Untitled Texas Attorney General Opinion

ATTORNEYGENERAL OF TEXAS

GREG ABBOTT

December lo,2004

The Honorable Jo& R. Rodriguez Opinion No. GA-0280

El Paso County Attorney

County Courthouse Re: Whether the Border Health Institute is a state

500 East San Antonio, Room 503 agency for various purposes (RQ-0229-GA)

El Paso, Texas 79901

Dear Mr. Rodriguez:

You ask whether the Border Health Institute created under Texas Education Code chapter

15 1 “generally qualities as a state agency, and whether it: (1) is entitled to sovereign immunity; (2)

must comply with the Texas Open Meetings Act; (3) must complywith the Texas Public Information

Act; (4) must follow state procurement and contracting rules; (5) must follow civil service rules; and

(6) must obtain non-profit corporation status to be able to solicit funding.“’

I. Background

The Seventy-sixth Legislature established the Border Health Institute (the “BHI”) in 1999

as a “collaboration or consortium of independent public and private entities.” TEX. EDUC. CODE

/INN. @ 15 1.001-.002(a) (Vemon2002). Section 151.002 provides for the establishment ofthe BHI

and describes its purpose:

(a) The Border Health Institute is established in the city of El

Paso.

(b) The institute shall operate in a manner that facilitates and

assists the activities of international, national, regional, or local health-

related institutions working in the Texas-Mexico border region to:

(1) create and fund centers or component

units within the institute to facilitate research in fields

of study affecting public health in the border region,

including researchrelated to diabetes, Hispanic health

‘Letter fromHonorable Jest R. Rodriguez, El Paso County Attorney, to Honorable Greg Abbott, Texas Attorney

General (May 17,2004) (on tile with the Opinion Committee, also avdable af http://www.oag.state.tx.us) [hereinafter

pequest Letter].

The Honorable Jose R. Rodriguez - Page 2 (GA-0280)

issues, infectious diseases, emerging infections,

environmental health issues, and children’s health

issues;

(2) deliver health care or provide health

education to persons living in the border region; and

(3) conduct and facilitate research in fields of

study affecting public health in the border region,

includingresearchrelated to diabetes, Hispanic health

issues, infectious diseases, emerging infections,

environmental health issues, and children’s health

issues.

Id. 5 15 1.002(a)-(b). The bill analysis corroborates that the purpose of the BHI “is to deliver health

care or provide health education to persons living in the border region and conduct research in fields

of study affecting public health, including research related to infectious diseases, diabetes,

environmental health issues, and children’s health issues.” HOUSE COMM. ONHIGHEREDUC., BILL

AI\IALYSlS,Tex. H.B. 2025,76th Leg., R.S. (1999).

The initial governing board of the BHI was composed of the chief executive officer or

president, or their designees, of the following nine institutions:

(1) The University of Texas at El Paso;

(2) Texas Tech University Health Sciences Center at El Paso;

(3) El Paso Community College District;

(4) R. E. Thomason General Hospital;

(5) El Paso City/County Health District;

(6) The University of Texas Health Science Center at Houston,

School of Public Health:

(7) El Paso County Medical Society;

(8) Paso de1 Norte Health Foundation; and

(9) The Texas Department of Health.

TEX. EDUC. CODE ANN. $9 151.003(a), .004(a) (Vernon 2002). The governing board is authorized

to adopt procedures for “changing, adding, or removing entities as members of the institute and

creating development or advisory boards for the institute.” Id. 5 151.003(b). At present, the

following institutions hold voting positions on the BHI board

The Honorable Jose R. Rodriguez - Page 3 (GA-0280)

. El Paso City-County Health and Environmental District

. El Paso Community College

. El Paso County Medical Society

. Texas Department of Health

. Texas Tech University Health Sciences Center at El Paso

. Thomason Hospital

. University of Texas at El Paso

. University of Texas, Houston, School of Public Health,

El Paso Campus

See TEX. DEP’T OF HEALTH, BORDER HEALTH INSTITUTE, available af http://www.rlO.tdh.state

.tx.uslobhbhi/bhi.htm (last visited Oct. 6,2004). TheBHI governing board is required to adopt rules

governing operations and deliberations of the board and the institute, and the governing board may

hire an executive director and staff necessary to operate the institute. See TEX. EDUC. CODE ANN.

3 15 1.004(b)-(c) (Vernon 2002). The governing board is required to meet at least once a year “to

review the progress of the institute and to determine the institute’s future actions and operational

plans.” Id. 5 15 1.004(d).

Section 15 1.005 of the Education Code describes the funding for the BHI and provides:

(a) In addition to any amount appropriated by the legislature,

the institute may apply for and accept funds from the federal

government or any other public or private entity. The institute or any

member ofthe institute may also solicit and accept pledges, gifts, and

endowments from private sources on the institute’s behalf. A pledge,

gift, or endowment solicited under this section must be consistent

with the purposes of the institute.

(b) The governing board of the institute shall manage and

approve disbursements of appropriations, funds, pledges, gifts, and

endowments that are the property of the institute.

(c) The governing board of the institute shall manage any

capital improvements constructed, owned, or leased by the institute

and any real property acquired by the institute.

Id. 5 151.005(a)-(c). Under section 151.006, physical facilities to be used in research projects,

provision of health care, and education programs may be “provided [to the BHI] by a public or

private entity or by a cooperative, consortium, or joint venture consisting of public or private

The Honorable Jose R. Rodriguez - Page 4 (GA-0280)

entities.” Id. 5 151.006. Additionally, a physical facility “may be constructed, maintained, or

operated with funds the institute receives under Section 15 1.005 and any funds appropriated for that

purpose.” Id.

A bill analysis prepared by the House Research Organization in 1999 notes that “[i]n

December 1998, the University of Texas System and Texas Tech University signed a collaborative

agreement dedicated to creating a future health campus in El Paso. Establishing the Border Health

Institute would be the next logical step.” HOUSE RESEARCH ORGANIZATION, BILL ANALYSIS, Tex.

H.B. 2025,76th Leg., R.S. (1999). The Texas Department ofHealth’s website described the status

of the BHI in early 2003. See TEX. DEP’T OF HEALTH, BORDER HEALTH INSTITUTE, available at

http://www.rl O.tdh.state.tx.us/obhibhiibhi.htm (last visited Sept. 4,2004). Although the legislature

in 2003 did not fund the remaining two-year program of the Texas Tech Health Sciences Center, it

did nevertheless provide funding for the BHI as part of its appropriation to the University of Texas

at El Paso. A line item appropriation in the 2003 General Appropriations Act for the University of

Texas at El Paso listed $284,375 for the “Border Community Health Education Institute” for both

fiscal year 2004 and fiscal year 2005. See General Appropriations Act, Act of June 1,2003,78th

Leg., R.S., ch. 1330, art. 111.78, 2003 Tex. Gen. Laws 5023, 5339.

The BHI is required to provide an “annual audited financial statement and a status report of

each project undertaken” to each member of the governing board and to each member of the

legislature “whose district includes any portion of a county where the [BHI] is established or

operating.” TEX. EDUC. CODE ANN. § 15 1.008 (Vernon 2002). Moreover, the BHI governing board,

“in consultation with the institute’s members,” is required to develop a ten-year strategic plan “to

guide and evaluate the institute’s progress toward achieving the purposes of the institute under

Section 15 1.002.” Id. § 15 1.Ol O(a). Each even-numbered year, not later than December 15, the BHI

governing board must submit to the legislature and to the Texas Higher Education Coordinating

Board “a report concerning the strategic plan including any recommendation for legislative

action.” Id. 5 15 1.Ol O(d). Those institutions that are subject to the oversight and rules of the Texas

Higher Education Coordinating Board under chapter 61 of the Education Code “remain subject to

that supervision and those rules as those institutions participate in the institute and its activities.”

Id. 8 15 1.009. The member institutions subject to Coordinating Board oversight are the University

of Texas at El Paso, Texas Tech University Health Sciences Center at El Paso, the University of

Texas Health Science Center at Houston, School of Public Health, and the El Paso Community

College District. See id. 55 61.003, .051.

II. Status of the BHI: State Agencv or Political Subdivision?

The BHI is one of a number of entities that combine both state and local characteristics. See,

e.g., Tex. Att’y Gen. Op. No. JM-424 (1986) at 2 (community centers); Tex. Att’y Gen. LO-95-024,

at 4 (Coastal Coordination Council). Its nine original statutorily-proscribed member institutions

included seven public agencies and two private entities. Its present composition includes six public

and two private members. The BHI is created by statute and its duties prescribed thereby. It may

receive appropriated as well as federal funds. It is required to submit reports to the legislature

and to the Higher Education Coordinating Board in even-numbered years. It appears to be a

governmental body for all purposes.

The Honorable Jo& R. Rodriguez - Page 5 (GA-0280)

The more difficult question is whether the BHI is a state or local governmental entity. In

Guaranty Petroleum Corporation v. Armstrong, 609 S.W.2d 529 (Tex. 1980), the Supreme Court

of Texas considered whether a navigation district constituted a “political subdivision” or a “board

or agency of the state.” The court declared:

A political subdivision differs from a department[,] board or

agency of the State. A political subdivision has jurisdiction over a

portion of the State; a department, board or agency of the State

exercises its jurisdiction throughout the State. Members of the

governing body of apolitical subdivision are elected in local elections

or are appointed by locally elected officials; those who govern

departments, boards or agencies of the State are elected in statewide

elections or are appointed by State officials. Political subdivisions

have the power to assess and collect taxes; departments, boards and

agencies do not have that power. Our examination of a number of

statutes shows that the legislature has consistently recognized these

distinctions between departments, boards or agencies on the one hand

and political subdivisions on the other.

Id. at 53 1. The court ultimately concluded that the Brownsville Navigation District was a “political

subdivision” rather than a “department, board or agency of the State.” Id. at 530.

In Lohec v. Galveston County Commissioner’s Court, 841 S.W.2d 361 (Tex. 1992), the

Supreme Court of Texas, in considering the status of the Galveston County Beach Park Board, cited

the Guaranty Petroleum case and emphasized that “[clounty beach park boards lack state-wide

jurisdiction, a trait required of entities recognized as departments, boards, or agencies of the state.”

Id. at 364. Moreover, “[tlhere is no indication that county beach park boards are encompassed by

[the state purchasing statute’s] definition of a ‘state agency’ as one ‘in the executive branch of state

government.“’ Id. Thus, the court concluded that the beach park board was an entity of county

government. See id. at 365-66. As the dissenting opinion points out, however, the majority seems

to have relied most heavily for its conclusion on the observation that, if county beach park boards

are not deemed to be an organ of county government, they would be “independent and autonomous

entities which are exempt from any meaninghI oversight.” Id. at 366.

Finally, in a very recent case, the Supreme Court reiterated the test for determining whether

an entity is a “state agency.” In Texas Department of Transportation Y. City of Sunset Valley, No.

03-0041,200$ WL 2125670, at *4 (Tex. Sept. 24,2004) (not yet reported), the Court, in considering

an argument that a municipality was a “state agency,” stated as follows:

[W]e have long recognized a distinction between agencies of the

State, which generally exercise statewide jurisdiction, and political

subdivisions like municipalities, which have limited geographic

jurisdiction. SeeMonsanto Co. Y. Cornerstonesbfun. Util. Dist., 865

S.W.2d 937, 939-40 (Tex. 1993) (“[A] political subdivision differs

from a[n] . . agency of the State. A political subdivision has

jurisdiction over a portion of the State; a[n] agency of the State

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exercises its jurisdiction throughout the State. [T]he legislature

has consistently recognized these distinctions between agencies

on the one hand and political subdivisions on the other.“).

The difficulty in applying the Guaranty Petroleum, Lohec, and Sunset Valley standards

becomes apparent when considering the status of the BHI. The BHI has much more tenuous ties

with local government than does a navigation district or a county beach park board. A majority of

its members represent institutions ofhigher education located in places as geographically diverse as

El Paso, Lubbock, and Houston. The purpose of the BHI is, inter alia, to deliver health care, provide

health education, and to assist the activities of various health-related institutions “working in the

Texas-Mexico border region,” a region that stretches from El Paso to Brownsville. Finally, the BHI

is required to submit biemial reports to the legislature and to the Higher Education Coordinating

Board. On the other hand, under the jurisdictional test of Guaranty Petroleum and Lohec, the BHI

clearly fails to qualify as a state agency within the executive branch of state government. Its

jurisdiction is limited to “aportion ofthe state” rather than to the state as a whole. Furthermore, its

membership bears the indicia of neither state agency nor political subdivision: members are not

elected or appointed either by local officials or state officials. BHI membership was initially fixed

by its enabling legislation. It is at present determined by the board members themselves. We must

conclude that, in its present composition, the BHI is neither political subdivision nor state agency.

Rather, it occupies that nebulous territory between those two extremes, partaking of the qualities of

both, but never fully either.

III. Ouestions and Analvsis

Although we cannot determine the precise status of the BHI for all purposes, we can discern

the applicability of particular statutes to that entity.

A. Sovereign Immunity

You first ask whether the BHI is entitled to sovereign immunity. As we have

indicated, the BHI is neither political subdivision or state agency. While the entitlement to sovereign

immunity ofboth state and local governmental entities is well established in Texas law, no judicial

decision has considered its applicability to hybrid entities such as the BHI. We will, consequently,

briefly review the law regarding sovereign immunity as applied to both state and local entities. We

caution, however, that we cannot determine as a matter of law whether the BHI is entitled to any

kind of sovereign immunity. The legislature has simply failed to provide any guidance in this matter.

The following discussion is therefore predicated on the assumption that the general principle of

sovereign immunity is applicable to the BHI.

Initially, we note that the Supreme Court of Texas has distinguished between immunity from

suit and immunity from liability. See Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401,405 (Tex. 1997).

“Zmmunityfrom suit bars a suit against the State unless the State expressly gives its consent to the

suit,” while “[i]mmunityfrom liability protects the State from judgments even ifthe Legislature has

expressly given consent to the suit.” Id.

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With regard to tort liability, the legislature has partially waived sovereign immunity for both

the state and its political subdivisions. The Texas Tort Claims Act, chapter 101 of the Civil Practice

and Remedies Code, broadly defines “governmental unit” to include “any other institution, agency,

or organ of government the status and authorityofwhich are derived from the Constitution ofTexas

or fkom laws passed by the legislature under the constitution.” TEX. CIV. PRAC. &REM. CODE ANN.

5 101,001(3)(D) (Vernon Supp. 2004-05). TheBHI, as acreature ofstatute, is thus a“govemmenta1

unit” for purposes of the Tort Claims Act.

Section 10 1.025 of the Civil Practice and Remedies Code provides:

(a) Sovereign immunity to suit is waived and abolished to the extent

of liability created by this chapter.

(b) A person having a claim under this chapter may sue a

governmental unit for damages allowed by this chapter.

Id. 9 101.025 (Vernon 1997). Liability ofthe state government under the Tort Claims Act “is limited

to money damages in a maximum amount of $250,000 for each person and $500,000 for each single

occurrence for bodily injury or death and $100,000 for each single occurrence for injury to or

destruction of property.” Id. 5 101.023(a) (Vernon Supp. 2004-05). A unit of local government’s

liability “is limited to money damages in a maximum amount of $100,000 for each person and

$300,000 for each single occurrence for bodily injury or death and $100,000 for each single

occurrence for injury to or destruction ofproperty.” Id. 5 101.023(b). Because we have determined

that the BHI is neither a state governmental agency nor a local governmental entity, but rather a

hybrid ofthe two, we cannot say with assurance which tort liability limitation would apply. We may

conclude, however, that the BHI is entitled to sovereign immunity in tort cases, except to the extent

such immunity is waived by statute.

With regard to contractual liability, the Texas Supreme Court said in Federal Sign that when

it contracts with private citizens, the State “waives only immunity from liability.” Fed. Sign, 95 1

S.W.2d at 408. On the other hand, “a private citizen must have legislative consent to sue the State

on a breach of contract claim. The act ofcontracting does not waive the State’s immunityfrom suit.”

Id. As to local governmental entities, “[t]he general authority of counties and other local

governments to sue and be sued generally acts as a statutory consent to suit although not a waiver

of sovereign immunity.” 35 DAVID BROOKS, COUNTY AND SPECIAL DISTRICT LAW 5 2.2 n.5 (2d

ed. 2002) (statutes and cases cited therein).

The BHI is not, as we have indicated, either a state or local governmental entity. Federal

Sign could be read, however, to imply that no governmental entity is immune from liability on a

valid contract. We may also infer from that case that the BHI retains immunity from suit unless and

until permission to sue is granted by the legislature. As previously noted, most local governmental

entities have the statutory authority to sue and be sued. No such authority is granted to the BHI in

its enabling legislation. In our view, therefore, the legislature has not waived the BHI’s immunity

from suit for breach of contract. Accordingly, a party aggrieved by its contract with the BHI must

seek legislative permission to sue that entity.

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B. The Open Meetings Act

You next ask whether the BHI is subject to the Texas Open Meetings Act (the

“OMA”). See Request Letter, supru note 1, at 1, 5-7; TEX. GOV’T CODE ANN. $5 551.001-,146

(Vernon 1994 & Supp. 2004-05) (Open Meetings Act). The OMA provides that “[elvery regular,

special, or called meeting of a governmental body shall be open to the public, except as provided by

this chapter.” TEX. GOV’T CODE ANN. 5 55 1.002 (Vernon 1994). “Governmental body” is defined

for purposes of the OMA as follows:

(A) aboard, commission, department, committee, or agency

within the executive or legislative branch of state government that is

directed by one or more elected or appointed officials;

(B) a county commissioners court in the state;

(C) a municipal governing body in the state;

(D) a deliberative body that has rulemaking or quasi-judicial

power and that is classified as a department, agency, or political

subdivision of a county or municipality;

(E) a school district board of trustees;

03 a county board of school trustees;

(G) a county board of education;

(H) the governing board of a special district created by law;

(I) a local workforce development board created under Section 2308.253;

(J) anonprotitcorporationthatiseligible toreceivefundsunderthefederal

community services block grant program and that is authorized by this state to serve

a geographic area of the state; and

(K) a nonprofit corporation organized under Chapter 67,

Water Code, that provides water supply or wastewater service, or

both, and is exempt from ad valorem taxation under Section 11.30,

Tax Code.

Id. 5 551.001(3) (Vernon Supp. 2004-05). We have already determined that the BHI is not an

“agency within the executive or legislative branch of state government,” and that it does not qualify

as any kind of local governmental body. In addition, it is not a nonprofit corporation under

subdivisions (J) and (K) of section 551.001(3). These conclusions do not mean, however, that the

BHI is exempt from the Open Meetings Act.

III Sierra Club v. Austin Transportation Study Policy Advisory Committee, 746 S. W.2d 298

(Tex. App.-Austin 1988, writ denied), the court of appeals considered the applicability ofthe OMA

The Honorable Jose R. Rodriguez - Page 9 (GA-0280)

to the AustinTransportation StudyPolicy Advisory Committee (“ATSPAC”), “aseventeen-member

body composed of state, county, regional, and municipal public officials.” Id. at 300. Although not

legislatively created, ATSPAC had been designated a “Metropolitan Planning Organization” under

federal law, and was an “official body designated by the governor.” Id. at 300-01. The ATSPAC

played “a vital role in deciding which highway projects are planned, built and funded in the Austin

urban area.” Id. The court concluded that although the ATSPAC was not a “special district” in the

usual sense, it functioned as such for purposes of the OMA. Id. at 301.

Like the ATSPAC, the BHI is primarily composed of representatives of public entities. In

addition, its enabling statute indicates that it performs governmental functions, particularly those of

providing health care and health education to persons living in the border region. The BHI, unlike

ATSPAC, was created by statute. Both receive appropriated and federal funds, even if indirectly.

As the court noted in Sierra Club, the language of the OMA “clearly reveals the Legislature’s

intention to give it broad coverage.” Id. at 300. It “broadly applies to any meeting by a quorum of

the members of a governmental body which meets to discuss any public business or policy, with

certain exceptions.” Id. (emphasis added). As a result, we believe that the BHI exhibits the kind of

qualities sufficient to bring it within the category of a “special district” for purposes of the OMA.

See TEX. GOV’T CODE ANN. $ 551,001(3)(H) (Vernon Supp. 2004-05); see also Sierra Club, 746

S.W.2d at 301. We conclude that chapter 551 ofthe Government Code, the Open Meetings Act, is

applicable to meetings of the governing board of the BHI.

C. The Public Information Act

Your next question is whether the BHI must comply with the Texas Public

Information Act. See Request Letter, supra note 1, at 7-8; TEX. GOV’TCODEANN. $4 551.001-,353

(Vernon 1994 & Supp. 2004-05) (Public Information Act). Section 552.002 of the Government

Code defines public information as “information that is collected, assembled, or maintained under

a law or ordinance or in connection with the transaction of official business by a governmental

body. . or. . for a governmental body and the governmental body owns the information or has a

right of access to it.” TEX. GOV’T CODE ANN. 5 552.002 (Vernon Supp. 2004-05). Section 552.003

defines governmental body, in part, as follows:

(viii) the governing board of a special district;

.

(xii) the part, section, or portion of an organization,

corporation, commission, committee, institution, or agency that

spends or that is supported by public funds;

Id. 8 552.003(1)(A)(viii), (xii). W e h ave already concluded that the BHI is a “special district” for

OMA purposes under the test of Sierra Club. We need not, however, extend the Sierra Club case

beyond its scope, because the BHI is “an organization. that spends or that is supported by public

funds.” We conclude that the BHI is a “governmental body” under the terms of chapter 552 of the

Government Code, and thus subject to the Public Information Act.

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D. State Procurement and Contracting Rules

You also ask whether the BHI “must follow state procurement and contracting rules.”

Request Letter, supra note 1, at 1, 8. Under the State Purchasing and General Services Act, a state

agency is defined as:

(A) a department, commission, board, office, or other agency

in the executive branch of state government created by the state

constitution or a state statute:

(C) a university system or an institution of higher education

as defined by Section 61.003, Education Code, except a public junior

college.

TEX. GOV’T CODE ANN. § 2151.002 (Vernon Supp. 2004-05). Chapter 2155 of the Government

Codes sets forth the state purchasing rules and procedures that a state agency must follow. See id.

$5 2155.001.,448 (Vernon 2000 & Supp. 2004-05). Because we have determined that the BHI is

not a state agency within the executive branch of government nor a university system or institution

of higher education, we conclude that the BHI is not required to follow state procurement and

contracting rules.

E. Civil Service

You further question whether the BHI must follow civil service rules. See Request

Letter, sup-a note 1, at 1,s. Civil service systems may be created under chapters 143 and 158 of the

Local Government Code for municipalities and counties. See TEX. LOC. GOV’TCODE ANN. chs. 143,

158 (Vernon 1999 & Supp. 2004-05). There is no such system for employees of state agencies or

educational entities. Because we have concluded that the BHI is neither a state agency nor a local

governmental entity, we are aware of no statute that would require the BHI to follow civil service

rules.

F. Nonprofit Corporation Status

You finally ask whether the BHI must obtain nonprofit corporation status in order to

solicit funding. See Request Letter, sup-a note 1, at 1, 8. The BHI is, as we have indicated, a

creature of statute. Unlike, for example, the Texas Guaranteed Student Loan Corporation, it is not

deemed a nonprofit corporation by its enabling legislation. See Tex. Att’y Gen. Op. No. MW-295

(1981). The BHI may, by statute, receive appropriated funds and federal funds, as well as funds from

any public or private entity. See TEX. EDUC. CODE ANN. 3 151.005(a)-(c) (Vernon 2002). Its

governing board or any member “may. solicit and accept pledges, gifts, and endowments from

private sources on the institute’s behalf.” Id. § 151.005(a). Because its funding is specifically

described by its enabling legislation, and its solicitation of f?mds is specifically permitted, the BHI

need not obtain nonprofit corporation status in order to solicit funding.

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SUMMARY

The Border Health Institute is neither a state agency

within the executive branch of state government nor a local

political subdivision. The BHI may or may not be entitled to

sovereign immunity. It must comply with the Open Meetings

Act and the Public Information Act. It is not required to follow

state procurement and contracting rules, nor is it subject to civil

service rules. The BHI need not obtain nonprofit corporation

status because it has statutory authority to solicit funding from

public and private sources.

Yours very truly,

&- G OTT

Attorney General of Texas

BARRY R. MCBEE

First Assistant Attorney General

DON R. WILLETT

Deputy Attorney General for Legal Counsel

NANCY S. FULLER

Chair, Opinion Committee

Rick Gilpin

Assistant Attorney General, Opinion Committee