THE AITCBRNEB GENE&& 

OF-XAS 

AURTIN. T*rxlas 78711 

August 3, 1973 

The Honorable Dr. J. W. Edgar 

Commissioner of Education 

Texas Education Agency 

201 E. Eleventh Street 

Austin, Texas 78701 

Dear Dr. Edgar: 

Opinion No. H- 79 

Re: May the State Textbook 

Committee recommend and 

the State Board of Education 

adopt textbooks containing 

materials cooperatively 

developed by an independent 

laboratory but financed in 

part by the State, on which I 

the State will realize royalties7 

Information submitted in connection with your opinion request reflects 

that a contract was executed between the Texas Education Agency and Southwest Education Development Laboratory, a non-profit organization, for 

the development~of certain educational programs. Funds were made available under 20 U. S. C. A. 241e, which authorizes grants to State educational 

agencies for educational programs and projects reaching migratory children. 

All funds utilized were originally Federal grant funds, though a portion was 

channeled through the State Treasury. 

The research was satisfactorily conducted and the materials were developed to the satisfaction of the Texas Education Agency, the State thereby 

receiving the principal things it had bargained for. The contract also.contemplated, but did not require, that the materials developed would be subsequently published and marketed commercially. Under Federal Copyright 

Guidelines, U. S. 0. E. , 35 F. R. 7317, royalties on materials published in *’ 

connection with a project financed by such Federal grants are to be distributed 

to the co-sponsors in proportion to the co-sponsors’ financial contribution 

to the: project. A co-sponsor can reject the royalty payments. The publisher under the Guidelines may obtain a copyright on the published material 

for a five year period. During that time, the publisher’ alone can utilize 

the materials. 

p. 357 
. . 

The Honorable Dr. J. W. Edgar, page 2 (H-79) 

The laboratory which developed the materials under the TEA contract 

solicited bids from over 100 publishers for the publication of these textbook materials; however, only one bid was received, and it came from a 

wholly-owned, non-profit subsidiary of the laboratory, The bid contained 

a proposal that any royalties paid be divided on a pro-rata basis among the 

entities involved in the transaction, including the.‘Texas Education Agency, 

The laboratory contracted with the bidder to publish the mater ial. 

The Texas Education Agency did not join in the contract with the pub- 

: lisher, nor has it yet either agreed or refused to participate in royalties 

which might be,realieed from the sale of the published materials in this 

: 1 or other state:s. Since the publisher is the only one under the copyright 

” that may utiliie the materials developed, unless the publisher is allowed 

to compete for a textbook contract, the State of Texas will have no opportunity.to utilize the materials it was instrumental in developing. 

Your questions are: 

‘“(1) Legally,., may the State Textbook ,Committee 

,. recommend for adoption and the State Board of Education, of this state adopt ,(for multiple textbook list 

purposes) textbooks submitted on bid by a publisher, 

which contain materials cooperstively.developed with 

an indepe~ndent laboratory, financed in part,from 

Central Education Agency funds and the State (agency) 

to realize pro-rata royalties on,all sales thereof. 

‘I 

“(2) Would foregoing royalties, provided permissible, alter the answer ,to question (l)? ‘I’ 

-. 

Your questions can beg answered only in the context of “public policy. ‘I 

There is no statute which speaks specifically to ,the problem, but several 

sections of the Texas,Education Code bear on it., 

Subchapter B, Chapter 12, Title 2, Texas Education Code, V. T. C. S., 

$12.11(e) places a duty on the State Textbook Committee to recommend to 

the Commissioner of Education a: complete.list of: textbooks which it approves 

for .adoption. Textbook contracts are to be competitively’bid,except those 

concerning textbooks for the blind and visually handicapped and for kindergarten purposes, which may be let without bidding (5 $12.03 and 12.04). 

Section 12.20 requires contractor affidavits negating improper interests on 

the part of Textbook Committee members or Board members. 

p. 358 
The Honorable J. WI Edgar, Page 3 (H-79) 

The actions and contracts of the State Board of Education, a State agency, 

should not only be in harmony with the laws and Constitution of the State of 

Texas, but should also-be consistent with the “public policy” of the State; 

Contracts that interfere with or deetroy the freedom of discretion that 

is required of public officers in the discharge of their,official,duties are 

impediments to the proper adminietration of government. Contracts in 

their nature calculated to influenc,e the, action of.,public officers and the effect 

of which is to influence them one way or another, are against public policy. 

Meyers v. Walker,’ 276 S. W.. 305 (Tex. Civ. App., East., 1925, no writ); 

13 Tex. Jur. 2d, Contra&s, § 183. 

Meyers v, Walkeri supra, involved anticipated bids for city paving 

contracts. Severai of the bidders, prior to the contract award, agreed 

among themselves and with the Mayor and City Commissioners that the 

successful bidder would bear the cost of several trips todistant cities made 

by the officials to inspect different types of paving. Such ,trips were made 

and then successful bidder paid the expense. A taxpayer brought suit to 

enjoin the sale of the paving bonds on grounds that the re.sulting contract 

was illegal, The Court held the contract void, saying (at p. 307): 

“This trip of inspection was made, no doubt, with 

sincerest purpose and no intention of wrong, but the 

precedent is dangerous . . . . The greatest danger in 

approving such practice is that one favor would lead 

to another, and loans, presents and like innocent gifts 

might lead to a rivalry in offers which would destroy. 

competition in such matters and finally bring a season 

of corruption.. ” 

We are of the’opinion that this case, too, could establish a dangerous 

precedent Ihe object of our textbook laws is to secure for the children of 

Texas the finest materials that can be obtained at reasonable cost to the appropriate school fund.. Decisions in that area ought not to be influenced by 

considerations of possible loss of profit to the State generally, or to some 

other fund because of the selection made. Were it otherwise, prospectiv.e 

‘bidders might concentrate upon supplying such “fringe benefits” rather than 

.upon producing the best and most economical textbooks possible. 

p. 359 
The Honorable Dr. J. W. Edgar, page 4 (H-79) 

In our opinion, in order that it might retain freedom to select the best 

materials for the use of Texas school children, the Texas Board of Education 

must decline to participate with private interests in the continuing royalties 

possibly to be realized from the sale of the materials developed. There is 

really no other choice, because if it retained an interest in such royalties, 

then it could not legitimately permit the publisher to bid for a: c~ontract. If 

it did not permit the publisher to bid, it would (possibly) prevent the selection 

of the best materials available. Thus, any contractual provision purportedly 

to allow the Texas Education Agency to participate with private interests 

in the royalties realized from publication of the materials would be void. 

See Waterbury v. City of Laredo, 5 S. W; 81 (Tex. 1887). 

What we have said ~&es not restrict the ability of the.State Board of 

Education to utilize text materials prepared, developed and published by 

State agencies which do not occupy the pdsition of ~private contractors. 

Nor would lump-sum settlement of accounts with private contractor8 

prior to soliciting bids necessarily be prohibited. Public policy does not 

discourage economy or thrift, or the prudent use of available resources, 

but it does condemn arrangements which tend to subvert the meritorious 

selection of textbooks. 

To your questions, then, we reply that in our opinion the State Textbook 

Committee may not recommend for adoption, nor may the State Board of, ‘I,~~ 

Education adopt, textbooks upon which the State is to realize pro-rata 

royalties from the private publishers thereof, but when the State is not 

participating with private interests in the royalties from a textbook, the 

textbook may be properly recommended and adopted though it contains 

materials cooperatively developed with an independent laboratory, financed 

in part from Central Educational Agency funds. 

In addition to the authorities cited above, see Grayson County v. Harrell, 

202 S. W. 160 (Tex. Civ.App., Ama., 1918, writ ref’d. ); Uvalde Construction 

Co. v. Shannon, 165 S. W. 2d 512 (Tex. Civ.App., East., 1942, no writ); 

Bryan v. Texas State Board of Education, 163 S. W. 2d 837 (Tex. Civ. App., 

El Paso, 1942, no writ); 13 Texi Jur. 2d, Contracts, $190; 17 Am. Jur. 2d, 

Contracts, 174 et seq. ; Goodier v. Hamilton, 19 P. 2d~ 392 (Wash. 1933); 

Dodson v. McCurnin. 160 N.~W. 927 (Iowa 1917). 

p. 360 
The Honorable Dr. J. W. Edgar, page 5 (H-79) 

SUMMARY 

The State Textbook Committee may not recommend 

for adoption, nor may the State Board of Education adopt, 

textbooks upon which the State is to realize pro-rata 

royalties from the private publishers thereof, but when 

the State is not participating with private interests in the 

royalties from a textbook, the textbook may be properly 

recommended and adopted though it contains materials 

cooperatively developed with an independent laboratory, 

financed in part from Central Educational Agency funds. 

Very truly yours, 

DAVID M. KENDALL, Chairman 

Opinion Committee 

p. 361