## TEIE ATFOKNEY GENEWAL OF %-EXAS Avans - 78711
November 21, 1975 The Honorable R. W. Steen, President Stephen F. Austin State University Nacogdocher. Texa6 7596 1 Opinion No. H- 742

Dear Prerident Steen: Re: Whether a state university may u6c appropriated fund6 or auxiliary cntcrpriae fund6to purchacle liability insurance for administrative officers andregents. You have reque6ted our opinion regarding whether a state university may use appropriated fund6 or auxiliary enterpriee funds topurchacle liability inrurance for it6 adminietrative officer6 and regents. InAttorney General OpinionH-70 (1973), we concluded thatthe trustees ofan independent school district might purchase liability insurance toprotect themllelve6 from the expense of defending litigation brought against them individually for acts or omiseions committed bythem inthe good faith discharge oftheir official duties, and to protect themselver from awards in all case6 inwhich the district was or might have been held liable for the same damagee. The opinion was predicated uponrection 20.48 ofthe ‘Texas Education Code, which specifically permits the expenditure of “[l]ocal school funds
. . . for the payment of insurance premiums. ” Neither the Education Code nor any other statute, however, makes any provision for the purchare ofgeneral liability insurance by or on behalf 0f.a state univerrity. We believe that the absence ofany statutory authorization similar to rection 20.48 which would authorize liability insurance coverage as tothe Univerrity itrelf i6 fatal to the argument that coverage may be extended tothe trustees. The 1975 General Appropriation6 Act. Act6 1975, 64th Leg., ch. 743, article 4, section 19-b. permit6 thepurchase of
“insurance premiumr, where authorized by law
. . . from appropriated fund6.” (Emphasis added). Since there is, however, nostatutory authorization for thepayment of 6uchpremium6, even byimplication as in Opinion

p. 3153The Honorable R. W. Steen, page 2 (H-742)
.

H-70, it is apparent thatthis expenditure may not be made from appropriated funds. We notethat article 5. section 55 ofthe General Appropriations Act, foundatActs 1975. 64th Leg., ch. 743. specifically prohibits the expenditure ofappropriated fund6 “for the purpose of purchasing policies of insurance covering claim6 arising under the Texas Tort Claims Act.” Neither dowe believe thatliability insurance may be purchared from auxiliary enterprise funds. Although such funds are committed to the control of the governing board ofthe institution by section 51.002 ofthe Education Code, section 51.006 provide6 that “the provisions of this subchapter are subordinate to the general appropriations act for the support of each institution. ” Since. as we have indicated, the General Appropriation6 Act permits thepurchase of insurance premiums only where authorized bylaw, it ir our opinion thatthepayment of liability insurance premium6 for adminietrative officers and regent6 would notbe a proper expenditure of the kind ofauxiliary enterprise fund6 recognized by 6ection 51.002. We therefore conclude thata state university may use neither appropriated funds nor auxiliary enterprise funds to purchase liability insurance for it6 adminigtrative officer6 andregents. SUMMARY A state univereity may use neither appropriated fund6 **nor** auxiliary enterprise fund6topurchase liability insurance for its administrative officers and regents. Very truly yours,

// Attorney General of Texa6

p. 3154Ihe Honorable H. W. Steen. page 3 (H-742)

APPROVED:

DAVID M. KENDALL, First Assistant

C. ROBkRT HEATH. Chairman Opinion Committee

p. 3155