                                                         R-449




Hon. L. A. Uoods
State Sup rintendent of Public       Instruction
Departmentf! of Education
Austin, 'Texas
                       Op;inion No,, V-213
                       Re:    Maximum pric~e the State
                              may pay for school te,xt-
                              books, and related fact
                              questions.
Dear Sir:
          We refer to your le,tter       of May 1, 1947,           from
which we quote in part?
            "A~rtic~e~~2&2,,~ R~,.C. AS.,, provfdes
     Lnpart as, fol?&ws:       1;. . . 'Th83maximum
     price at mch.the        Texas State Text Ekaek
     Commiss,ion ,shall ,eontract to pay f.o.b.
     the Texas~ depos&tory of the publisher,
     for any books to be used ,in the public
     schools of thXs Stateshall         not exceed
     the mininnun pr5ce at whic:h the publisher
     sells such b:ooks &wholesale          quantities,,
     f.o.b.   the publisher's     publish$,ng house,
     after all discounts, have been, deducted.          . .I
            "Sectian 4 of the Official     Texas
     Textbook Contract Form prepared by the
     Attorney Beneralt~s office    provides as
     folloua:      *It is hereby expressly     stip-
     uEated that the pr*ic:es, hereby c,ontracted
     to be paid the pubUsher f.o.b.        its Texas
     depository     for the books herein described
     and to be use% in the public ,schools of
     this State shall never exceed the minimum                 '
     price at which the pubUsher sells such
     books in whol~e%ale quantities     f.o.b.     the
     publisher*s     publishing house, after all
     discounts have ,been deduc.ted.      The said
Hon. L. A. wOoas - Page 2-4-213


     publisher    covenants and agrees to
     file in the offloe      of the State Super-
     Intendent of Public InsOructlon be-
     tween June 1 and June 15 of each year,
     a sworn statement listing        the lowest
     net wholesale price and terms of sale
     of all books herein contracted         for
     when sold to other states,        counties,
     dealers,   depositories,     schools,    Indivi-
     dual purchasers,      or otherpurchagers-,
     And the said publisher       further cove-
     nants and agrees that if at, any tine
     during the period of this cemtruct any
     book or books herein named or any edi-
     tions thereof substantially        slmllar to
     the official     samples @n file in the
     office   of the State Superintendent        shs2.P
     be sold at a lower net wholesale price,
     f.o,b,   publisher@s shipplng point tc any
     state, county, dealer, depsn%toriea,
     school,   individual,    pr others than the
     price agreed upon in this contract,
     then such lowers price shall immediately
     become the contract price between the
     publisher and the State, of Texas pro-
     vlded the State desires to accept such
     books in the revised or changed editlon,~
            “Two books were adopted in another
     State in day, 1946 at a price of 9 84
     EODT        for eaoh of the books.     TAe con-
     ‘tract-%     effective   as of July- 1, 1946.
     In November, 1946 these same booka as
     far as content is concerned were offered
     to the Texas State Board of Education
     and a contract nas awarded at 8.90 per
     oopg for each of the two books*        The only
     differences     we have been ab&s to find in
     the books offered in both states relates
      to the design on the Covers.       The pagiaa-
      tlon Is identical     and the content the same.
     The contract which was awarded by the Texas
     State Board of Education is effective        as
      of September 1, 1947. We have only re-
      cently discovered     that the books were be-
      ing supplied to another state at the present
      time at the lower price.      ,e .
           “In view of the foregoing       statutory
Hon. L. A. WOoda- ‘Page 3


     provisions    and tam    of the contractural
     agreement, we deialre to submit for your
     consideration    and request your opinion on
     the following    quentionr:
           “1)  Is the State    of Texas entitled
     to urchase these books      at the price of
     s.at Per copy which Is     the pnice at which
     they are being supplied     to public schools
     in a neighboring  state,    or must the State
     of Texas pay the price     of $*90 stipulated
     in Its contract?
           “2)   If a textbook is under contract
     in another state for a five-year    period
     at a stipulated   price,  may the State of
     Texas contract to purchase this book or
     substantially   similar editlcas.  thereof at
     a higher price at any time during the period
     In which the book Is under contract in the
     other State?”
           There being no statement in the submitted facts
to the contrary,  we assume for the purposes of this opin-
ion that requirements    cOnditions.and   revisions  of Artl-
cles 2842 as amended’by Acts 1945 28t6        2847  2848
2849, 2a5i, 2853, 2854 and 2856, v: C, St, ha& been’met
and that there exists b reason thereof a contract ef-
fective  September 1, 19%7,,as approved by the Board of
Education and the publisher of the two textbooks In ques-
tion executed Ain accordance with Article    2675b-5 and 2854,
v, c. s.
           The pricer whih the Ward .of Education &F con-
tract to pay for textbooks adoptbd for use In Vie public
school% of Texas Is governed by Artiole      2852, V, C. S.
It provides that the maxiarm price fro,bu the Texas de-
pository  of the publisher   shall, not exceed the lninimum
price at which the publisher ,selXs such book in whole-
sale quantitiee    frolbr the publisher’s  publishing   house,
after all discounts have been deducted,       Furthermore,
It provides that any contract nad~e for such book at a
higher price than the maxlnmmherein fixed shall be void.
              Se&ion 4 of the Official       Texas Contract Form,
heieinabove      quoted, incorporates    in substance the ftied
maximumprice provision        of Artlcls    2852, Under said
contract foon, the publisher        further agrees that if at
any tiae during the period of the contract any books
named therein or gubstantially         similar to thee official
samples
    .      on  file   in the office   of State Superintendent
        i,
Hon. L, A, Woods - Page 4 - V-213



shall    be sold   at a lower net wholesale price
f.o,b,    publlsherle   sn;lpping point to any State,
etc+,    than the price n&reed upon in the con-
tract, then such lower pr8,ce ahall
become the oentraat price between t ii==%%&P
                                      ‘e pu
and the State of Texas,, {x&uphasis oure)
           It is our opinion that the phrase,
“minimum price at which the publisher sells such
book in wholesale quantit1ee8, f#o#b,, the pub-
lisherls  publi@hin$ place, after all dlscowz$ts
have been deduoted    a8 employe,d in Artiole  2852,
should be construed to mean that mlnimum price,
whatever it may be, as evidenced    on the sample
copies of the books offered   for sale and submitted
to the Board of Education pursuant to the pro-
visions of Article   2846, and on the.basis   of Whioh
said offer the State Board of Educatgon and the
publisher  execute their contract,*
              If, in fact, on the date the contract
was consummated between the Board of Education
and the publisher,        the publisherfs   mlnlmum price
for the textbook in question,          or books substan-
tially    similar,     ia the lowest net price at whhich
they are Bold or offered for saY.e in whOle8ale
quantities      f,o,b.   the publisherla   publishing
house to other States, counties or other purchas-
ers, then, in our opinion,         the price contracted
for is in conformity with the provisions            of Arti-
cle 2852.       If, however, subsequent to the con-
summation of the contract,         the publisher offers
and sells said textbook,         or substantially    similar
books, at a lower net price than provided for in
the contract,        then the terms Bf the contract     epe-
cifically     provide that such lower price shall
immediately become the contract price between the
publlsher and the State of Texas.
           Stated in another manner, we do not
believe that the minimum rioe C1aUs.e in Article
2852 can properly be cons e rued to mean that lowest
net price at which like textbooks were offered
and contracted   for in wholesale quantities, f.o,b,
the publisherr    publishing house, at a time prior
to that date when the like textbeoks were offered
for sale to the State of TaXas and en the basis
of which said offer a contract has been consummated,
_   .’




         Hon. L. A, Woods - Page 5 A-V-213


                                                               based
                                                               net
         aale price for the textbook@ ,M qu ,+lon,       or books sub-
         stantially    eimi$ar thereto, II@@ 9otz: per copy for e&h
         of the books at ,$he daMa the ~c%W@@ct .w&e consvrumat,ed
         between the Boar&l of Pduca.t:ion @MI the publisher,      the
         State muat pay the price g,tSpt@*Wd in ,the contract
         for book8 furnished thereumder, unWtes, and until the
         publisher reduoe.a its price when> ,under the terms of
         the conWWt,      the $oWm price wlXl Wiediately       and
         automatically    becow the contract pr%ce between the
         State and the publieher,
                   AccordIn&?,   our answer ta your second ques-,
         tion is in the, afMrmative   asium&ng the contract made
         in the other State for a five-year   period was consumma-
         ted at a time prfor to the Texas contract and assuming
         the lower mlnlmum sal,es price offer of the publisher
         made to the other State was made at a time prior to the
         time it submitted its samples and bid to the State of
         Texas.




                          ~Bztted.on i2he :eavbag%t;ed
                                                     factie~, the
                    State of Texas mu@ pay .qO# per copy per
                    textbook or .boGka .~&~Wta&ia&ly s&eilar




                    during   the term ,of thC coritnoct.
                         !l%e erSwteao* 0f a Iong term con-
                    tract betweem a, p&M~ber and &other
                    State prorL~      for the ,eaXe of textbooks
                    at a c:erta&n f&,x+$ prl;c,e would not pre-
                    clude Ohi? Texaie State Aboard of Education
                    from contractlag   *#$%I a$d publisher   for
                    sb&%ar textboolar at a higheir price,    when
                                                             .. .




non, L, A, Woode - Page CL-V-213



          the higher pMce at the time the
          Board cmmmmate8 the controct~
          does not exceed the minimum price
          at which the publisher sells such
          books In wholesale qimntltles,  f.o.b,
          the publisher~s  PUbiiShing house,
          after all discounts have been de-
          ducted.
                                   Very truly   yours
                            ATTOFtNEY
                                    QW            OF TEXAS


                                       Ghester E. Ollison
                                                Assistant
cEo:ajm




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