The Attorney General of Texas
December 31, 1982
MARK WHITE
Attorney General
Mr. Kenneth H. Ashworth Opinion No. MW-566
Supreme Court Building Connnissioner
P. 0. Box 12548
Coordinating Board lk: Whether Senate Bill No.
Austin. TX. 78711. 2548
5121475-2501
Texas College & University System 118 of the Sixty-seventh
Telex 9101874.1387 200 E. Riverside Drive Legislature applies to public
Telecopier 5121475-0286 Austin, Texas 78704 community junior colleges
Dear Mr. Ashworth:
1607 Main St., Suite 1400
Dallas, TX. 75201.4709
214/742-8944 You ask two questions regarding Senate Bill No. 118 enacted by
the Sixty-seventh Legislature. Acts 1981, 67th Leg., ch. 16, at 21.
This bill, codified as article 6813e, V.T.C.S., provides in part:
4824 Alberta Ave., Suite 180
El Paso, TX. 79905-2793
9151533-3484
sec. 2. A state governmental body may not
make a deduction from the compensation paid to an
officer or employee whose compensation is paid in
1220 Dallas Ave., Suite 202 full or in part from state funds unless the
Houston, TX. 77002.8986
7 13/650-0686
deduction is authorized by law.
You first ask whether article 6813e applies to public community
806 Broadway, Suite 312 junior colleges.
Lubbock, TX. 79401.3479
8061747-5238
This statute defines "state governmental body" in part as
follows:
4309 N. Tenth, Suite B
McA,,en, TX. 78501-1685 (1) a board, commission, department. office, or
5121682.4547 other agency that is in the executive branch of
state government and that was created by the
200 Main Plaza, Suite 400 constitution or a statute of the state, including
San Antonio, TX. 76205.2797 an institution of higher education as defined by
5121225~4191 section 61.003, Texas Education Code, as
amended....
An Equal Opportunity/
Affirmative Action Employer Section 61.003 of the Texas Education Code defines "institution of
higher education" to include "any public junior college." Article
6813e therefore applies to officers and employees of public cormunity
junior colleges whose compensation is paid in full or part from state
funds.
You next ask whether article 6813e, V.T.C.S., prohibits
deductions from the compensation of public community junior college
officers or employees when the deduction is for personal savings or
indebtedness and is forwarded to a credit union or bank.
p. 2083
Mr. Kenneth H. Ashworth - Page 2 (MW-566)
The answer to your question depends on whether this kind of
transaction involves "a deduction from the compensation paid" to the
officer or employee. "Deduction" is defined by the dictionary as
"something that is or may be subtracted," for example, deductions from
taxable income. Webster's New Collegiate Dictionary 293 (1980). We
believe article 6813e, V.T.C.S., applies to any amount subtracted from
an employee's paycheck representing take-home pay. Thus, article
6813e, V.T.C.S., would prohibit deductions from the compensation of
public community junior college officers and employees when the
deduction is for personal savings or indebtedness to be forwarded to a
credit union or bank.
A brief submitted to this office suggests that article 6813e does
not apply to deductions which merely constitute a different form of
payment to an employee, such as payment of a portion of his salary to
his credit union account. However, there are currently on the books
statutes which effectively offer a different form of payment to the
employee. Article 6252-3b, V.T.C.S., allows public employees to
participate in deferred compensation plans. Even though the employee
will ultimately receive the money, the legislature considered it
necessary to enact a statute authorizing state officers to defer an
employee's compensation.
The legislative history reveals some discussion of the deposit of
an entire paycheck in the employee's credit union account. senate
Floor Tape 1, side 1, Senate Bill No. 118, 2d Reading. Feb. 23, 1981.
However, the discussion did not cover the transfer of a portion of the
employee's check to his savings account. The distinction between
"deduction" and deposit of a paycheck in a financial institution is
illustrated by section (3) of article 4344b. V.T.C.S., enacted by the
same legislature which enacted article 6813e, V.T.C.S. This statute
concerns the direct deposit of payroll warrants by magnetic tape
transfer. See Attorney General Opinions MW-333 (1981); MW-213 (1980).
Article 4344b provides in part:
(3) Notwithstanding the provisions of any
other statute, the Comptroller of Public Accounts
may establish and operate an electronic funds
transfer system to transfer directly into their
accounts in financial institutions onlv: (11
. ,
employees' gross state salaries less deductions
specifically authorized by state or federal law or
reimbursement for travel and subsistence of
employees and (ii) payments of annuitants by the
Employees Retirement System of Texas or the
Teacher Retirement System of Texas under either
system's administrative jurisdiction. An
authorized payee must request in writing to
participate in any electronic funds transfer
system established and operated by the Comptroller
of Public Accounts. A single transfer may contain
p. 2084
Mr. Kenneth H. Ashworth - Page 3 (MW-566)
payments to multiple payees without the necessity
of issuing individual warrants for each payee.
The Comptroller shall establish procedures for
administering the system and may use the services
of financial institutions, automated
clearinghouses, and the federal government. The
use of electronic funds transfer or any other
payment means does not create any rights that
would not have been created had an individual
state warrant been used as the payment medium.
The State Treasurer may not make payment of a
state employee’s salary before the last working
day of the payroll period. (Emphasis added).
Acts 1981, 67th Leg., ch. 253, at 632. Thus, the legislature
authorized deposit of the employee’s salary less deductions
specifically authorized by law. We believe the transfer of a portion
of the employee’s salary to his savings account would constitute a
deduction within article 6813e.
You also ask whether section 2.07 of the Education Code provides
authority for such salary deductions. This statute provides in part:
(b) Any teacher’s or school employee’s
assignment, pledge, or transfer of his salary or
wages 68 security for indebtedness -- or any
interest or part of his salary or wages -- then
due or which may become due under an existing
contract of employment shall be enforceable only
under the following conditions:
(1) Before or at the time of execution,
delivery, or acceptance of an assignment,
pledge, or transfer, written approval must be
obtained from the employing authority or
officer, and if the teacher or school
employee executing the instrument is employed
by:
. . ..
(C) a college, university, or any
other educational institution, approval
of his assignment, pledge, or transfer
must be obtained from the salary
disbursement officer of the college,
university, or other educational
institution;
(2) Any assignment, pledge, or transfer
must be in writing and acknowledged as
p. 2085
I
Mr. Kenneth H. Ashworth - Page 4 (MW-566)
required for the acknowledgement of deeds or
other recorded instruments, and if executed
by a married person, it must also be executed
and acknowledged in a like manner by his or
her spouse; however, the employer approving
an assignment, pledge, or transfer need not
acknowledge it; and
(3) An assignment, pledge, or transfer
shall be enforceable only to the extent that
the indebtedness it secures is a valid and
enforceable obligation.
The predecessor of this statute has been held to authorize salary
deductions from teachers' salaries as security for indebtedness
pursuant to the teacher's assignment of salary. Attorney General
Opinions o-4033, O-3474 (1941); O-2141 (1940). See also Attorney
General Opinion M-613 (1970). If an officer or employee has made an
assignment of salary for an indebtedness to a bank or credit union, we
believe section 2.07 would authorize salary deductions to pay that
indebtedness. However. we do not believe section 2.07 authorizes
deductions for the purpose of payments into the employee's savings
account. Section 2.07 permits assignments as security for
indebtedness, that is, to pay an obligation to a third party. Se.2
Trevino v. Trevino, 555 S.W.2d 792 (Tax. Civ. App. - Corpus Christi
1977, no writ) (defining debt). Payment to the employee's own account
does not involve an obligation to a third party.
SUMMARY
Public community junior colleges are subject to
6813e. V.T.C.S., which prohibits deductions from
the compensation of public officers and employees
unless authorized by law. Article 68131~~ applies
to deductions for personal savings or
indebtedness. Section 2.07 of the Texas Education
Code authorizes deductions from the salaries of
employees and officers of such institutions for
indebtedness to be forwarded to a credit union or
bank, but does not authorize such deductions for
personal savings.
MARK WHITE
Attorney General of Texas
JOHN W. FAINTER, JR.
First Assistant Attorney General
p. 2086
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Mr. Kenneth H. Ashworth - Page 5 (MW-566)
RICHARD E. GRAY III
Executive Assistant Attorney General
Prepared by Susan L. Garrison
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Susan L. Garrison, Chairman
Jon Bible
Roxanne Caperton
Rick Gilpin
Patricia Hinojosa
Jim Moellinger
Bruce Youngblood
p. 2087