                      October 14, 1968


Honorable Harry B. Kelton                Opinion No. M-289
Director, Texas National Guard
  Armory Board                           Re:   Merit increases for Armory
West Austin Station                            Board employees and cons-
Austin, Texas 78703                            truction of House Bill No.
                                               5, Acts of 60th Legislature,
                                               Article V,~Section 1, and
Dear Mr. Kelton:                               Article 6252, V.C.S.
            Your request for an opinion poses the following ques-
tion:
          "Should one or more of the employees on
     a local fund payroll be given a one step merit
     increase effective September lst, 1968 and
     later in the year the payroll is transferred
     for payment from our General Revenue appropria-
     tion for classified salary positions, can the
     State Comptroller legally approve the salaries
     for payment at the step two rate of the Classi-
     fication Salary Schedule provided such merit
     increases conform to the provisions Article V,
     Section 1, paragraph a, sub-paragraph (2) of
     House Bill No. 5, Acts of the 60th Legislature,
     First Called Session, 1968 and Article 6252
     Revised Civil Statutes of Texas?"
          Subdivision (2) of Section 1 of Article V of the current
Appropriation Act relating to merit salary increases provides:
             "(2) MERIT SALARY INCREASES. During the
        fiscal year beginning September 1, 1968, in ad-
        dition to other salary increases authorized in
        this Section, agency administrators may,grant
        merit salary increases to selected employees
        whose performance or productivity is consistent-
        ly above that normally expected or required.
        Such merit increases shall be subject to the
        following restrictions:

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 Ron. Harry B. Kelton, Page 2     (M-289)


           "(a) The source of funds shall be only
      the items of appropriations in this Act for
      'Merit Salary Increases', except as otherwise
      authorized below. The maximum monthly expendi-
      ture for merit salary increases shall be one-
      twelfth of the total appropriation for that
      item.
           "(b) No employee may receive more than
      two one-step increases from funds appropriated
      for merit salary increases during the fiscal
      year beginning September 1, 1968.
           "(c) For agencies financed from more than
      one fund, the oost of merit increases shall be
      allocated to each fund in the same proportion
      as regular payrolls bear to such funds.
           "(d) Where a specific line item appro-
      priation Is not provided for merit salary in-
      creases, agencies are authorized to allocate
      not more than 1.7s of the fiscal 1969 budget
      for classified positions, provided however that
      any merit salary increases so granted shall
      be subject to the provisions of thzs section
      related to merit salary increases.
            Regular full-time salaried employees of the Texas
  National Guard Armory Board hold classified positions under the
  provisions of Article 6252-11, Vernon's Civil Statutes, unless
  the employees have been excluded from such Position Classification
  Plan by executive order of the Governor or by direction of the
  Legislature. Article 6252-11, Section ~2. Thus it was held in
  Attorney General Opinion WW-1095 (1961) that the Position Classi-
  fication Plan did not apply to the Finance Commissionand the
  Banking and Savings and Loan Departments for the reason that
  their employees were excluded by direction of the Legislature
: by virtue of the provisions of Article 342-112, Vernon's Civil
  Statutes. Likewise it was held in Attorney General Opinion
  WW-1222 (1961) that the employees of the Texas State Board of
  Plumbing Examiners were excluded from the Position Classification
  Plan by direction of the Legislature by virtue of the provisions
  of Article 6243-101, Sets. 5 and 7, Vernon's Civil Statutes.
           In view of the provisions of Article 6252-11, whether
 a regular full-time salaried employee is in a classified or un-
 classified position is not made dependent upon the source from
 which his salary is paid, but rather is made dependent upon

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Hon. Harry B. Kelton, page 3 (M-289)


whether such employee has been excluded from the Position Classi-
fication Plan by executive order of the Governor or by direction
of the Legislature. The fact that an employee is paid from funds
outside the Treasury during part of a fiscal year and paid from
funds in the State Treasury during another part of the fiscal
year will not affect the salary rate to be paid such employee
if such employee during such period of time remains in a classi-
fied position.
          In answer to your question you are advised that when
such employees are later transferred on the payroll for the pur-
poses of their salary being paid from funds in the State Treasury,
they are to receive salaries at the rate provided for in the
Position Classification Schedule; and the Comptroller may legally
approve merit salary increases which oonform to the provisions
of Subdivision (2) of Section 1 of Article V of the current
General Appropriation Act relating to merit salary increases.
                      SUMMARY
          The fact that an employee is paid ,from~funds
     outside the Treasury during part of a fiscal year
     and paid from funds in the State Treasury during
     another part of the fiscal year will not affect
     the salary rate to be paid such employee if such
     employee during such period of time remains in a
     classified position.
                             Vfitruly   yours,




Prepared by John Reeves
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Hawthorne Phillips, Chairman
Kerns Taylor, Co-Chairman
Steve Hollahan
Robert Darden
Malcom Smith
Z. T. Fortescue
A. J. CARUBBI, JR.
Executive Assistant
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