Untitled Texas Attorney General Opinion ( 1996 )

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DAN MORALES
ATTORHEY
CENERAL September 23.1996
Dr. KemtethH. Ashworth Opiion No. DM-419
Commissioner
Texas Higher Education Re: Whether the Texas Guaranteed
Coordiiting Board Student Loan Corporation may garnish the
P.O. Box 12788 wages of a county employee for the
Austin, Texas 78711 purpose of collecting a federally guaranteed
student loan (RQ-803)
The Honorable James M. Kuboviak
Brazes County Attorney
300 Bast 26th Street, Suite 325
Bryan, Texas 77803
DearGe4ttlenten:
You have each asked this office questions concerning the garnishment or
withholding of wages for unpaid student loans. Mr. Ashworth’s question concems
whether, as a matter of state constitutional and statutory law, wages may be withheld from
a state employee by the comptroller. Mr. Kuboviak’s question concerns whether the
Texas Guaranteed Student Loan Corporation, acting pursuant to a federal statute, may
garnish the current wages of a Brazes County employee despite the Texas Constitution’s
prohibition on garnishment. Smce our contra&g answers depend on their bases in either
state or federal law, we are answering these questions together.
Mr. Ashworth asks whether the decision of the Texas Supreme Court in Orange
Carnty v. wore, 819 S.W.2d 472 (Tex. 1991). would authorize the comptroller to
withhold payroll and retirement warrants to state employees who are delinquent in
repaying Hinson-Ha&wood loans.* B%zreheld that an offset of wages by a cow which
was both the employer and the creditor of the debtor, a cow commissioner, did not
constitute a garnishment which was constitutionally impermissiile under article XVI,
section 28 of the Texas Constitution. While as a consequence of Wore such withholding
by the comptroller may not constitute a constitutionshy impermissiile garnishment of
current wages., the comptroller is nevertheless without statutory authority to take such an
action.
‘~hc Hinson-HazlcwoodWlege Student Loan Program established ~mmant te artide lIl,
section sob of the Texas thStituti0~see 19 T.A.C. 5 21.53, is adminbd by the Texas Higher
Educationcoordinating Boardpmuant to the rules set forth in title 19. chapter21. s&chapter C of the
Texas Adminbativecodc.
Dr. Kemmth H. Ashworth - Page 2 (DM-4 19)
The Honorable James H. Kuboviak
Before its amendment in 1991, section 403.055 of the Government Code would
have permitted the comptroller to withhold a payroll warrant or other compensation to a
state employee. It then read in relevant part. “A warrant may not be issued to a
person. . if the person is indebted. . . to the state,. . . until the debt. . [is] paid.”
However, when section 4031055 was amended by the Seventy-second Legislature, among
the amendments was the addition of section 403.055(c), which states, “This section does
not prohibit the comptroller corn issuing a warrant to pay the compensation of a state
officer or employee.” Act ofMay 26, 1991,72d Leg., RS., ch. 641, 8 7, 1991 Ten. Gen.
Laws 2357, 2359-60. The plain language of this amendment, as well as its legislative
history, makes it clear that the comptroller is authorized to pay the compensation of state
officers and employees who owe debts to the state. See House Comm. on State Atl’airs,
Bill Analysis, S.B. 1095, 72d Leg., RS. (1991). Moreover, precisely the same language
was added by the Seventy-second Legislature to subsection (e) of section 57.48 of the
Education Code, which had before amendment flatly prohibited the comptroller from
issuing warrants to persons who defaulted on Guaranteed Student Loans. Act of
May 26, 1991, 72d Leg., RS., ch. 641, 8 1, 1991 Tex. Gen. Laws 2357, 2357-59. These
amendments taken together evidence a clear legislative intent to exempt wmpen&tion of
state officers and employees from the comptroller’s power to withhold warrants from
debtors and defaulters.
That being the case, the comptroller must issue such warrants as a matter of law.
Government Code section 403.056 requires the comptroller, after certain procedures are
completed, to “deliver the warrant to the person entitled to receive it.” Government Code
section 403.072 requires tbi comptroller to accept payroll claims from state agencies and
prepare warrants to pay for such claims. Government Code section 404.069(a) provides
that warrants to withdraw money from trust tbnds held by the treasurer “shall be issued by
the comptroller.” The issuing of such warrants is not di -cretionaty; it is a ministerial duty.
See fighlfoor v. Lane, 140 S.W. 89 (Tex. 1911) (holding that comptroller could not refuse
to issue warrant for attorney general’s salary.)
Retirement benefits, like wages and salaries, constitute compensation. See, e.g.,
Prewift v. Smith, 528 S.W.Zd 893,896 (Tex. Civ. App.-Austin 1975, no writ); Davidson
Texas, Inc. v. Garcia, 664 S.W.2d 791. 793 (Tat. Civ. App.-Austin 1984, no writ).
Accordingly, like salary warrants, such benefits must be paid to those entitled to them
even if such persons have defaulted on &son-Ha&wood loans, pursuant to section
403.055(c) of the Government Code.
Should the legislature find this result unfortunate and desire to remedy it, it may of
course do so. We caution, however, that any such legislation must consider the question
of due process. A salary or retirement warrant is valuable property, and the Fifi and
Fourteenth Amendments to the United States Constitution require that such property not
be taken without due process of law. The requirement of due process is that a deprivation
of this nature must “be preceded by notice and opportunity for hearing appropriate to the
nature of the case.” Mullane v. Central Hanover Bank & Tiust Co., 339 U.S. 306, 313
p. 2331
Dr. Kenneth H. Ashwotth - Page 3 (DM-419)
The Honorable James H. Kuboviak
(1950). What process may be due in a particular case was generally adumbrated by the
Supreme Court in Matthews v. EMidge, 424 U.S. 319,334-35:
[IIdentification of the specific dictates of due process generally
requires consideration of three distinct factors: Fii, the private
interest that will be affected by the official action; second, the risk of
an adverse deprivation of such interest through the procedures used,
and the probable value, if any, of additional or substitute procedural
safeguards;. and finally, the Government’s interest, including the
fun&on involved and the fiscal and administrative burdens that the
additional or substitute procedural requirement would entail.
The Matthews yardstick is a flexible one. The United States Court of Appeals for
the Fifth Circuit has on occasion found even informal procedures suflicient to meet due
process requirements. See Nimon v. Resolution Trust Cop.. 975 F.2d 240.247 (5th Cir.
1992). However, we believe it would be most prudent for the legislature, should it decide
to address this matter by statute, to include notice and hearing requirements in the statute
as well.
In the tight of our answer to Mr. Kuboviak’s question, however, it may not be
necessary for the legislature to address the matter, as we will presently explain.
Mr. Kuboviak asks whether the Texas Guaranteed Student Loan Corporation (“TGSLC”)
may garnish the current wages of an employee of Brazes County despite the provision of
article XV& section 28 of the Texas Constitution, the same provision which was at issue in
Wme. Because the statutory basis on which the TGSLC is acting is 20 U.S.C. 4 M%(a),
a federal statute which explicitly preempts state law, the Texas Constitution’s prohibition
of such gsmishment is ineEective in this case.
Article VJ of the Constitution of the United States provides, in relevant part, “This
Constitution, and the Laws of the United States which shall be. made in Pursuance thereoc
and all treaties made, or which shall be made, under the authority of the United States,
shall be the supreme Law of the Land; and the Judges in every State shall be bound
thereby, any Thing in fhe Constitution or Laws of any State to the Contnny
no?wirhsrunding.” U.S. Const. art. VJ (emphasis added).
In this instance, the language of 20 U.S.C. 5 1095a(a) expressly pre-empts any
wntrary state law. It reads, “Notwithstanding any provision of State law, a guaranty
agency. . . may garnish the disposable pay of an individual to collect the amount owed by
the individual . . .” This language makes it clear that the Texas Constitution and statutes
may not be interposed to prevent TGSLC as a guaran~ agency from proceedmg to
garnish the wages of an employee of Brazes County.
That being the case, TGSLC has among the tools at hand for its collection of the
federally guaranteed loans which it administers, the ability to garnish current wages of
P. 2332
Dr. Kenneth H. Ashworth - Page 4 (DM-419)
The Honorable James H. Kuboviak
defaulting state employees, pursuant to 20 U.S.C. lOSSa( The procedure by which it
ten effect such garnishment is defined by the statute, which provides for pm&privation
notice and opportunity to be heard. To the extent that Hinson-Ha&wood loans are
subject to the Federal Family Education Loan Program, see 19 T.A.C. 5 21.54, defaulters
are subject to grunishment by TGSLC. It may well be therefore that the availability of this
remedy would obviate the necessity for any amendment of section 403.055 of the
Government Code or section 54.78 of the Education Code. Such a decision, of course, is
within the province of the legislature rather thsn this office.
SUMMARY
Section 403.055 of the Government Code and section 57.48 of
the Education Code prohibit the comptroller from withholding salary
or retirement warrants from persons who are delinquent in repaying
Hinson-Ha&wood college student loans. However, the Texas
Guaranteed Student Loan Corporation, pursuant to 20 U.S.C.
3 1095a(a) has the authority to garnish the wages of persons who
default on Federal Family Education Loan Program loans, including
state and county employees, despite the stricture of article XVI,
section 28 of the Texas Constitution.
DAN MORALES
Attorney General of Texas
JORGE VEGA
Fii Assistant Attorney General
SAIUH J. SHIRLEY
Chair, Opinion Committee
Prepared by James E. Tourtelott
Assistant Attorney General
p. 2333