# TH~~A~ORNEYGENERAL OF’ TEXAS AXJIWX-IN.

T-s 78711

May 7, 1975
The Honorable hi. L. Brockette Commiraioner ofEducation 201 East Eleventh Street Austin, Texar 78701 Opinion No. H- 602 Re: Uee of school dicrtrict fund6 to purchase personal injury insurance protection. Dear Dr. Brockette:

Noting that school dirtrictr are authorized to purchase insurance protection againat claim8 made by injured partier and othera under the Texas Tort Claims Act (Article 6252-19, V. T. C.S.), 

### your office has asked whether an independent rchool dirtrict may we local district maintenance funds to purchase:

(a) Personal injury protection coverage as provided for in article 5.06-3, Vernon’8 Texas Inruranco Code (Acts 1973, 63rd Leg., ch. 52, p. 90); (b) Uninsured motorist protection as provided for inarticle 5.06-1, Vernon’8 Texas Insurance Code, (Acts 1967; 60th Leg., .ch. 202; p. 448). InAttorney General Opinion M-989 (1971)this office concluded that school districts 

### were authorized to purchase insurance protection against claims for bodily injury arising out of risks recognized by section 3ofthe Texas Tort Claim8 Act (the general liability section) and that they might also purchase such insurance to 

### cover employees exposed to individual liability byvirtue 

### oftheir official 

### duties. And - see Attorney General Opinion H-70 (1973). - Article 5.06-3 

### requirea that, 

### unlear the coverage ir rejected inwriting, all policier ofautomobile liability inrurance issued or delivered in thin State shall provide for personal injury protection 

### coverage, defined in subparagraph (b)ar:

p. 2670The Honorable M. L. Brockette page 2 (H-602)

“Personal injury protection” consists ofprovisions ofa motor vehicle liability policy which provide for payment to the named insured inthe motor vehicle liability policy and members ofthe insured’s household, any authorized operator or passenger ofthe named insured’s motor vehicle including aguest occupant, upto an amount of $2,500 for each such person for payment ofall reasonable expenses arising from the accident and incurred within three years from the date thereof for necessary medical, surgical, X-ray and dental services, including prosthetic devices, and necessary ambulance, hospital, professional nursing and funeral services, and in the case ofan income producer, payment ofbenefits for loss ofincome as the result ofthe accident; and where the person injured in the accident was not anincome or wage producer at the time ofthe accident, payments of benefits must be made in reimbursement ofnecessary and reasonable expenses incurred for essential services ordinarily performed by the injured person for care and maintenance ofthe family or family household.

. . . Subparagraph (c) ofthe article provides that the benefits are payable without regard tofault and without regard to the availability of similar benefits from a collateral 

### source. Itprovides that payment ofthe benefit shall not create in the insurer any right of subrogation. These provisions assure recovery by the beneficiary regardless ofduplicate payments in a judgment against a third person, under workmen6 compensation, under a hospitalization policy, under apolicy covering interruption of employment, or any other source.

Despite the similarity ofthis coverage to other coverages which have been approved for purchase by subdivisions ofthe State, and particularly school districts, we are compelled tohold that there is no authorization for a school district to purchase personal injury protection

p. 2671The Honorable M. L. BrockeJte page 3 (H-602)

**coverage** as defined in article 5.06-3(b) ofthe Insurance Code.

Furnishing hospitalization insurance has been upheld only because it is considered a part ofthe employee’s compensation. Attorney General Opinions Nos. WW-7.31 (1959); WW-1101 (1961). And see Byrd V. City ofDallas, 6S.W. 2d. 738 (Tex. 1938). - However, under section 5.06-3, the coverage bought by the school district is not only for the employee but also for any other persons who are injured while riding invehicles owned by the school district and operated by its employees. Although limited coverage which benefited only the employee and those for whom he is financially responsible might be authorized as apart ofan employee’s compensation, s,uch broad coverage as 5.06-3 contemplates is not, in **our** opinion, actually employee compensation since the benefits inure to such a,broad ,group of persons.Further, the school district is not authorized to spend funds to benefit private individuals. Tex. Const. art. 3, sets. 50, 51and 52. Under section 5.06-3, the no-fault character ofthe coverage would provide benefits to persons towhom the school district owes nolegal obligation.

In **our** opinion the provisions of such coverage, at the expense ofthe school district, would amount to agrant ofpublic money or thing ofvalue toan individual, inviolation ofarticle 3, sections 50, 51and 52 ofthe Texas Constitution.

We, therefore, answer your first question in the negative. Uninsured motorist coverage is not defined by **statute as**  precisely as is personal injury protection coverage. See article 5.06-1, Vernon’s Texas Insurance Code. **As** described inLheTexas Standard Form automobile liability policy, it is the obligation ofthe insurer: To pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator ofan uninsured

p. 2672The Honorable M. L. Brockette page 4 (H-602)

automobile **because** ofbodily injury, sickness or disease. including death resulting therefore,

. . . caused by accident and arising **out** ofthe ownership maintenance or use ofsuch uninsured automobile

. , . In effect, payment under this 

### coverage would meet the obligation ofa third person tothe occupant ofthe district’s vehicle (whether an employee or not) at the expense ofthe district. Wefeel the same observations we made earlier as to the personal injury protection coverage would apply and that there is no authority for the purchase of such uninsured motorist coverage by a school district upon its vehicles.Such coverage does not inany way meet any obligation ofthe school district created by the Tort Claims Act.

We therefore answer your second question inthe negative. SUMMARY The purchase ofeither personal injury protection coverage or uninsured motorist coverage byan independent school district with local district maintenance funds would be unconstitutional.

LL, First Assistant

C. ROBERT HEATH, Chairman Attorney General of Texas

Opinion Committee

p. 2673