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 to validity 

of state funded food cooperitive, 

and related questionr. 

Dear Prerident Nolen: 

YOU have requerted our opinion concerning a propored food 

cooperative at .North ‘Texan State Univerrity. 

Specifically yaur questions are: 

1. Could a private food cooperative composed 

of students and faculty member8 of NTSU: 

(a) initially fund this cooperative by means of 

a grant 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 a proper auxiliary enterpriee? 

(a) if so, could it be housed in a university 

owned building and could it purchase in bulk with 

the University Food Service? 

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

It is our understanding that the Student Government Association 

of NTSU deaires to establish and manage a food cooperative composed 

of NTSU 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 5 54. 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 5 54.503(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 

of the institution. ” Education Code 5 54. 503(b). This section has been 

construed to allow expenditures for “services directly involving or being 

of benefit or interest to students. ” Letter Advisory No. 50 (1973): In addition, 

Letter Advisory No.’ 6 ‘(1973) held the use of a private instrumentality for 

the implementation of such services to be permissible, stating: 

Prima facie, at least, the expenditures would 

be for a public purpose, establiahed by the determination of the governing body that the service was 

necessary or desirable in carrying out the educational functions of the institution, though the question 

would ultimately be a judicial one. Expenditures for 

a true public purpose do not violate Article III, Section 51 of the Constitution (prohibiting grants of public 

money to corporations or individuals), even when a 

private agency is used to achieve the purpose . . . 

The governing board of an institution of higher 

education, in adopting rules and regulations for its 

operation, exercises delegated legislative powers, 

and in the absence of a clear showing that it has 

acted arbitrarily or has abused the authority vested 

in it, the courte will not interfere. 

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

A food cooperative would, of course, be a service “directly involving or being of benefit to students. ” Letter Advisory No. 6 (1973). The 

question of whether it would be “necessary or desirable in carrying out the 

educational functions of the institution” (Education Code 5 54. 503(b) 1 is 

within the jurirdiction of the governing board to authorize and approve 

student services. Education Code 5 54.503 (a). There may exist valid 

educational goals involved in the 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 to unprepared food sold by a cooperative as to prepared food served by a cafeteria, and we are therefore unable 

to decide as a matter of law ‘that it would not be “necessary or desirable 

in carrying out the educational functions of the institution. ” Consequently, 

it is 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 to further a proper public purpose, the cooperative may be housed in a 

university building,the uee of which is controlled by the, board. The 

governing board of an institution of higher education exercises great 

discretion over the use of buildings. Splawn v. Woodward, 287 S. W. 677 

(Tex. Civ. App., Austin 1926, no writ). While that case dealt with statutes 

concerning the University of Texas, similar authority is.granted to the 

governing board of NTSU. 

Section 95.28 of the 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 . . . . ” 

In a case dealing with NTSU, the court stated: 

[the] University has~a legitimate interest in 

efficiently managing the uee of its facilities 

for the benefit of the entire university community. Duke v. N. T.S. U., 338 F. Supp. 

990, 998 (E. D. Tex. 1971). 

p. 2314 

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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 of NTSU does not have 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 fork space utilization in all educational and general buildings 

and fadlitter at institution8 of higher 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 of knowledge. Excluded are 

auxiliary enterprise buildings and facilities, including but not limited to dormitories, cafeterias, 

student union buildings, stadiums, and alumni 

centers. 

It is therefore apparent that a cooperative may be houaed in any 

auxiliary enterprise building or facility, since the governing board has 

complete control over ,such facilities. However, the approval of the 

Coordinating Board is necessary in order to house 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 of the board in 

this matter. 

You further ask whether the cooperative may be supported as 

an auxiliary enterpriae of the university. In addition to the general 

definition of auxiliary 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 the American 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 

ore staff and that charges at a rate directly related 

but not necessarily equal to the cost of the service. 

Since a food cooperative would come within either definition, it is our 

opinion that it would 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 of NTSU if it is properly approved 

by the governing board as “necessary or desirable 

in carrying out the educational functions of the 

institution. ” It may also be operated as an auxiliary 

enterprise. 

The cooperative, with the approval of the governing board, may be housed in an auxiliary enterprise 

facility or any other facility over which the board 

has complete control. It may be housed in an 

educational or general building or facility with the 

approval of the Coordinating Board. 

The cooperative, with the approval of the governing board, may purchase in bulk with the Univereity 

Food Service. 

Very truly yours, 

/ / Attorney General of Texas 

p. 2316 
. . . . 

’ 

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

APPROVED: 

C. ROBERT HEATH, Chairman 

Opinion Committee 

lg 

p. 2317