The Honorable Jane Nelson 

Chair, Committee on Finance 

Texas State Senate 

Post Office Box 12068 

Austin, Texas 78711 

Dear Senator Nelson: 

KEN PAXTON 

ATTORNEY GENERAL OF TEXAS 

May 27, 2016 

Opinion No. KP-0093 

Re: Whether an institution of higher 

education may enter into a contract with a 

business entity in which an institution's board 

member has an interest (RQ-0081-KP) 

You ask whether "an institution of higher education may enter into a contract with a 

business entity in which· an institution's board member has an interest." 1 You explain that during 

its 2015 session, the Legislature enacted Senate Bill 20 relating to various aspects of state agency 

contracting. 2 Among the legislative changes in Senate Bill 20 is the addition of subchapter F to 

chapter 2261 of the Government Code. See TEX. Gov'T CODE§§ 2261.251-.257 (subchapter F, 

"Ethics, Reporting, and Approval Requirements for Certain Contracts"). Subsection 226 l .252(b) 

provides that a "state agency may not enter into a contract for the purchase of goods or services 

with a private vendor with whom [certain] agency employees or officials have a financial interest," 

specifically including "a member of the agency's governing body." Id. § 2261.252(b)(l). While 

subchapter F does not define "state agency," the Legislature expressly applied the subchapter "to 

an institution of higher education acquiring goods or services under" certain grants of authority in 

the Education Code. Id.§ 2261.25l(a); TEX. EDUC. CODE§§ 51.9335 ("best value" acquisition 

authority generally applicable to institutions of higher education), 73.115 ("best value" authority 

of the University of Texas M. D. Anderson Cancer Center).3 

1

See Letter from Honorable Jane Nelson, Chair, Senate Comm. on Finance, to Honorable Ken Paxton, Tex. 

Att'y Gen. at I (Nov. 23, 2015), https://www.texasattorneygeneral.gov/opinion/request-for-opinion-rqs ("Request 

Letter"). 

2Act of May 31, 2015, 84th Leg., R.S., ch. 326, 2015 Tex. Gen. Laws 1477, 1477-89 (Senate Bill 20). 

3For purpose of subtitle D of the Government Code ("State Purchasing and General Services"), "state 

agency" means: 

(I) a department, commission, board, office, or other agency in the executive 

branch of state government created by the state constitution or a state statute; 
The Honorable Jane Nelson - Page 2 (KP-0093) 

An existing provision of the Education Code, however, subsection 51.923( d), states that an 

"institution of higher education is not prohibited from entering into a contract or other transaction 

with a business entity in which a member of the governing board of the institution of higher 

education has an interest" provided the interest is not substantial or the member discloses the 

interest and refrains from voting on the contract or transaction. TEX. EDUC. CODE§ 51.923(d).4 

As you note, "[t]hese provisions appear to contradict one another." Request Letter at 1. 

When two statutes appear contradictory, courts try to harmonize them to avoid conflicts, 

giving full effect to both if possible. Texas Indus. Energy Consumers v. CenterPoint Energy Haus. 

Elec., LLC., 324 S.W.3d 95, 107 (Tex. 2010); Acker v. Texas Water Comm 'n, 790 S.W.2d 299, 

301 (Tex. 1990) (stating that "statutory repeals by implication are not favored"). When statutes 

irreconcilably conflict, the Code Construction Act provides rules to determine which should 

prevail. Subsection 31 l.025(a) of the Code Construction Act provides that if effect cannot be 

given to two irreconcilable statutes, the statute latest in date of enactment prevails as the last 

expression of legislative intent. TEX. Gov'T CODE § 311.025( a) (Code Construction Act). But a 

different rule applies when one provision is general and the other is specific on the same subject, 

in which case the specific provision "prevails as an exception to the general provision, unless the 

general provision is the later enactment and the manifest intent is that the general provision 

prevail." Id.§ 31 l.026(b); Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 901 (Tex. 

2000) (recognizing the "traditional statutory construction principle that the more specific statute 

controls over the more general"). 5 

We begin by examining the scope of the two statutes to determine the extent to which they 

may conflict. Section 2261.252 of the Government Code is a prohibition on certain contracts of 

state agencies: 

(b) A state agency may not enter into a contract for the purchase of 

goods or services with a private vendor with whom any of the 

(continued from previous page) 

(2) the supreme court, the court of criminal appeals, a court of appeals, or the 

Texas Judicial Council; or 

(3) a university system or an institution of higher education as defined by Section 

61.003, Education Code, except a public junior college. 

TEX. Gov'T CODE § 2151.002. 

4The substance of section 51.923(d) was enacted in 1989, and the section was last amended in 2011. Act of 

May 22, 1989, 71st Leg., R.S., ch. 647, § I, 1989 Tex. Gen. Laws 2140, 2140--41 (formerly codified as section 

51.921, Education Code), renumbered by Act of March 25, 1991, 72d Leg., R.S., ch. 16, § 19.01(23), 1991 Tex. Gen. 

Laws 244, 369, and amended by Act of April 25, 1995, 74th Leg., R.S., ch. 76, § 5.95(91), 1995 Tex. Gen. Laws 

458, 553; Act of May 27, 2011, 82d Leg., R.S., ch. 1049, § 2.01, 2011 Tex. Gen. Laws 2687, 2690. 

5While subsection 31 l.026(b) states that a "special or local provision" prevails over a general provision, 

opinions of Texas courts and attorney general opinions construe "special or local" to mean "specific." Tex. Att'y 

Gen. Op. No. GA-0650 (2008) at4, citing City of Dallas v. Mitchell, 870 S.W.2d 21, 23 (Tex. 1994). 
The Honorable Jane Nelson - Page 3 (KP-0093) 

following agency employees or officials have a financial 

interest: 

(1) a member of the agency's governing body; 

(2) the governing official, executive director, general counsel, 

chief procurement officer, or procurement director of the 

agency; or 

(3) a family member related to an employee or official described 

by Subdivision (1) or (2) within the second degree by affinity 

or consanguinity. 

( c) A state agency employee or official has a financial interest in a 

person if the employee or official: 

(1) owns or controls, directly or indirectly, an ownership interest 

of at least one percent in the person, including the right to 

share in profits, proceeds, or capital gains; or 

(2) could reasonably foresee that a contract with the person 

could result in a financial benefit to the employee or official. 

TEX. Gov'T CODE§ 2261.252(b)-(c). Subsection 51.923(d) of the Education Code is a grant of 

authority, allowing institutions of higher education specifically to contract with an entity in which 

a member of the board of trustees has an interest in certain circumstances: 

( d) An institution of higher education is not prohibited from entering 

into a contract or other transaction with a business entity in 

which a member of the governing board of the institution of 

higher education has an interest if the interest is not a substantial 

interest or, if the interest is a substantial interest, the board 

member discloses that interest in a meeting held in compliance 

with Chapter 551, Government Code, and refrains from voting 

on the contract or transaction requiring board approval. Any 

such contract or transaction requiring board approval must be 

approved by an affirmative majority of the board members 

voting on the contract or transaction. 

TEX. EDUC. CODE§ 51.923(d).6 

6Subsection 51. 923( e) defines what constitutes a substantial interest under the statute: 

[A] member of a governing board has a substantial interest in a business entity 

if: 

( 1) the member owns 10 percent or more of the voting stock or shares of the 

business entity or owns either 10 percent or more or $15,000 or more of the 

fair market value of the business entity; 
The Honorable Jane Nelson - Page 4 (KP-0093) 

Because subsection 51.923(d) of the Education Code would authorize some contracts that 

subsection 226 l .252(b) of the Government Code would prohibit, the statutes irreconcilably 

conflict where they overlap. See NXCESS Motor Cars, Inc. v. JP Morgan Chase Bank, NA., 31 7 

S.W.3d 462, 469 (Tex. App.-Houston [1st Dist.] 2010, pet. denied) (stating that statutes conflict 

"[i]f the same factual situation can harvest different results under different statutes" (internal 

quotation marks omitted)). Thus, we must analyze how to resolve the conflict using the rules in 

the Code Construction Act. 

Briefs submitted to this office contend that section 51. 923 of the Education Code should 

operate as a specific exception to section 2261.252 of the Government Code. 7 Even if we were to 

agree that section 51. 923 of the Education Code is the more specific statute, this would not render 

it effective as an exception to section 2261.252 of the Government Code. This is because a general 

statute will prevail over a specific statute when "the general provision is the later enactment and 

the manifest intent is that the general provision prevail." TEX. Gov'T CODE § 311.026(b ). In 

section 2261.252, the later-enacted statute, the Legislature specifically made the prohibition 

applicable to an "institution of higher education," and expressly included members of a governing 

body within the prohibition. Id. §§ 2261.25l(a), .252(b)(l), (3). Thus, the words of specific 

inclusion manifest intent that the statute prevail with respect to certain contracts for the purchase 

of the specified goods and services by an institution of higher education. Id.§ 2261.251(a). For 

such contracts, the prohibition in section 2261.252(b) prevails over the authorization in section 

51. 923 of the Education Code to the extent the statutes conflict. 8 Accordingly, section 2261.252(b) 

of the Government Code prohibits a contract by an institution of higher education to purchase 

certain goods or services from a private vendor in which a member of the institution's governing 

body or a certain family member has a prohibited financial interest. 

(continued from previous page) 

(2) funds received by the member from the business entity exceed 10 percent of 

the member's gross income for the previous year .... 

(3) the member is an officer of the business entity or a member of the governing 

board of the business entity; or 

(4) an individual related to the member in the first degree by consanguinity or 

affinity, as determined under Chapter 573, Government Code, has an 

interest in the business entity as described by Subdivision (1), (2), or (3). 

TEX. EDUC. CODE§ 51.923(e)(l)-(4). 

7

See generally Brief from John Huffaker, Vice Chancellor & Gen. Counsel, Tex. Tech. Univ. Sys. (Jan. 12, 

2016); Brief from Daniel H. Sharphorn, Vice Chancellor & Gen. Counsel, the Univ. of Tex. Sys. (Dec. 22, 2015) 

(briefs on file with the Op. Comm.). 

8Contracts and transactions not subject to the prohibition in section 2261.252(b) of the Government Code 

may still be authorized under section 51.923 of the Education Code. 
The Honorable Jane Nelson - Page 5 (KP-0093) 

SUMMARY 

Section 2261.252 of the Government Code prohibits a 

contract by an institution of higher education to purchase certain 

goods or services from a private vendor in which a member of the 

institution's governing body or a certain family member has a 

prohibited financial interest. 

JEFFREY C. MATEER 

First Assistant Attorney General 

BRANTLEY STARR 

Deputy First Assistant Attorney General 

VIRGINIA K. HOELSCHER 

Chair, Opinion Committee 

WILLIAM A. HILL 

Very truly yours, 

KEN PAXTON 

Attorney General of Texas 

Assistant Attorney General, Opinion Committee