..-
R-797
rE ORNEY GENERAL
a‘EX&3
November 7, 1947.
Hon. 0. II. Cavners Oplnlon No.. v-427,
Thet @tate Auditor
Auatln 11, Texas lb: Thb l pplloabl5lty’ of the a
general pxovlrionsIn tb
ourt-ent Departmental Apptio-
‘jwiatloa Bill to the Texas
Employlueat Comm1ss1bn.
‘Ue’refer to four letter of September 8,
1947, in which jou request the opinion of this
department as to whether or not the Texas BmplOy-~
ment Conmilsslon~ is now a State Department or Agency
to the extent that It and its employees come under
the lavs which regulate generally other State Depart-
ments and the General Provisions of the current
Departmental Appropriation Act a
In order to fully comprehend the status of
the Texas Eaploymnt Commission and its relation tom
the laws ,which generally regulate other State Depart-
mentr and the Genekal Provisions of the current Depart-
mental Approprlatlon Act, IO LB neoeesary to exemlne
the Irederal Statutes a8 vsll a8 the State Statutes.
Thlr Is lndllrpensable for the reason that the unemplof-
mnt compensation acts bdopted In the several States
wore rubrtantielly contemporaneour and were adopted
purrubnt Go and lm iccord wfth the Irederal SoolU
58ouri-Q Aat. M1. are deri&md to operbt& to@hex’
Meward Hbah. Co. v. Dada,
~lbv:~~~ryi%m3~ log A* L a 1eg3* car-
rloheal ;: 804Ji8 r1) coal 8 c&e co, 361 i. 8. 495
57 3. Ct. 868, 109 A. t. A, 13273 46 A8. JW. p. &.
The Texas limployment Connnissfon 18 a State
&ency and its employees me State employees. It vaa
contemplated ynder this coordinated Federal mad State
unesplment compensation system that the admlnlstra-
tlon thereof would be handled through designated State
agencies. The Commlssloti vaa designated b the Legle-
l..t;;Wa;a the State Agency to admlnlater t 3:Is sySt8m
s
-..
Hon. C. If.Civness, page 2 V-&7
Under this coordlaated Federal and State
unemployment compensation eyitem, the Federal <)overn-
Pent usea the taxes that It collect8 to pay the costr
of administering both the Federal and Nate plan8 and
the amounts collected bJ Ahe%State8 are used ao161f
la the payment of~benaflt8~to unemplq~~workerr.
*hi8 mop- uwd to d~~a,;idri8iltruti~'CO8t i8 sent
t* tb nveral Sta~e'",bJr:,bb~~l~~t~~,.oi,~:~ TMa8UrJ
upon & certiflcatrcmY~o8~ the -Social: ~Sedurlty Boaql.
we quote fror 432U.zLC.A,, S8&502,: 1a:pwt: aa*~follarr:
a(a).The:'Board, @hall iron time to :tlm
certiij.to'the Secriqxy of the,Treaeury for
payment' to,:each:State "uhich ha8 an ugemploy-
Section 503 oi Tit16 42 of 0. 8. C. A.
provide?: .'
“(a) She Board &all make Qe @*&tlfia&
t&on for p4QJIeat tP &lay etatie llnxess it find8
that the law oi rodb &ate, approaed by the
wbrd uabar $eotia8 1600-1611 Of st1e 26,
includes provirioP for-
"(1) &ach rithods of adali#l~atratSo~
(including afteln faauary 1, 1940, sethods
mlatlng to the establl@ment Bw *tint*-
name of personnel afandarda on a arePIt
basis, except that the board ehall exerclsq
no authority vlth Peapeet to the 86leotion,
tenure Of office, and oQ8psasbtion Of q
individual emplqed in acoordanee vlth saoh
wthodr) a8 ~IW f'ou@ by the Board to be
reasonably caloulatad to insure full payment
of une8ploy8ent eorpensation when due;
e . . l
"(8) pffeotivs July 1, 1941, the 'expendt-
ture Of IIll Mw8 rooelvedpbIk'8lllllt t0 BeC-
tion 502 of this title solely for the ourposes
and In the emouat8,found necesa J bs the Board
for the proper and ef'ficient admitiistration
of such state law. . . ." (mphasia supplied)
P .
Hon. C. I?. Cavness, page 3' V-427
The remaining provisions in the above quoted
sectlon provide that in the event the State Agency
charged with the administration of the State Unemploy-
ment Compensation Law falls to carry out the require-
ments of the Bond, the Board shall make no’certiflce-
tlon for paputs to the recalcitrant State.
The applicable provisions of our State Law
are found in Article 5221b, R. C. 3,
Section 9 thereof contains the following
provlslone:
It ,h~;)b~tl,“md;;; ;owerz ;‘,om$~~l~~:
h f th 1
administer thls Act; and it shall hsve
power and authority to adopt, amend, or
rescind such rules and regulations, to
employ such persons, make such eendi-
tures, require such reports, make 83
investigations, and take such other ac-
tion as it deem necessary OP sultabla to
that en&:
,
as the Social Security Boar@ mey from time
to time require, and shall comply with such
provi8lons as the Doclal Security Board msy
from time to time find necessary to assure
the correotness and verlflcstlon of such
Section 11 of Article 5221b provides
as f allows:
“(a) Spa1 Fund,: There is hereby
created in t e mreasurg a special
fund to be known ‘as the Unemployment
Hon. C. B. Csvness, page 4 v-k27
Com$ensation AdministratIon Fund. All
moneye which Bpe deposited or paId into
this fund are hereby appropriated and
made available to the Commission and
shall be coatlnuousl~ avallable~to the
Commieaion for expenditure in accordance
with the provisions of this Act and shall
not 1aDse at am time or be transferred
appropriated by this State, all ro’n@yr
received rrom the United States of Amorlob
or any agency thereof* including the &&rai
Qecurlty Board. . . . (Emphasis added)
The above quoted provisions reveal an
unrletakablo intent on the part of Cowrear and the
Texas Legislature that all moneys received froti tbs
Federal Government under ?Pltle III of the Social
Security Act can be expended only in the amounts
and la accordance with the standtU+ds of the Social
Seourity Administration and the rules and regula-
tions adopted by the Commission to meet such etsnd-
arde .
The Texas Employment Commlasion Is also the
State Agency designated to.admlnlster the employment
rervlce in cooperation with the Federal Government.
Article 5221b-10, R. C. 9. This service was taken
away f’rom the States by executive order during World
War II, and was not returned to the States until
November 16, 1946. The Federal i3overnment,likewlao
furnishes the funds necesrrary to adrainlater thie
program. These funds are authorized to be paid to
the States by the Secretary of Labor by ceFtlfyin$
to the Federal Security Administrator the amount ta
be paid to the State aad the Federal Security Admlnlr-
trator then certifies this amount to the Secretary of
Treasury in addition to the amount payable under Eec-
tlon 502(a) of Title 42. This money likewlse however
must be expended according to the rules and standards
prescribed by the Federal Agency. We quote from 29
U.S.C,A., Sec. 4gh, as follows:
Hon. C. H. Cavness, page 5 V-427
“Each State’ agency cooperating with
the United States Employment Service under
Section8 49-49C, 49d, 49e-49k of this title
Shall m&e such reports concerning its oper-
ations ,and expenditures as shall be prey-
crlPed by the Federa SecuPltF Adminlstrtior.
It &ml1 be thwdll o? the AdmlnlstrPtor to
eecertaln whqther 8 b system o? Pub110 bmplq-
rent offices maintained in each Stite is con-
ducted In accordance w.ith the riij.es and regu-
lations and the standards oft efficiency mes-
cribed by th6 Administrator in: ,accordance
with the Provisions of said sections. TAO
administrator may revoke any existing cer-
tlfiCates or withhold an further certificate
provided for in section 5 gf of this title,
whenever he shall determine, as to any State,
that the cooperatinn State wencg has not
ended the moneys naid to it or
,to be apmri,!ated
e with plans a
added 1
The States are still operatin& under the
Wagner-Peyser Act of 1933 which requ.iTea the submls-
sion of a detailed plan of operation’,by each State
and the strict adherence to such plan as well as to
the Pules and r%gulations Promulgated bJ the Director
Q? the United States Employment Llervice and the Secre-
tary of Labor. It will be noted that the United States
Employment Service Issues statements of policy which
must be adhered to by the States.
It follows that the moneys allotted to the
State for employment service purposes by ,the Federal
Government can be expended by the State only in accord-
ance with the plans approved undgr theso sections.
Under these cooperatU+ e&avors the several
Federal Agencies give to the!‘iSt&te t,he, Q&ndaxds far the
State to follow in formulating the nules. ahd regtilations
relative to variour lrgstems. After the State, has pre-
Pared ita rules and regulitiont+,,, thpse,. are iubmittsd to
the Federal Agencis8 for approval, ‘and once they ar8
approved they aannot be altered, or changed ,without first
securing the aPpFova1 of the Federal Agencies.
- -
Hoa. C. H. Cavnees, page 6 V-427
These approved plans,as they a.%%called,
are very detailed aud cover every phase of the
admlnlstratlon or the &qts and tho e~psad&twes
that are lnade in oonneatfog therewith. To deaon-
strata; we rerer to the personnel o? the Comalsslon.
The reoruitlng or its employees ie done through a
merit eystem, which sTatem must be operated %iccord-
ing to the standards prescribed by the Federal
Agencies. 75ach employee auat oome within a cer-
tain, classification doaignated under a comprehen-
sive cLaaslfioattoa plan which prescribes the title
of each employee; a description of’ the duties and
responaibllitler, the rinimum requirements of traln-
lng, experience, education and other qua)lflcrtlonsO
Each employee is patd according to a comprehensive
compensation plan which includes salary schedules
for the varlous classes of employees, and it is
definitely provided that no employee can be paid
a salary unless It conforms to the plan and la at
one OS the salary levels established for the class.
!Phe tsglalature of Texas has reoogW?ied
the necessity of extensive Oooperation vith the
Federal &enoy as Is shown by the previously quoted
,. strtutrs and the follolQiag quotation from the Depart-
mental Appz’opriation Bill:
‘Al$ Bloneys granted to this State by the
Federal Gooernment for the admSnistrat5on of
the Uaemplogaent Compensation Act We hereby
a propristed to bs expended for purposes far
wii ich such moneys were granted. Ilotwithstand-
lng any othsr provisions or this Act, moneys
granted for travel shall be expended in the
amounts and in accordance with the standarti
of the Social Security AdministratSon and
the United States Bmployment Service of the
Department of Labor and the rules and regu-
lations adopted by the Unemployment Compensr-
tion CoeeDlsaZon to meet such rtandWds. out
or rthtr towel expenee paid~ solely rroa
FrdeWl gWitd, and llaade in aiXN&UV3e with
the Federal 8tbndaPds as being nscssfbary rm
proper ad&oist.ratSbn of the Dnemploament
CompensatSon Act shall not require approval
by the Attoraey benerrl.
Eon. C. Ii. Cavness, page 7 V-427
“Salaries of the employees of the Unem-
ployment Compensation Commission and members
of the Commission shall be paid in accordance
with agreements made between the Commlsslon
and the Social Security Administration and
the United States Employment Service of the
Department of Labor, but in no case shall
such salaries be less than those authorized
by the Act creating the Unemployment Compen-
sation Conxuisslon.
“It Is specifically provided that all
moneys now on deposit to the credit of the
Unemployment Compensation Fund, and all
moneys reoelved for the credit of such fund,
are hereby appropriated for the payment of
benefits and refunds hs authorized by the
provisions of the Unemployment Compensation
Law.” Vol. 6, Vernon’s Texas Session Laws,
50th Legis., 1947, P. 930.
The reason the Legislature has acted in the
manner above set forth becomes apparent when we realize
that all of the funds used in the administration of
these systems sxe furnished by the Federal Government
and none are furnished by the State. Under the Federal
enactments, the Federal Oovernment will continue to
furnish such funda only as long as the Commisslon com-
plies with the rules and regulations of the Federal
Security Admlnlatrator with Z?egaPQto the expenditure
OS the moneys so furnished,
The paragraph In the Departmental Appropria-
tlon Act, page 930, which reads:
“Al.1 the above items appropriated for
administration to the Texas Unemployment
Compensation Commission shrll be subject .~
t0 the SpprOVU Or the Lsglslatlve Audit
Committee and none or the funds herein
provided ahall be spent until such lpprovaI .
shall have been obtained,”
does not change the policy of having the funds supplied
by the Federal government to be ex
with the standards rescrlbed by &?~~&~~la~~~~“~Y
Thls provision appl f es insofar aa it Is not in conflict
with the general provisions of the Texas Unemployment
Compensation Act and the standards and regulations
approved by the FedoraI Agencies.
. -,-
Hon. C. H. Cavness, page R V-42?
As has been previously noted, the employmept
service was taken over by the Federal QovernllSent"during
World War II under Executive Order. This service was
returned to the States effective November 16, 1946, and
the sdmlnistratlonof the service will continue to be
financed solely by Federal Funds at least up to July 1,
1948. As a precautionsPymeasure, the Legislature of
Texas appropriatedout of the General Fund certain items
to be used to match between five and ten per cent of the
Federal Funds used In the administrationof the employ-
ment service in the event Congress re ulres such a match-
ing program subsequent to July 1, 194?i. These Items are
regulated by the general laws of Texas ana have been so
recognized, as is evidenced by an Attorney Qeneral'a
opinion addressed to the Board of Control, dated July 13,
1 9 37 l
In view of the foregoing it 1s our opinion
that although the Texas Employment Commission Is a State
Agency and lts,employeesare State employees,yet with
respect to Federal Funds expended they are primarily
governed by the standards prescribed by the Social
Security Administratorand the United States Employ-
ment Service of the Department of Labor and the rules
and regulations adopted by the Comm$sslon to meet such
standards. Otherwise the,generalprovisions of the law&
of this State are applicable.
The Texas Employment Commission IS a State
Agency and its employees BPB State employees.
However, Federal Funda expended for admlnistra-
tion of the agency sre primarily governed by the
standards prescribed by the Social Security Admin-
istrator and the United States Employment Service
of the Department of Labor and the rules and regu-
i;gr;ddopted by the Coamlssion to meet such
Otherwise, the general provisions of
the laws bf this State are applicable. 29 U.S.C.)?.,
Sec. 29h; 42 U,S.C.A., Sections 502, 502(a); Article
5221b-Sectionsg(a), 9(i), 10 and 11, R. C, 9.
Very truly yours
ATTORREY CiEmERALOF TEXAS
By 4::. r--z.?&%&-
Robert 0. Koch
Assistant