                  THE     ATTORNEY    GENERAL
                             OF TEXAS


                            March 19, 1990



    Honorable Wilhelmina Delco          Opinion   NO.   JM-1146
    Chairman
    Higher Education Committee          Re: Authority of a univer-
    Texas House of Representatives      sity to allocate space in a
    P. 0. Box 2910, Office 413-C        campus building to be used
    Austin, Texas   78769-2910          exclusively  by a private
                                        group of faculty members
                                        (RQ-1845)

    Dear Representative   Delco:

         You ask whether Texas A & M University    may allocate
    space in a campus building‘ to be used exclusively for an
    auxiliary enterprise of the university known as the Faculty
    Club   (hereinafter the club).    The primary   question   is
0   whether   such an   arrangement  is constitutional.      This
    question was previously   asked of this office, but the
    request was withdrawn prior to the issuance of an opinion.
    Attorney General Opinion Request RQ-1407 (1988). Since that
    original opinion request, the operation    of the club has
    changed considerably   with the university    assuming more
    responsibility.

         We have separately received a brief from the university
    system explaining the operation of the club and its rela-
    tionship with the university.   The brief informs us that the
    club is now being operated as an auxiliary enterprise       of
    Texas A 8 M University.  The  vice president for finance   and
    administration of Texas A 8 M University     administers   the
    club, and university employees staff it. The brief     further
    states that a nonprofit corporation provides bar services to
    the faculty club and uses the bar receipts to purchase     bar
    supplies and to reimburse the university for its administra-
    tion of the faculty club. The vice president directs the
    payment of expenses of the corporation.

         The   club serves its members and their guests as well as
    visiting   professors, former students, parents, friends and
    others.    However, visitors (who we understand    to be non-
    members)   may not make reservations but are accommodated only
    as space   permits.




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Honorable Wilhelmina   Delco - Page 2    (JM-1146)


                                                                 ?


     With that understanding  of the club, we must look at
the controlling law. Governance of A L M University and the
A 61M University System is vested  in the board of regents.
Educ. Code 55 85.11, 86.02. Section 85.21 of the Education
Code generally  establishes the authority of the board   as
follows:

           The board shall make bylaws, rules, and
        regulations it deems necessary and proper for
        the government of the university system and
        its institutions,   agencies,  and services.
        The board shall regulate the course of study.
        and prescribe   the   course of    discipline
        necessary to enforce the faithful discharge
        of the duties of the officers, faculty, and
        students.

     Those Education  Code provisions    generally   vest the
board of regents with the power to manage         and control
university property.. sfn w         . Woo-       287 S.W. 677
(Tex. Civ. App. - Austin    1926, io writ).' The board of
regents has delegated its responsibility for the management
and control of university property to the chief executive
officer of each part of the system. Texas A & M University
System, Administrative Policy and Reporting Manual    g c-11.2
(April 25, 1989).

     While we find no express authority for the university
system to operate auxiliary enterprises, we believe that the
university is authorized   to operate   such non-educational
facilities.   m    Educ.   Code 55 51.008(b),     61.003(14);
Attorney General Opinions H-513   (1975); H-456 (1974); LA-6
(1973). Furthermore, a faculty club fits within the para-
meters of "auxiliary enterprises" indicated by the examples
listed in section 61.003(14), which reads as follows:

           'Educational  and general buildings      and
        facilities* means buildings     and facilities
        essential  to or commonly associated       with
        teaching, research,   or the preservation    of
        knowledge, including the proportional     share
        used for those activities in any building    or
        facility used jointly with auxiliary     enter-
        prises. Excluded    are auxiliary    enterprise
        buildings and facilities,   including but not
        limited to dormitories, cafeterias,     student
        union   buildings,    stadiums,    and   alumni
        centers, used solely for those purposes.




                               p. 6052
Honorable Wilhelmina   Delco - Page 3   (JM-1146)




     The faculty club under consideration     here  is very
similar to the student food cooperative       addressed    '
Attorney  General Opinion H-513.     In that opinion,   th::
office determined that a state university, with the approval
of the governing board, was authorized either to house and
supply a private food coop or to operate one as an auxiliary
enterprise.  Attorney General Opinion H-513 (1975).

     The governing   board of the A 8 M University     System
apparently has not given direct approval for the operation
of the faculty club.     However,  the board has indirectly
approved the club in its adoption of the university   budget,
which includes a separate     line item for the club.      We
believe that the regent's inclusion of club expenses in the
university budget is tantamount   to approval by the regents
of the operation   of the club. It is our further opinion
that the regents may delegate responsibilities for adminis-
tration of the club to university    officers.  The court in
8ache Halsev Stuart Shields. Inc. v. Universitv of Houston,
638 S.W.2d 920 ITex. ADD. - Houston rlst Dist.1 1982, writ
ref'd n.r.e.) examined-kections of the Education Code- rela-
tive to the power of the board.of regents of the University
of Houston.   Those provisions    were very similar to the
sections cited above relative to the board of regents of the
A & M University System. The court addressed the issue of
whether the board of regents was authorized      to delegate
some of its duties to university officers    and found that,
inasmuch as the board of regents had a certain power,       it
also had the power to delegate "the details of management to
a President and other officers."     &   at 926. The court
noted:

        By enacting the above mentioned sections, the
        Legislature obviously  contemplated that the
        Board could not run a large University   with-
        out a great deal of aid from individuals
        intimately familiar with the details of the
        University on a day to day basis. The Board
        has been given the authority to delegate   the
        actual running   of the University     and to
        select people qualified to do so, and has
        been authorized to retain power of approval,
        power to hire, and power to fire, should the
        employees not perform adequately.

a   at 927.




                                p. 6053
Honorable Wilhelmina Delco - Page 4         (JM-1146)




     For tbe above reasons, we believe that Texas A brM
University is authorized  to operate a faculty club as an
auxiliary enterprise of the university.

     We understand that-your principle concern is that this
allocation of university  property might contravene  article
III, section 51, of the Texas Constitution, which provides
in part as follows:

               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.

     While the terms of that section appear to prohibit only
grants of money,  the provision has been construed to pro-
hibit tbe grant of any public property without the receipt
of.an adequate ouid nro -&lo. Q&son v; Warsu       118 S.W.2d
621 (Tex. Civ. App. - Waco 1938, writ dism#dj;       Attorney
General Opinions JW-551 (1986); &lW-89 (1979); WW-790 (1960).

     We do not think that use of university funds, property,
                                                                1
or staff for then club is necessarily prohibited by article
III, section 51. If it is determined that the operation   of
the club furthers university purposes, for example by en-
hancing faculty relations or by helping to attract more
qualified faculty members, and that such uuid nro ou
proportionate to the club's use of public funds, prop:&:
or staff, then we think that article III, section 51 is no
obstacle   to its operation.    The board of    regents  has
apparently made such determination,  in the first instance,
by implicitly   approving  the club's operation    when    it
approved an item for the club's expenses in the university
budget.

     Whether  the university   receives an adequate     gl&j
pro   aupfor the club's use of public property    and funds
ultimately involves questions of fact. We think that this
determination is for the regents in the first instance.

     We assume, for the purposes of this opinion, that other
legal requirements have been met. See. e.a., V.T.C.S.   art.
6252-5~   (corporation performing  an auxiliary   enterprise
service must present a financial statement, provide  payment
statements, and execute a bond payable to the state): j&
art. 6252-llf (state agencies must enact rules governing the
relationship between the agency and "a private  organization
                                                                ?




                                  P. 6054
Honorable Wilhelmina Delco - Page 5    (JR-1146)




designed to further the purposes and duties of the agency");
Educ. Code 5 61.0572 (coordinating board approval of space
utilization in all educational and general buildings).

                       SUMMARY
           The operation  of a faculty club as an
        auxiliary enterprise of Texas A L M Univer-
        sity does not violate article III, section
        51, of the Texas Constitution as long as it
        serves a public purpose or the university
        receives an adequate ouid ore QUO.




                                  J            b
                                    Very truly yo    ,

                                         nl,
                                    JIM      MATTOX
                                    Attorney General .of Texas

MARYRELLER
First Assistant Attorney General

JUDGE ZOLLIE STRARLEY
Special.Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Karen C. Gladney
Assistant Attorney General




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