### THE ATTORNEY GENERAL OF TEXAS

March 19, 1990

Honorable Wilhelmina Delco Opinion NO. JM-1146 Chairman Higher Education Committee Re: Authority of auniverTexas House ofRepresentatives sity to allocate space ina P. 0. Box 2910, Office 413-C campus building tobe used Austin, Texas 78769-2910 exclusively by a private group of faculty members (RQ-1845)

Dear Representative Delco:

You ask whether Texas A &MUniversity may allocate space ina campus building‘ tobeused exclusively for an auxiliary enterprise of theuniversity 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question was previously asked of this office, but the request was withdrawn prior to the issuance of an opinion.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 abrief from the university system explaining the operation of the club and its relationship with the university. Thebrief informs us that the club isnow being operated as an auxiliary enterprise of Texas A 8MUniversity. Thevice president for finance and administration of Texas A 8 MUniversity administers the club, anduniversity employees staff it. The brief further states that anonprofit corporation provides bar services to the faculty club anduses thebar receipts topurchase bar supplies and to reimburse the university for its administration of the faculty club. The vice president directs the payment of expenses of the corporation.

The club serves itsmembers and their guests aswell as visiting professors, former students, parents, friends and others. However, visitors (who we understand tobe nonmembers) may notmake reservations but are accommodated only
as space permits.

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With that understanding of the club, wemust look at the controlling law. Governance ofA LMUniversity and the A 61 MUniversity System isvested intheboard of regents. Educ. Code 55 85.11, 86.02. Section 85.21 of the Education Code generally establishes the authority of theboard as follows:

The board shallmake bylaws, rules, and

regulations itdeems necessary andproper for the government of theuniversity 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 thepower 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 itsresponsibility 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 andReporting Manual gc-11.2 (April 25, 1989).
While we findno express authority forthe 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 fitswithin the parameters 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 theproportional share used for those activities inanybuilding or facility used jointly with auxiliary enterprises. Excluded are auxiliary enterprise buildings and facilities, including but not limited to dormitories, cafeterias, student union buildings, stadiums, and alumni centers, used solely forthose purposes.

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The faculty club under consideration here is very similar to the student food cooperative addressed ' Attorney General Opinion H-513. Inthat opinion, th:: office determined that a stateuniversity, with the approval of the governing board, was authorized either tohouse and supply aprivate 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, theboard has indirectly approved the club in itsadoption of theuniversity budget, which includes a separate line item for the club. We believe that the regent's inclusion of club expenses in the university budget istantamount to approval by the regents of the operation of the club. It is our further opinion that the regents may delegate responsibilities for administration of the club touniversity officers. The court in 8ache Halsev Stuart Shields. Inc.v.Universitv of Houston, 638 S.W.2d 920 ITex.ADD. -Houston rlstDist.1 1982, writ ref'd n.r.e.) examined-kections of the Education Code- relative to the power of theboard.of regents of the University ofHouston. Those provisions were very similar to the sections cited above relative to theboard of regents of the A &MUniversity System. The court addressed the issue of whether the board of regents was authorized to delegate
some of itsduties touniversity officers and found that, inasmuch as the board of regents had a certain power, it alsohad the power to delegate "thedetails ofmanagement to aPresident and other officers." & at 926. The court noted:

Byenacting the abovementioned sections, the

Legislature obviously contemplated that the Board could not run a largeUniversity without a great deal of aid from individuals intimately familiar with the details of the University on aday to daybasis. 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 tohire, andpower to fire, should the employees not perform adequately.

a at 927.

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For tbe above reasons, we believe that Texas A br M University isauthorized to operate a faculty club as an auxiliary enterprise of theuniversity.

We understand that-your principle concern isthat this allocation ofuniversity property might contravene article III, section 51, of the Texas Constitution, which provides inpart as follows:

The Legislature shall have no power to make any grant or authorize themaking of any grant of public moneys to any individual, association of individuals, municipal or other corporations whatsoever.

While the terms of that section appear toprohibit only grants ofmoney, the provision has been construed to prohibit 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 donot think that use ofuniversity funds, property, or staff for thenclub isnecessarily prohibited by article III, section 51. If it isdetermined that the operation of the club furthers university purposes, for example by enhancing faculty relations or by helping to attract more qualified faculty members, and that such uuid nro ou proportionate to the club's use ofpublic funds, prop:&: or staff, thenwe think that article III, section 51 is no obstacle to its operation. The board of regents has apparently made such determination, inthe first instance, by implicitly approving the club's operation when it approved an item for the club's expenses inthe university budget.

Whether the university receives an adequate gl&j **pro aup**  for the club's use of public property and funds ultimately involves questions of fact. We think that this determination is forthe regents inthe first instance.

We assume, forthepurposes of this opinion, that other legal requirements have beenmet. 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 abond payable to the state): j& art. 6252-llf (stateagencies must enact rules governing the relationship between the agency and "aprivate organization 1

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designed to further thepurposes and duties of the agency"); Educ. Code 5 61.0572 (coordinating board approval of space utilization inall educational and general buildings).

SUMMARY
The operation of a faculty club as an auxiliary enterprise of Texas A LM University does notviolate article III, section 51, of the Texas Constitution as long as it
serves a public purpose or the university receives anadequate ouid ore QUO.
Very truly yo , 

# J b

nl, JIM MATTOX Attorney General .ofTexas

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

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