The opinion
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