Untitled Texas Attorney General Opinion ( 1955 )

September 2, 1955
Honorable John H. Winters Opinion No. s-172
Executive Director
State Department of Publia Welfare Rc: Eligibility of emplog-
Austin, Texas ees of State institu-
tions of higher learning
for Social Security
Dear Mr. Wintersr coverage.
You have requested an opinion on the following questions:
"1. Are the employees (Including those subject
to the Teacher Retirement System) of the University
of Texas and ,theother State administered institu-
tions of higher learning eligible for Social Secur-
ity aoverage under the definition as set out in
Section 1 Subsection (c) of House Bill No. 666,
Chapter 4&, Acts of the 54th Legislature, and,
therefore, must be mandatorily included along with
other eligible State employees?
"2. Are the employees (including those subject
to the Teacher Retirement System) of the University
of Texas and other State administered Institutions
of higher learning eligible for Social Security
coverage under the terms of Sections 1 and 2 of
House Bill No. 709, Chapter 501, Acts of the 54th
Legislature?
"3. Are the employees (excluding those subject
to the Teacher Retirement System) of the University
of Texas and the other State administered institu-
tions of higher learning eligible for Social Security
coverage under the terms of Sections 1 and 2 of House
Bill No. 7097
"4. If your opinion or ruling to question number
2 is affirmative, then is there a specific appropria-
tion for the matching contrlbutillrller?
If so, Is such
appropriation provided for In House Bill No. 6661
Hon. John H. Winters, page 2 (S-172)
“5 . If, in your opinion, the University of
Texas and other State administered institutions of
higher learning are not instrumentalities of the
State and are not juristic entities, and therefore
do not come under provisions of House Bill No. 709;
and if in your opinion they are not State institu-
tions in the usual meaning, then would their em-
ployees (excluding those subject to the Teacher Re-
tirement S stem) come under the provisions of House
Bill No. 6 l6 for mandatory coverage?"
House Bill 666 authorizes the State Department of
Public Welfare to enter into agreements with the Secretary of
Health, Education and Welfare to obtain Federal old-age and
survivors insurance (hereinafter called OASI) coverage for
State employees. Section 1, Subsection (c) of House Bill 666
defines the term "State employee' as follows:
"(c) The term 'State employee' in addition to
its usual meaning shall include elective and ap-
pointlve officials of the State, but shall not in-
clude those persons rendering services in positions,
the compensation for which Is on a fee basis. ,The
term 'State Employee' shall not include any employees
in position subject to the Teachers Retirement System
except those employed by State departments, State
agencies, and State institutions as construed in
their usual meaning."
Section 6 of House Bill 666 provides for the collec-
tion of contributions. It makes provision for deduction of the
employees' part from the employees' compensation and for allo-
cation and appropriation of funds for payment of the State's
part of the contribution for employees who are subject to cov-
erage under the provisions of the bill.
House Bill 709 amends Sections 1 and & of Chapter 500,
Acts of the 52nd Legislature, Regular Session, 1951 (Article
695g, Vernon's Civil Statutes), which allows political subdi-
visions to negotiate for OASI coverage for their employees.
Section 1 of the bill adds a new subdivision to Section 1 of
Article 695% so as to extend the definition of "political
subdivision as follows:
"(h) The term 'political subdivision' Includes
an instrumentality of the State, of one or more of
its political subdivisions, or of the State and one
or more of its political subdivisions, but only if
such instrumentality is a juristic entity which is
.
Hon. John H. Winters, page 3(S-172))~.'
legally separate and dl5t~inc'cfrom the State or
subdivision and'onlg if its-employees are not by
virtue of their relation to sush juristic entity
employees of the.State L;,,,y/
or '/
5mbdlvision."
,i,, ,,
.~,
Section 2 of the bill adde the following provision to
Section 4 of Article 695gt
" . . Any instrumentality of the State,
for which dkeot appropriations are made by the
Legislature, may aontributsto thenold-age and
survivor's insurance programof the Federal @ov-
ernment for employees covered by Chapter 470,
Acts, 1937, Forty-fifth Legislature, Regular
Session, and amendments thereto, only suah funds
as are speoificallg appropriated therefor."
Chapter 470 referred to above is the act establishing the Teacher
Retirement of Texas (Artlale 2922-1, V.C.S.).
It is obvious from an analysis of the provisions of
these two bills that State Institutions of higher learning can-
not be included in both bills. If these Institutions are in-
strumentalities of the State within the definition contained in
House Bill 709; their employe,esnecessarily are not aovered by
House Bill 666, since one of the conditions for coverage under
House Bill 709 is that the employees not be "employees of the
State" and House Bill 666 applies only to State employees. On
the other hand, if these Institutions are not legal entities
separate and distinct from the State, the logical conclusion
would be that their employees ar5 State employees and that House
Bill 666 was lntended~to apply to them.
House Bill 666 does not contain a basic definition for
the term "State employee." It sets out aertain classes of per-
sons who are included and certain alasses who are excluded, and
it presupposes that when modified by ~these inclusions and ex-
clusions the term shall have,its%sual meaning”; but It does
not attempt to clarify what ,thzi
usual meaning is in terms of the
departments'and agentdee whose'employees are aonsidered to be
State employees. However, we are aided In this respect by the
Federal Social Security Law, 'which authorizes contracts for
coverage of State employees who are performing servic 8 in con-
nection with a governmental (nonproprietary) funatlonf only if
The operation of institutionsof higher education by the State
is ~a governmental funution& Raineg v. Malone, 141 S.W.2d 713
(Tex.Clv.App. 1940).
.
Hon. John H. Winters, page 4 (S-172)
the contract applies to all departments and agencies of the
State which are not separate legal entities. Under Federal
law the State mayexolude certain classes of employees within
these departments and agencies, but'it may not exclude the
department or agency as such. Thus, House Bill 666 conforms
to Federal law only if the over-all meaning of "State employee"
without the enumerated modifications includes employees of the
State institutions of higher learning if these institutions
are not separate legal entities. In the absence of proof to
the contrary, it must be assumed that the term was not intended
to have a more restricted meaning than would be permitted un-
der the Federal law, for otherwise the enactment of House Bill
666 would have been an idle gesture.
Undoubtedly the State institutions of higher learning
are instrumentalities of the State in the broad sense that they
are the means through which the State carries on one of the
functions of government. However, they are included in House
Bill 709 only if they meet the conditions (1) that they are
separate and distinct juristic entitles and (2) that their em-
ployees are not employees of the State. It is our opinion that
they do not meet either of these conditions.
There is no definitive criterion for determining
whether an instrumentality is a separate legal entity. An in-
strumentality which is created as a corporate body or as a
"body politic and corporate" ordinarily would be considered to
have a legal existence separate from the State, although it
might still possess some of the attributes of the State's sov-
ereignty. It does not follow that an instrumentality which is
not expressly created as a corporate body could not constitute
a separate juristic entity, but the law establishing it would
have to imply its separate existence before it should be treated
as such. That the legal status of an Institution of higher learn-
ing depends on the status ascribed to it by State law is illus-
trated in Ramsey v. Hamilton, 181 Ga. 365, 182 S.W.392,398 (19%).
In some States these institutions are organized as bodies corpor-
ate and are regarded as independent legal entities. State ex rel.
Black v. State Board of Education, 33 Idaho 415, 196 P. 201
)* Fanning v. University of Minnesota, 183 Mlnn. 222, 236 N.W.
2iFiG31) In other States, they are not legal entities. Ramses
v. Hamilton, supra; State v. McMillan, 12 N.D. 280, 96 N.W. 310,
31b (1903).
The institutions of higher learning in this State are
not corporate bodies, and the courts have never treated them
as seuarate entities. The organization and powers of the gov-
erningboards of the various institutions are sufficiently similar
that their status in this respect is no different from that of
Hon. John H. Winters, page 5 (S-172)
the University of Texas. The relation of theUniversity to
the State is exemplified in the following cases.
In Group No. Cne Oil Corporation v. Baas, 38 B.2d 680,
684 (W.D.Tex.1930,rev'd on other grounds, 141 F.2d 4831, it is
stated!
"The university is not a corporation. Its
affairs are directed and controlled exclusively
by the state. The title to what is commonly
called university lands is in the State. Appro-
priations for maintenance and operation are reg-
ularly made by the Legislature. The university
is in fact and in law a branch of the state
government."
Rainey v. bialone,141 S.W.2d 713 (Tex.Civ.App.l940),
held that the Regents of the University are vofficers of the
State" and that the Board is the "head of a department of the
State Government."
In Walsh v. University of Texas, 169 S.W.2d 993 (Tex.
Civ.App.1942,error ref.), we find this language:
"The University and the Board of Regents are
institutions of the State, and neither has any
existence independent of the State. . . . Property
belonging to the University of Texas is the prop-
erty of the State. York v. Alley, Tex.Civ.App.,
25 S.W.2d 193, writ refused."
In our opinion, these holdings foreclose any conten-
tion that the State institutions of higher learning have any
existence separate from the State itself. We are further of the
opinion that employees of these institutions are employees of
the State, The purpose of adding this second condition is ob-
scure. If the instrumentality has no existence separate from
the State, it would seem to follow that under ordinary condi-
tions of employment its employees would be employees of the
State. However, the fact that this second condition was added
in House Bill 709 suggests that the converse would not be true;
that employees of a separate entity would not as a necessary
consequence be outside the class of "employees of the State but
still might be considered State employees for the purpose of OASI
coverage e If this provision appeared in a statute for coverage
of State employees as well as employees of separate instrumentali-
ties and the statute contained a comprehensive definition of the
term vhich included the employees of some instrumentalities which
were separate entities, we would think that its purpose was merely
Hon. John H. Winters, page 6 (S-172)
to emphasize that instrumentalities were to have the authority to
make separate agreements only if their employees would not bs cov-
ered under an a reement for coverage of State employees generally.
If House Bill 6 %6 csontainedsuch a definition, we would conclude
that the same meaning was, intended in House Bill 709, since the
statutes are in oar1 materia. But House Bill 666 does not assist
in arriving at the intended meaning, and we must conclude that the
term is to be construed in the manner in which it is commonly used
and understood by the Legislature in other connections.
In numerous places in the general provisions of the bi-
ennial appropriation acts the Legislature uses the term 'employees
of the State or oomparable terms to include employees of the in-
stitutions of higher learning. Section 62 of Article XVI of the
Constitution authorizes the creation of a retirement fund for the
"appointive officers and employees of the State." The employees
of the institutions of higher education are ineligible for member-
ship in the Employees Retirement System of Texas, created pursuant
to this constitutional,authorization, only because they are subject
to the Teacher Retirement System and the State laws do not permit
membership in both systems. Before the Teacher Retirement System
was extended to include auxiliary employees of educational insti-
tutions, it was conceded that these employees were eligible for
membership in the Employees Retirement System because of their
status as "employees of the State." It is our belief that the term
as generally used by the Legislature would be taken to include em-
ployees of these institutions unless a oontrary intention was clear-
ly shown.
Sinoe these institutions are not instrumentalities as
defined in Seation 1 of Bouse Bill 709,your second and third ques-
tions are answered in the negative. We need not answer your fourth
question, as the restriction in Section 2 of House Bill 709 applies
only to instrumentalities which are within the dsfinition in Sec-
tion 1 of the bill. Even if it were construed to apply to other
instrumentalities, the speaific appropriation for these institutions
would be found in House Bill 666, under the conclusion we have
reached in answer to your first question as hereinafter discussed.
As already indicated, it is our opinion that the employees
of these institutions are included in the general term "State
employee" in House Bill 666, sinoe the institutions are not separ-
ate legal entities. The remaining question is whether the employees
who are in positions subject to the Teacher Retirement System are
excluded, under the provision which states that the term shall not
include employees in positions subjeot to the Teacher Retirement
System "except those employed by State departments, State Agencies,
and State institutions as construed in their usual meaning.
Hon. John H. Winters, page 7 (S-172)
Without evidence that the usual meaning as intended in
House Bill 666 was otherwise, we must conclude that the meaning
usually given the terms by the Legislature and the courts was
that intended by the bill. The courts have held that the insti-
tutions of higher learning are State institutions and departments
of the State government. Rainey v. Malone, supra; Walsh v. Uni-
versity of Texas, supra; Mumme v. Marrs, 120 Tex. 383, 40 S.W.2d
31 (1931); Cochran v. Cavanaugh, 252 S fir.284(Tex.Civ.App.1~92~).
Throughout the statutes pertaining to iheir establishment,
collection of fees and the administration of funds collected by
them, we find them referred to as institutions, State educational
institutions, and institutions of higher education. Title 49,
Chaps. 2 - Pa, V. C. S. Article 608, V. C. S., which places in
the Board of Control the authority to contract for printing, bind-
ing, and stationery for the State departments, institutions and
boards except such work as may be done at the various educational
and eleemosynary institutions, includes contracts for the insti-
tutions of higher learning. Att'y. Cen. Op. 0-5283 (1943). In
the biennial appropriation acts they are referred to as State
institutions of higher education, State institutions, educational
institutions, and agencies of higher education.
The hospitals and special schools under the control of
the Board for State Hospitals and Special Schools and certain
agencies under the jurisdiction of the State Board of Education
and the State Derjartmentof Public Welfare are also referred to
as "institutions in the statutes, and were formerly known under
the official designation of "eleemosynary institutions" until
changed by the Legislature in 1949. Arts. 3174, 3174a, 3174b,
v. c. s. The schools under the jurisdiction of the Youth Develoo-
ment Council were formerly referred to in the appropriation acts
as "reformatory institutions" and are sometimes known as "correc-
tional institutions." Each of these agencies is an institution
of a specialized character, just as the institutions of higher
learning are of a specialized character. We cannot say that the
usual meaning does not include institutions of higher learning
with any more reason than we could say that it does not include
eleemosynary institutions.
In answer to your first and fifth questions, we hold
that the employees of these institutions, including those subject
to the Teacher Retirement System, are eligible for OASI coverage
under House Bill 666.
It might be ur ed that this construction of the last
sentence in Subsection ?c) renders it meaningless and unneces-
sary in that there would be no State employees subject to the
Teacher Retirement System who would be excluded. A similar
contention might be made with respect to the provision in Section
Hon..John H. Winters, page 8 (S&172)
2 of Rouse Bill 709. To r?se language in Hurt v. Cooper,
13C',fex.433, 110 S.W.26 96 1937)# we need not indulge in any
speculation on what agencies or instrumentalities, if any, come
within the terms of these provisions. However, these and other
provisions in the bills raise ambiguities which would justify
a consideration of their legislative history to clarify the ln-
tent of the Legislature in enacting them. But the legislative
history as revealed in the official records throws no light on
the agencies to which they were intended to apply,
We have been seriously hampered in our study of these
questions by the lack of a record of committee hearings and
deliberations and debates in the Legislature. There are strong
indications from extraneous sources that the sponsors of House
Bill 709 believed and represented to the Legislature that it
applied to the institutions of higher learning; that the sponsors
of House Bill 666 believed and represented to the Legislature
that it excluded employees of the institutions of higher learn-
ing who were subject to the Teacher Retirement System; and that
the Legislature enacted the bills in the belief that it would
not be possible for the employees of these institutions who
were covered by the Teacher Retirement System to be included
in any contract for Social Security coverage until the Legisla-
ture took further action to appropriate money for payment of the
contributions. In this connection, the adoption of Senate Joint
Resolution 5, Senate Bill 290, and Senate Concurrent Resolution
78 form a part of the background necessary to an understanding
of what may have been the legislative intent with respect to
the coverage of employees subject to the Teacher Retirement System.
If these surmises were borne out by legislative records
and reports, the conclusions we have reached on some of the ques-
tions would be different. But we have not felt at liberty to be
influenced by information from souraes which a oourt would refuse
to consider if these questions were before it. It is our belief,
from a review of the decisions of this State and elsewhere, that
the courts of Texas would not allow evidence of opinions and state-
ments of members of the Legislature and third persons outside the
official records of the Legislature to show a legislative intent
at variance with the language used in the enactments.
example, Wiseman v. Madison Cadillac Co., 191 Ark.1021, 'd
1007 (1935); Security Feed & Seed Co. v. Lee, 138 Fla ‘0.
869 (1939); Ocean Forest Co. v. Woodside 184 S.C.428 11 .3
C$P;7!za;;ay v. Bushfield, 69 s D 2 6 N W.2d 1 (1943); City
P State, 198 Wash. 682;1zP'F'.2d.826(1939‘ ); Pa ke v.
Ameriaan Automobile Ins.
-- CO,, 248 Wis, 347, 21 N.W.2d 72m ;
a2 C.J.S.. Statutes. Secs. 3549355,356. On the basis of the language
employed-and the legislative history of the bills as shown by the
official records, we are unable to reach any other answers than the
ones we have given.
Hon. John H. Winters, page 9 (S-172)
SUMMARY
State institutions of higher learning are
State institutions in the usual meaning of that
term, and their employees are State employees.
Therefore, employees of these institutions, in-
cluding employees in positions subject to the
Teacher Retirement System, are eligible for Fed-
eral old-age and survivors insurance Social
Security) coverage under House Bill 6il
6, Chapter
467, Acts of the 54th Legislature, which provides
for coverage of State employees.
~lhe State Institutions of higher learning are
not juristic entities which are separate and dis-
tinct from the State, and their employees are not
eligible,for Social Security ooverage under Arti-
cle 6958, Vernon's Civil Statutes, as amended by
House Bill 709, Chapter 501, Acts of the 54th
Legislature, whioh authorizes Social Security cov-
erage agreements for certain instrumentalities of
the State and of Its political subdivisions.
APPROVED: Yours very truly,
Marietta M®or Payne JOHN BEN SHEPPERD
Reviewer Attorney General
Davis Cirant
Reviewer BY
Will D. Davis Assistant
Special Reviewer
John Atohison
Acting First Assistant
John Ben Shepperd
Attorney General
MKW/rt