Untitled Texas Attorney General Opinion

The Attorney General of Texas Hewh 18. 1985 JIM MAllOX Attorney General supm OolJrt sulwng Mr.ClaytonT. G6rrbon opinionno. m-300 ‘. 0. Box 12545 Eucutive Director rurwt. TX 75711.2545 prploycesRetiremew:System Re: Whether the Employees 51w75.2501 of Tuu RetirementSystem is entitled Telex 2lw74lS7 hcoplw 513l47bo2w P. 0. Box 13207 to depository intereat on a Auotin* TexaB 787Ll. particularfuud under article 6543d. V.T.C.S. Dear l4r. Gerriwn: You request am.opinion from thie office conceroingthe dispoai- tion of deporitory.:lnterest earned by an lccount held.by the atate treaeurer.ou .behalf of the Lav Rnforcemeut and Cuetodial Officer .SupplemutelRetircmmt Fund. .Thia account, deeignatedFund No. 977 by the etete treaturer, is estebliehedes a pert of the Employees Retirement.Syrtem cf Texas. a portion of whose esoete is credited to the fund. V.T.C.S. Title llOB, Public RetirementSystems, (25.306(7) (1985Pamphlet). Pou inform ue that while the fund retains the incoW derived from w5 Bmwwy. wt. 312 Lubboak,lx.7wol34To iuvestnut made~owtridethe state treasury,it has not been credited low7474225 with the depositoryinterestearned by Pund No. 977. Accordingly,you lk vhether the fund-is entitled to mxh interest and, if so, whet ~uthod shouldbe wed to calculetepreviouslyeccumulatedInterestnot 43WN.lOll*r4SUluS uanm,Tx. 75wl-lws creditedto Fund lo. 977. 31-7 ..’ .:: & ~&&ory provisionrelevant'tothe diapoaitior'ofdepository futerest.i8lrticlw2543d~~V.T.C.S..which provides the follcuing in aloualnRu4sLin.400 pertinentpart: i' 5ulAnlonlo.Tx.~7 512R25415l Intertat~receive~on accouut of the deposita of-moueya iu funds.and lc o u nte in the.charge of An 5eudolloAnnrr .. the Stat11Treenurershallbe allocated,eefollavs: Afnmm(k Adlql5molqw _~ 'C To ,uch~-.constitotionelfund there .&all be credited:the pro tata portion oft the. inter&t received due to such ‘fund. The remeinder of the :.lnterertireceived; with the. exception of thnt' '~ .~ iportion-,wquired.by other statutea'tobi ~creditkd :on a,.prwrata basis to protected tax pajmkntr. Au111 br. credited to the General Rweme Pund. Tha intweet received shell be allocated on e monthly basis. . p. 1355 Mr. Cleytou T. Garrison- Ptrge2 (JR-300) V.T.C.S. art. 2543d. il. This office has deteruined ou nuuerous occasiousthat in additionw the funds exeuptedabove, assets held in the foru of A trust sre alw exempt frou the requirementsof article 2543d. See Attorney Gene181 Opinious RR-338 (1981); IN-82 (1979); E-1040 cl-); n-468 (1969). The opinions just cited establish that in order to be charac- terized as trust funds, the assets in question should reflect, auong other things, (1) that they are aduinisteredby a trusteeor trustees, (2) tbat the assets sre neither granted to the state in its sovereign capacitynor collectedfor the general operationof state governmeat. and (3) that they are to bezspent and invested for specific, limited purposes and for the bemfit of A specific group of individuals. Being in the ueture of a trust, such assets are eutitledto retain the proceeds frou their investment. Attorney General Opinions MW-481 (1982); U-468 (1969). Cf. Attorney General Opinion B-1243 (1972) (interest earned in join~~uuds must be deposited into the general revenue fund). The saue theory applies to interest earned ou tiue depositsof these assete. kttorneyGeneralOpiniou If-468(1969). SLe Lauson v. BaRer, 220 S.U. 26'S,272 (Tex. Civ. App. - Austin 1920. writ ref’d). Accordingly, thqr are not ,subject to the provisions of article 25436. Attorney Gencr~l OpinionsMl-82 (1979);Ii-1040(1977). In ours opinion, ths Lav Enforcement and Custodial Officer Sappl-tal Retirement Puud is A trust fund entitled to retain depositoryinterest. The retireuentfund is administeredby the board of trustees of the EuployeosRetirementSystem. V.T.C.S. Title 1lOB. Public RetirementSyntema, '125.101(1985 Pauphlet). This office has previously deteruined that: the assets of the Euployees Retireuent system, of uhich the retitement fund is A part, exe trust funds. Attorney General Opinion UW-565 (1959). The retireueut fund is not collected for. the general.operation of the state; rether, it is AVAihblA Ody t0 PAY "supplemsntalretir-t and death benefits to lau enforcementAnd cuetodf,al officers"and for "edministratiou of the fuod.”.P.T.C.S:.TitlellO:B,w. 525.313(b);~'The method and form of lnvestmmt of retirement fund assets are limited, see V.T.C.S. Title 1lOB. m. 1125.103(c)end '25.302.and the proceeds of any such investmentare expresslymade part ~of the retir-t fund. See V.T.C.S.I-.Title llOB, Sara. 125.313(a). These features iiK. eufficient. iu oar view, to, remove the .retiremsntfund from the coverage, :-of article 2543d,, The interest eerned on deposits of the retirement~fund,therefore, arot,be credited~to the retirementfund itself end not depositedin the general rweuue fund. Your ,ucond inquiry~concernethe'propermethod of creditingthe retirementfund for interel#tlerned in previousyears. We are unable to giv~eAdvice AS to the specificaccountingmethod or tims intervals tQ be -usedin cakulating 'pastinterest..The ansuer to this question depends on ioformetion act provided by your request -- a, the terms. duration,sod types Iofdeposits, appliuble rates of IntSrSSt. etc. We c*n 8tate *a e geueral matter. however. that the retirement p. 1356 . Mr. Clayton T. Gerriroo- Page 3 (JR-300) fund hAS exhibitedthe lfoleuentionedtrust fund ChAYACtAYi6tiCS since its crention in 1979. St,e Acts 1979. 66th Leg., eh. 269, et 528 (Meting foroer nrticle~~iSf-1. V.T.C.S.,lsteblishingLAW Enforcc- mt And Curtodinl OffICC!:Suppleuentel Retireuent Fuod). Conre- quAAtlY* the retiremeot fund la entitled to credit for depository ioterestfrom that date. Before the retireuentfund pay be’credited with this interest, however. esrtain lioitations~ oo the use of trenouryfundsmst be coucidered. Article VIII, section 6 of the TexAr Constitutioo prohibits vithdreunl of funds from the stnte treneury in the Absence of legirlativel ppropriatioo. The TeXAs Supreue Court he8 held that fundr lrroueouslydeposite~l in the general revenue fund are oeverthe- less subjectto this couetltutionelliuitetionend uy oot be removed frou the trenruryuithout :lc!gisletive actlou. lienionv. Lockhnrt. 114 S.W.2d 216. 219 (Tex. 1938:l.s Accordingly.the legislntureuost make a specific Appropriation before AO~ ioterest erroneourlydeposited in the generalreveouefund my be returnedto the retirementfund. SUIIMARY The tnr tnforcement and Custodial Officer SuppleuentalRetlcemeot Fund must be creditedfor ioterest earned on deporits of the fund. Any interest previourly deposited in the geoeral rwenue fund uurt receive epecified legirlative lpproprintion ba:Eore return to the retireueot fund. ~+tYJy-& MATTOI Attorney hOerA of Texae TonGRan F%rrt Assistant Attorney General DAVID R. RICRARDS Executive ASSiStAnt Attorney CaoerAl RIa( GILPIR Chairman,OpioionColnittce Preparedby Rick Gilpin AsSiAtAntAttorney GeoerAl p. 1357 Mr. Claytoo t. Garrbou - PASS 4 (Jn-300) AFPsmm: 0PIn101 cmmxntP Rick Gilpin, CIuirmm JonBible CollaCarl suun&rriAon Tar* m=-=Y Jim Moellinger Jmntfer Uggs IlAuy suttm p. l358 .