Untitled Texas Attorney General Opinion

THEAITORNEY GENERAL
OF TEXAS
Amrrm.- 767ll

January 31, 1975

The Honorable C. C. Nolen Opinion No. H- 513
Preridart
North Texar State Univerrity Re: Quertionr ao to validity
Dentob, Texan 76203 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?

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 determina-
tion of the governing body that the service was
necessary or desirable in carrying out the educa-
tional functions of the institution, though the question
would ultimately be a judicial one. Expenditures for
a true public purpose do not violate Article III, Sec-
tion 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 involv-
ing 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 coopera-
tive 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 com-
munity. Duke v. N. T.S. U., 338 F. Supp.
990, 998 (E. D. Tex. 1971).

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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 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 forkspace 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, includ-
ing 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 govern-
ing 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 govern-
ing 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

p. 2317