Untitled Texas Attorney General Opinion

A NEY GENERAL EXAS Honorable Robert S. Calvert, Opinion No. C-705 Comptroller of Public AccQUntS Austin, Texas Re: Whether control of the build- ing and grounds purchased with Texas Employees Retire- ment System Trust funds is within the jurisdiction of the State Board of Control Dear Mr. Calvert: or the Retirement System. By two letters to-this office, ,one~dated May 16, 1966, and the other dated May'l9, 1966, you have requested an opinion in regard to the aboye~mat~tgr. ,VIequote from your letters as follows: Letter of'~Mav~16th. "The Texas Employees Retirement System, out of Trust funds (Article 6228a R.C.S.) under the control of that agency has recently completed an office building and it is now being occupied by the retirement system. II . . . . "The management and control of the building and grounds necessarily,calls for the expenditure of funds from the State,"Treasuty.orthe Trust funds with the State Treasurer under the control of the retirement system, This expense raises the question as to~what agency shall supervise the maintenance and operation of the building and grounds. "Please advise if the control of the build- ing and grounds is under the jurisdiction of the State Board of Control or the Retirement System?" -3403- Hon. Robert S. CalVert. Page 2 (C-705) Letter of Mav 19th II . . . . "It was further discussed at that time, in anticipation of accounts for repair and improve- ments of the building and grounds which could not be considered as a part of the original cost to submit to you the question now in your office. The information needed by me is to determine what approval should be required for passing for pay- ment bills covering the type in question: Employees RetirementsSystem, Board.of Control or both?" Article 622Sa;Section 2, Vernon's Civil Statutes, as amended, provides, fin part. as follows: "A. The Employees Retirement System of Texas heretofore,established under the laws of this State is hereby eontinued in corporate exist- ence . . . and the management and operation of said system from the effective date of this Act shall be governed by the provisions of this Act. "B. Said system shall continue to be known as the Employees Retirement System of Texas, and by such name all of its business shall be trans- acted, all of its funds invested, and all its cash. securities and other properties shall be held. 81 . . . . "D. The Retirement System shall have the powers and privileges of a corporation and shall have also the powers,,privileges and immunities hereinafter conferred.-"~ Section 6 of Article 6228a. provides in part that: "1. The General Administration and responsi- bility for the operation of the Retirement System and for making effective the provisions of the Act are hereby vested in a State Board of Trustees II . . . . -3404- Hon. Robert S. Calvert, page 3 (C-705) Section 7 of Article 6228a. provides that: "C. The Treasurer of the State of Texas shall be the custodian of all bonds, securities, and funds. All payments from said funds shall be made by him on warrants drawn by the State Comptrol- ler of Public Accounts supported only upon vouchers signed by the Secretary of the Retirement System and the Chairman of the State Board of Trustees. A duly attested copy of a resolution of the State Board of Trustees designating such persons shall be filed with said Comptroller as his authority for issuing such warrants." Section 13 of Article 6228a provides, in part, as follows: I,. . . All provisions of the law inconsistent with the provisions of this Act are hereby repealed to the extent of such inconsistency . . . ." The land and building in question were purchased pur- suant to Senate Concurrent Resolution No. 17, Acts 59th Legis- lature, Regular Session 1965, page 1978, which contained, in part, the following: "WHEREAS, The Board of Trustees of the Bm- ployees Retirement System of Texas has requested Legislative advice concerning the acquisition of suitable real property and the construction of an office building for the System: and II . . . . "WHEREAS, Under the provisions of the Re- tirement Act, funds are available to acquire both the land and the building contemplated by the Board of Trustees of the Employees Retire- ment System . . .: and "WBEREAS, It will not require any additional legislation other than this resolution for the Board of Trustees to acquire such land and con- -3405- Hon. Robert S. Calvert, page 4 (C-705) struct a building for the Employees Retirement System to be paid from the Expense Fund: now therefore, be it "RESOLVED, By the Senate of the State of Texas, the House of Representatives concurring, that the Board of Trustees of the Employees Re- tirement System of the State of Texas be authorized to purchase a,suitable site and to erect thereon a building adequate to house the employees and the files of such System; . . . .I, 1, It is clear from those portions of Article 6228a quoted above that the Retirement System is a corporate entity. Section 2. B. of Article 6228a, quoted above, provides that all properties of the Retirement System shall be held in the name of the "Em- ployees Retirement System:of~:Texas'?. Article 622Sa~,placesthe administration of the Retire- ment System in the hands of the Board of Trustees, and the State Treasurer is made custodian,,,of,allbonds, securities, and funds belonging to the Retirement System. The statute provides that all payments from Retirement System funds under the custodian- ship of the State Treasurer shall be made by the Treasurer on II . . . warrants ~drawnby the State Comptroller of Public Accounts supported only upon vouchers signed bv the Secretary of the Retirement System and the-Chairman of the State Board of Trustees." (Emphasis added.) Artiale 665, Vernon's Civil Statutes, provides, in part, that: "The State Board of Control shall have charge and control of all public'buildings, grounds and property of the State, . . . and is charged with the responsibility to properly.care for and protect such property from damage, intrusion or improper usage . . . . And the Board shall be authorized to provide for the allocation,of space in any of the public buildings to the departments of the State Government and for thg'yses authorized by law to : ;3406- ,, . . Hon. Robert S. Calvert, page 5 (C-705) have and occupy space in the State buildings, and shall be authorized to make any repairs to any such buildings or parts thereof necessary to the service- able accomodation of the uses to which such build- ings or space therein may be allotted." If the building and grounds in question were held to be under the control of the Board of Control pursuant to Article 665, then by virtue of such holding, the Board of Control would be vested with the right to provide for the allocation of space in the building to the various departments of the State govern- ment. Such an allocation of space for the use by other depart- ments of the State government would be inconsistent with the legislative intent as manifested in Article 6228a and Senate Con- current Resolution No. 17, cited above, and would be in contra- vention of the trust nature of the property, as hereinafter dis- cussed. This office held in Attorney General's Opinion WW-565 that the funds of the Employees Retirement System are the pro- perty of a trust created for the benefit of a class of citizens of this State. Opinion WW-565 was based on the authority of Friedman v. American Surety Co. of New York, 137 Tex. 149, 151 S.W.Zd 570 (1941) wherein the Supreme Court of Texas was concerned with the status of the Employees Compensation Fund and the necessity for specific legislative appropriation prior to the expenditure of certain monies belonging to the fund. In conclud- ing that legislative appropriation was not necessary, the Court stated: 4, .the fund created by the Act in its . . very inception becomes the property of a trust created for the benefit of a class of citizens of this State . . . . The taxes are levied and collected for such fund, and not for the State in its sovereign capacity." It necessarily follows that the building and grounds in question having been acquired with trust funds, are impressed with the trust and remain trust property, subject to the manage- ment and control of the Board of Trustees of the Texas Employees Retirement System and do not fall within that category of pro- perty placed under the management of the State Board of Control -3407- - . Hon. Robert S. Calvert, page 6 (C-705) by Article 665. SUMMARY Control of building and grounds purchased with Texas Employees Retirement System Trust funds is within the jurisdiction of the Board of Trustees of the Texas Retirement System. Payment of accounts for maintenance of and im- provements to the building and grounds of the Retirement System should be made by the Treasurer out of the Texas Employees Retirement System Trust funds on warrants drawn by the State Comptroller supported only upon vouchers signed by the Secretary of the Retirement System and the Chairman of the State Board of Trustees. Yours very truly, WAGGONER CARR Attorney General By:-&=+ Lewis E. Berry, Jr. Assistant LEBjr:ra APPROVED: OPINION COMMITTEE W. V. Geppert, Chairman Paul Phy C. Daniel Jones, Jr. John Reeves W. 0. Shultz APPROVED FOR THE ATTORNEY GENERAL BY: T. B. Wright -3408-