The Attorney General of Texas
August 4, 1980
MARK WHITE
Attorney General
Honorable Kenneth II. Ashworth Opinion No. MW-215
Coordinating Board
Texas College and University System Re: Implementation of the Texas
P. 0. Box 12788, Capitol Station State College and University
Austin, Texas 78711 Employees Uniform Insurance
Benefits Act, Ins. Code art. 3.50-3.
Dear Commissioner Ashworth:
You ask several questions concerning the Texas State College and
University Employees Uniform Insurance Benefits program created by the
provisions of article 3.50-3 of the Insurance Code. You first ask whether the
institutions of higher education in Texas are required to adopt and
implement a program of insurance premium payments for retired employees.
Article 3.51-5 of the Insurance Code, enacted in 1975, provides that the
“costs of group life and health insurance premiums to persons retired under
the Teacher Retirement Act, who at the time of their retirement were
employed by . . . a Texas senior college or university . . . shall be fully paid
from the funds of such . . . institution. . . .‘I Article 3.50-3 of the Insurance
Code enacted in 1977, states that one of its purposes is
Sec. 2(f) to recognize the long and faithful service
and dedication of employees of the Texas state
colleges and universities and to encourage them to
remain in service until eligible for retirement by
providing health insurance and other group insurance
benefits for such employees;
Institutions covered by the Act are required to “contribute monthly to the
cost of each insured employee’s coverage. . . .‘I Ins. Code art. 3.50-3, § 12.
The Act &fines “employee ” to include employees who retire under the
Teachers Retirement System of Texas or the Optional Retirement Program
established by articles 51.351 - 51358 of the Texas Education Code. Ins.
Code art. 3.50-3, SS 3(a)(2), (4). In our opinion, article 3.50-3 clearly
requires state agencies of higher education to implement a program of
insurance premium payments for retired employees.
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Honorable Kenneth H. Ashworth - Page Two (Mw-215 1
You next ask whether the institutions of higher education have authority to use
institutional line item appropriations for other items to support the program for retired
employees. Section 4b of article IV of the General Appropriations Act for 1979-81 states
that “insurance premiums where authorized by law . . . may be purchased from
appropriated funds.” Section 4d states that ” ‘General Operating Expenses’ as used in the
medical and dental institutions shall include . . . insurance premiums where authorized by
law. . . .‘I Section 5 provides that, with the approval of the governing board, “transfers
may be made between the items of appropriations for the general academic institutions”
regardless of whether the items are general revenue or local funds. In our opinion,
institutions may transfer appropriation items to pay for insurance premiums for retired
employees as permitted by article IV, sections 4b, 4d, and 5 of the General Appropriations
Act.
You next ask whether article 3.50-3 of the Insurance Code obligates junior college
districts to implement a program of insurance premium payments for retired employees.
Article 3.50-3 defines “employees” to include persons who have retired from junior college
teaching. Sec. 3(A). Article 3.51-5 of the Insurance Code does not require junior colleges
to pay insurance premiums for retired employees. However, its provisions are to be
construed in harmony with the more recently enacted article 3.50-3, which is clearly
applicable to retired junior college employees. See Goldman v. State, 277 S.W.Zd 217 (Tex.
Civ. App. - Amarillo 1954, writ ref’d n.r.e.) (statutes in pari materia must be harmonized);
see also Attorney General Opinion H-1114 (1978). A question has arisen as to whether the
state may control funds of a junior college district other than appropriated funds. Junior
college districts are oolitical subdivisions of the state. Attornev General Ooinion M-707
(197Oj; see Shepherd vl San Jacinto Junior College Dist., 363 S.W.2”d 742 (Tex. ‘1963); King’s
Estate v. School Trustees of Willacy County, 33 S.W.Zd 783 (Tex. Civ. App. - San
Antonio 1930, writ ref’d). They are established pursuant to statutes enacted by the
legislature. See Educ. Code ch.-130. In order to receive state appropriations, they must
comply “with3 existing laws, rules, and regulations governing the establishment and
maintenance of public junior colleges. . . . ‘I Educ. Code S 130.003(b)(3). They acquire local
funds pursuant to state law. See Tex. Const. art. VII, S 3; Educ. Code § 130.121 (tax
assessment). There is ample precedent for legislative control of local junior college funds.
Educ. Code 5 130.084; see Educ. Code S 20.48; Attorney General Opinion MW-38 (19791. Of
course, particular fundzay be earmarked for special purposes. See Educ. Code S 130.123
(revenue bonds for acquisition of facilities). However, we find% general prohibition
against legislation which would alter or control the expenditure of nonappropriated funds
by junior colleges.
Your next question is as follows:
If the cost of the premium payment per employee for the basic
coverage(s) prescribed under Article 3.50-3 of the Insurance Code
exceeds the per employee amount appropriated in the General
Appropriations Act for the purpose of insurance premium
payments, do the institutions have an obligation to pay the portion
of the premium that exceeds the amount appropriated per
employee and included in the General Appropriations Act? If so, do
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Honorable Kenneth H. Ashworth - Page Three (MW-215)
the institutions have the authority to use funds included in other
line item appropriations in view of Section [25] of Article IV of the
General Appropriations Act?
Section 11 of article 3.50-3 provides in part:
From the first day of employment, each active full-time employee
who has not waived basic coverage or selected optional coverages
shall be protected by a basic plan of insurance coverage
automatically. The premium for such coverage shall not exceed
the amount of the employer contribution. . . .
In our opinion, this provision contemplates a basic coverage that will be fully funded by
the employer contribution. Section 12 requires that institutions and agencies covered by
the Act “shall contribute monthly to the cost of each insured employee’s coverage no less
than the amount appropriated therefor by the legislature in the General Appropriations
Act. . . .” Section 25 of article IV of the current Appropriations Act provides that the
state’s contribution for employee premiums on group life, health, and accident policies
should not exceed $35 per month in fiscal 1980 and $40 per month in fiscal 1981.
General legislation enacting or repealing a statute may not be included in a general
appropriation bill. Tex. Const. art. III, S 35; Moore v. Sheppard, 192 S.W.Zd 559 (Tex.
1946); Conley v. Daughters of the Republic of Texas, 151 S.W. 877 (Tex. Civ. App. - San
Antonio 1912), aff’d, 156 S.W. 197 (Tex. 1913). In order to be valid, riders to the
Appropriations Act must be related to and germane to the act. Jessen Associates, Inc. v.
Bullock, 531 S.W.Zd 593 (Tex. 1975). If we construe section 25 to limit the permissible
contribution under section 12 of article 3.50-3 to an amount less than the premium for the
basic plan required by section 11, it will be inconsistent with those provisions of general
law, and therefore an invalid attempt to enact general law in the general appropriations
act. Statutes are to be construed to render them constitutional and valid where possible.
Hamrick v. Simpler, 95 S.W.Zd 357 (Tex. 1936). Section 25 can be constitutionally
construed as a limitation on the expenditure of appropriated funds. Thus, institutions
receiving funds in article IV of the General Appropriations Act may spend from
appropriated funds no more than $35 per employee premium per month in 1980 and no
more than $40 per employee premium per month in 1981. Since section 12 of article 3.50-3
authorizes covered institutions and agencies to contribute monthly “no less than the
amount appropriated therefor by the legislature ‘I they may contribute more than the
amounts appropriated. (Emphasis added). Since section 11 requires the premium for the
basic plan to be fully funded from the employer contribution, it obligates the employer t0
pay the excess over the amount appropriated. However, since section 25 of article IV
limits the expenditure of appropriated funds, the excess must be paid from
nonappropriated funds.
You finally ask whether institutions must contribute to the premium payment of
employees paid from nonappropriated funds an amount equal to the premium contribution
for employees included in line item appropriations. You also inquire about the source of
such premium payments. Section 12 of article 3.50-3 provides in part:
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Honorable Kenneth H. Ashworth - Page Four (NW-215)
Each institution and agency covered under the provisions of this
Act shall contribute monthly to the cost of each insured employee’s
coverage . . . as determined by the governing board of the
institution in its respective official operating budget, if the
employees are compensated from funds appropriated by such
budgets rather than by the General Appropriations Act. . . .
This provision gives the governing board some discretion as to the amount of premium and
the sources within its operating budget. Sections 4b and d of Article IV of the General
Appropriations Act permit payment of “insurance premiums where authorized by law”
without limiting this benefit to persons compensated by appropriated funds. We therefore
believe the governing board may use either appropriated or nonappropriated funds to pay
insurance premiums of employees compensated by nonappiopriated funds, for example
auxiliary employees. If appropriated funds are used, the limitations of premium payments
found in section 25 of article IV will be applicable. Of course, the monthly contribution
must be large enough to fund the premium for the basic plan to which each employee is
entitled under section 1L
SUMMARY
Article 3.50-3 requires institutions of higher education in Texas,
including junior colleges, to fund insurance premiums for retired
employees. They may use appropriated funds for that purpose
pursuant to sections 4b, 4d, and 5 of article IV of the General
Appropriations Act, and subject to the limitations on dollar amount
in section 25. If the cost of the premium payments for the basic
coverage prescribed under section 11 of article 3.50-3 exceeds the
per employee amount appropriated for that purpose, the institution
must pay the additional amount.
ve$u&%&
MARK WHITE
Attorney General of Texas
JOHN W. FAINTER, JR.
First Assistant Attorney General
Prepared by Susan Garrison
Assistant Attorney General
APPROVED:
OPINION COMMlTTEE
C. Robert Heath, Chairman
Martha Allan
David B. Brooks
Susan Garrison
William G. Reid
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