The Attorney General of Texas 

October 9, 1980 

MARK WHITE 

Attorney General 

Honorable Wilhelmina Delco 

Chairman 

Committee on Higher Education 

P. 0. Box 2910 

Austin, Texas 78769 

Opinion No. I+~253 

Re: Whether a nonprofit corporation acting as ‘a higher education 

authority under section 53.47(e) of 

the Education Code Is governed by 

other parts of chapter 53 

Dear Representative Delco: 

You request our interpretation of one provision of chapter 53 of the 

Education Code, relating to the establishment and operation of Higher 

Education Authorities. A Higher Education Authority may be created by a 

city. It has the power to issue revenue bonds to obtain funds to purchase 

student lcen notes guaranteed under the provisions of the Higher Education 

Act of 1965. Educ. Code § 53.47. You inquire about the following provision: 

(e) In lieu of establishing an authority under the 

provisions of this chapter, the governing body of a 

home-rule city or cities may request a nonprofit 

corporation heretofore organized to exercise the 

powers enumerated and provided in this section for 

and on its behalf. If the corporation agrees to 

exercise such powers, the directors of such corporation shall thereafter be appointed by and be subject 

to removal by the governing body of the home-rule 

city or cities, and except as herein provided, Sections 

53.14, 53.15, 53.31, 53.32, 53.38, and 53.41 through 

53.43 of the Texas Education Code shall apply to and 

govern such corporation, its procedures, and bonds. 

Educ. Code § 53.47(e). You wish to know whether an authority operating 

under this provision ls exempt from the sections of chapter 53 not cited in 

section 53.47(e). 

Subsection (e) of section 53.47 provides that a nonprofit corporation 

heretofore organized may exercise the powers enumerated in this section. 

Subsection (a) of this section provides that an authority heretofore created 

may issue revenue bonds to obtain funds to purchase student loan notes. It 

states as follows: 

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Honorable Wilhelmina Delco - Page Two (I@?-253) 

Revenue bonds issued for such purpose shall be issued in accordance 

with and with the effect provided in this chapter, except Section 

53.36 shall not apply, as said chapter has been modified by Chapter 

3, Acts of the 61st Legislature, Regular Session, 1969, as amended 

(Article 717k-2, Vernon’s Texas Civil Statutes), and by Chapter 784, 

Acts of the 61st Legislature, Regular Session, 1969 (Article 717k-3, 

Vernon’s Texas Civil Statutes). Such bonds shall be payable from 

and secured by a pledge of revenues derived from or by reason of 

the ownership of student loan notes and investment income after 

deduction of such expenses or operating the loan program as may 

be specified by the bond resolution or trust indenture. 

Educ. Code §53.47(a). In our opinion, section 53.47(a) subjects the nonprofit corporation 

to all provisions in chapter 53 relating to the issuance of revenue bonds except for section 

53.36. Thus, sections 53.34, 53.35, 53.37, 53.39, and 53.40, would apply to the nonprofit 

corporation operating pursuant to section 53.47(e) of the Education Code. 

In our opinion, the remaining substantive provisions of chapter 53 are not applicable 

to a nonprofit corporation operating under section 53.47(e) of the Education Code. Some 

of the remaining provisions give a coherent body of powers and attributes to Higher 

Education Authorities, which are not applicable to the nonprofit corporation operating 

under section 53.47(e) of the Education Code. For example, the Higher Education 

Authority organized under chapter 53 may acquire educational facilities. Certain other 

provisions of the chapter are related to this power. Public hearings in the House 

Committee on Higher Education on the bill which became section 53.47(e) indicate that 

the legislature was solely concerned with permitting certain existing nonprofit corporations to issue bonds in order to purchase student loan notes. Public hearings on Senate Bill 

No. 454, House Committee on Higher Education, May 6, 1975, tape filed with Hearing 

Reporter, John H. Reagan Building. There was no reference to the power to acquire 

educational facilities. 

Various provisions appear to s&serve the power to acquire educational facilities. 

These are not, in our opinion, made applicable to nonprofit corporations by section 53.47. 

For example, Higher Education Authorities lack the power to tax and the power of 

eminent &main. Educ. Code §§ 53.31, .32. Of course, these powers do not exist without a 

legislative grant, s Lasater v. Lopez, 217 S.W. 373 (Tex. 1919); Hall v. Wilbarger County, 

37 S.W.2d 1041 (Tex. Civ. App. - Amarillo 1931), aff’d, 55 S.W.2d 797 (Tex. Comm’n App. 

1932), but in the case of a nonprofit corporation, there is less need to rule out the grant of 

power by implication. See Attorney General Opinion H-1067 (1977). A Higher Education 

Authority may issue revenue bonds secured by the revenue from its facilities, and may 

operate its facilities on certain terms. Educ. Code §§ 53.33, .44. Finally, the property 

owned by the authority is exempt from taxation because it is held for educational purposes 

only. Educ. Code 5 53.46. Again, these provisions are not relevant to a nonprofit 

corporation which does not hold educational facilities. Nor is section 53.11, relating to the 

creation of a Higher Education Authority, relevant to a hitherto existing nonprofit 

corporation operating under section 53.47(e). 

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Honorable Wilhelmina Delco - Page Three (M+253) 

Section 53.12 of the Education Code states that an authority comprises only the 

territory included within the boundaries of the city or cities creating it. Although this 

provision is not expressly applicable to a nonprofit corporation operating under section 

53.47(e), the city using the corporation is still subject to the general rule that a municipal 

corporation’s powers cease at its boundaries and cannot be exercised beyond them without 

the plain manifestation of legislative intent. City of Arlington v. Lillard, 294 S.W. 829 

(Tex. 1927); Ex parte Ernest, 136 S.W.2d 595 (Tex. Crim. App. 19391; Dallas Power & Light 

Co. v. Carrington, 245 S.W. 1046 (Tex. Civ. App. - Dallas 1922, writ dism’d). The 

nonprofit corporation may, but is not required to, limit the purchase of notes to notes 

executed by students attending school in a certain geographical area or by students who 

are residents of the area. See Educ. Code § 53.47(d). 

Two final provisions are not expressly made applicable to a nonprofit corporation 

organized under section 53.47(e). Section 53.45 provides that an authority may borrow 

money and accept grants from and enter into contracts with the United States, Texas, any 

municipal corporation, and any public or private person or corporation. The nonpiufit 

corporation certainly has implied power to enter into contracts necessary to issue revenue 

bonds and purchase student loan notes and does not need the broader contractual powers 

referred to in section 53.45. Section 53.13 provides that an authority is a body politic and 

corporate having the power to perpetual succession, that it may sue and be sued, and that 

it may make, amend, and repeal its bylaws. In our opinion, a nonprofit corporation 

organized under the Texas Non-Profit Corporation Act, articles 1396-1.01 to 1396-lLO1, 

V.T.C.S., has at least the power of perpetual succession, the power to sue and be sued, and 

the power to make, amend and repeal its bylaws consistent with chapter 53 of the 

Education Code, which powers are necessary to its performance of its duties under section 

53.47(e). 

SUMMARY 

A nonprofit corporation operating under section 53.47(e) of the 

Education Code is subject to the sections of chapter 53 referred to 

in that section as well as those sections relating to the issuance of 

bonds. Although it is not subject to the other provisions of chapter 

53, other laws having similar effect may be applicable in some 

cases. 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

Aw 

MARK WHITE 

Attorney General of Texas 

RICHARD E. GRAY Hl 

Executive Assistant Attorney General 

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Honorable Wilhelmina Delco - Page Four (MK-253) 

Prepared by Susan Garrison 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Susan Garrison, Acting Chairman 

Ride Gilpin 

Eva Loutzenhiser 

Bruce Youngblood 

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