               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?

                        (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 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).




                                                                        -
                                      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    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
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        ’




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




                    APPROVED:




                    C. ROBERT HEATH,       Chairman
                    Opinion Committee

                    lg




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