                    September 14, 1965


Mr. John S. Hovenga                 Opinion No. C-503
Executive Director
Board of Regents                    Re:   Whether or not the
Texas State Teachers Colleges             President,Comptroller,
Austin, Texas                             or any other employee of
                                          an institutionunder the
                                          Board of Regents of Texas
                                          State Teachers Colleges
                                          may be an officer or stock-
                                          holder of the bank deslg-
                                          nated by such Board as the
                                          depositorybank for such
Dear MP. Hovenga:                         Institution.
          In your letter requesting an opinion from this office,
you ask the following question:
         "'If the Board of Regents of the State
    Teachers Colleges enters Into a depository
    agreement with a local bank for an institu-
    tion under this Board, Is It permissible for
    the President, Comptroller,OP any other em-
    ployee of that Institutionto be an officer
    or a stockholderof that bank that is deslg-
    nated by the Board of Regents to be the De-
    pository Bank for that institution.'"
          The Board of Regents for the State Teachers Colleges
was establishedby Article  2647, Vernon's Civil Statutes. The
general control and management of the State Teachers Colleges
is vested In the Board of Regents of the State Teachers Colleges.
Article 2644, Vernon"s Civil Statutes. The general powers of
the Board of Regents are expressed In paragraph 1 of Article
2647, VeTnon's Civil Statutes. Paragraph l8 Article 2647,
Vernon's Civ1; Statutes, provides as follows:
           D i >
            * The Board of Regents of tRe State
          '*I
     Teachers: Colleges Is char&ed with the
                                _;I,
                                   j6i"
Mr.   John S. Hovewa,   page 2 (C-503)


       responslbllltyof the general control and
       management of all State Teachers' Colleges
       for white persons and may erect, equip and
       repair buildings; purchase libraries,furniture,
       apparatus, fuel and other necessary supplies;
       employ and discharge presidents or principals,
       teachers, treasurersand other employees; and
       fix the salaries of the persons so employed.
       The principal of each State Teachers' College
       shall nominate annually to the board of regents
       such professors,teachers, officials, and
       assistants as In his opinion will promote the
       best interest of the Institution."
           The authority of the Board of Regents of the State
Teachers Colleges to select a depository bank for local funds
other than local income from educationalactivities is expressed
In Section 2, Article 2654d, Vernon's Civil Statutes, and Article
IV, Section 34, paragraph j of House Bill 12, Acts 59th Leglsla-
ture,  Regular Session, 1965, the General AppropriationBill.
This provision of House,Blll 12 is quoted as follows:
           II Local Depositories. The governing
            Cl.
      boards of the respective institutionsfor which
      appropriationsare made in this Article are
      hereby authorizedto select depository banks
      for the safekeepingof local funds other than
      those specified In the Section, 'Local Income
      from EducationalActivities,'of this Article,
      The boards shall require said depository banks
      to furnish adequate surety bonds or securities
      to be posted for the assurance of safety of such
      deposits. The depository bank or banks so selected
      are hereby authorized to pledge their securities
      for assurance of safety for such funds. All
      such local funds shall be de sited In these
      depositorieswithin seven (7p"days from date of
      collection. The governing boards may require
      the depository so designated and selected to
      pay Interest on deposits at a rate to be agreed
      upon by said depositoriesand said boards.
          No employee of a school under the jurisdictionof the
Board of Regents of the State Teachers Colleges has any respon-
sibility In selecting a depository bank for local funds.
         Article 6252-9, Vernon's Civil Statutes, establishes
standards of conduct for officers and employees of State agencies,


                                 -2377-
Mr. John S. Hovenga, page 3 (C-503)


legislatorsand legislativeemployees in the area of possible
conflict betwe2c their private interests and official duties.
          Article 6252-9,   Section 3(g), Vernon's Civil Statutes,
provides as follows:
          "No officer or employee of a state agency
     shall transact any business in his official
     capacity with any business entity of which he
     is an officer, agent, or member& or In which
     he owns a controllinginterest.
          Therefore3 it Is our opiniorithat It is not permlssible
for an employee of a school und,erthe jurisdictionof the Boards
of Regents of the State Teachers Colleges to be an officer or
controlling stockholderin the depository bank selected by the
Board of Regents, unless such employee does not transact any
business In his official capacity with the depository bank.
                      SUMMARY
          It is not permissible for an employee of
     a school und.erthe jurisdictionof the Board.
     of Regents of the State Teachers Colleges to
     be an officer or controlling stockholderIn the
     depository bank selected by the Board of Regents,
     unless such employee d.oesnot transact any
     business in h3.scfflcial capacity with the
     d,epositorybank*
                              Very truly yours,
                             WAGGONER CARR
                             4ttorney Oeneral


                              By:   ,&8-/f?tia~,'~
                                    IvanR. Williams, Jr.
                                    Assistant
1RWjr:ms:mkh
Mr. John S Hovenga, page 4 (C-503)


APPROVED:
OPINION COMMITTEE
w. V. Geppert, Chairman
John Banks
James Strock
Wayne Rodgers
Howard Fender
APPROVED FOR THE ATTORNEY GENERAL
BY: T. B. Wright
