     1



c.




                                        The Attorney         General of Texas
                                                        March 28, 1986
         JIM MATTOX
         Attorney General


         Supreme Court Building         HonorableAnn W. Xchards             OpinionNo. m-459
         P. 0. BOX 12548                Treasurerof the 'stateof Texas
         Austin. TX. 78711. 2549
         51214752501
                                        P. 0. Box 12608.GlpitolStation      Ue: Whether awards to state
         Telex 9101874.1387             Austin,Texas 7:3711                 employees under the State
         Telecopier  51Z475-0288                                            EmployeeIncentiveProgramcon-
                                                                            travenearticleIII, section44,
         714 Jackson, Suite 700
                                                                            of the Texas Constitution
         Dallas, TX. 752024506
         2141742-8944                   Dear Ms. Richards:

                                             You request legal advice on implementingthe State Employee
         4824 Alberta Ave.. Suite 180
                                        Incentive Program, which was created by article 6252-28, V.T.C.S.
         El Paso, TX. 799052793
         915/533-3484
                                        See Acts 1985, 69th Leg., ch. 873, at 6421. The statute creates the
                                        State EmployeeInclentiveCommission,consistingof the state auditor,
                                        the comptroller,,rlle
                                                            treasurer,the administratorsof various agencies
         1001 Texas, Suite 700          and three members of the public. Section 4 of article 6252-28,
         Houston, TX. 77002.3111        V.T.C.S..provide:3in part:
         712&?23-58ea

                                                    The ~commissionshall develop policies and
         808 Broadway, Suite 312                 organize procedures to implement a statewide
         Lubbock, TX. 79401.3479                 program to reward state employees in the manner
         808,747.5238                            providedby this Act for employeerecommendations
                                                 that reduce.state expenditures,increase state
         4309 N. Tenth, Suite B                  reventm3!, or improve the quality of state
         McAllen. TX. 78501-1885                 service:r..
         5121682.4547
                                        Sec. 4(a). Other provisionsestablishproceduresfor the submission,
         2w MaIn Plaza, suite 400
                                        evaluation,and adoption of employee recommendations.V.T.C.S. art.
         San Antonio, TX. 782012797     6252-28, 097-10. The commissionmay grant a monetary bonus to an
         51212254191                    employeewhose suggestionis implementedif it produces savings that
                                        can be computedu:iinga cost-benefitanalysis. Id. 92. Benefitsthat
                                        cannot be computed or intangible savings maybe recognizedby a
         An Equal Opportunity/
         Affirmative Action Employer
                                        nonmonetarycertiiicateof appreciation.Id. Section2(e) states the
                                        formulafor compuzingthe amount of a bonu=warded under the program:

                                                    (e) An employee whose recommendationresults
                                                 in a net annual savings,or increasein revenues,
                                                 of $100 or more is eligible for a bonus of 10
                                                 percent of the net savings,or revenue increase,
                                                 up to a maximum award of $5,000. An employee
                                                 whose ::trcommendationresults in a net annual
                                                 savings, or increase in revenues, of less than



                                                                  p. 2097
                                                                      I


HonorableAno W. Richards- 'Page2     (JM-459)                             .

                                                                      I




         $100 is not eligible for a bonus but is eligible
         for a certificateof appreciation.

     You first ask whether the monetary awards authorizedby article
6252-28,V.T.C.S.,are constitutional under articleIII. section44 of
the Texas Constitution.

    ArticleIII, section44 of the constitutionprovides:

           The Legislature shall provide by law for the
        cosmensationof arL officers, servants,agents and
        public contractors. . . but-shall not-grant
                                                -   extra
        compensationto .z*y officer, agent, servant. or
        Public contractor+ after such public service shall
        have been performed or contract entered into, for
        the performanceof the same; nor grant, by appro-
        priation or otherrise,any amount of money out of
        the Treasury of tGc State, to any individual,on a
        claim, real or pritended,when the same shall not
        have been provide? for by pre-existinglaw. . . .
        (Emphasisadded).

You are concerned about the constitutionalprohibition against
grantingextra coupensatior,
                         to an officerafter the serviceshave been
performed.

    Article III, section 44, does not prohibit the payment of
benefits to employees as en element of compensationor a tern of
employment. &   Byrd v. City  of D;E8::6 $.$      ::t6J,T.'".
                                                            1928);
Attornev General Ouinions H-1303                           Article
6252-28, V.T.C.S.,'does not permit an.&ployee to receive extra
compensationfor performingthe duties of his state anployusnt,as
demonstratedby the exclusi,ans
                             found in section6 of the statute:

            (a) Each full-time state employee is eligible
         to participateir.the programexcept an employee:

               (1) who has authority to implement the
            recommendation
                         being made;

                 .   .   .   .

               (3) whose job descriptionincludes respon-
            eibilitpfor cost analysis,efficiencyanalysis,
            savings iuplemcntation,or other related pro-
            grams within ibe euployee'sagency;

               (4) involveidin, or who has access to,
            agency resear,chand development programs, if
            that informationis used as the basis of the
            recosmendation;
                          or


                                 p. 2098
,   HonorableAnn W. Richards- Page 3   (J&459)




                   (5) whose    job   description includes
                developing the type of change in the agency
                administratior.that is recommended by the
                recommandstior.. . .

    V.T.C.S.art. 6252-28,56. The statuteinsteadadds a new term to an
    eligibleperson'semploymentrelationshipwith the state, enablingan
    employeeto receivecompensationfor performingintellectual   work that
    is beyond the scope of his employmentresponsibilities and that has a
    concrete monetary value to the state. Merely by submitting a
    recommendation, an employel:assigns to the state all claims based on
    the recommendation.inclu~dingpatent claims, copyright claims,
    trademarkclaims,and other:analogousclaims. V.T.C.S. art. 6252-28,
    IlO(      Thus, the state may receive some consideration from
    participants in the State Employees Incentive Program whose
    suggestionsare not implemented.

        Attorney General 0p::nionWW-790 (1960) determined that an
    employee awards program of the State Highway Commission did not
    violate article III, secizion44 of the Texas Constitution. The
    AppropriationsAct authorizedthe HighwayDepartmentto give employees
    serviceaward pins and certificatesas compensationfor longevityof
    serviceand safety award pins and certificatesfor safe operationof
    state equipment. Acts 195'):,
                               56th Leg:, 3d~C.S., ch. 23, at 590; see
    also Acts 1985, 69th Leg.. ch. 980, art. V, 511, at 7768 (simi~
    vision   in currentapproFriation8 act). The opiniondeterminedthat
    article III, section 44 of the constitutiondid not prohibit the
    awards,statingas follows:

             Just becausethe awardsare based on the lengthof
             the employee'sservice, it does not follow that
             the awards are 'additionalcompensation'in pay-
             ment for past serviceafter such servicehas been
             performed. It !.e within the discretionof the
             Legislatureto dd?terminethat a state employeeis
             more valuable to the State today because of his
             uperience gained by long and faithfulpast per-
             formance.

    Attorney General Opinion WW-790 (1960); see also Attorney General
    Opinion H-336 (1974). In our opinion, the legislaturemay also
    compensate employees for valuable suggestionspursuant to article
    6252-28,V.T.C.S.,without violatingarticle III, section 44 of the
    Texas Constitution.
         We will deal with you::secondand third questionstogether. You
    ask whether funds have been appropriatedto the State Employees
    Incmtive Commissionfor the 1986-1987bienniumto make awards. If no
    funds are appropriated ta make awards under the State Employee
    IncentiveProgram,you wish to know whether a state agency,which has
    the authorityto accept donationsor gifts, may make awards on behalf


                                p. 2099
HonorableAnn W. Richards- Page 4   (JM-459)




of the commissionto state employeesbased   on   the recommendationof
the commission.

                            providesin part:
    Article6252-28.V.T.C.!;.,

            Sec. 2. . . .

            (b) From fund% appropriatedfor this purpose,
         the State EmployesIncentiveCar
                                      mission may grant
         awards to eligi6le state emnlovees who make
         recommendationsi%at reduce state expenditures,
         increasestate revenues,or Improvethe qualityof
         state services.

            .   .   .   .

            Sec. 4. (a) The commission shall develop
         policies and orgakize procedures to implement a
         statewideprogrsm:toreward state employeesin the
         manner proved by this Act for employeerecommenda-
         tions that red&     state exuenditures.increase
         state revenues,or improve <he quality of state
         services.

            .   .   .   .

            Cd) The coam~lssion may accept contributions
         and/or assistan@ from private institutionsand
         organizations,and may requestand receiveaid and
         assistancefrom the governor'soffice, the Texas
         Advisory Commisstionon IntergovernmentalRela-
         tions, and other state agencies so as to provide
         for an effectivekmplementationof this Act.

            Sec. 5. (a) each state sgency shall designate
         an agency coord:i;ator.The agency coordinator
         shall:

            (1) promote ~lgencyemployee participationin
         the program;

            (2) obtain an impartial evaluation of each
         proposedemployeerecommandation;

            (3) promote rhe Implementation of       adopted
         recommendations
                       by the agency;

            (4) monitor the cost savings and other
         benefitsthat result from the implementation
                                                   of an
         employeerecommendation;



                              p. 2100
t

    HonorableAnn W. Richards-'Page 5   (34-459)




                (5) file rc7orts with the commission as
             requiredby the rules of the commission;and

                (6) arrange and conduct intra-agency award
             ceremoniesto recognizeagency employeeswho are
             grantedawardsunder this Act.

                (b) The agency coordinator shall maka the
             initial determinationof the eligibility of an
             employee recoxmeldationor of an agency employee
             who makes a recommendation.An employee who is
             aggrievedby the ~eligibilitydeterminationof the
             agency coordinatD:r
                               may request a redetermination
             by the commission. (Emphasisadded).

         We are unable to find any appropriationexpresslymade to the
    State EmployeesIncentiveCommissionfor the 1986-1987biennium for
    any purpose. See Acts 1981i,69th Leg., ch. 980, at 7496-7499(recapi-
    tulation of appropriationsmade to axecutive and administrative
    departmentsand agencies). Section4(d) of article6252-28,V.T.C.S.,
    does not, in our opinion,c'onstitute an appropriationof gifts to the
    commission. It authorizes.lthe commissionto receivegifts which have
    bean appropriatedby the lsgislature,and earmarkssuch gifts for the
    commission'suse. See TM, Const. art. VIII, 56; National Biscuit
    Companyv. State, 13z.W.21~ 687 (Tex. 1940). The Appropriations   Act
    includes a rider which appropriates"bequestsand gifts of money to
    state agencies named in t,h.is Act" to the agency designatedby the
    grantor. Acts 1985, 69th !Ieg.,ch. 980, art. V, 519, at 7776. Since
    the commissionis not named in the Appropriations Act, the rider does
    not appropriateto the commissioncontributionsreceived under the
    authority set out in section 4(d). See generally V.T.C.S. art.
    4393-1, %§4.001-4.004(StateFunds Reform Act). Based on our review
    of the currentAppropriatixls Act, the commissionhas not receivedan
    appropriationto fund the awards authorized by article 6252-28,
    V.T.C.S.

        As we understandyour third question,you wish to know whether
    another state agency with authority to accept donations may use
    donatedfunds to make awards to state employeeson behalf of the State
    EmployeesIncentiveCommission. Stated anotherway, you ask whether
    another agency may use its donated funds to finance the awards the
    commissiondecidesto make.

         In our opinion,anotherstate agencymay not use donatedfunds to
    make awards on behalf of the State Employee'sIncentiveCommission.
    As already pointed out, g:Lftsto state agencies are appropriatedby
    the followingrider:

                Sec. 19. ACCEPTANCE OF GIFTS OF MONEY. All
             bequests and gifts of money to state agencies
             named in this Ac,tare hereby appropriatedto the


                                    p. 2101
                                                                        :

HonorableAnn W. Richards- !?age6   (JM-459)




         agency designated by the grantor and for such
         purposes as the grantor may specify, subject to
         the following:

            (1) All such bequests and gffts of money,
         unless exewuted 1;;~
                           . sueclfic
                              -       atatutorvauthorltv.
                                                      _-
         shall be deposited into the State Treasury and
         shall be expenddz in accordance with the pro-
         visions of this A-$. (Emphasisadded).

Acts 1985, 69th Lag., ch. 9130,art. V, 119. This provisloudoes not
authorizeagencies to accept gifts; it merely appropriatesgifts to
agencies authorizedby genmal law to accept them. Attorney General
OpinionsH-1180 (1978);H-X!0 (1973);O-4681 (1942). An agency with
generallaw authorityto acclept gifts may accept only those gifts made
for purposes which reasousbly relate to its statutory purposes.
AttorneyGeneralOpinionsMW-373 (1981);H-120 (1973).

     The quoted AppropriatjonsAct rider providesthat gifts received
by au agency must be expended in accordancewith the Appropriations
Act. They may thereforebo used only for the purposesauthorizedby
items of appropriationto th,atageucy. See Tex. Const. art. VIII, 16;
National Biscuit Company v. State, 135 S.W.2d 687 (Tex. 1940).
Moreover, donated funds a;? also subject to su appropriationsact
rider which prohibits the transfer of appropriatedfunds from one
ageucy to another unless the transfer Is specificallyauthorizedby
the AppropriationsAct. Acts 1985, 69th Leg., ch. 980, art. V, 563,
at 7792. The arrangewent'youhave inquiredabout is not preciselya
transferof funds, but it 1s very similar in effect to a transferof
appropriatedfunds from anotherstate agency to the commission.

     Article III, sectiontilt of the Texas Constitutionprohibitsthe
appropriationof money fmm the Treasury unless pre-existinglaw
authorizesthe appropriation. Austin Natioaal Bank v. Sheppard,71
S.W.2d 242 (Tex. 1934). Article 6252-28, V.T.C.S., authorizes an
appropristion to the commissionfor awardsunder the incentiveprogram
it administers;the commis3:Lon  may grant awards "[flrom funds appro-
priated for this purpose. . . ." V.T.C.S.art. 6252-28.52(b). Other
state agencies may assist the commissionto provide for effective
implementation of the incentiveprogram,and each state agencyhas an
agency coordinatorwith some responsibility for the functioningof the
programwithin his agency. Set V.T.C.S. art. 6252-28, 5$4(d).5, 7.
Article 6252-28,V.T.C.S.,does not, however,authorizean appropria-
tion to any agency other than the commissionto financethe awards to
state employees. We are unaware of another state agency with general
law authorityto m&s awards to employeeschosenby the State Employee
Incentive Commission. Std.teagmcies have some authority to make
awards as additionalcomptmsationto their own employees,sea Acts
1985, 69th Leg., ch. 980, art. V, $11, at 7768; Attorney-&era1
OpinionWW-790 (1960),but we do not know of an agency other than the



                              p. 2102
HonorableAnn W. Richards- Page 7 (JM-459)




commissionwith authoriry'10make awards to employeesof any and all
state agencies.

     Administrativeagencies have only those powers expressly con-
ferred on them by statute, and those necessarilyimpliedfrom express
powers. Railroad Commiss~.on  of Texas v. Red Arrow Freight Lines,
Inc., 96 S.W.Zd 735 (Tex. Eiv. App. - Austin 1936, writ ref'd). The
legislaturehas expresslyconferredupon the commissionthe authority
to receivesoorooriatious
            _.  _        under the State Emulovees
                                           .  .    IncentiveProgram.
and the commissionmay not transferthis authorityto anotheragency;
See Moody v. Texas Water C~mlmission,373 S.W.2d 793 (Tex. Civ. App. -
GLn    1963,writ ref'd n.r,e.)(governmantal  powersmust be exercised
by body delegatedby law and cannotbe delegatedto others).

                            SUMMARY

            The monetary awards authorizedfor the State
         Employees Incentive Program by article 6252-28,
         V.T.C.S., do not ,violatearticle III, section 44
         of the Texas Conistitution.No funds have been
         appropriated to the State Employees Incentive
         Commissionfor t1,e1986-1987bienniumto make such
         awards. Another state agency may not spend
         donated funds to finance awards made by the
         commissionto sta,teemployees.


                                      .+?.JZh

                                             MATTOX
                                      AttorneyGeneralof Texas

JACK HIGHTOWER
First AssistantAttorneyGf:neral

MARY KELLER
ExecutiveAssistantAttornc:y
                          General

ROBERT GRAY
SpecialAssistantAttorneyG~eneral

RICK GILPIN
chai-,   opinioncommittee:

Preparedby Susan L. Garrir,aa
AssistantAttorneyGeneral


                                p. 2103
