Number 18 March 2. 1973

Number 18 March 2. 1973 Honorable Robert Q. Crane Treasurer and Receiver General State House Boston, Massachusetts 0213.3 Dear Treasurer Crane: You have asked my opinion as to the constitutionality of the first sen- tence in section 64 inserted into G. L. c. 29 by St. 1972. c. 807. § 3, which reads: '^Tlie state treasurer may contract with an employee to defer a portion of that employee's income and may subse- quently with the consent of the employee, purchase a life in- surance or annuity contract, for the purpose of funding a de- ferred compensation program for the employee, from any life underwriter duly licensed by the commonwealth who repre- sents an insurance company licensed to contract business in the commonwealth ..." (Emphasis supplied.) 74 P.D. 12 You have further inquired whether, if the answer is that the statute is constitutional, the first sentence means "The State Treasurer may con- tract for the Commonwealth of Massachusetts with an employee to defer a portion of the employee's income." In effect, § 64, inserted into G. L. c. 29 by St. 1972. c. 807, § 3, deals with fringe benefits for employees for a life insurance or annuity con- tract or for deferred compensation, paid for by the employee out of de- ferred income. This is but an extension of other types of fringe benefits which are clearly contractual in nature, as between the Commonwealth and its employee; cf. pensions (G. L. c. 32, §§ 3(2), 25(5) ); life insur- ance (G. L. c. 32A, §§ 5, 6); and which involve deductions from payroll, e.g. pensions (G. L. c. 32, § 22); life insurance (G. L. c. 32A, § 8(a) ). A procedure similar to that in § 64 has been in force in the Commonwealth since 1963. (See St. 1963, c. 466, § 2, which added a sentence to G. L. c. 29, § 31 relating to the payment of premiums for an annuity contract for any employee of the Department of Education or certain educational in- stitutions. There would seem to be no constitutional limitation on the power of the state to so contract with its employees, and public policy would seem to support it. With reference to your second question, it would appear that the pro- vision that the "State treasurer may contract" clearly means "on behalf of the commonwealth." Cf. G. L. c. 29, § 35, which impliedly permits a note, bank mortgage or security belonging to the Commonwealth to be made to the State Treasurer by name and, if so made, permits him or any successor in office to assign, transfer or discharge it — obviously for the benefit of the Commonwealth. I conclude, therefore, that St. 1972, c. 807, § 3 is constitutional, and that the provision therein that "The State treasurer may contract with an employee ..." means "The state treasurer may contract on behalf of the commonwealth with an employee ..." Very truly yours, ROBERT H. QUINN Attorney General