### ATTORNEY GENERAL OF 

### TEXAS GREG ABBOTT

December lo,2004

The Honorable Jo& R. Rodriguez El Paso County Attorney County Courthouse 500 East San Antonio, Room 503 El Paso, Texas 79901 Opinion No. GA-0280 Re: Whether the Border Health Institute is astate agency for various purposes (RQ-0229-GA)

Dear Mr. Rodriguez: You ask whether the Border Health Institute created under Texas Education Code chapter 151“generally qualities as astate agency, and whether it: (1) is entitled to sovereign immunity; (2) must comply with the Texas Open Meetings Act; (3)must complywith the Texas Public Information Act; (4)must follow state procurement and contracting rules; (5)must follow civil service rules; and (6) must obtain non-profit corporation status to be able to solicit funding.“’
I. Background The Seventy-sixth Legislature established the Border Health Institute (the “BHI”) in 1999 as a “collaboration or consortium of independent public and private entities.” TEX. EDUC. CODE /INN. @ 151.001-.002(a) (Vemon2002). Section 151.002 provides forthe establishment ofthe BHI and describes its purpose: (a)The Border Health Institute isestablished in the city ofEl Paso. (b) The institute shall operate in amanner that facilitates and assists the activities ofinternational, national, regional, orlocal healthrelated institutions working in the Texas-Mexico border region to:

(1) create and fund centers or component units within the institute to facilitate research in fields of study affecting public health in the border region, including researchrelated todiabetes, Hispanic health

‘Letter fromHonorable Jest R.Rodriguez, ElPaso County Attorney, toHonorable Greg Abbott, Texas Attorney General (May 17,2004) (on tile with the Opinion Committee, alsoavdable afhttp://www.oag.state.tx.us) [hereinafter pequest Letter].The Honorable Jose R. Rodriguez - Page 2 (GA-0280)

issues, infectious diseases, emerging infections, environmental health issues, and children’s health issues; (2) deliver health care or provide health education to persons living in the border region; and (3) conduct and facilitate research infields of study affecting public health in the border region, includingresearchrelated to diabetes, Hispanic health issues, infectious diseases, emerging infections, environmental health issues, and children’s health issues. Id. 5 151.002(a)-(b). The bill analysis corroborates that the purpose ofthe BHI “is to deliver health care orprovide health education topersons living inthe border region and conduct research in fields of study affecting public health, including research related to infectious diseases, diabetes, environmental health issues, and children’s health issues.” HOUSECOMM.ONHIGHEREDUC.,BILL AI\IALYSlS,Tex. H.B. 2025,76th Leg., R.S. (1999). The initial governing board of the BHI was composed of the chief executive officer or president, or their designees, of the following nine institutions:

(1) The University of Texas atEl Paso; (2) Texas Tech University Health Sciences Center atEl Paso; (3) El Paso Community College District; (4) R. E. Thomason General Hospital; (5) El Paso City/County Health District; (6) The University of Texas Health Science Center at Houston, School of Public Health: (7) El Paso County Medical Society; (8) Paso de1Norte Health Foundation; and (9) The Texas Department ofHealth. TEX.EDUC.CODEANN. $9 151.003(a), .004(a) (Vernon 2002). The governing board is authorized to adopt procedures for “changing, adding, or removing entities asmembers ofthe institute and creating development or advisory boards for the institute.” Id. 5 151.003(b). At present, the following institutions hold voting positions on the BHI boardThe Honorable Jose R. Rodriguez - Page 3 (GA-0280)

. El Paso City-County Health and Environmental District

. El Paso Community College

. El Paso County Medical Society

. Texas Department ofHealth

. Texas Tech University Health Sciences Center at El Paso

. Thomason Hospital

. University of Texas at El Paso

. University of Texas, Houston, School ofPublic Health, El Paso Campus
See TEX. DEP’T OFHEALTH, BORDERHEALTH INSTITUTE,available af http://www.rlO.tdh.state .tx.uslobhbhi/bhi.htm (last visited Oct. 6,2004). TheBHI governing board isrequired to adopt rules governing operations and deliberations ofthe board and the institute, and the governing board may hire an executive director and staff necessary to operate the institute. See TEX. EDUC. CODEANN. 3 151.004(b)-(c) (Vernon 2002). The governing board is required to meet at least once ayear “to review the progress of the institute and to determine the institute’s future actions and operational plans.” Id. 5 151.004(d). Section 151.005 of the Education Code describes the funding for the BHI and provides:

(a) Inaddition to any amount appropriated bythe legislature, the institute may apply for and accept funds from the federal government or any other public orprivate entity. The institute or any member ofthe institute may also solicit and accept pledges, gifts, and endowments from private sources on the institute’s behalf. Apledge, gift, or endowment solicited under this section must be consistent with the purposes of the institute. (b) The governing board of the institute shall manage and approve disbursements of appropriations, funds, pledges, gifts, and endowments that are the property ofthe institute. (c) The governing board of the institute shall manage any capital improvements constructed, owned, or leased by the institute and any real property acquired by the institute. Id. 5 151.005(a)-(c). Under section 151.006, physical facilities to be used in research projects, provision of health care, and education programs may be “provided [to the BHI] by a public or private entity or by a cooperative, consortium, or joint venture consisting of public or privateThe Honorable Jose R. Rodriguez - Page 4 (GA-0280)

entities.” Id. 5 151.006. Additionally, a physical facility “may be constructed, maintained, or operated with funds the institute receives under Section 151.005 and any funds appropriated forthat purpose.” Id. A bill analysis prepared by the House Research Organization in 1999 notes that “[i]n December 1998, the University ofTexas System and Texas Tech University signed acollaborative agreement dedicated to creating afuture health campus in El Paso. Establishing the Border Health Institute would be the next logical step.” HOUSERESEARCHORGANIZATION,BILLANALYSIS, Tex. H.B. 2025,76th Leg., R.S. (1999). The Texas Department ofHealth’s website described the status of the BHI in early 2003. See TEX. DEP’T OFHEALTH,BORDERHEALTHINSTITUTE,available at http://www.rl O.tdh.state.tx.us/obhibhiibhi.htm (lastvisited Sept. 4,2004). Although the legislature in 2003 did not fund the remaining two-year program of the Texas Tech Health Sciences Center, it did nevertheless provide funding for the BHI aspart ofits appropriation to the University ofTexas at ElPaso. A line item appropriation in the 2003 General Appropriations Act for the University of Texas at El Paso listed $284,375 for the “Border Community Health Education Institute” for both fiscal year 2004 and fiscal year 2005. See General Appropriations Act, Act of June 1,2003,78th Leg., R.S., ch. 1330, art. 111.78,2003 Tex. Gen. Laws 5023, 5339. The BHI isrequired to provide an “annual audited financial statement and a status report of each project undertaken” to each member of the governing board and to each member of the legislature “whose district includes any portion of a county where the [BHI] is established or operating.” TEX.EDUC.CODEANN.§ 151.008 (Vernon 2002). Moreover, the BHI governing board, “in consultation with the institute’s members,” is required to develop aten-year strategic plan “to guide and evaluate the institute’s progress toward achieving the purposes of the institute under Section 151.002.” Id. § 151.OlO(a). Each even-numbered year, not later than December 15,the BHI governing board must submit to the legislature and to the Texas Higher Education Coordinating Board “a report concerning the strategic plan including any recommendation for legislative action.” Id. 5 151.OlO(d). Those institutions that are subject to the oversight and rules ofthe Texas Higher Education Coordinating Board under chapter 61 of the Education Code “remain subject to that supervision and those rules as those institutions participate in the institute and its activities.” Id. 8 151.009. The member institutions subject to Coordinating Board oversight are the University of Texas at El Paso, Texas Tech University Health Sciences Center at El Paso, the University of Texas Health Science Center at Houston, School of Public Health, and the El Paso Community College District. See id. 55 61.003, .051. II. Status ofthe BHI: State Agencv or Political Subdivision? The BHI isone ofanumber ofentities that combine both state and local characteristics. See, e.g., Tex. Att’y Gen. Op. No. JM-424 (1986) at2(community centers); Tex. Att’y Gen. LO-95-024, at 4 (Coastal Coordination Council). Its nine original statutorily-proscribed member institutions included seven public agencies and two private entities. Its present composition includes sixpublic and two private members. The BHI is created by statute and its duties prescribed thereby. Itmay receive appropriated as well as federal funds. It is required to submit reports to the legislature and to the Higher Education Coordinating Board in even-numbered years. It appears to be a governmental body for all purposes.The Honorable Jo& R. Rodriguez - Page 5 (GA-0280)

The more difficult question is whether the BHI is a state or local governmental entity. In Guaranty Petroleum Corporation v.Armstrong, 609 S.W.2d 529 (Tex. 1980), the Supreme Court of Texas considered whether anavigation district constituted a “political subdivision” or a“board or agency of the state.” The court declared: A political subdivision differs from adepartment[,] board or agency of the State. A political subdivision hasjurisdiction over a portion of the State; a department, board or agency of the State exercises its jurisdiction throughout the State. Members of the governing body ofapolitical subdivision are elected inlocal elections or are appointed by locally elected officials; those who govern departments, boards or agencies ofthe State are elected in statewide elections or are appointed by State officials. Political subdivisions have the power to assess and collect taxes; departments, boards and agencies do not have that power. Our examination of a number of statutes shows that the legislature has consistently recognized these distinctions between departments, boards oragencies onthe one hand and political subdivisions on the other. Id. at 531. The court ultimately concluded that the Brownsville Navigation District was a“political subdivision” rather than a“department, board or agency ofthe State.” Id. at 530. In Lohec v. Galveston County Commissioner’s Court, 841 S.W.2d 361 (Tex. 1992), the Supreme Court ofTexas, in considering the status ofthe Galveston County Beach Park Board, cited the Guaranty Petroleum case and emphasized that “[clounty beach park boards lack state-wide jurisdiction, atrait required ofentities recognized asdepartments, boards, or agencies ofthe state.” Id. at 364. Moreover, “[tlhere is no indication that county beach park boards are encompassed by [the state purchasing statute’s] definition of a ‘state agency’ asone ‘inthe executive branch of state government.“’ Id. Thus, the court concluded that the beach park board was an entity of county government. See id. at 365-66. As the dissenting opinion points out, however, the majority seems to have relied most heavily for its conclusion on the observation that, ifcounty beach park boards arenot deemed to be an organ ofcounty government, they would be “independent and autonomous entities which are exempt from any meaninghI oversight.” Id. at 366. Finally, in avery recent case, the Supreme Court reiterated the test for determining whether an entity is a “state agency.” In Texas Department 

### ofTransportation Y. City 

### ofSunset Valley, No. 03-0041,200$ WL 2125670, at*4 (Tex. Sept. 24,2004) (not yetreported), the Court, in considering an argument that amunicipality was a“state agency,” stated as follows:

[W]e have long recognized a distinction between agencies of the State, which generally exercise statewide jurisdiction, and political subdivisions like municipalities, which have limited geographic jurisdiction. SeeMonsanto Co. Y.Cornerstonesbfun. Util.Dist., 865 S.W.2d 937, 939-40 (Tex. 1993) (“[A] political subdivision differs from a[n]

. . agency of the State. A political subdivision has jurisdiction over aportion of the State; a[n] agency of the StateThe Honorable Jose R. Rodriguez - Page 6 (GA-0280)

exercises itsjurisdiction throughout the State. [T]he legislature has consistently recognized these distinctions between agencies on the one hand and political subdivisions on the other.“). The difficulty in applying the Guaranty Petroleum, Lohec, and Sunset Valley standards becomes apparent when considering the status of the BHI. The BHI has much more tenuous ties with local government than does anavigation district or acounty beach park board. A majority of itsmembers represent institutions ofhigher education located inplaces asgeographically diverse as ElPaso, Lubbock, and Houston. The purpose ofthe BHI is, inter alia, to deliver health care, provide health education, and to assist the activities of various health-related institutions “working in the Texas-Mexico border region,” aregion that stretches from ElPaso to Brownsville. Finally, the BHI is required to submit biemial reports to the legislature and to the Higher Education Coordinating Board. On the other hand, under thejurisdictional test of Guaranty Petroleum and Lohec, the BHI clearly fails to qualify as a state agency within the executive branch of state government. Its jurisdiction is limited to “aportion ofthe state” rather than to the state as awhole. Furthermore, its membership bears the indicia of neither state agency nor political subdivision: members are not elected or appointed either by local officials or state officials. BHI membership was initially fixed by its enabling legislation. Itis atpresent determined by the board members themselves. We must conclude that, in its present composition, the BHI is neither political subdivision nor state agency. Rather, itoccupies that nebulous territory between those two extremes, partaking ofthe qualities of both, but never fully either. III. Ouestions and Analvsis Although we cannot determine the precise status ofthe BHI for allpurposes, we can discern the applicability ofparticular statutes to that entity. A. Sovereign Immunity You first ask whether the BHI is entitled to sovereign immunity. As we have indicated, the BHI isneither political subdivision or state agency. While the entitlement to sovereign immunity ofboth state and local governmental entities iswell established in Texas law, nojudicial decision has considered its applicability to hybrid entities such asthe BHI. We will, consequently, briefly review the law regarding sovereign immunity as applied to both state and local entities. We caution, however, that we cannot determine as amatter of law whether the BHI is entitled to any kind ofsovereign immunity. The legislature has simply failed toprovide any guidance inthis matter. The following discussion is therefore predicated on the assumption that the general principle of sovereign immunity is applicable to the BHI. Initially, we note that the Supreme Court ofTexas has distinguished between immunity from suit and immunity from liability. See Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401,405 (Tex. 1997).

“Zmmunityfrom suit bars a suit against the State unless the State expressly gives its consent to the suit,” while “[i]mmunityfrom liability protects the State fromjudgments even ifthe Legislature has expressly given consent to the suit.” Id.The Honorable Jose R. Rodriguez - Page 7 (GA-0280)

With regard totort liability, the legislature haspartially waived sovereign immunity forboth the state and itspolitical subdivisions. The Texas Tort Claims Act, chapter 101 ofthe Civil Practice and Remedies Code, broadly defines “governmental unit” to include “any other institution, agency, ororgan ofgovernment the status and authorityofwhich are derived from the Constitution ofTexas or fkom laws passed by the legislature under the constitution.” TEX. CIV. PRAC. &REM. CODEANN. 5 101,001(3)(D) (Vernon Supp. 2004-05). TheBHI, asacreature ofstatute, isthus a“govemmenta1 unit” for purposes of the Tort Claims Act. Section 101.025 of the Civil Practice and Remedies Code provides: (a) Sovereign immunity to suit iswaived and abolished to the extent of liability created by this chapter. (b) A person having a claim under this chapter may sue a governmental unit for damages allowed by this chapter. Id. 9 101.025 (Vernon 1997). Liability ofthe state government under the Tort Claims Act “islimited to money damages in amaximum amount of$250,000 for each person and $500,000 for each single occurrence for bodily injury or death and $100,000 for each single occurrence for injury to or destruction ofproperty.” Id. 5 101.023(a) (Vernon Supp. 2004-05). A unit of local government’s liability “is limited to money damages in a maximum amount of $100,000 for each person and $300,000 for each single occurrence for bodily injury or death and $100,000 for each single occurrence for injury to or destruction ofproperty.” Id. 5 101.023(b). Because we have determined that the BHI is neither a state governmental agency nor a local governmental entity, but rather a hybrid ofthe two, we cannot say with assurance which tort liability limitation would apply. Wemay conclude, however, that the BHI is entitled to sovereign immunity intort cases, except to the extent such immunity is waived by statute. With regard to contractual liability, the Texas Supreme Court said inFederal Sign that when it contracts with private citizens, the State “waives only immunity from liability.” Fed. Sign, 951 S.W.2d at408. On the other hand, “aprivate citizen must have legislative consent to sue the State on abreach ofcontract claim. The actofcontracting does not waive the State’s immunityfrom suit.” Id. As to local governmental entities, “[t]he general authority of counties and other local governments to sue and be sued generally acts as a statutory consent to suit although not awaiver of sovereign immunity.” 35 DAVID BROOKS, COUNTY AND SPECIALDISTRICTLAW 5 2.2 n.5 (2d ed. 2002) (statutes and cases cited therein). The BHI is not, as we have indicated, either a state or local governmental entity. Federal Sign could be read, however, to imply that no governmental entity is immune from liability on a valid contract. We may also infer from that case that the BHI retains immunity from suit unless and until permission to sue is granted by the legislature. As previously noted, most local governmental entities have the statutory authority to sue and be sued. No such authority is granted to the BHI in its enabling legislation. In our view, therefore, the legislature has not waived the BHI’s immunity from suit for breach of contract. Accordingly, aparty aggrieved by its contract with the BHI must seek legislative permission to sue that entity.The Honorable Jose R. Rodriguez - Page 8 (GA-0280)

B. The Open Meetings Act You next ask whether the BHI is subject to the Texas Open Meetings Act (the “OMA”). See Request Letter, supru note 1, at 1, 5-7; TEX. GOV’T CODEANN. $5 551.001-,146 (Vernon 1994 & Supp. 2004-05) (Open Meetings Act). The OMA provides that “[elvery regular, special, orcalled meeting of agovernmental body shall be open to the public, except asprovided by this chapter.” TEX. GOV’T CODEANN.5551.002 (Vernon 1994). “Governmental body” is defined for purposes of the OMA as follows: (A) aboard, commission, department, committee, oragency within the executive or legislative branch ofstate government that is directed by one or more elected orappointed officials; (B) a county commissioners court in the state; (C) amunicipal governing body in the state; (D) adeliberative body thathasrulemaking orquasi-judicial power and that is classified as a department, agency, or political subdivision of a county or municipality; (E) a school district board of trustees; 03 acounty board of school trustees; (G) acounty board of education; (H) the governing board of a special district created by law; (I) alocal workforce development board created under Section 2308.253; 

### (J) anonprotitcorporationthatiseligible toreceivefundsunderthefederal community services block grant program and that is authorized by this state to serve a geographic area ofthe state; and (K) a nonprofit corporation organized under Chapter 67, Water Code, that provides water supply or wastewater service, or both, and is exempt from ad valorem taxation under Section 11.30, Tax Code. Id. 5 551.001(3) (Vernon Supp. 2004-05). We have already determined that the BHI is not an
“agency within the executive or legislative branch ofstate government,” and that itdoes not qualify as any kind of local governmental body. In addition, it is not a nonprofit corporation under subdivisions (J) and (K) of section 551.001(3). These conclusions do not mean, however, that the BHI is exempt from the Open Meetings Act.
IIISierra Club v.Austin Transportation Study Policy Advisory Committee, 746 S.W.2d 298 (Tex. App.-Austin 1988, writ denied), the court ofappeals considered the applicability ofthe OMAThe Honorable Jose R. Rodriguez - Page 9 (GA-0280)

tothe AustinTransportation StudyPolicy Advisory Committee (“ATSPAC”), “aseventeen-member body composed of state, county, regional, and municipal public officials.” Id. at300. Although not legislatively created, ATSPAC had been designated a“Metropolitan Planning Organization” under federal law, and was an “official body designated by the governor.” Id. at 300-01. The ATSPAC played “avital role in deciding which highway projects areplanned, built and funded inthe Austin urban area.” Id. The court concluded that although the ATSPAC was not a“special district” inthe usual sense, it functioned as such for purposes of the OMA. Id. at 301. Like the ATSPAC, the BHI is primarily composed ofrepresentatives ofpublic entities. In addition, its enabling statute indicates that itperforms governmental functions, particularly those of providing health care and health education topersons living in the border region. The BHI, unlike ATSPAC, was created by statute. Both receive appropriated and federal funds, even ifindirectly. As the court noted in Sierra Club, the language of the OMA “clearly reveals the Legislature’s intention to give itbroad coverage.” Id. at 300. It“broadly applies to any meeting by aquorum of the members of a governmental body which meets to discuss any public business or policy, with certain exceptions.” Id. (emphasis added). As aresult, we believe that the BHI exhibits the kind of qualities sufficient to bring it within the category of a“special district” for purposes ofthe OMA. See TEX. GOV’T CODEANN. $551,001(3)(H) (Vernon Supp. 2004-05); see also Sierra Club, 746 S.W.2d at 301. We conclude that chapter 551 ofthe Government Code, the Open Meetings Act, is applicable to meetings ofthe governing board ofthe BHI. C. The Public Information Act Your next question is whether the BHI must comply with the Texas Public Information Act. See Request Letter, supra note 1,at7-8; TEX. GOV’TCODEANN. $4 551.001-,353 (Vernon 1994 & Supp. 2004-05) (Public Information Act). Section 552.002 of the Government Code defines public information as “information that is collected, assembled, or maintained under alaw or ordinance or in connection with the transaction ofofficial business by agovernmental body.

. or. .for agovernmental body and the governmental body owns the information orhas a right of access to it.” TEX. GOV’T CODEANN. 5552.002 (Vernon Supp. 2004-05). Section 552.003 defines governmental body, in part, as follows: (viii) the governing board of a special district;

. (xii) the part, section, or portion of an organization, corporation, commission, committee, institution, or agency that spends or that is supported by public funds; Id. 8552.003(1)(A)(viii), (xii). Wehave already concluded that the BHI is a“special district” for OMA purposes under the test ofSierra Club. We need not, however, extend the Sierra Club case beyond its scope, because the BHI is“an organization. that spends or that is supported bypublic funds.” We conclude that the BHI is a“governmental body” under the terms of chapter 552 of the Government Code, and thus subject to the Public Information Act.The Honorable Jo& R. Rodriguez - Page 10 (GA-0280)

D. State Procurement and Contracting Rules You also askwhether theBHI “must follow state procurement and contracting rules.” Request Letter, supra note 1,at 1, 8. Under the State Purchasing and General Services Act, astate agency is defined as: (A) adepartment, commission, board, office, orother agency

in the executive branch of state government created by the state constitution or a state statute:

(C) auniversity system or an institution ofhigher education asdefined by Section 61.003, Education Code, except apublic junior college. TEX.GOV’T CODEANN. § 2151.002 (Vernon Supp. 2004-05). Chapter 2155 of the Government Codes sets forth the state purchasing rules and procedures that a state agency must follow. See id. $5 2155.001.,448 (Vernon 2000 & Supp. 2004-05). Because we have determined that the BHI is not astate agency within the executive branch ofgovernment nor auniversity system or institution of higher education, we conclude that the BHI is not required to follow state procurement and contracting rules. E. Civil Service You further question whether the BHI must follow civil service rules. See Request Letter, sup-a note 1,at 1,s. Civil service systems may be created under chapters 143 and 158 ofthe Local Government Code formunicipalities and counties. SeeTEX.LOC.GOV’TCODEANN.chs. 143, 158 (Vernon 1999 & Supp. 2004-05). There is no such system for employees of state agencies or educational entities. Because we have concluded that the BHI is neither a state agency nor alocal governmental entity, we are aware of no statute that would require the BHI to follow civil service rules. F. Nonprofit Corporation Status

You finally ask whether the BHI must obtain nonprofit corporation status in order to solicit funding. See Request Letter, sup-a note 1, at 1, 8. The BHI is, as we have indicated, a creature of statute. Unlike, for example, the Texas Guaranteed Student Loan Corporation, itis not deemed anonprofit corporation by its enabling legislation. See Tex. Att’y Gen. Op. No. MW-295 (1981). The BHI may, by statute, receive appropriated funds and federal funds, aswell asfunds from any public or private entity. See TEX. EDUC.CODEANN. 3 151.005(a)-(c) (Vernon 2002). Its governing board or any member “may. solicit and accept pledges, gifts, and endowments from private sources on the institute’s behalf.” Id. § 151.005(a). Because its funding is specifically described by its enabling legislation, and its solicitation of f?mds is specifically permitted, the BHI need not obtain nonprofit corporation status in order to solicit funding.The Honorable Jose R. Rodriguez - Page 11 (GA-0280)

SUMMARY The Border Health Institute is neither a state agency within the executive branch of state government nor a local political subdivision. The BHI may or may not be entitled to sovereign immunity. It must comply with the Open Meetings Act and the Public Information Act. It is not required to follow state procurement and contracting rules, nor is it subject to civil service rules. The BHI need not obtain nonprofit corporation status because it has statutory authority to solicit funding from public and private sources. Yours verytruly,

&- G OTT Attorney General of Texas

BARRY R. MCBEE First Assistant Attorney General DON R. WILLETT Deputy Attorney General for Legal Counsel NANCY S. FULLER Chair, Opinion Committee Rick Gilpin Assistant Attorney General, Opinion Committee