# THEAITORNEY GENERAL OF TEXAS Amrrm.- 767ll

January 31, 1975 The Honorable C. C. Nolen Preridart Opinion No. H- 513 North Texar State Univerrity Dentob, Texan 76203 Re: Quertionr ao tovalidity of state funded food cooperitive, and related questionr. Dear Prerident Nolen:

YOUhave requerted our opinion concerning apropored food cooperative at.North ‘Texan State Univerrity.

Specifically yaur questions are:

1. Could a private food cooperative composed ofstudents and faculty member8 of NTSU: 

### (a)initially fund this cooperative by means of agrant or loan from the Student Service Fee6 Fund? (b)be housed in a university-owned structure? (c) purchase in bulk with the University Food 

### Service? 2. Could NTSU sponsor an entity which would eel1 

### grocery items and would the eale of such items be aproper auxiliary enterpriee? (a)if so, could it be housed in auniversity owned building and could it purchase in bulk with the University Food Service?

p. 2312The Honorable C.C. Nolen page 2 (H-513)

Itis our understanding that the Student Government Association ofNTSU deaires to establish and manage afood cooperative composed ofNTSU students, staff and faculty members and funded through a grant or loan from the Student Service Fees Fund.

Student service fees may be used only for the support of student services (Education Code 554. 503(e) )which are defined as “textbook rentals, recreational activities,
. . . and any other student activities and services specifically authorized and approved by the appropriate governing board. ” Education Code 554.503(a). The governing board may collect from students “the cost of student services which the board deems necessary or desirable in carrying out the educational functions ofthe institution. ” Education Code 554. 503(b). This section has been construed to allow expenditures for “services directly involving or being ofbenefit or interest to students. ” Letter Advisory No.50 (1973): Inaddition, Letter Advisory No.’ 6‘(1973) held the use ofa private instrumentality for the implementation of such services to bepermissible, stating: Prima facie, at least, the expenditures would be for a public purpose, establiahed by the determination ofthe governing body that the service was necessary or desirable in carrying out the educational functions ofthe institution, though the question would ultimately be ajudicial one. Expenditures for atrue public purpose do notviolate Article III, Section 51ofthe Constitution (prohibiting grants ofpublic money to corporations or individuals), even when a private agency is used toachieve the purpose . . . The governing board ofan institution ofhigher education, in adopting rules and regulations for its operation, exercises delegated legislative powers, and in the absence ofa clear showing that ithas acted arbitrarily or has abused the authority vested in it, the courte will not interfere.

p. 2313The Honorable Cl.C. Nolen page 3 (H-513)

A food cooperative would, of course, be a 

### service “directly involving or being ofbenefit to students. ” Letter Advisory No. 6 (1973). The question ofwhether it would be 

### “necessary or desirable in carrying outthe educational functions of the institution” (Education Code 554. 503(b) 1is within thejurirdiction of the governing board to authorize and approve student services. Education Code 554.503 

### (a). There may exist valid educational goals involved inthe adminiatration of such a program. Furthermore, schools have traditionally furnished cafeteria 

### service on the theory that proper nutrition is essential to a good learning atmosphere. We believe that reasoning applies as well tounprepared food sold by a cooperative as to prepared food served by a cafeteria, and we are therefore unable to decide as a matter oflaw ‘thatitwould not be 

### “necessary or desirable in carrying outthe educational functions ofthe institution. ” Consequently, itis our opinion that a food cooperative 

### may be funded by a grant or loan from the Student Service Fees Fund.

Once the governing board approves the program and thereby finds it tofurther aproper public purpose, the cooperative may be housed in a university building,the uee ofwhich is controlled by the,board. The governing 

### board ofan institution ofhigher education exercises great discretion over the use ofbuildings. Splawn v. Woodward, 287 S.W. 677 (Tex. Civ. App., Austin 1926, nowrit). While that case dealt with statutes concerning the University of Texas, similar authority is.granted to the 

### governing board ofNTSU.

Section 95.28 ofthe Education Code, made applicable to NTSU by section 105.41, authorizes the board to “formulate rules for the general control and management of the school
. . . .”

Ina case dealing with NTSU, the court stated:

[the] University has~a legitimate interest in efficiently managing the uee ofits facilities for the benefit ofthe entire university community. Duke v. N. T.S. U., 338 F. Supp. 990, 998 (E. D. Tex. 1971).

p. 2314 -

.. .

The Honorable C. C. Nolen page 4 (H-513)



### Aa the court indicates, rent 

### may be charged for the ure of any fadlity.

However, the governing board ofNTSU does nothave full control over the use. of educational and general buildinge. Section 61.058(l) of the 

### Education Code empowers the Coordinating Board to “determine formulas 

### forkspace utilization in all educational and general buildings and

### fadlitter atinstitution8 

### ofhigher education. ” Section 61.003.(13) 

### provides:

‘Educational and general buildings and

facilitier’ means buildings and facilities essential to or commonly associated with teaching, 

### research, or the preservation ofknowledge. Excluded 

### are auxiliary enterprise buildings and facilities, including but not limited to dormitories, cafeterias, student union buildings, stadiums, and alumni centers. Itis therefore apparent that a cooperative may behouaed in any auxiliary enterprise building or facility, since thegoverning board has complete control over ,such facilities. However, the approval ofthe Coordinating Board is necessary in order tohouse the cooperative in an educational or general building or facility.

The decisioncmcerriing whether the cooperative may purchase in bulk with the University Food Service would rest with the governing board pursuant to its general authority aa provided in section 95.28,. We have found no provision which limits the authority ofthe board in this matter.

You further ask whether the cooperative may be supported as an auxiliary enterpriae ofthe university. Inaddition to the general definition ofauxiliary enterprise set out above in section 61.003(13), tbe following definition is contained in College and University Business Administration, Chapter 13, page 128 (Revised Edition, 1968), which is published by theAmerican Council on Education.

p. 2315

### The Honorable C.C. Nolen page 5 **(H-513)**

An auxiliary enterprise is an entity that exists to furnish a service to students, faculty orestaff and that charges ata rate directly related butnot necessarily equal tothe cost ofthe service. Since a food cooperative would come within either definition, it is 

### our opinion that itwould constitute a proper auxiliary enterprise. The above discussion concerning housing and supply for a private cooperative would be applicable to one operated as an auxiliary enterprise. SUMMARY A food cooperative may be operated as a student service ofNTSU ifit is properly approved by the governing board as “necessary ordesirable in carrying out the educational functions of the institution. ” Itmay also be operated as an auxiliary enterprise. The cooperative, with the approval ofthe governing board, may be housed inan auxiliary enterprise facility or any other facility over which the board has complete control. Itmay be housed in an educational or general building or facility with the approval of the Coordinating Board. The cooperative, with the approval ofthe governing board, may purchase inbulk with the Univereity Food Service. Very truly yours,

/ / Attorney General of Texas

p. 2316. . . .
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### The Honorable C.C. Nolen page 6 (H-513)

APPROVED:

C. ROBERT HEATH, 

### Chairman Opinion Committee lg

p. 2317