The Attorney General of Texas
February 21. 1986
JIM MAl-TOX
AttorneyGeneral
Supreme Court Bullding Mr. Bruce Hineman Opinion No. 34-429
P. 0. BOX 12546 Executive Secretary
Austl”.
TX.76711-
2542 Teacher Retirement System Re: Whether section 35.4041, Title
512l4752501 llOB, V.T.C.S., requires a school
of Texas
Telex 910/674.1367
district to pay state retirement
Telecopier 5121475-0266
1001 Trinltp Street
Austin, Texas 787'01 contributions on all compensation
paid by the district and creditable
714 Jackson. Suite 700 with the retirement system
Dallas. TX. 75202.4506
2141742-6944
Dear Mr. Einemen:
4624 Alberta Ave.. SUile 160 You have requested an opinion on the following question:
El Paso, TX. 79905.2793
915/533.3464 Does section 35.4041, Title llOB, V.T.C.S.,
require a school district to pay state retirement
1W1 Texas. Suite 700
contributions for its employees entitled to a
“o~.c.ton, TX. 77002.3111 minimum salary under section 16.056 of the Educa-
71312235666 tion Code on all compensation paid by the school
district ;andcreditable with the retirement system
even if some of that compensation is paid for
606 Broadway, Suite 312
Lubbock, TX. 794013479
additiona work that is not within the duties of
6061747-5236 the posit:lonsubject to the statutory minimum?
In order for a school district to receive financial support from
4309 N. Tenth, Suite B
the Foundation School Fund it must comply with certain requirements
McAllen, TX. 76501-1665
512/532-4547 set by the legislztture. One requirement is that the school district
mnat pay certain school district employees at least the minimum salary
established by the: legislature. Educ. Code 516.056. Section 16.056
200 Main Plaza, Suite 400 sets out minimum salaries based on job description and on the experi-
San Antonio. TX. 762052797
ence and qualification of the employee.
512l2254191
The legislatur,ehas used that minimum salary scale as the basis
An Equal OpportUnitYi for limiting the state's obligation to contribute to the Teacher
Afiirmaiive Action Employer Retirement System. Each fiscal year the state is required to contri-
bute to the Teacher Retirement System an amount equal to 8% percent of
the aggregate annua'lcompensation of all members of the system during
that fiscal year. V.T.C.S. Title llOB, Public Retirement Systems,
635.404(a) (1985 pamphlet). The provision you ask about, section
35.4041, puts a cap on the state's obligation to contribute on behalf
of certain members:
p. 1967
‘_
Mr. Bruce Hineman - Page 2 (a-f-429)
For members entitled to the minimum salary for
certain school pNersonne1 under Section 16.056,
Education Code, the employing district shall pay
the state's contribution on the portion of the
member’ s salary that exceeds the statutory
minimum.
V.T.C.S. Title llOB, Pub:.ic Retirement Systems, 935.4041(a) (1985
pamphlet).
Your question deals %c:Lththe effect of that provision on the
state's obligation to contl,ibuteto the retirement system on behalf of
a school district employee who receives compensation from the school
district for work for whj.ch the Education Code provides a minimum
salary as well as for work that is not subject to the minimum salary
scale. An example of such an employee would be a teacher who also
works for the school district as a bus driver. Teachers are subject
to the minimum salary provisions of the Education Code; bus driVers
are not. See Educ. Code 516.056. Specifically, you ask whether a
school district must pay an 85 percent contribution to the retirement
system for any compensation such an employee receives from the school
district other than the minimum salary established for one of his
jobs, even if the extra compensation is for work that is not part of
the duties of the position subject to the minimum salary scale. We do
not think that the 1egisl;u:ureintended section 35.4041(a) of Title
1lOB to require school districts to pay the 8% percent contribution
under such circumstances.
Section 35.4041(a) requires a school district to pay the state's
contribution for members entitled to a minimum salary "on the portion
of the member’s salary tha,:exceeds the statutory minimum." We think
that the most reasonable reading of that language is that a school
district is only obligatetl to make the 8% percent contribution for
compensation an employee rt,ceivesas compensation for a particular job
that is in excess of the u,inimom salary set for that job. The state
would remain obligated to nake the 8% percent contribution for compen-
sation an employee receives for performing a wholly separate job.
The legislature enacted section 35.4041(a) as part of the
education reform bill comcrclnly known as "House Bill No. 72." Acts
1984, 68th Leg., 2d C.S., &h. 28, art. 2, 119, at 343. Although the
Bill File to House Bill No. 72 in the Legislative Reference Library
does not reveal the legislature's purpose in including the provision
codified as section 35.4041(a) in that act, we think that at least one
purpose of section 35.4041l:a)was to prevent the state from using its
resources to increase the gap between rich and poor school districts.
p. 1968
. ..
Mr. Bruce Hinemsn - Page 3 (JM-429)
The toequality in tk,e ability of school districts to finance
themselves has received much attention in recent years. See, e.g.,
San Antonio Independent !&ho01 District
--- v. Rodriguez, 411 U.S. 1
(1973). Sy limiting the state's obligation to pay contributions to
the Teacher Retirement Sys,:tmon salaries above the statutory minimum,
the legislature required s&o01 districts who csn afford to pay higher
salaries to bear the entire cost of compensating school district
personnel more generously than state law requires. Cne reason for
concluding that a purpor,e of section 35.4041(a) was to promote
equality in school district finances is that section 35.4041(s) 3s
inapplicable to a school district if the district's tax rate iB
125 percent or more of the statewide average tax rate. V.T.C.S. Title
llOB, Public Retirement S:rstems,535.4041(h) (1985 pamphlet). Thus,
when a school district is .%bleto pay high salaries because it imposes
a high tax rate rather &an because it enjoys a good tax base, the
state will make contributLx;e on the extra compensation.
Requiring school districts to make the 8% percent contribution cn
compensati& paid to a teacher for moonlighting as a bus driver,
however, would not further Iequalityin school financing. Rather, it
would discouriageschool d:istrictsfrom hiring teachers to do supple-
mental work. We cannot imagine that this was the legislature's
intent.
Both the language of section 35.4041(a) and the apparent purpose
behind that section require us to construe that section as meaning
that a school district muE,tpay the state's contribution on campsnsa-
tion it pays an employee fD.ra particular job that exceeds the miniu.um
compensation set out for that job in section 16.056 of the Education
Code.
SUMMARY
Section 35.4,)41(a) of Title llOB, V.T.C.S.,
m-s that a school district most psy the state's
1. For example, as LDng as bus drivers work at least l/2 of a
standard work load, they sre members of the Teacher Retirement System.
See 16 T.A.C. 25.1, 25.2, 215.6. The state contributes to the retire-
mentsystem on behalf of all members. V.T.C.S. Title llOB, Public
Retirement Systems, 535.404 (1985 pamphlet). If the school district
were required to pay, in effect, a 84 percent surcharge for bus
drivers who are also teachers, it would make economic sense for the
school district to hire 1~v.sdrivers on whose behalf the state would
pay the 8% percent contribution.
p. 1969
Mr. Bruce Elineman- Page 4 (JM-429)
contribution on compensation it pays an employer
for a particular job that exceeds the minimum
compensation set out for the job in section 16.056
of the Education Code.
JIM MATTOX
Attorney General of Texas
JACK BIGHTOWER
First Assistant Attorney Gtacral
MARY KELLER
Executive Assistant Attormy General
ROBERT GRAY
Special Assistant Attorney G,eneral
RICK GILPIN
chainnan, Opinion committar:
Prepared by Sarah Woelk
Assistant Attorney General
p. 1970
Untitled Texas Attorney General Opinion
Combined Opinion