                        May 7,   1969


Senator A. M. Aikln, Jr.             Opinion No. M- 391
Chairman, Committee on Education
Capitol Building                     Re: Constitutionalityof
Austin, Texas                            Senate Bill 631 re-
                                         lating to state
                                         tuition equalization
                                         and constitutionality
                                         of Senate Bill 485
                                         establishingan ed-
                                         ucational tuition
Bear Senator Aikln:                      scholarshipprogram.
    You have requested an opinion from this office concerning
the constitutionalityof Senate Bills 631 and 485, both of
which are simlllar and will be considered together in this
opinion In that each bill authorizespayment of tuition scholar-
ship for individualswho choose to attend private colleges and
universitiesand otherwise qualify for such scholarshipsunder
a state administeredprogram.
    Senate Bill 631 provides In Section 1, as follows:
         "LEGISLATIVEFINDINGS AND POLICY; (a) The
    legislaturefinds that the demand for higher
    educationalfacilitiesand services is increasing
    at a rate which places a severe strain on the
    ability of the state to supply them, and particularly
    challengesthe resources available to provide additional
    campuses,buildings, equipment,and other capital
    investments. In this state there exist many excellent
    privately-supportedcolleges and universitieswhich
    make large contributions~towardraising the educational
    level of the people of this state and which thereby
    assume a large part of the state's acknowledgedre-
    sponsibilityto provide for the education of its citizens.
    To encourage enrollment at these institutionsis to
    relieve the strain which irouldotherwise be placed on
                          - 1933 -
Senator A. M. Alkln, Jr., page 2   (M-391


     the public institutions. The legislature flnds
     that the granting of assistance to resident
     students at the privately-supportedcolleges
     and universitieswill stimulate enrollmentat
     these Institutions,and thus promote the objec-
     tives of the state to improve educational
     opportunitiesat all levels. The legislature
     thereforedeclared that the granting of such
     assistancewill promote essential public policies,
     will be accompaniedby adequate consideration,
     and will not be a gratuitousgrant of public funds
     to private InterestsIn violation of the Constl-
     tution.
          "(b) In view of the findin s and determi-
     nations expressed in Subsection7a) of this sec-
     tlon, it is the public policy of this state to
     grant financialassistanceto Texas.resldents
     enrolled in the privately-supportedcolleges and
     universitiesof this state under the terms and
     conditionsprescribedIn this Act and to the ex-
     tent provided by legislativeappropriations."
     Section 3 sets outcertain definitions to be used In the
Aot, defining "residentstudent," "eligible Institution,"
"designatedofficer" of an institution, "eligiblecourse," and
"Ineligiblecourse."
     Section 4 provides for the making of an applicationfor
tuition'assistancefor the resident student by the designated
officer of an eligible lnst'$tutlon,The applicationmust be
accompaniedby a signed, sworn report on a form prescribedby
the comptroller,giving enumerated pertinent Informationas to
the applicant,his educationalstatus and progress, and other
Informationto be required in order to determine compliance
with the requirementsof this Act.
          'Sec. 5. TUITION ASSISTANCE GRANT. On recelpt~
     of an applicationand enrollment report from an
                          -1934-~
Senator A. M. Aikln, Jr.,.page 3   (M-391
     eligible institution,the comptroller shall compute
     the amount of the tuition assistance grant under
     this Act as follows:
    For each resident student, $20 for each semester-
    hour or its e ulvalent, Of eligible courses which
    he completed ?passed or failed but not dropped)
    during the semester or term as indicatedby the
    enrollmentreport. However, the total amount for
    each staudent is limited to a maximum of $30.
    The proper amount shall be paid directly to the
    student by warrant drawn on the state treasury..
         "Sec. 6. REGULATIONS. The comptrollermay
    make reasonableregulations,consistentwith the
    PurPoses and policies.of this Act, to enforce the
    requirements,conditions, and limitations ex-
    pressed in this Act. Copies ,ofall regulations
    shall be dlstributed'toeach eligible institution."
    Senate Bill 485 provides in Section 1 thereof as follows:
         "Section 1. The Legislature finds and de-
    clares that the diffusion of knowledge Is a matter
    of primary concern in the Interests of the general
    welfare of the people of this State as a whole;
    that Article VII of the Constitution of this State
    constitutesa declaration of public policy obli-
    gating the Legislature to make all provision reason-
    ably possible for the education of the cltlzens
    of the State; that the.conditlonsand demands of
    modern society require excellence and extensive-
    ness in the field of higher education as well as
    In secondary;that the number of,persons desirous
    of securing and capable of attaining a college
    education Is increasingmore rapidly than existing
    State-supportedfacilities for higher education
    can be expanded; that the securing of properly
    trained and qualified faculty members Is a growing
    serious problem; that the costs of both physical
    plants and institutionaloperation are rising at
    such at rate that it is neither feasible nor fi-
    nancially practical for State institutionsto assume
    the entire burden of higher education in this State;
    that this State is fortunate In having within its
    boundaries a goodly number of independentaccredited
    colleges and universitiesoffering both general and
    specializedcourses of study substantiallyidentical
    to or comparablewith those provided by the State-
    supported colleges and universities;that the in-
    dependent accredited colleges and universitieshave
    establishedplants and qualified administrators
                         -1935-
Senator A. M. Alkin, Jr., page 4   (M-391


    and faculty and staff members; that the high
    tuition which the independentcolleges and uni-
    versities are normally forced to charge has made
    those institutionsunavailableto many of the
    citizens of the State who would otherwisehave
    chosen to take advantage of their facilitiesand
    has resulted In many instances in the operation
    of those institutionswith less than maximum
    enrollment;and that by the estabZishmentof a
    Tuition ScholarshipProgram aiding qualified
    students to enroll In independent colleges and
    universities,the State of Texas can at minimum
    expense fulfill Its obligation of providing for
    the education of its citizens."
    Section 2 provides for a special fund called the "Tuition
ScholarshipFund" for such purposes of appropriationby the
Legislatureand ultimate deposit in the State Treasury.
    Section 3 requires the CoordinatingBoard, Texas College
and University System, to administer the Fund and Section 4
sets out the necessary qualificationsfor resident applicants,
Including educat,lonal
                     status and progress, and such other "re-
quirements for qualificationsas the Board may establlsh...on
the basis of aptitude, past performancein academic studies,
financial condition, course of study desired to be pursued,
the demands of the economic community of the State of Texas;
and other factors as the Board may deem advisable."
    Section 5 provides for distributionof funds to qualified
applicants in an "amount by which the tuition charge at t,he
accredited independentcollege or university exceeds the tuitio:
for the same course of study at the University of Texas, but
no one applicant in any one semester may receive as a TultloQ~
Scholarshipan amount In excess of $300.00. “It further pro-
hibits the expenditureof any portion of the fund~for any per&o
                          - 1936 -
Senator A. M. Alkln, Jr., page 5    (M-391


"to attend a theologicalseminary or mlnlsterlalschool, or,
in any school, to pursue a course   of study designed as pre-
paration for any type of church-orientedwork or profession."
     Section 6 gives the Board power to adopt rules and regula-
tions to effectuatethe purposes of the Act, and Section.7
authorizes the Board to delegate to the Commissionerof the
CoordinatingBoard the powers, duties, and functionsauthorized
In this Act. Section 8 requires the Board to make an annual
report to the Governor as to the number of scholarshipsgranted,
names of recipients,and other Informationdescribing the ef-       ..
fectlvenessof the state program. Section 9 discloses the
"urgent   need to make higher educationalfacilities available
to the greatest number of Texas residents at the lowest possible
cost to the State..."
     Several constitutionalquestions which appear to be per-
tinent, concern whether the bills violate Section 51 of Article
III and Section 6 of Article XVI, Constitutionof Texas.
     Section 51 of Article III declares, in part:
          "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
     corporationswhatsoever;.,."
     Section 6 of Artlcla XVI provides, In part:
          "No appropriation.for private or individual
     purposes shall be made..."
     The purpose of these two sections of our constitutl?h
II
 a.. Is to prevent the applicationof public funds to private
                          -1937-
Senatoy A. M. Alkln, Jr., page 6 @f-391)


purposes; in other words, to prevent the gratuitousgrant of
such fund-,to any individualor ckporation whatsoever.. . ,n
Av.                             1.60 Tex.*348, 331 S.W. 737, 742   (19&j)‘,

      Section    1 of Article    VII of the Constitutionof Texas ma
it the duty of the Legislatureto make suitableprovision for an
efficientsystem of public.free schools, leaving the manner
of the support and maintenance of educationin the state to the
discretionof the Legislature,it being recognizedtherein
that, "A general diffusion of knowledge being essentialto the
preservationof the liberties and rights of the people." Cur
Supreme Court has held that this constitutionalpi-ovlslon
                                                        will'
be liberallyconstrued and that the enumerationtherein of what
the Legislaturemy       or shall do In providing a system of ed-
ucation is not to be regarded as a limitationon the general."
power of the Legislature to pass laws on the subject. Mume
v. Marl%, 120 Tex. 383, 40 S.W.?d 31, 33 (1931).
      We are unable to find any case authoritieswhich hold
that edticatlonal
                scholarshipsare not a proper public and
governmentalpurpose.
      In Attorney General Opinion No. C-474 (1965), It was con-
cluded that, purauant to legislationtherein considered,vouchers
issued to colleges and universitieswhich provided for teacher
trainingassistanceunder the state plan atiproved
                                               by the super-
vising state agency were valid as a proper governmentalor
public purpose     and did not therefore violate Section 51 Of
Article III, Constitutionof T&as+
                                -1938-
Senator A. M, Alkin, Jr.; page 7   (M-391


     In the course of the above opinion, it was pointed out that,
"The.determinationof what constitutesa 'publicpurpose' for
which a State may expend moneys has been held to be primarily
a legislativefunction...and the determinationof the legis-
lative body of the matter has been held to be not subject to
be reversed except in instanceswhere such determinationIs
palpably and manifestly arbitrary and incorrect. State ex rel.
McClure v. Hagerman, 155 Ohio St. 320, 98 N.E. 2d a35 (1951)."
In accord, 16 C.J.S. 768, Sec. 151 (5), ConstitutionalLaw.
     In this connection, it should be observed that the benefits
to the State from an expenditurefor a public purpose is fn the
nature of considerationand the funds expended therefore are
not,a gift even though hrlvate persons are benefitted therefrom."
Attorney General Opinion No. v-1067 (1950) Likewise, this office
also concluded In Attorney General Opinion No. C-530   (1965):

     "It is plain that an expenditureis not necessarilybarred
because Individualsas such may profit...",citing authorities.
In accord, 51 Am. Jur. 381 Taxation, Sec. 330, et seq.
     In Housing Authority of City of Dallas v. Iilgginbotham,
135 Tex. 158, 143 S.W. 2d 79 (19&O), our Supreme Court upheld
the constitutionalityof the erection of public low rent housing
projects against the contention that the same was a gift to in-
dividuals and therefore unconstitutional.
     In the opinion the court held that the Legislative declaration
of ,acertain thing to be for a public purpose or use must be
given weight by the courts, and -thedeterminationof that question
                          -1939-
Senator A. M. Alkln, Jr., page 8   (M-391


depends upon the character of the use and not the extent thereof.
The Court further observed that, "It is immaterialif the use
is limited to the citizens of a local neighborhood,or that the
number.of citizens likely to avail themselves of it is lnconsider-
able, so long as it is open to all who choose to avail themselves
of It."
    The Supreme Court later in Friedman v. American Security
Company of New York, 137 Tex. 149, 151 S.W. 26 570, upheld the
UnemploymentCompensationAct, against the contention that it
violated the constitutionalprohibitionsagainst gift or ap-
propriationsof public funds for a private purpose. The Court
again took a liberal view and held that"... no court ought to
say that such a purpose is outside of the administrationof
government." It reasoned that, "The administeringof govern-
ment..,coversand embraces a very large field of action... It
certainly serves a public purpose... is of very vital concern
to the State, and to every inhabitantthereof. Unemployment
always has had, and always will have, a very profound influence
upon the public welfare. The evils which attend it permeate
every part of our social, economic, and political structure...
this Act was intended to lessen these evils..."
    The promotion of education,like unemployment,must be
likewise considered to serve a public or governmentalpurpose.
It has a direct and substantialeffect upon employment,with
all of the attendant social, economic, and political rami-
fications. That private schools or individualrecipientsmay
                         -1940-
Senator A. M. Aikin, Jr., page 9    (M-391



Incidentallybenefit from the tuition scholarshipswe believe
is immaterialand does not render the character of the purpose
any less public or governmental,
     One other constitutionalquestion raised by at least
one of the bills as to whether the payment of tuition which
benefits privately supported schools, some of which may be
denominational,is prohibited by Article 1, Section 7, Con-
stitution of Texas, has been previously determined.bythis
office In Attorney General Opinion No. c-644 (1966),holding
that it is Immaterialthat private schools, though denominational,
are utilized as the pipe-line through which a public expenditure
is made, "the test being not who receives the money, but the
character of the use for which it is expended."

                          SUMMARY

          Senate Bills 631 and 485 would not be un-
     constitutionalIn appropriatingmoneys for
     tuition scholarshipsfor students to attend
     private universitiesor colleges, although some
     are denominational,since such state program
     for the promotion of education is for a public
     governmentalpurpose and benefit to-the in-
     dividual or institutionis incidental,

                        Ver# truly yours,


                              ORDMARTIN

Prepared by George Kelton
Assistant Attorney General

                          -1941-
Senator A. M. Aikin, Jr., page 10   (M-391


APPROVED
OPINION COMMITTEE
Kerns Taylor, Chairman
Houghton Brownlee
Bob Crouch
Roger Tyler
Fielding Early
Ray McGregor
W. 0. Shultz
W. V. Geppert
Staff Legal Assistant
Hawthorne Phillips
Executive Assistant




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