Untitled Texas Attorney General Opinion ( 1990 )

THE ATTORNEY GENERAL
OF TEXAS
March 19, 1990
Honorable Wilhelmina Delco Opinion NO. JM-1146
Chairman
Higher Education Committee Re: Authority of a univer-
Texas House of Representatives sity to allocate space in a
P. 0. Box 2910, Office 413-C campus building to be used
Austin, Texas 78769-2910 exclusively by a private
group of faculty members
(RQ-1845)
Dear Representative Delco:
You ask whether Texas A & M University may allocate
space in a campus building‘ to be used exclusively for an
auxiliary enterprise of the university known as the Faculty
Club (hereinafter the club). The primary question is
0 whether such an arrangement is constitutional. This
question was previously asked of this office, but the
request was withdrawn prior to the issuance of an opinion.
Attorney General Opinion Request RQ-1407 (1988). Since that
original opinion request, the operation of the club has
changed considerably with the university assuming more
responsibility.
We have separately received a brief from the university
system explaining the operation of the club and its rela-
tionship with the university. The brief informs us that the
club is now being operated as an auxiliary enterprise of
Texas A 8 M University. The vice president for finance and
administration of Texas A 8 M University administers the
club, and university employees staff it. The brief further
states that a nonprofit corporation provides bar services to
the faculty club and uses the bar receipts to purchase bar
supplies and to reimburse the university for its administra-
tion of the faculty club. The vice president directs the
payment of expenses of the corporation.
The club serves its members and their guests as well as
visiting professors, former students, parents, friends and
others. However, visitors (who we understand to be non-
members) may not make reservations but are accommodated only
as space permits.
p. 6051
Honorable Wilhelmina Delco - Page 2 (JM-1146)
?
With that understanding of the club, we must look at
the controlling law. Governance of A L M University and the
A 61M University System is vested in the board of regents.
Educ. Code 55 85.11, 86.02. Section 85.21 of the Education
Code generally establishes the authority of the board as
follows:
The board shall make bylaws, rules, and
regulations it deems necessary and proper for
the government of the university system and
its institutions, agencies, and services.
The board shall regulate the course of study.
and prescribe the course of discipline
necessary to enforce the faithful discharge
of the duties of the officers, faculty, and
students.
Those Education Code provisions generally vest the
board of regents with the power to manage and control
university property.. sfn w . Woo- 287 S.W. 677
(Tex. Civ. App. - Austin 1926, io writ).' The board of
regents has delegated its responsibility for the management
and control of university property to the chief executive
officer of each part of the system. Texas A & M University
System, Administrative Policy and Reporting Manual g c-11.2
(April 25, 1989).
While we find no express authority for the university
system to operate auxiliary enterprises, we believe that the
university is authorized to operate such non-educational
facilities. m Educ. Code 55 51.008(b), 61.003(14);
Attorney General Opinions H-513 (1975); H-456 (1974); LA-6
(1973). Furthermore, a faculty club fits within the para-
meters of "auxiliary enterprises" indicated by the examples
listed in section 61.003(14), which reads as follows:
'Educational and general buildings and
facilities* means buildings and facilities
essential to or commonly associated with
teaching, research, or the preservation of
knowledge, including the proportional share
used for those activities in any building or
facility used jointly with auxiliary enter-
prises. Excluded are auxiliary enterprise
buildings and facilities, including but not
limited to dormitories, cafeterias, student
union buildings, stadiums, and alumni
centers, used solely for those purposes.
p. 6052
Honorable Wilhelmina Delco - Page 3 (JM-1146)
The faculty club under consideration here is very
similar to the student food cooperative addressed '
Attorney General Opinion H-513. In that opinion, th::
office determined that a state university, with the approval
of the governing board, was authorized either to house and
supply a private food coop or to operate one as an auxiliary
enterprise. Attorney General Opinion H-513 (1975).
The governing board of the A 8 M University System
apparently has not given direct approval for the operation
of the faculty club. However, the board has indirectly
approved the club in its adoption of the university budget,
which includes a separate line item for the club. We
believe that the regent's inclusion of club expenses in the
university budget is tantamount to approval by the regents
of the operation of the club. It is our further opinion
that the regents may delegate responsibilities for adminis-
tration of the club to university officers. The court in
8ache Halsev Stuart Shields. Inc. v. Universitv of Houston,
638 S.W.2d 920 ITex. ADD. - Houston rlst Dist.1 1982, writ
ref'd n.r.e.) examined-kections of the Education Code- rela-
tive to the power of the board.of regents of the University
of Houston. Those provisions were very similar to the
sections cited above relative to the board of regents of the
A & M University System. The court addressed the issue of
whether the board of regents was authorized to delegate
some of its duties to university officers and found that,
inasmuch as the board of regents had a certain power, it
also had the power to delegate "the details of management to
a President and other officers." & at 926. The court
noted:
By enacting the above mentioned sections, the
Legislature obviously contemplated that the
Board could not run a large University with-
out a great deal of aid from individuals
intimately familiar with the details of the
University on a day to day basis. The Board
has been given the authority to delegate the
actual running of the University and to
select people qualified to do so, and has
been authorized to retain power of approval,
power to hire, and power to fire, should the
employees not perform adequately.
a at 927.
p. 6053
Honorable Wilhelmina Delco - Page 4 (JM-1146)
For tbe above reasons, we believe that Texas A brM
University is authorized to operate a faculty club as an
auxiliary enterprise of the university.
We understand that-your principle concern is that this
allocation of university property might contravene article
III, section 51, of the Texas Constitution, which provides
in part as follows:
The Legislature shall have no power to
make any grant or authorize the making of any
grant of public moneys to any individual,
association of individuals, municipal or
other corporations whatsoever.
While the terms of that section appear to prohibit only
grants of money, the provision has been construed to pro-
hibit tbe grant of any public property without the receipt
of.an adequate ouid nro -&lo. Q&son v; Warsu 118 S.W.2d
621 (Tex. Civ. App. - Waco 1938, writ dism#dj; Attorney
General Opinions JW-551 (1986); &lW-89 (1979); WW-790 (1960).
We do not think that use of university funds, property,
1
or staff for then club is necessarily prohibited by article
III, section 51. If it is determined that the operation of
the club furthers university purposes, for example by en-
hancing faculty relations or by helping to attract more
qualified faculty members, and that such uuid nro ou
proportionate to the club's use of public funds, prop:&:
or staff, then we think that article III, section 51 is no
obstacle to its operation. The board of regents has
apparently made such determination, in the first instance,
by implicitly approving the club's operation when it
approved an item for the club's expenses in the university
budget.
Whether the university receives an adequate gl&j
pro aupfor the club's use of public property and funds
ultimately involves questions of fact. We think that this
determination is for the regents in the first instance.
We assume, for the purposes of this opinion, that other
legal requirements have been met. See. e.a., V.T.C.S. art.
6252-5~ (corporation performing an auxiliary enterprise
service must present a financial statement, provide payment
statements, and execute a bond payable to the state): j&
art. 6252-llf (state agencies must enact rules governing the
relationship between the agency and "a private organization
?
P. 6054
Honorable Wilhelmina Delco - Page 5 (JR-1146)
designed to further the purposes and duties of the agency");
Educ. Code 5 61.0572 (coordinating board approval of space
utilization in all educational and general buildings).
SUMMARY
The operation of a faculty club as an
auxiliary enterprise of Texas A L M Univer-
sity does not violate article III, section
51, of the Texas Constitution as long as it
serves a public purpose or the university
receives an adequate ouid ore QUO.
J b
Very truly yo ,
nl,
JIM MATTOX
Attorney General .of Texas
MARYRELLER
First Assistant Attorney General
JUDGE ZOLLIE STRARLEY
Special.Assistant Attorney General
RENEA HICKS
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Karen C. Gladney
Assistant Attorney General
P. 6055