Court Opinion

ID: 4132638
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:28:48.630435+00
Date Added: 2024-06-11T14:34:14.705081
License: Public Domain

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

                                                  Re:     Whether a state university
                                                          may u6c appropriated fund6
                                                          or auxiliary cntcrpriae
                                                          fund6 to purchacle liability
                                                          insurance for administrative
Dear Prerident Steen:                                     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 pro-
tect 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 authoriza-
tion similar to rection 20.48 which would authorize liability insurance cover-
age 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 authoriza-
tion 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