I
R-692
.’
T~~EATI-ORNEY GENERAL,
OF??EXAS
AULITIN II. -TEXAS
PRICE DANIEL
*Trcx?NEY GENeRAL
August 15, 1947
Hon. 0. ii. Lloyd, Executive Secretary,
Employees detirement System of Texas
Post ~Office Box 791
Auatin, Texas Opinion No. V-345
de: Whether the Employees
Hetirement System may
employ an actuary as
an independent con-
tractor, who at the
same time, is an ac-
tuary for another
State Agency.
Ubar Sir:
Your letter to this Denartu:ent asked for an
opinion as to wile,ther i#Z. John ;j; ,iudd, J;. :~a:{ be em-
ployed as an independent contractor to furnish actua-
rial services to the Emplo ees Retirement 3ystsm of
Texas. YOU disclose that Kr. liudd his at the present
time serving,as a consulting actuary for the Teacher
itetirement System of Texas. iie is carried on the pay
roll of that Department as a part-time errployee.
ilitll reference to whether Mr. Hudd, if em-
ployed, would ‘be an nemployeev or an “independent con-
tractor,v the following information is obtained from
correspondence furnished to us by you: Kr. Hudd main-
tains an independent business as a consulting actuary
at 107 West 14th .Street in Austin. He retains a staff
of emplo?:ees and furnishes 0~11of his own office ma-
chines anil equipment. He is enpaged in actuarial ‘work
as an independent .contractor for various insurance com-
panies and pension systems. His work, with the Teacher
detirement System .is that of furnishing actuarial serv-
ices. ile was offerea a oosition as Assistant Directorand
Actuary for the.Teacher hetirement jystem at $4800.00
per year. In the alternative, he was offered $2500.00
per year to be their consulting actuary. He ;‘lzc;q”,;d
their latter offer and rejected the former.
not occupy any desk space in any Teacher Retirement
Systes office. He does not have any stated office
Hon. 0. H. Lloyd - Page 2 v-345
hours. me is free from tile control of the Teacher Re-
tirement System with respect to the details of the man-
ner of his work.
There is considerable doubt as to whether or
not Mr. Rudd is an vemployeen of the Teacher Retirement
System, as distinguished from an “independent contrac-
tor”. But, assumin that he is an wemployeew of the
Teacher Retirement Eystem, the recited facts clearly
indicate that Mr. Rudd would be retained by the Rmploy-
ees Retirement System as an “independent contractoru
rather than as an “employee”.
In Opinion No. V-303, promulgated by this of-
fice on July 15, 1947, a co y of which Is herewith en-
closed, it was held that a ! tate employee Is not pro-
hibited by law from entering into and executing a con-
tract, as an independent con$ractor, with another State
agency where there was no incompatibility in such work,
and where there was no failure to discharge his State
duties.
There is no incompatlblllty in furnishing ac-
tuarial services to both the Teacher Retirement System
and the Employees Retirement System. There are no con-
flicts of interest; neither position is subordinate to
~the other; neither is sntaFonistic to the other; nei-
ther has any Tower to appoint or remove any employee of
the other; neither audits the books of the other; and
neither exercises any supervision over the- other.
Article XVI, Section 33, of the Texas Consti-
tution provides:
*The accounting officers of this State
shall neither draw nor pay a warrant upon
the treasury in favor of any person, for
salary or c&t!:ensation as a;*ent, officer or
appointce, ~110 110lds at the sari::: time any
other ol’fice or vosit;on of horlor:ntrrs&
or profit under this tate . . .
phasis added)
However, an independent contractor occupies
neither an office nor position under the State. Ho is
not an agent of the State. He is free to control the
details of the work, and may work at such ilours a:; he
may see fit; he is free to employ or diucharye assist-
ants without consulting anyone connected with the State:
,
,
Hon. G. H. Lloyd - Page 3 v-345
and he would be responsible for his own torts and the
torts of his employees. The Employees Retirement Sys-
tem is merely interested in the results of his work,
to-wit, the actuarial tables and information to be fur-
nished .by him.
We, therefore, hold that Article XVI, Section
33, of the Constitution is not aprlicahle in this situ-
ation, and that you may engage Fir. Kudd as a consulting
actuary as an independent contractor. By accepting
such contractj he,.wculd not jeopardize k-is 'part,;tinte
position with tire ,l'eacher itetireuient &StStii, and the
accounting officers of.this State would be justified in
issuing warrants in his behalf for services rendered.to
both departments.
Srn&ARY
The Employees. lietirement bystem of
Tews may engage an actuary as an inde-
pendent contractor'who,, at the same time,
is an actuary for: another: state Depart-:
ment, there being no incompatibility in
such work, and there being no neglect of
any State duties.
Yours very truly,
ATTORNEY
GENERAL
OF TEXAS
G&2%-u
e
Joe H, Greenhill
Executive Assistant
APPROVED:
JG@-&-
FIRST ASSISTANT
JRG:erc