Mr. Bill A. Shirron, Executive Director Arkansas Teacher Retirement System #3 State Capitol Mall Little Rock, Arkansas 72201
Dear Mr. Shirron:
This is in response to your request for an opinion concerning A.C.A. § 24-7-401 (Supp. 1993), a provision of the "Arkansas Teacher Retirement System Act," as amended, and the manner in which the state employer contributions are to be paid from the Public School Fund to the Arkansas Teacher Retirement System. In your correspondence, you specifically reference subparagraphs (c)(2) and (d)(1) of A.C.A. § 24-7-401, which were amended pursuant to Sections 2 and 3 of Act 435 of 1993 and provide:
(c)(2) For each fiscal year beginning July 1, 1993, or later, the dollar amount of state employer contributions to be paid during the fiscal year shall be the lesser of the result of multiplying the applicable percent of active member payroll for the fiscal year by the total covered salaries during the fiscal year, including any required prior-year reported salaries, of members whose positions are financed by the State Public School Fund, taking the result to the nearest dollar, or the amount appropriated by the General Assembly during each biennium.1
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(d)(1) The board shall certify annually to the treasurer of the State the amounts calculated at the rate established by law or appropriated, whichever is less, for employer contributions to be paid by the state, which contributions shall be paid from the State Public School Fund or federal funds administered by the State Board of Education. [Emphasis added.]2
With respect to the foregoing provisions, you note in your correspondence that the state employer contribution funds are appropriated to the Department of Education for each year of the current biennium.3 You also state, however, that "when allocations for the Public School Fund are made under the Revenue Stabilization Law, the amount to be paid to the Teacher Retirement System may be reduced from the amount appropriated, and the system receives for the fiscal year only the reduced amount." With respect to this matter, you have asked for an opinion on the following question:
As set out in A.C.A. §§ 24-7-401(c)(2) and (d)(1), respectively, do the words "amount appropriated by the General Assembly during each biennium" and "amounts . . . appropriated" refer to the amount actually appropriated by the General Assembly or the amount funded under the Revenue Stabilization Law?
Pursuant to the provisions of A.C.A. § 24-7-401 set forth above, it is clear that the amount of state employer contributions to the Arkansas Teacher Retirement System for each fiscal year shall be either (1) the "amount appropriated by the General Assembly during each biennium," or (2) "the result of multiplying the applicable percent of active member payroll for the fiscal year by the total covered salaries during the fiscal year, including any required prior-year reported salaries, of members whose positions are financed by the State Public School Fund, taking the result to the nearest dollar," whichever is less. A.C.A. §24-7-401(c)(2). The Board of Trustees of the Arkansas Teacher Retirement System is required to certify annually to the State Treasurer the resultant contribution amounts (i.e., whichever of the aforementioned figures proves to be the lesser amount), and these amounts are to be paid ". . . from the State Public School Fund or federal funds administered by the State Board of Education."4 A.C.A. § 24-7-401(d)(1). Disbursement of funds from the Public School Fund are, however, subject to the restrictions of the Revenue Stabilization Law, A.C.A. § 19-5-101et seq. (1987 and Cum. Supp. 1993). See Section 28 of Act 1312 of 1993, as referred to in footnote 3 of this opinion (stating "[d]isbursement of funds authorized by this Act shall be limited to the appropriation for such agency and funds made available by law for the support of such appropriations; and the restrictions of . . . the Revenue Stabilization Law . . . shall be strictly complied with in disbursement of said funds.") Thus, it is my opinion that if the lesser of the amounts for state employer contributions is the "amount appropriated by the General Assembly," as referred to in A.C.A. § 24-7-401(c)(2), the amounts going to the Teacher Retirement System may ultimately be less than the stated appropriation because the fund out of which the amounts are to be paid is subject to the Revenue Stabilization Law.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Nancy A. Hall.
Sincerely,
WINSTON BRYANT Attorney General
WB:NAH/cyh
1 Pursuant to Section 2 of Act 435 of 1993, the following changes were made to this subparagraph of A.C.A. § 24-7-401: substitution of "July 1, 1993" for "July 1, 1991"; insertion of "the lesser of"; addition of "or the amount appropriated by the General Assembly during each biennium."
2 Pursuant to Section 3 of Act 435 of 1993, the following changes were made to this subparagraph of A.C.A. § 24-7-401: substitution of "Treasurer of State" for "State Treasurer"; insertion of "or appropriated, whichever is less." The term "board," as appears in this subparagraph refers to the Board of Trustees of the Arkansas Teacher Retirement System. See A.C.A. §§ 24-7-202(1) (2) (Supp. 1993).
3 For the biennial period ending June 30, 1995, I assume that you are referring to Act 1312 of 1993, the legislation which appropriates certain funds to the Department of Education, to be payable from the Public School Fund. Under Section 1 of Act 1312, the appropriation for "Teacher Retirement Matching" is $126,000,000 for fiscal year 1993-94 and $133,000,000 for fiscal year 1994-95.
4 The State Board of Education is responsible for the management and investment of the Public School Fund pursuant to A.C.A. § 6-20-203(c) (Repl. 1993).