The opinion
Honorable Frank M. Jackson
Executive Secretary
Teacher Retirement System of Texas
Austin, Texas
Opinion NO. ~~-600
Re: Status of funds accru-
ing to the Teacher
Retirement System of
Texas for the remainder
of the fiscal year end-
ing August 31, 1959, and
the availability of such
funds to pay administra-
tive costs of the Teacher
Dear Mr. Jackson: Retirement System.
Your request for an opinion submits two (2) ques-
tions for our consideration as follows:
"1. Should monies accruing to the
respective funds of the Teacher Retirement
System, particularly funds accruing to the
interest fund thereof, for the remainder of
this fiscal year ending August 31, 1959, be
deposited In a special trust account in the
custody of the State Treasurer or should same
be deposited in the State Treasury.
"2. If such funds are properly deposited
inthe special trust account may any portion of
the funds so deposited be used by the System to
cover deficiencies in funds appropriated for
administrative costs for the remainder of this
fiscal year without the necessity of further
legislative appropriation. In this connection,
the aggregate expended for administrative costs,
including appropriated funds plus the supple-
mentary funds from the trust account, would not
exceed the total authorized for administrative
costs by general statute. (The total of
teacher membership fees plus a sum not to exceed
Honorable Frank M. Jackson, page 2 (~~-600)
50# per member which ma be transferred
from the interest fund.
Your first question is expressly answered by the
final sentence, under I'Summary",in Attorney General's
Opinion w-565 (1959), wherein it is stated:
"Funds hereafter accruing to each
retirement system should be deposited in
such trust account."
Funds collected by the Teacher Retirement System
include membership fees, income from investments and match-
ing contributions paid by teacher members. These colleotfons
together with any other funds or monies collected by the
Teacher Retirement System for the remainder of this fiscal
year and thereafter, unless the applicable statutes are amended
to provide otherwise, should be placed in the hands of the
State Treasurer, as custodian, and not in the Treasury.
Section 10 of Article 2922-1, Vernon's Texas Civil
Statutes, provides for the creation of the various funds of
the Teacher Retirement System. Included Is the Expense Fund
from which all expenses of administration and maintenance dare
directed to be paid. No part of the Expense Fund comes from
state tax sources. The fund is made up of the $2.00 annual
membership fee paid by each teacher member with the further
provision that if the aggregate of membership fees collected
is insufficient to cover expenses of administration, the
system's Board of Trustees shall transfer to the Expense Fund
from the Interest Fund an amount necessary to cover administra-
tive costs but in no event shall the amount transferred exceed
in any one year Fifty Cents ($ .50) per member of record as of
August 31 of that year. Hence, it is evident that the Legis-
lature by general statute has placed a definite limit on the
funds available to the Teacher Retirement System to cover
administrative costs. This limit cannot under any cfrcum-
stances be exceeded and It is immaterial in so far as this
limitation is concerned, whether the funds expended come from
the Treasury or from the trust account In the hands of the
Treasurer as Custodian.
As we have pointed out, monies properly collected
for the credit of the Expense Fund and Interest Fund, as
well as other funds of the Retirement System, for the remainder
of this fiscal year should not be deposited In the State
Treasury but should be placed in a special trust account in the
Ronorable Frank H. Jackson, page 3 (~1-600)
hands of the State Treasurer. The funds so deposited may be
expended to supplement present Pegislative appropriations for
~adminlstrative costs of the Retirement System for the re-
mainder of this fiscal year without the necessity of legisla-
tive appropriation. This conclusion must follow since Section
6 of Article VIII of the Constitution of Texas, merely requires
that funds deposited in the Treasury cannot be expended or
drawn from the Treasury without specific appropriation. This
provision of the Constitution,,by its clear terms, applies only
to funds within the Treasury and not to funds outside the
Treasury. The expenditure of such funds, however, Is governed
by the restrictions set out above. This means that the total
costs of administration and.maintenance of the Retirement
System for this fiscal year must not exceed the aggregate of
membership fees standing to the credit of the Expense Fund
plus the transfer of a sum from the Interest Fund to the Ex-
pense Fund not to exceed Fifty Cents ($ .50) per member of
record as of August 31, 1959, Your request points out that
these limits will not be exceeded.
Your second question, therefore, is ansuered in the
affirmative.
Monies accruing to the respective funds of the
Teacher Retirement System for the remainder of
this fiscal year and thereafter, unless the ap-
plicable statutes are'amended to provide other-
wise, should be deposited outside the Treasury
In a special trust account with the State
Treasurer as Custodian.
The funds so deposited may be used by the Board
of Trustees of the Teacher Retirement System,
within the limits described, to supplement cur-
rent legislative appropriations for costs of
administration and maintenance.
Yours very truly,
WILL WILSON
Attorney General of Texas
Lkonard Passmore
Assistant
LP:rm:mg
Honorable Frank M. Jackson, page 4 (~~-600)
APPROVED:
OPINION C~OMMITTEE
Geo. P. Blackburn
Richard 0. Jones
J. Milton Richardson
Marvin H. Brown, Jr.
Robert T. Lewis :
David R. Thomas
REVIEWED FOR TRE ATTORNEY GENERAL
BY: W. B. Geppert