Honorable Travis White
President
Midwestern University
Wichita Falls, Texas 76308
Opinion No. R-196
Re: Validity of Senate Bill
292, Acts 60th Legislature,
Regular Session, 1967,
Chapter 729, page 1955
an Act relating to an
Optional Retirement Program
for teachers (Article
Dear Dr. White: 2922-11, V.A.C.S.)
Your request for an opinion on the above subject
poses the following questions:
"1. Does the vesting provision in section 3(a) of
ArticLe 2922-U., V.A.C.S., violate section 488 of Article
3 of the Texas Constitution?
"2. Does section 8(d) of Article 2922-11, V.A.C;S.,
violate the first paragraph of section 48a of Article 3 of
the Texas Constitution?
"3. Does the last paragraph of section.8 of Article
2922-11, V.A.C.S., violate the second paragraph of section
48a of Article 3 of the Texas Constitution?
"4 . Does the fact that Article 2922-11, V.A.C.S.,
does not contain any provision providing for the coordination
of benefits payable under the Optional Retirement Program
with those payable under other state pension retirement funds
or direct aid from the State of Texas, violate the second
paragraph of section 48a of Article 3 of the Texas Constitution?"
Section 48 of Article 3 of the Texas Constitution expressly
confers on the Legislature the power to levy taxes both to
support the pub11c schools, including colleges and universities,
and to pay all employees of the State.
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Hon. Travis White, page 2, (M-196)
Section 48a of Article 3 of the.Constitution gives
the Legislature the power to tax to establish the Teachers
Retirement System fund, and Section 48b of the same article
establishes the Teachers Retirement System and its Board
of Trustees.
Article 2922-li, V.C.S., authorizes an Optional Re-
tirement Program under which the governing boards of state
colleges and universities may contract with any life in-
surance or annuity company qualified to do business in
Texas to provide retirement benefits for their staff and
faculty. Under this statute, when a governing board es-
tablishes the optional plan, each faculty member may elect
either to remain in the Teachers Retirement System or to
become a participant in the Optional Retirement Program.
As we approach the question of the constitutionality,
of Article 2922-15, it would be well to observe that we'do
not seek the answer by trying to find some specific power
in the Constitution which authorizes the statute. The
State Constitution, unlike the,Federal, is not a grantof
power, but serves solely as a limitation of power. So the
Legislature may exercise all legislative power not denied
or prohibited to it by the Constitution. All intendments
are against restrictions upon the legislative power. In
order for the courts to hold an act of the.Legislature,,un-
constitutional, they must be able to point out the,specific " "
provision which inhibits the legislation. Also, if there
be two possible constructions, the one favoring the con-
stitutionality of a statute will be followed. A statute is
not declared unconstitutional in a doubtful case, but every
intendment and presumption favoring constitutionality is
indulged in. Byrd v. Dallas, 118 Tex. 28, 6 S.W.Zd 738..
(1928). To the same effect are: Shepherd v. San'Jacinto
Junior College District, et al., 363 S.W.2d 742 (Tex. Sup.
1963): Perkins v. State of Texas, 367 S.W.Zd 140 (Tex. Sup.
1963); Government Services Insurance Underwriters v. Jones,
368-,S.W.Zd560 (Tex. Sup. 1963)0 As stated
case "where ..* there is a tenable theory supporting t e
in th' =I?@
questioned legislative power .D. the provision ... should be
upheld."
Pension systems for public employees were put in opera-
tion by statute long before the constitutional amendments
regarding such systems were passed. These statutory systems
were upheld as constitutional in 1928 by.the Supreme Court
in Byrd v. Dallas, supra, and in subsequent cases, such as,
? : 129 Tex. 150, 101 S.W.2d 1009
, of Dallas, 141 Tex 170, 170 S.W.
” 939 -
Hon. Travis White, page 3, Wl96)
2d 722 (Tex. 1943). The Supreme Court reasoned that the
retirement pension is part of the compensation of the em-
ployee. Thus, public funds were being put to a public
purpose and there being no constitutional prohibition, the
statutes were constitutional.
It follows that the Legislature had and has the consti-
tutional power to create a pension system to provide retire-
ment benefits for persons employed in public schools, colleges,
and universitites supported by the State, without relying on
sections 48a and b of Article 3 of the Constitution. 'There
are many reasons why it may be desirable to establish a program
through an amendment to the Constitution, but it is apparent
that a feared lack of constitutional power was not the reason
behind the enactment of sections 48a and b, inasmuch as that
power already clearly existed. Whether the Legislature lacks
the constitutional power to establish a second or alternate
retirement program for persons employed in state-supported
colleges and universities will thus depend upon whether or
not there is a prohibition against the creation of such a
program in sections 48a and b of Article 3, since it is clearly
permissible under the remainder of the Constitution.
Question No. 1
Section 3(a) of Article 2922-11, requires that the
Optional Retirement Program provide ‘for the vesting of
benefits after one year of participation.' You inquire
whether that vesting provision violates section 48a of
Article 3 of the Texas Constitution. Section 48a provides,
in pertinent part, that with respect to the Teachers Retire-
..::. ment System fund authorized by section ,i8a, "no person shall
be eligible for retirement who has not rendered ten years
.a of creditable service in such employment, and in no case"
shall any $person retire before either attaining the age 55~
or completing 30 years of creditable service, but shall be
entitled to refund of moneyspaid into the fund."
Thus, out of the Teachers Retirement System fund, no
benefits can be paid to anyone who has not met the service
and age requirements set out in section 48a, and any person
not meeting those requirements would have no right to any
part of the fund except the right to have refunded the moneys
he or she had theretofore paid into the fund.
On the other hand, under the Optional Retirement Program
authorized by Article 2922-li, the faculty member's right 'to
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.
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Hon. Travis White, page 4, (M-196) 0
benefits vests after only one year of participation in
the program, and if the faculty member terminates his
employment after such vesting date, the faculty member
would be entitled to retain all benefits which had then
accrued to*him.
However, the provisions of section 48a do not operhte
as a prohibition against the vesting provision of the
~~$n:~ Retirement Program. Section 48a specifically re-,
- and only to - the Teachers Retirement System
fund, and it does not purport to operate as a broader
limitation on legislative power. The Optional Retirement
Program is not a part of the Teachers Retirement System,
. and the moneys contributed to the Optional Retirement
. Program never become a part of the Teachers Retirement
System fund. All moneys appropriated and allocated to
the Teachers Retirement System are paid to it monthly
‘based on the estimates of the System Trustees. Those
moneys become a part of the Teachers Retirement System
fund when so paid. See Art. 2922-1, Sec. 11, subparagraph
2(b) and Art. 7083a.2, Sec. 3.
The Optional Retirement Program derives its moneys
from its own appropriations and from the contributions
of the participants in the program. The State's contri-
butions are paid by the Comptroller to the disbursing
officers of the several institutions, and those disbursing
officers pay the total contributions of the State and the
participants in the program.to the company or companies
providing the benefits. See the last paragraph of Section
8 of Article 2922-U. Thus, each of the two retirement
programs has its own method of financing its benefits, but
they are in no way confljxting and in no way a limitation,
upon each other. It is the duty of a court to uphold the
statute if in doing so it.can be given a reasoriable con-"~
struction that will botti render it constitutional and carry
out the legislative intent. 12 Tex.Jur.Zd 388, Constitutional
L&I, Sec. 44.
Accordingly, we answer your first question in the negative.
Question No. 2
Section 8(d) of Article 2922-3.1provides that under the
Optional Retirement Program, the State shall not only contri-
bute the amount which it would have been required to contri-
bute under the Teachers Retirement System, but also an ad-
ditional amount equal to 6% of that portion of the faculty
Hon, Travis Nhlte, page 5, (M-196)
member’s saiary which exceeds the amount of annual salary
that 1s sub]ect to computation of contributions to the Teachers
Retirement System - but only "to the extent that such con-
tributlon itc the Optional Retirement System) is not pro-
hibited by other applicable laws of this state now or here-
after in force and effect." You inquire whether section
8(d) of Article 2922-li violates the first paragraph of '
section 48a of Article 3 of the Texas Constitution, which
paragraph, in pertinent part, provides that "the amount
contributed by the State to such fund each year shall be
equal to the aggregate amount required by law to be paid
into the (Teachers Retirement System) fund by such em-
ployees, and shall not exceed, at any time 6% of the com-
pensation pard each such person by the State and/or school
districts, and shall in no one year exceed the sum of $504
for any such person."
Assuming ias we do for the purpose of considering
this questlonr that the above quoted section 48a limitations
on the amount of the State's contribution to the Teachers
Retirement System fund apply to and govern the amount the
State may contribute to the,Optional Retirement Program,
section 8(d) of Article 2922-U still does not violate
section 48a, because the State's contribution made under
section 8(dt is authorized only "to the extent that such
contrlbutzon 1s not prohibited by other applicable laws
of this Stare now or hereafter in force and effect."
Therefore, if the above quoted section 48a limitations
are applicable to the State's contribution made under
Section 8(d), then by the express terms of section 8(d)
those section 48a limitations will control, and there
can therefore be no violation of section 48a. Where such
a statute can be given a more restricted interpretation ',
to apply only to matters lying within the legislative
power, a court will do so and uphold its validity to I
harmonize with the Constitution. 12 Tex.Jur.2d 390,
Constitutional Law, Sec. 45.
Accordingly, we answer your second question in the
negative.
Question No, 3
In view of the issue raised in your fourth question, we
assume that your third question involves the following portion
of section 8 of Article 2922-li, to wit: "The contributions
of faculty members participating in the Optional Retirement
.
Hon. Travis White, page 6, (M-196)
Program in each institution of higher education shall be
deducted as provided by law applicable to the System. The
contribution of the State for faculty members participating
in the Optional Retirement Program in each institution of
higher education shall be paid by the Comptroller of Public
Accounts of the State of Texas to the applicable institution
of higher education. The disbursing officer of such insti-
tution of higher education shall pay the total of such con-
tributions from both the faculty member and the State to the
company providing the Optional Retirement Program for that
institution." You inquire whether the above quoted p~rovision
violates the following portion of section 48a of Article 3
of the Texas Constitution, to wit: "The Legislature may
authorize all moneys coming into such fund to be invested in,
bonds or other evidences of indebtedness of the United States,
or of this State, or any county, city, school district, or
other municipal corporation or district of this State, or in
such other securities as are now or hereafter may be permitted
by law as investments for the Permanent University Fund of
this State: provided a sufficient sum shall be kept on hand
to meet payments as’they become due each year under such re-
tirement plan, as may be provided by law: ....'
As we have pointed out heretofore in this opinion,
section 48a authorizes the establishment of the Teachers
Retirement System fund and prescribes certain conditions ;
governing the operation of that fund. Indeed, in the pro-
vision here under consideration section 48a states that
"The Legislature may authorize all moneys coming into the
fund to be invested ....I Thus, it is perfectly clear Hiat
theconstitutional orovision in auestion deals onlv with
"moneys coming into-the (Teacher; Retirement Syst&) fund.'
Rut the questioned provision in the last paragraph of
section 8 of Article 2922-11 does not deal with "moneys
coming into the (Teachers Retirement System) fund.' On the
contrary, it deals exclusively with moneys that never go
into the Teachers Retirement System fund. As stated be-
fore, the moneys dealt with under the provisions of Article
2922-li remain in the hands of the Comptroller of Public
Accounts and the disbursing officers of the several insti-
tutions of higher education until they are paid to the r~
company or companies providing the Optional Retirement
~Program. Therefore, there is no conflict between.the above
quoted provision of Article 2922-11 and the above quoted
provision of section 48a of Article 3 of the Texas Consti-
tution because they relate to different moneys, and, again,
there is no attempt in section 48a to prohibit or limit any-
thing other than the activities of the Teachers Retirement
System.
Hon. Travis White, page 7, (M-196) .
In accordance with the canons of construction hereto-
fore discussed, we answer your third question in the nega-
tive.
Question No. 4
,Section 7 of Article 2922-U provides as follows:
"A faculty member with ten (10) or more years of
creditable service under the Retirement System who
has elected to participate in the Optional Retire-
ment Program in accordance with the provisions of
Section 5 and who has not further elected to with-
draw his contribution as provided in Section 6 shall
become a limited member of the Retirement System for
the purpose of accruing Service Retirement Benefits as
hereafter provided but shall no longer be considered
as a member of the Retirement System for the purpose
of accruing Disability, Death and Survivor Benefits
,thereunder and no such disability, death and survivor
benefits shali be payable by reason of limited member-
ship except as hereafter provided. If a limited member
shall die before retirement and during any school year
in which the member is in service, there shall be paid
.to his designated beneficiary the accumulated contri-
butions standing to the account of the member in the
Teacher Savings Fund; however, no other death or sur-
vivor benefit or option shall be payable by reason
thereof. The faculty member on limited membership
shall be required to make no further contributions to
the Retirement System. A limited member shall be en-
titled to Service Retirement Benefits under the,Re-,
tirement System: provided, however, that for the pur-
pose of computing the Standard Annuity under the *'
methods provided by law and thus the amount of such
7, benefits only the faculty member's creditable service
and compensation prior to making an-election to parti-
cipate in the Optional Retirement Program shall.be
considered."
YOU inquire whether the above quoted section 7 violates
the second paragraph of section 48a of Article 3 of the Texas
Constitution which provides, in pertinent part, that "the reci-
pients of (the Teachers Retirement System) fund shall not be
eligible for any other State pension retirement funds or direct
aid from the State of Texas , unless such other State pension
Hon. .TraviaWhite, page 8 (M-196)
or retirement fund, contributed by the State, le released
to the State of Texas aa a condition to recelvlng such other
pexisionaid ....‘I
Since Article 2922-11 does not provide or contemplate
that a recipient of the Teachers Retirement System fund who
elects to pdrtlcipate in the Optional Retirement Program
will release to the State the moneys. contMbuted by the, State
to the OptIonal Retirement Program to hle credit, It follows
that 80 long as a faculty member is a recipient of the Teachers
Retirement System fund, he Is not eleglble to receive any
benefits from the Optional Retirement Program. He may easily
cease to be a recipient of the Teachers Retirement System
fund by withdrawing from the Teachers Retirement System and
withdrawing from the fund all contributions he has made.thereto.
See section 48a of Article 3 of the Texarr Conbtitutlon; Section
6 of A+cle 2922-U. Of cpuree, upon the withdrawal of such
conttlbutions from the fund; the faculty member will thereby
forfeit and relinquish all accrued rights a8 a member of).th& :.
Teacher8 Retlrcment System.
Since section 7 of Article 2922-11 attempts to permit
recipients of the Teachers Retirement System fund to be
eligible for another State pension retirement fund without
“such other State pensiop retirement fund, contributed by the
State to the credit of the recipient, being released to the
State of Texas,” said se’ction 7 violates the above quoted
provisions ~of section 48a of Article 3 of the Texas Consti-
tution and is therefore, unconstitutional and void because
neceshlarilyantagoqletic to the clear constitutional pro-
vision. 12 Tex. JLWB. 2d 3’74, Constitutional Law, Sec. 30.
However, since the act out of which Article 2922-11 arose
contained a savings or severabllity clause and since all:of
the other provisions .of the’ act can be given effect without
giving effect to section 7 thereof, the remainder of Article
2922-U iB not Invalidated by the unconstltutlonallty of sec-
tion 7. 12 Tex.Jur.2d 394, Constitutional Law, Sec. 49, and
ca6es there cited.
Accordingly, we answer your fourth question that section
7 of Article 2922-11 is Invalid because it violatee section 48a
o? Section 3 of the TeXaB Constitution.
What has been,said heretofore in this opinion disposes bf
the four specific questions posed by you, but it ehould bea
noted that in enacting Article 2922-11, the Legislature adopted
the following statement of purpose and intent:
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, .
Hon. Travis White, page 9, (M-196)
"The Legislature finds that higher education is
vitally rmportant to the welfare, if not the sur-
vrval, of Texas and the United States at this stage
in history and that the quality of higher education
is dependent upon the quality of college and uni-
versity faculties. The Legislature finds, therefore,
that moneys spent on recognizedmeans for producing
an excellent system of public higher education is
money spent to serve a public purpose of great im-
portance. The Legislature finds further that a sound
faculty retirement program that provides full and com-
plete retrrement benefits to teachers and administra-
tors who have given faithful service to state-supported
institutions of higher education is a well-recognized:
means for improvins a state's nrocram of DubliC hiaher
education. The Legislature's purpose in establishing
the retirement program provided for by this Act is to
improve further the higher education available to the
vouth at the state-suonorted colleoes and universities
and to establish this-Retirement p-rogram as part of the
plan of compensation for the faculty of these colleges
and universities." (Emphasis added.)
Section 49b of Section 3 of the Texas Constitution, like
section 48a discussed above, deals with "moneys coming into
the (Teachers Retirement System) Fund," and has no application.
to moneys in, or contributions to , the Optional Retirement'
Program, which latter moneys and contributions never go into
and.never become a part of the Teachers Retirement System
fund.
We conclude, therefore, that neither section 40a nor
49b of Section 3 of the Texas Constitution contains any pro-
hibition against the establishment of a second or alternates
retirement program for persons employed in state-supported
colleges and universities, and that with the exception of
section 7 noted above, the Legislature was fully empowered
to create the Optional Retirement Program authorized in Article
2922-11.
SUMMARY
1. The vesting provision of section 3(a) of Article
2922tli, V.C.S., does not violate section 48a of Article 3
of the Texas Constitution.
.
2. Section 8(d) of Article 2922-li, V.C.S., does not
violate the first paragraph of section 40a of Article 3 of
the Texas Constitution.
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Hon. Travis White, page 10, (M-196)
3. The last paragraph of'section.8 of Article 2922-li,
V.C.S., does not violate the second paragraph of.section 48a
of Article 3 of the Texas Constitution.
4. Section I of Article 2922-li', V.C.S.~;violates
section48a of Section 3 of the Texas Constitution and is
therefore invalid. However, it is severable! 'and the re-
mainder of the Article is not rendered invalid by the un-
constitutionality of section 7.
5. With the exception of section7 of Article'i2922-li,
V.C.S..,the,Legislature was empowered to.create the,Dptional
Retirement,Program authoriz,edby Article 2922:li.
Prepared by Houghton Brownlee, Jr.
Assistant Attorney General
APPROVED:.
OPINION COMMITTEE
Hawthorn Phillips,'Chairman
Kerns B. Taylor, Co-Chairman
W. V. Geppert
Ralph Rash
Milton Richardson
Jack Sparks
Robert Flowers
.HaroldKennedy
Executive Assistant
A. J. CARUBBI, JR.
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