Untitled Texas Attorney General Opinion ( 1957 )


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  • Honorable F. T. Graham        Opinion No. W-215.
    Criminal District Attorney
    Cameron County                Re:   Legality of payment of
    Brownsville, Texas                  pension, vacation end
    welfare benefits by navi-
    gation district to trust
    fund for benefit of em-
    Dear Mr. Graham;                    plogees.
    In your letter of July 18, 1957, you request an
    opinion of this office aoncerning the legality of the payment
    by the Port Isabel-Ban Benito Navlgation District of certain
    moneys from time to time to a trust fund for the benefit of
    certain employees of the District. The problem is whether
    the payment contravenes the constitutional provision contained
    in Sections 4, 51, 52, and 53 of Article III of the Constitu-
    tion of Texas against gifts, grants, and gratuities.
    From your letter it appears that these employees are
    engaged in the loading and unloading of cargo to and from
    ships using the Navigation District's ship channel and other
    facilities. These benefits consist of pension, vacation and
    welfare funds and are part of the overall compensation paid
    to these employees,
    Although not paid to these employees Immediately
    and directly, they are paid to a trust fund for their ultimate
    use and benefit. In our opinion these payments are not a
    gratuity because the employee does not get them unless he
    works D and ha gets them only in the proportion to the number
    of hours which he works.
    Friedman V- American Surety Co. of New York, 
    151 S.W.2d 570
    , 578 (Sup.Ct. 194J.)was a suit challenging the con-
    stitutionality of the Texas Unemployment Compensation Act
    (Art, 5121b, V.C.S.). The Supreme Court said:
    "It is true that the employers alone directly
    create the unemployment fund, but it is created
    for the benefit of their employeea. Therefore, the
    right of such employees to enjoy or participate in
    the fund in times of unemployment should be re-
    garded as a part of their compensation or wages.
    _         -
    --.       _
    Honorable F. T. Graham, page 2   (WW-21.5)
    All employees who labor or perform services for
    employers who are covered by this Act labor or
    serve in part for the right to enjoy the bene-
    fits of this unemployment fund. So regarded,
    the fund and the benefits to be derived there-
    from by unemployed employees cannot be regarded
    as a gratuity within the meaning of Section 51
    of Article III of our State Constitution. To
    the contrary, those who come under its provi-
    sions have labored or served for such privilege.
    Byrd vO City of Dallas, 
    118 Tex. 28
    , 
    6 S.W.2d 738
    .
    "In the case just cited this Court had be-
    fore it a statute which authorized a certain
    class of cities to create a pension or aid fund
    for certain of their officers and employees.
    The fund was created in part by payments made
    into the same by the officers and employees to
    be benefited and in part by the City out of its
    own revenues. The plan authorized by the stat-
    ute contemplated that the officers and employees
    of the City designated should receive their sal-
    aries in the usual way, and, in addition thereto,
    should be entitled to participate in the pension
    fund above described. Itwasheld that the stat-
    ute did not create or attempt to create a gratu-
    ity; but that the right to participate in the
    pension fund was a part of the compensation paid
    for the services rendered. We think the same
    principle applies here. The right of an em-
    ployee covered by this Act to participate in the
    fund created thereby is a part of the compensa-
    tion earned while he is employed.n
    The Friedman case, sunra, involved an unemployment
    fund, The BJ& case, m,       involved a pension or aid fund.
    In our opinion the payments involved in these asses are so
    similar to the payment of pension, vacation and welfare bene-
    fits under the arrangements outlined In your letter as to
    render these cases fully decisive of your question. There-
    fore, we~hold that the payment of such funds is not a gratu-
    ity.
    -      .
    _ .--
    Honorable F. T. Graham, Page 3 (WW-215)
    SUMMARY
    Funds paid by a Navigation District to
    a pension, vacation and welfare trust
    fund for the benefit of employees as a
    part of the compensation paid such em-
    ployees is not a grant, gratuity or
    donation of public funds within the
    meaning of Sections 44, 51, 52 or 53
    of Article III or Section 3 of Article
    XI of the Constitution of Texas.
    Very truly yours,
    WILL WILSON
    Attorney General of Texas
    RRR:wb                               Assistant
    APPROVED:
    OPINION COMMITTEE
    H. Grady Chandler, Chairman
    W. V. Geppert
    B. H. Timmins, Jr.
    Wallace Finfrock
    REVIEWED FOR THE ATTORNEY GENERAL
    BY: Geo. P. Blackburn
    

Document Info

Docket Number: WW-215

Judges: Will Wilson

Filed Date: 7/2/1957

Precedential Status: Precedential

Modified Date: 2/18/2017