                                 The Attorney        General of Texas
                                               December 30, 1983
JIM MATTOX
Attorney General



Supreme Court Building         Honorable Thomas F. Lee             Opinion No. JM-118
P. 0. Box 12546                District Attorney
Auslln, TX. 70711- 2546        P. 0. Box 1405                      Re: Whether article XVI, section
5,2/475-2501
                               Del Rio, Texas   78840              40 of the Texas Constitution
Telex 9101674-1367
Telecopier   51214750266
                                                                   prevents a school teacher working
                                                                   under a federally funded program
                                                                   from receiving compensation for
714 Jackson. Suite 700
                                                                   service as a city councilman
Dallas, TX. 75202.4605
2141742-6944
                               Dear Mr. Lee:

4624 Alberta Ave.. Suite 160        You have asked whether article XVI, section 40, of the Texas
El Paso, TX. 79905-2793        Constitution prevents public school teachers who work under federally
91515333464
                               funded programs from receiving compensation for service as city
                               councilmen. We conclude that since such persons receive at least part
  01 Texas,    Suite 700       of their compensation from state funds, they may serve simultaneously
iiouston, TX. 770023111        as public school teachers and as members of a city council only if
7131223-5886                   they receive no salary for service on the city council.

                                    Article XVI, section 40, of the Texas Constitution provides, in
606 Broadway, Suite 312
Lubbock, TX. 79401-3479
                               pertinent part, that
606/747-5236
                                        [SItate employees or other individuals who receive
                                        all or part of their compensation either directly
4309 N. Tenth. Suite B
McAllen. TX. 76501-1665
                                        or indirectly from funds of the State of Texas and
5121682.4547                            who are not State officers, shall not be barred
                                        from serving as members of the governing bodies of
                                        school districts, cities, towns, or other local
200 Main Plaza, suite 4Kl
                                        governmental districts; provided, however, that
San Antonio, TX. 78205-2797
5121225-4191
                                        such State employees or other individuals shall
                                        receive no salary for serving as members of such
                                        governing bodies.
An Equal OppOrtunityI
Affirmative Action Employer         Since it is clear that a public school teacher may not receive a
                               salary for service on a city council if any part of the teacher's
                               compensation is derived directly or indirectly from state funds, the
                               question is whether the teachers you describe are compensated by state
                               funds within the meaning of article XVI, section 40. -See Attorney
                               General Opinion MU-230 (1980).




                                                         p. 498
Honorable Thomas F. Lee - Page 2   (JM-118)




     Two of the teachers are employed by the school district as
directors of programs enacted by the Elementary and Secondary
Education Act, which are referred to as a Title I, Regular Program,
and Title I, Migrant Program. -See Public Law 97-35, title 5, subtitle
D, chapter 1, sections 551-560, codified as 20 USCA 853801 et seq.
Funding from the federal government for these programs is deposited in
the state treasury in H.E.W. Fund No. 148 and is appropriated to the
Texas Central Education Agency by the Texas Legislature. See General
Appropriations Act, Acts 1983, 68th Leg., ch. 1095, art. III, $1, at
111-2. The funds in question are administered by the Texas Education
Agency and forwarded to the school district by state warrants.
Federal funds deposited in the state treasury become state funds. -See
Attorney General Opinion C-530 at 2529 (1965).

     You also describe a teacher who is employed by the school
district as director of a program enacted by the Elementary and
Secondary Education Act, which is referred to as a Title VII,
Bilingual Education Program. See Bilingual Education Act, codified as
20 USCA 983221-3261. Federal-&ding      for this program is forwarded
directly to the school district from the federal government and is
deposited in a Designated Purpose Fund in which the school district
places other federal, state, and local funds.

     You advise that each of the described teachers participates in
the State Retirement System, which is administered by a state agency,
and each teacher makes the employee's contribution to the system. The
employer's contribution is paid from the federal program funds. A
provision of the Teacher Retirement System requires that, if an
employer applies for money provided by the United States or an agency
of the United States and if any of the money will pay part or all of
an employee's salary, the employer shall apply for available money to
pay the required state contribution to the retirement system. When an
employer receives money for the state contribution from an application
made in accordance with that provision, the employer shall immediately
send the money to the retirement system for deposit in the general
revenue fund of the state treasury. See V.T.C.S. Title 1lOB. Public
Retirement Systems, 935.405. As we already have noted, federal funds
deposited in the state treasury become state funds subject to
appropriation. See Attorney General Opinion WW-565 (1959). The
legislature appropriates the required state contribution to the
Teacher Retirement System out of the general revenue fund. See
General Appropriations Act, Acts 1983, 68th Leg., ch. 1095, art. 1%
$1. at 111-18.   Retirement benefits, including future benefits, are
compensation. See Byrd v. City of Dallas, 6 S.W.Zd 738 (Tex. 1928);
Attorney Generalpinion M-413 (1969); Letter Advisory No. 154 (1978).

     Therefore, we conclude that each of the teachers in question
receives part of his compensation indirectly from funds of the state




                                   p. 499
Honorable Thomas F. Lee - Page 3    (~~-118)




and may serve on a city council only if he receives no salary for
service on the city council.

                             SUMMARY

            Certain public school teachers who work under
         particular federally funded programs receive at
         least part of their compensation from state funds.
         Therefore, article XVI, section 40, of the Texas
         Constitution permits such teachers to serve as
         members of a city council only
         salary for service on theJi!$+
                                   city




                                        JIM     MATTOX
                                        Attorney General of Texas

TOM GREEN
First Assistant Attorney General

DAVID R. RICHARDS
Executive Assistant Attorney General

Prepared by Nancy Sutton
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Rick Gilpin, Chairman
Colin Carl
Susan Garrison
Jim Moellinger
Nancy Sutton
Bruce Youngblood




                                   p. 500
