Opinion No.
Background
- The Texas State Board of Education manages the Permanent School Fund (PSF) and contemplates recovering funds via outside counsel.
- No constitutional or statutory provision expressly authorizes paying attorney fees from PSF absent a legislative appropriation.
- The Board questions whether Article VII, section 5(f) could imply authority to use PSF assets to pay private attorneys.
- Article VII, section 5(f) permits prudent investment management, not funding attorney fees without appropriation.
- Section 5(b) provides that PSF management expenses must be paid by appropriation, not unappropriated PSF funds.
- Contingency-fee contracts, if permitted, would fall under Government Code chapter 2254, subchapter C.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May PSF funds be used to pay attorney fees without an appropriation? | Lowe argues no implied authority under 5(f) to pay fees from PSF. | Attorney General potentially suggests implied need to manage assets; 5(b) requires appropriation. | Not authorized without legislative appropriation. |
| If permitted, must contingency-fee contracts comply with Chapter 2254? | Lowe seeks to avoid 2254 procedures for contingency fees. | Contingency-fee contracts are subject to 2254 Subchapter C. | Yes; contingent-fee contracts must comply with 2254. |
Key Cases Cited
- Pub. Util. Comm'n of Tex. v. City Pub. Serv. Bd. of San Antonio, 53 S.W.3d 310 (Tex. 2001) (implied powers must not contradict statute)
- Tex. Mun. Power Agency v. Pub. Util. Comm'n of Tex., 253 S.W.3d 184 (Tex. 2007) (agency powers are limited to express or reasonably implied powers)
- In re Entergy Corp., 142 S.W.3d 316 (Tex. 2004) (clear and express powers; avoid conflicting inferences)
- Tex. Indus. Energy Consumers v. CenterPointEnergy Houston Elec., LLC, 324 S.W.3d 95 (Tex. 2010) (agency may not expand powers beyond statute)
- Pub. Util. Comm'n v. GTE-Southwest, Inc., 901 S.W.2d 401 (Tex. 1995) (explicitly limits agency actions to authorized powers)
- Sexton v. Mount Olivet Cemetery Ass'n, 720 S.W.2d 129 (Tex. App.—Austin 1986) (warns against inferred new powers from express powers)