. 

,- ‘.. ’ 

The Attorney General of Texas 

October 5. 1981 

MARK WHITE 

Attorney General 

290 Mai” Flu.. suit* uo 

S,” A”lonii. TX. 75205 

512J7294191 

Mr. E, D. Walker, Chancellor 

The University of Texas System 

601 Colorado Street 

Austin, Texas 78701 

Dear Mr. Walker: 

Opinion No. ml-373 

Re: Agreement between the 

University of Texas Law 

School Foundation and the 

University of Texas 

School of Law 

You inquire about the relationship between the University of 

Texas and the University of Texas Law School Foundation. The 

University of Texas Law School Foundation is a nonprofit corporation 

vith the purpose of supporting the educational undertaking of the 

School of Lav of the Universi.ty of Texas. It solicits donations and 

expends funds to benefit the law school, acting as conduit and 

coordinator of gifts made by other parties. You state that the 

foundation and school of law wish to formalize their relationship 

through a Memorandum of Understanding which you have submitted to us. 

The memorandum states the foundation’s intent to continue to make 

donations to the university. describes the purposes to be, served by 

these donations, and states certain conditions under vhich the 

university will accept them. 

You ask whether the university’s compliance vlth its 

representations under the Memorandum of Understanding would constitute 

a gift or grant of public money to a corporation in violation of 

article III, section 51 of the constitution. which provides in 

pertinent part: 

The Legislature shall have no power to make 

any grant or authorize the making of any grant of 

public moneys to any individual, association of 

individuals, municipal or other corporations 

whatsoever. 

The Memorandum of Understanding raises this constitutional question 

because, in .addition to providing for donations flowing from the 

foundation to the law school, it also states that the law school will 

provide, for example, office space, utilities, and some staff 

assistance to the foundation. 
E. D. Walker - Page 2 ow373) 

. 

We must first, hovever, determine vhether the university has 

statutory authority to accept the terms of the five sections of the 

memorandum. Section 6S.31 of the Education Code states aome relevant 

powers of the University of Texas Regents. 

(a) The board is authorized and directed to 

govern. operate, support , and maintain each of the 

component institutions that are nov or may 

hereafter be included in a part of The University 

of Texas System. 

. . . . 

(c) The board has authority to promulgate and 

enforce such other rules and regulations for the 

operation, control, and management of the 

university system and the component institutions 

thereof as the board may deem either necessary or 

desirable.... 

(e) The board Is specifically authorized. 

upon terms and conditions acceptable to it, to 

accept and administer gifts, grants, or donations 

of any kind, from any source. for use by the 

system or any of the component institutions of the 

system. 

Section 65.31(e) of the Education Code gives the regents considerable 

discretion to accept donations “of any kind” with conditions attached 

by the donor. We believe this broad language authorioes~ the regents 

to accept gifts of money, other intangibles, real and personal 

property, and services. See Letter Opinion R-1009 (To Honorable Frank 

Smith. Jan. 27, 1948). ?he conditions attached to the grant must be 

acceptable to the regents. 

The board has considerable latitude in exercising powers 

delegated to it by the legislature, subject to review for abuse of 

discretion. Foley v. Benedict, SS S.W.2d 805 (Tex. 1932); Letter 

Advisory No. 6 (1973). However, the board is charged vith the 

governing of the university system, see Education Code Section 65.11, 

and the exercise of its specific powersmust be In furtherance of this 

duty. A “university system” is the assoclatlon of agencies of higher 

education under a single governing board. Educ. Code 561.00319. The 

broad powers granted the regents by section 65.31(a), (c), and (e). 

&. to support and maintain, to promulgate rules and regulations, 

and to accept gifts. are to be exercised on behalf of the component 

institutions of the system. The University of Texas at Austin is an 

“institution of higher education within The University of Texas 

System.” Educ. Code $67.02. Thus the board of regents must exercise 

its powers of governance for the purpose of higher education as 

carried out by the component Institutions. Grants accepted for the 

university at Austin must reasonably relate to its purposes as an 

p. 1240 
E. D. Walker - Page 3 (Ml-373) 

educational institution. See Attorney General Opinions M-391 (1969); 

W-334 (1958); WW-S (1957).’ 

The Memorandum of Understanding contains a number of statements 

as to the foundation’s goal of serving the educational purposes of the 

law school and the kind of assistance it has rendered in the past and 

proposes to render in the future. These statements are found in 

sections one through three: 

1. The Foundation has engaged in development 

activities for The University of Texas School of 

Law (The Law School), has assisted in maintaining 

alumni reletions on behalf of The Law School, has 

participated~ ins the Continuing Legal Education 

(CLE) program of The Law School, has provided 

various and substantial support for the 

development of The Law School, its faculty and 

staff, and has furnished important administrative 

and other services to The Law School and The 

University. The continuation of these activities 

is essential to the maintenance of a law school of 

the first class. The University and The 

Foundation deem it appropriate to, and do hereby, 

memorialize the nature of the relationship between 

The Foundation and The University and The Law 

School, ratify and approve these past activities 

by The Foundation, and agree mutually for the 

future regarding the respective roles, rights, and 

obligations of The University and The Foundation 

in this relationship. 

2. The Foundation is a nonprofit educational 

corporation chartered in 1952 for the purposes of 

supporting the educational undertaking of The Law 

School by furthering legal education, legal 

research, financial assistance to deserving 

students, and the progress of law, and of 

soliciting donations for particular objectives to 

accomplish such purpose, and of cooperating with 

the ~advancement of the general welfare of The 

University as a whole. The Statement of 

Development Policy by the Board of Trustees of The 

Foundation includes the activities of securing, 

holding in trust.~ and administering funds for the 

benefit of The School of Law of The University of 

Texas at Austin. 

3. The Foundation agrees that, during the 

term of this Memorandum of Understanding, The 

Foundation: (1) will continue to invest and 

administer the funds presently on hand for the 

benefit of The Law School; (2) will continue to 

p. 1249 
E. D. Walker - Page 4 (km-373) 

conduct a development program for the benefit of 

The Lav School and The University to insure 

procurement and retention of outstanding law 

faculty members, to enrich the educational 

environment of The Law School, and by other 

reasonable means to enhance the prestige of, and 

to advance, The Law School, and will utilize its 

expertise, resources, and personnel for such 

purposes; (3) will use reasonable efforts to 

finance and conduct, or work with law school 

alumni groups interested in financing and 

conducting, programs and publications designed to 

maintain good alumni relations on behalf of The 

Law School; (4) will use on behalf of Ihe Law 

School, or will lease, loan, or give to The Law 

School from time to time, to the extent~that it is 

feasible to do so, equipment needed by The Law 

School or helpful to its operations; (5) will 

continue to render other assistance to The Law 

School of the general nature of the assistance 

that it has rendered in the past, and to render 

other assistance to The Law School in the future 

as may mutually appear desirable; and (6) will 

continue to recognize The School of Lav of The 

University of Texas at Austin as the sole 

beneficiary of its development policy and its 

educational support. 

These provisions restate and elaborate on the foundation’s 

purpose, as expressed in its charter, which is to support legal 

education by soliciting and expending donations for that purpose. 

They express numerous specific purposes directed at serving the law 

school’s educational enterprise: the provision of administrative 

services, financial aid for students, and funds and services directed 

at faculty recruitment. In addition, it has participated in the law 

school Continuing Legal Education program and has worked with alumni 

groups. With the possible exception of the latter endeavor, these 

activities are closely related to the educational function of the 

university. See Attorney General Opinions M-391 (1969)(provision of 

financial aido students); WW-334 (19SB)(Texas Tech television 

channel may accept conxnercial programs provided directors find 

reasonable relationship to statutory purposes of college); WW-S 

(19S7)(Texas Tech may engage in educational television broadcasting); 

V-1476 (1952)(salary of university comptroller may be supplemented 

with donated funds); O-4167 (1941)(University may spend funds for 

purpose of soliciting gifts from potential donors). ct. Attorney 

General Opinion M-223 (1968)(hospital district may spend public funds 

to pay travel costs of employees who recruit prospective employers). 

The legislature has in fact recognized that universities may cooperate 

with alumni associations. See V.T.C.S. art. 1396-2.23A(E)(8). It 

has, hovever. prohibited the= of appropriated funds for the support 

and maintenance of alumni organizations Of activities. General 

p. 1250 
g. D. Walker - Page S (MW-373) 

Appropristlons Act, Acts 1979. 66th Leg., ch. 843. art. IV, 117. at 

2859. Thus, if the regents of the university believe that the support 

of alumni organizations will benefit the educstional purposes of the 

school, they will have to locate a permissible funding source’ The 

foundation can provide precisely that. 

Section four of the memorandum states in part the terms and 

conditions on which the university is willing to accept donations from 

the foundation: 

4. The University agrees that, during the 

term of this Hemorandum of Understanding, The 

University: (1) will provide reasonable space in 

or near The Law School building, as approved by 

The University President and The Lav School Dean, 

to The Foundation for the purpose of carrying out 

its obligations hereunder and for its general 

operations on behalf of The Law School* 

provide the utilities and telephon: “,‘e% 

reasonably needed by The Foundation in carrying 

out its activities under this Memorandum of 

Understanding; and (3) will permit reasonable use 

of University equipment and personnel as needed to 

coordinate the activities of The Foundation with 

the educational operations of The Law School, and 

hereby expressly recognizes that the Dean, 

Associate Deans, and members of The Law School 

faculty may reasonably assist from time to time in 

development programs as may be needed or helpful 

in coordinating those Foundation activities with 

the operations of The Law School. 

In our opinion, the university has statutory authority to provide 

the foundation with the items enumerated in section 4 as “terms and 

conditions’ attached to donations. See Educ. Code 165.31(e). 

University property is state property, see Walsh v. University of 

Texas’ 169 S.W.2d 993 (Tex. Civ. App. - El-so 1942, writ ref’d), but 

the regents have power to determine the use of campus buildings. 

Splawn v. Woodard, 287 S.W. 677 (Tex. Civ. App. - Austin 1926. no 

writ). Compare V.T.C.S. art. 601b. 54.01 (Purchasing and General 

Services Commission’s control of public building does not extend to 

higher education buildings). 

Counties have been oermitted to provide a nrivate entity with 

space in a public building where convenient or necessary to carry out 

a county purpose. See Sullivan v. Andrevs County, 517 S.W. 2d 410 

(Tex. Civ. App. - KPaso 1974, writ ref’d n.r.e.)(county leased 

clinic to physicians); Dodson v. Marshall, 118 S.W. 2d 621 (Tex. Civ. 

APP. - Waco 1938, writ dism’d)(space in courthouse leased. to 

individual for concession stand); Attorney General Opinions MU-200 

(1980)(county provided rent free space in courthouse to employees 

credit union); H-912 (1976)( contract ,with physician to practice in 

p. 1251 
E. 0. Walker - Page 6 (nw373) 

county medical clinic). Countfes have only those powers expressly or 

impliedly granted by the constitution and statutes. Canales v. 

Laughlin, 214 S.W.2d 451 (Tex. 1948); Anderson V. Wood’ 

1084 (Tex. 1941). The regents of the University of Texas have far 

broader powers to operate and manage component institutions within the 

system pursuant to regulations they deem necessary and desirable. 

Educ. Code 565.31(c). In our opinion, the board of regents has 

statutory authority over the provision of apace to private entitles at 

least as great as, and in all probability greater thsn. that of the 

commlasioners court. The provision of utilities may be regarded as 

incidental to the provision of space in the lav school,in view of the 

difficulty of the foundation making separate provision for them. 

Section 65.31(e) of the Education Code permits the university to 

“accept and administer” grants. This language implicitly acknowledges 

that the university vi11 have to devote some of its resources to 

administering grants it accepts, in particular the services of 

personnel. The regents have statutory authority to decide whether or 

not to accept a grant which involves particular administrative coats 

for the university. 

There is little or no precedent for a governmental body providing 

telephone services and the use of equipment to a private entity which 

uses space provided by the governmental body. See Attorney General 

Opinion MW-200 (1980) (county may provide media free space in 

courthouse, but may not provide free telephone service). tlovever, we 

believe the regents may regard the provision of this assistance as 

incidental to the provision of office space in the law school to the 

foundation. The foundation exists to serve the educational purposes 

of the law school by making various types of donations. The joint 

purposes of the law school and foundation may possibly be accomplished 

in a more cost effective way if the board of regents provides the 

foundation with a telephone and some equipment, rather than requiring 

it to use foundation resources to pay Its telephone bills and buy its 

own copy machine. We conclude that the board of regents has authority 

under section 65.31 of the Education Code which permits the law school 

to provide to the foundation in reasonable amount the resources 

enumerated in section four of the memorandum. 

Section five of the agreement states as follows: 

5. It is expressly mutually agreed that: 

(1) staff personnel working for or serving The 

Foundation may be paid as University employees, 

but the salaries and The University’s portion of 

retirement benefits for such personnel will be 

reimbursed to The University by The Foundation, 

and other usual benefits for such personnel will 

be provided by The University: however, all such 

personnel are subject to all of the rules. 

regulations’ and personnel policies of The 

University; (2) funds raised by the development 

p. 1252 
E. 0. Walker - Page 7 ww-373) 

activities of The Foundation may be subject to a 

reasonable management or operations charge or fee 

by The Foundation, but all such charges or fees in 

regard to endoved funds shall come from income and 

not from corpus; all funds, whether endowed, 

restricted, or unrestricted, raised by the 

development activities of The Foundation shall be 

held, invested. managed, and disbursed by The 

Foundation for the aole benefit of The Law School, 

subject to any restrictions placed thereon by 

particular donors. 

We understand section five, subsection (1) to provide that 

foundation employees are permitted to be on the university payroll and 

to be eligible for retirement and other benefits provided by the 

university to its own employees. The statutes and appropriations act 

forbid this arrangement. The appropriations act provides funds for 

departmental operating expense and staff benefits. Acts 1979, 66th 

Leg., ch. 043, art. IV, at 2787. See V.T.C.S. art. 68138. In our 

opinion, these funds are appropriatedfor university employees, and 

may not be specifically allocated for salaries or fringe benefits for 

the employees of a private corporation which is under contract with 

the university. See Acts 1979, 66 Leg., ch. 843. art. V. II(p), at 

2895. Nothing in-e university’s budget request to the sixty-sixth 

legislature indicates that any of the lav school’s departmental 

operating expense was to be allocated to foundation employees. State 

of Texas Request for Legislative Appropriations, Fiscal Years Ending 

August 31, 1980 and 1981, the University of Texas of Austin, at 74, 

~87. 

Where authorized by law. state agencies may employ an independent 

contractor, but he does not occupy an office or position under the 

state nor is he an agent of the state. Attoiney General Opinion V-345 

(1947). See also Attorney General Opi.lion H-1304 (1978). In 

addition, the appropriations act may authorize an expenditure for a 

consultant. Attorney General Opinion S-13 (1953). Hovever. vhere the 

appropriations act indicates that work is to be done by employees 

under the direct control of the agency, it may not expend its 

appropriation to contract for the performance of those services by an 

independent contractor. Attorney General Opinion S-80 (1953). In our 

opinion, employees of the Texas Law School Foundation are not entitled 

to be paid by the university. Nor are they entitled to receive 

vacation and sick leave benefits which the appropriations act provides 

state employees. Acts 1979. 66th Leg., ch. 843. art. V, 

$7(a),(b),(c). at 2901. 

Employees of the Law School Foundation may not become members In 

the Teacher.Retirement System. Section 3.03(b) of the Education Code 

provides as follows: 

Every employee in any public school or other 

branch or unit of the public school system of this 

p. 1253 
E. D. Walker - Page 8 (W-373) 

State is a member of the retirement system ao a 

condition of his employment. 

“Employee” is defined in part as “any person elnployed to .render 

service on a full-time, regular salary basis . . . by the board of 

regents of any college or university.” Educ. Code #3.02(s)(3). In 

Attorney General Opinion O-3399 (1941), it YPS determined that public 

school teachers who were employed and paid by the federal government 

and vhose services were controlled by a federal agency could not 

participate in the teacher retirement system. These persons were not 

teachers as that term is defined in the retirement statute because 

they were not employed by any state educational agency but were 

employed directly and exclusively by the federal government. See also 

Attorney General Opinion O-3409 (1941). Since employees of the Law 

School Foundation are not university employees, they are’ not eligible 

for retirement benefits under the teacher’s retirement system. 

Nor are employees of the foundation entitled to participate in 

the group insurance plan which the university provides its employees. 

Article 3.50-3 of the Insurance Code, the Texas State College and 

University Employees Uniform Insurance Benefits Act, provides group 

coverage for all employees of Texas state colleges and universities. 

“Employee” is defined as any person employed by a governing board of a 

state university, senior or community/junior college, or any other 

agency of higher education. Ins. Code art. 3.50-3. 13(a)(4)(A). 

Employees of the Texas Law School Foundation do not fit this 

definition and consequently are not eligible for insurance benefits 

‘under article 3.50-3 of the Insurance Code. See also V.T.C.S. art. 

5221b-6(b) (2) (unemployment compeqsation for state employees); art. 

6252-19 (Tort Claims Act makes state liable for torts of persons in 

paid service of state); art. 83098 (workmen’s compensation for state 

employees). 

Raving examined the memorandum from the perspective of the 

university’s statutory authority to agree to it, w turn to your 

question: whether the university would violate article III. section 

51 by complying with its representations under the memorandum. 

Article III, section 51 of the constitution provides in pertinent 

part: 

The Legislature shall have no power to make 

any grant or authorize the making of any grant of 

public moneys to any individual, association of 

individuals, municipal or other corporations 

whatsoever 

This provision prevents the legislature from giving away public funds 

or enacting a .statute which authorizes a state agency or political 

subdivision to do so. See Texas Pharmaceutical Ass’n v; DooleF. 90 

S.W. 2d 328 (Tex. Civ.App. - Austin 1936, no wit). Thus, the 

legislature may not authorize the University of Texas to grant public 

funds to an individual or corporation. 

p. ,1254 
E. 0. Walker - Page 9 (nw-373) 

Although article III, section 51 on its face prohibits only 

grants of money, it has been liberslly construed to prohibit the grant 

of state property and contract rights as well as money. Rhoads 

Drilling ~Co. v. Allred. 70 S.W. 26 576. 582 (Tex. 1934)(dicta); 

Attorney Gener al Opinions WW-790 (1960); I&153 (1957). 

We note that provisions one through three of the memorandum do 

not raise the constitutional issue which concerns you. These 

provisions describe the foundation’s donative purposes, and do not 

refer to benefits flowing from the university to the foundation. 

Section five does not raise,the article III, section 51 issue, because 

various statutes prevent the university from providing foundation 

employees with the described benefits. 

Section four of the memorandum does, however, raise the 

constitutional issue. It states that the university will provide the 

foundation with office space, telephone service, utilities, assistance 

from university staff and the use of university equipment. We have 

determined that the regents have statutory authority to provide this 

assistance to the foundation; we must next consider whether statutes 

granting such authority are constitutional as applied to the situation 

you present. 

Article III, section 51 of the constitution requires that a grant 

by the university to the foundation must serve a public purpose, 

appropriate to the function of a university, and that adequate 

consideration must flow to the public. Attorney General Opinions 

hW-89 (1979); H-1260 (1978); H-520 (1975); H-403 (1974). In addition, 

the university must, maintain some controls over the foundation’s 

activities, to ensure that the public purpose is actually achieved. 

Attorney General Opinions MW-89 (1979); H-1309 (1978); H-912 (1976). 

If these conditions are met, the grant by the public entity is not 

unconstitutional. 

As made clear by sections one through three of the memorandum, 

and by its charter, the foundation exists to serve the educational 

function of the law school. Public education is an essential 

governmental functiog. Rainey v. Malone, 141 S.W. 2d 713 (Tex. Civ. 

APP. - Austin 1940, no writ). The assistance provided by the 

foundation to the university helps it accomplish a public purpose 

entrusted to it. 

The foundation’s charter requires it to devote Its resources to 

benefitting the law school; therefore, the law school would still 

receive donations from the foundation even if it did not provide 

office space and other in klnd,assistance. See Boyd v. Frost National 

- 

Bank, 196 S.W. 2d 497 (Tex. 1946). 

Nonetheless, a public purpose may be served by providing the 

foundation with rent-free space In the law school. This determination 

is to be made by the university in the first instance. and if 

challenged, ultimately by a court. Attorney General Opinion H-403 

p. 1255 
e. D. walxer - rage 10 (tsw-373) 

. . 

(1974); see also Dodson v. Harshall, z, at 624. Although we lack 

sufficient information to state with certainty how the foundation’s 

presence in the law school serves the public purpose of higher 

education, we can at least raise some poasibilitles for consideration 

by the regents. 

For example, if law students and faculty members have easy access 

to the foundation office, they may learn about and benefit from the 

scholarship and research grants it offers. The foundation’s presence 

in the law school may help achieve full and efficient use of its 

resources by prospective recipients. It will also serve the 

convenience of persons in the law school who can contact the 

foundation vith a minimal expenditure of time. See Attorney General 

- 

Opinion MS-200 (1980). 

Law school administrators work with the foundation to coordinate 

foundation activities with those of the lav school. Their convenience 

will be served if the foundation is easily available for 

consultations. If the foundation also provides administrative 

services, these can be utilized easiest on the law school premises. 

Another factor to consider is whether the provision of office 

space and other assistance to the foundation enhances the cost 

effectiveness of operating the foundation. The regents might consider 

the value of the office space, telephone, utilities, equipment, and 

staff assistance the law school will provide as compared to equivalent 

items purchased on the market. Rental paid for an office would 

probably include a landlord’s profit. Since the foundation’s 

resources are to be used to benefit the university, savings on 

overhead costs should go to the law school. Providing the foundation 

with an office might free some resources worth more than the office 

from use for overhead so they could be devoted to law school 

education. 

In addition to serving a public purpose, the provision of office 

space and related assistance to the foundation must be subject to 

controls, contractual or otherwise. to insure that the public purpose 

is met. The Memorandum of Understanding is not a contract, since the 

representations made by the foundation either relate to Its past 

activities or express generalized intentions as to future help. The 

promises appear too vague to be enforceable as a contract, and the 

foundation’s compliance with its legal duties under the charter does 

not constitute~consideration. See Teague v. Edwards, 315 S.W. 2d 950 

- 

(Tex. 1958). 

llovever , other controls exist to assure that the provision of 

university office space and other benefits to the foundation serves 

and will continue to serve a public purpose, whether it is the 

convenience of the law school or increasing the value of the 

foundation’s contributions to public education. The board of regents 

has sufficient rule-making power to establish controls over this 

transaction. See Educ. Code 565.31. In particular, it has authority 

- 

p. 1256 
E. 0. Walker - Page 11 (MJ-373) 

to control the use of university property. Splawn v. Woodard. w. 

The memorandum recognizes this in noting that the university president 

and law school dean will control the allocation of space to the 

foundation subject to a test of reasonableness. Other office-related 

assistance going to the foundation is provided subject to a test of 

reasonableness. Memorandum, section 4. Law school administrators can 

see that the office space and other items provided actually serve the 

law school’s purposes. 

With respect to gifts for professorships and scholarships, 

section 65.36 of the Education Code provides detailed controls as to 

conditions which may be attached to these donations. Moreover, the 

convenient location of the foundation may enable law school 

administrators to shape foundation activities to some extent toward 

fulfilling the current needs of the law school. If the foundation’s 

presence on university property ceases to serve a public purpose, it 

may be removed at any time’ since it has no lease. The university has 

control of its premises and may require the foundation to vacate the 

office it uses. Cf. Morris v. Novotny’ 323 S.W. 2d 301 (Tex. Civ. 

APP . 

- Austin 195x writ ref. n.r.e.), cert. denied, 361 U.S. 889 

(1959). 

Additional controls over the allocation of university space to 

the foundation are found outside of the university. The state auditor 

is required to audit the use of public funds by the university and 

report to the Legislative Audit Committee. V.T.C.S. art. 

4413a-13(l),(2). Thus, university expenditures on behalf of the 

foundation will be subject to examination by the auditor and 

legislature. 

In addition, the Open Records Act defines ‘governmental body’ to 

include the portion of every corporation “which is supported in vhole 

or in part by public funds....” V.T.C.S. art. 6252-17a. 52(F). Since 

the foundation receives support from the university that is financed 

by public funds’ its records relating to the activities supported by 

public funds will be subjec,t to public scrutiny. See Open Records 

- 

Decision No. 228 (1979). 

Despite the absence of contractual controls designed to ensure 

that the presence of the foundation in the law school will serve a 

public purpose, we believe the regents can exercise sufficient control 

over this transaction pursuant to statutory authority. Furthermore, 

additional limitations on the foundation derive from other statutes as 

discussed above. Consequently, the university may comply with its 

representation under section four of the memorandum. 

SUMMARY 

The University. of Texas may provide the Law 

School Foundation with office space and other 

p. 1257 
C. 0. Walker - Page 12 (W-373) 

assistance where a public purpose will thereby be 

served, The regents have authority to decide in 

the first instance whether a public purpose is 

served. Sufficient statutory controls exist to 

ensure that the public Purpose will be achieved. 

Thus, the university may provide the foundation 

with the stated benefits vithout violating article 

III, section 51 of the constitution. 

The university lacks authority to place 

foundation ,employees on its payroll and give them 

fringe benefits reserved for state employees. 

HARK WHITE 

Attorney General of Texas 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

RICHARD E. GRAY III 

Executive Assistant Attorney General 

Prepared by Susan Garrison 

Assistant Attorney General 

APPROVED: 

OPINION COMHITTEE 

Susan L. Garrison. Chairman 

Jon Bible 

Jim Noellinger 

p. 1258