fact Is clear that those "elective and appointive
officials of the state" who are covered by Articles 3.50 and
3.51 of the Insurance Codegare, for all purposes of the
Insurance authorized by these Articles, "state employees"
in every respect as any other state employee. In this
respect (i.e. of being authorized to be covered by the
identical same insurance coverage as other state employees)
and to this extent, they are, when they retire, "member
retirees" within contemplation of Article 6228a, Sec. gB
and thus authorized to be covered by the retirement insurance
authorized by that Article.
     The insurance coverage authorized by Section 9B of
Article 6228a is clearly and wholly outside of, and has no
connection with, the constitutional retirement systems for
those state employees defined by Article 6228a, Section 10
as members of the Employees Retirement System of Texas and
those justices and judges who are members of the Judicial
Retirement System who are named In Article 6228b. This Sec.
9B gives no indication of excluding any person classified
under Articles 3.50 and 3.51 as a state employee. Our opinion
is that retired judges are within contemplation of this
Sec. 9B the same as other retired state employees.
     The classes of persons named at the outset of Articles
3.50 and 3.51 are not restricted to, but are more inclusive
than, those members of the Employee8 Retirement System named
in Article 6228a, Sections 1C and 3. The term "elective
and appointlve officials of the state" is not qualified in
any manner. The same session of the Legislature which
added this term to these two Articles also enacted Section
3Bl of Article 6228a. This Section expressly excludes from
membership in the Employees Retirement System,
          . . . any elective official in the Judicial,
         Education, District, or County, of the State
         of Texas other than those expressed eligible as
         provided herein."


    'See footnote 3, supra.




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,




    Hon. Everett L. Anshutz, page 7        (M-1098)


          The intent of the Legislature to distinguish between
    elective judges who are not eligible for membership in the
    Employees Retirement System but who are within the Insurance
    coverage of Articles 3.50 and 3.51 seems clear. Garrett v.
    Mercantile Natl. Bank at Dallas, 140 Tex. 394, 168 S W d
    Et;qLf31.   Wrbht  v. B-eter,  r 45 Tex. 142, 196 S.W.2d.g2


          Further, we believe that the Legislature intended that
    these two Articles, when considered In connection with Article
    6228a, Sec. 9B, are to be given a construction which would
    authorize active judges, whether elective or appointive, to
    be covered by this insurance and was not to bar them from
    coverage upon their becomln retired judges. Attorney General's
    Opinion No. M-919 (wWb+W.
         Our prior Opinion No. M-1052(1972) Is distinguished
    from our present holding. The holding in that Opinion
    considered only an employee-retiree of the Texas Education
    AgencylQho was not In any way subject to the jurisdiction
    of State Employees Retirement System after retirement.
    That Opinion correctly held that he was not covered to any
    extent by Article 6228a, Sec. 9B.
                                  q relates to a state official-
         The question now before u*
    retiree who, by the express terms of Articles 3.50 and 3.52
    of the Insurance Code, is to be treated as a state employee
    and therefore Is ,expresslyauthorized to be covered by


        loMany persons employed by the Texas Education Agency,
          an agency of the State, are ineligible for membership
          in the Employees Retirement System. Instead, they may
          become members of the Teacher Retirement System.
          Sec. 3.02 and 3.03, Texas Education Code.




                                  -5362-
Hon. Everett L. Anshutz, page 8         (M-1098)


both Articles 3.50 and 3.51 and also by Article 6228a, Section
9B as a "member retiree" eligible to participate in the group
insurance plan administered by the Employees Retirement
Syetem of Texas.


                                  2.

     In answer to your second question, it is our conclusion
that the actual payment to insurance carriers should be made
from "Fund 952," which the Legislature has dzslgnated in
Article 6228a to serve as an operating" or clearing"
account into which appropriations from all funds for that
purpose will first have been deposited.
      In the current General Appropriation Act:' under the
major heading "EknployeesRetirement System and Judicial
Retirement Administration," we find the first item of
expenditure entitled "State Contributions, Employees Re-
tirement and insurance premiums estlmated".12 (Emphasis
Added). The estimated total for this item is the sum of
four estimated amounts to be derived from several sources,
the first one being the General Revenue Fund. Bach of the
sub-items consists of commingled estimated amounts for
more than a single purpose. We note that Sec. 8A2(a) and
Sec. 9B of Article 6228a require the Employees Retirement
System annually to determine separately the exact amounts
required for matching retirement contributions and insurance
premiums. By these sections the Legislature has prohibited
any use of retirement trust funds for payment of insurance
premiums.
     It appears to us that the sub-item, "Out of the General
Revenue Fund," is the proper and only source for matching
retirement contributions made by all employees paid from
the General Revenue Fund regardlerof   where employed. In


     1lSee general citation in note 4, supra,
     12See footnote 8, supra




                               -5363-
l




    Hon. Everett L. Anshutz, page 9        (M-1098)


    like manner, it follows that the same sub-item is also the
    proper and only source to be used In payment of all Insurance
    premiums payable on behalf of "all member retire=   whose
    salaries prior to retirement were paid from the General
    Revenue Fund. Furthermore, all such matching for Highway
    Department employees and all-%zurance premiums payable on
    behalf of "all member retirees” who retired from the
    Highway Department are to be obtained from the sub-item
    “Out of the Highway Fund." This principle, as applied
    to Judicial officers who become "retirees" Is further re-
    inforced by the fact that their retirement compensation
    payments are made from the General Revenue Fund. The fact
    that all monies for premium payments are first put in Fund
    952 and that payments to insurance carriers are made out
    of Fund 952 is simply a matter of procedural and accounting
    convenience and is of no other legal significance.  No
    payments are made until after sufficient deposits for this
    specific purpose are made. Separate accounts are maintained
    to insure that no State matching for retirement purposes
    shall be used to pay insurance premiums.
                           -SUMMARY-
                  Retired judges are eligible to receive the
              benefit of limited State participation in the
              payment of insurance premiums under State group
              insurance programs. Art. 6228a, Sec. 9B, V.C.S.,
              Art. 3.50 and 3.51, Ins. Code, and Art. V, Sec.
              3, current General Appropriation Act.
                  Disbursements to insurance carriers may be
              made out of Fund 952 after the required amounts
              have been deposited therein from the General
              Fund Appropriation for "insurance premiums" under
              the major heading "Employees Retirement System
              and Judicial Retirement Administration."
                                            truly yours,




                                  -5364-
Hon. Everett L. Anshutz, page 10        (M-1098)


Prepared by W. E. Allen
Assistant Attorney General
APPROVED:
OPINION COI@UZTTEE
Kerna Taylor, Chairman
James Broadhurst
J. C. Davis
Arthur Sandlln
Roger Tyler
SAMUEL D. PICDANIEL
Staff Legal Assistant
ALFRED WALKER
Executive Assistant
NOLA WHITE
First Assistant




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