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 

fund6 to purchacle liability 

insurance for administrative 

officers and regents. 

You have reque6ted our opinion regarding whether a state university 

may use appropriated fund6 or auxiliary enterpriee funds to purchacle 

liability inrurance for it6 adminietrative officer6 and regents. 

In Attorney General Opinion H-70 (1973), we concluded that the trustees 

of an independent school district might purchase liability insurance to protect themllelve6 from the expense of defending litigation brought against 

them individually for acts or omiseions committed by them in the good faith 

discharge of their official duties , and to protect themselver from awards 

in all case6 in which the district was or might have been held liable for the 

same damagee. The opinion was predicated upon rection 20.48 of the ‘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 of general liability insurance by or on behalf 

0f.a state univerrity. We believe that the absence of any statutory authorization similar to rection 20.48 which would authorize liability insurance coverage as to the Univerrity itrelf i6 fatal to the argument that coverage may be 

extended to the trustees. The 1975 General Appropriation6 Act. Act6 1975, 

64th Leg., ch. 743, article 4, section 19-b. permit6 the purchase of 

“insurance premiumr, where authorized by law . . . from appropriated 

fund6. ” (Emphasis added). Since there is, however, no statutory authorization for the payment of 6uch premium6, even by implication as in Opinion 

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

H-70, it is apparent that this expenditure may not be made from 

appropriated funds. We note that article 5. section 55 of the General 

Appropriations Act, found at Acts 1975. 64th Leg., ch. 743. specifically 

prohibits the expenditure of appropriated fund6 “for the purpose of 

purchasing policies of insurance covering claim6 arising under the 

Texas Tort Claims Act.” 

Neither do we believe that liability insurance may be purchared 

from auxiliary enterprise funds. Although such funds are committed 

to the control of the governing board of the institution by section 51.002 

of the 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 the purchase of insurance premiums only 

where authorized by law, it ir our opinion that the payment of liability 

insurance premium6 for adminietrative officers and regent6 would 

not be a proper expenditure of the kind of auxiliary enterprise fund6 

recognized by 6ection 51.002. 

We therefore conclude that a state university may use neither 

appropriated funds nor auxiliary enterprise funds to purchase liability 

insurance for it6 adminigtrative officer6 and regents. 

SUMMARY 

A state univereity may use neither appropriated 

fund6 nor auxiliary enterprise fund6 to purchase 

liability insurance for its administrative officers and 

regents. 

Very truly yours, 

// 

Attorney General of Texa6 

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

APPROVED: 

DAVID M. KENDALL, First Assistant 

C. ROBkRT HEATH. Chairman 

Opinion Committee 

p. 3155