Case Information

*1 OFFICE OF THE ATTORNEY GENERAL OF TEXAS

AUSTIN

GENALS C. MANN ATTORNEY GENERAL

Fonorable Homer P. Rainey, President, The University of Texas Austin, Texas

Dear Dr. Rainey:

Opinion No. 0-2288 Re: Availability for expenditure of student fees for support and maintenance of the Texas Union and related matters.

We beg to acknowledge receipt of your letter of June 14, 1940, requesting an opinion from this department, which letter is in part as follows:

"On July 29, 1939, the Board of Regents of the University of Texas passed the following order, which appears in the minutes of the Board of Regents, page 880, Vol. M.:

"THE TEXAS UNION BUDGET FOR 1939-40.—Doctor Rainey presented the recommendations of the Board of Directors of the Texas Union for the budget for 1939-40. These recommendations included, first, a compulsory fee of one dollar per Long Session semester and fifty cents per summer session term to be collected from each student. This is in accordance with the provisions of the Education of Appropriation Bill for the Biennial of 1939-1941. The recommendations of the Board of Directors included, second, a detailed budget for 1939-40 amounting to $29,994.Itwasestimatedthatthecompulsoryfeeswouldproduce$ 24,299 on the basis of the enrollment for the Long Session of 1938-39 and the summer Session of 1938. Doctor Rainey stated that he

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Dr. Homer P. Rainey - Page 2

had not yot had sufficient time to study these recomemendations to permit him to make recommendations on all of the items. ^[2] On motion of Doctor Morgan, seconled by Dr. Aynesworth, the Board voted to levy the foes as recommended by the Board of Directors of the Texas Union; i.e., one dollar per Long Session semeater and fifty eents per Summer gession term, per student, effective at the beginning of the Long gession of 1939-40. On motion of Senator Blackert, seconled by Doctor Aynesworth, the Board then empowered President Rainey to approve and put into operation, after further study, a budget for the Texas Union for 1939-40.? ^[8] As you know, the case of Homer P. Rainey, et al, v. James L. Halone, which is now pending in the Court of Givil Appoals, arose over the collection of this foe from malone. Halone is the only student who has filed a suit of any kind in this connection, exoopt for some who joined with Halone in his first suit, which was abated by the trial court. The foes were uniformly collected from all students for the first semester of the school year 1939-40, but all of them which have not been assigned to the Texas Union by the students, are still being held by the Auditor and have not been made available for expenditure by the University. None of the students paid under a formal protest, nor did any write 'protest' on their receipts. ^[8] Then registration for the second semester began, it had become pretty generally known among the students that the Attorney General was contending that the 'suspense statute' applied to foes collected from the University students. Evidently that caused some students who opposed paying these foes to write across their receipts, and the carbon copies now on file in our Auditor's office, 'paid under protest.' There are perhaps a hundred of these.

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"No suits have been filled for the re-

covery of the foes paid under protest, such as are contemplated by the 'suspense statute', Artiole 7057b, V. A. C. 8. "The Union Board is the governing body established by order of the Board of Regents to administer the affairs of the Texas Union. That Board consists of five students, two exstudents, and two faculty members. The order of the Board of Regents providing for the board and the administration of the Texas Union is to be found in volume I, pp. 320-321, Regent's minutes, a certified copy of which has been furnished you in connection with the 11 tigation now pending. "The Board of Directors of the Texas Union is now engaged in compiling its budget to be submitted to the Board of Regents, in compliance with the order of the Board just referred to and subsection 19 of the current appropriations bill. Although we have not received a request from the Board of Directors of the Texas Union that we turn over to them the foes which have been collected, we anticipate that they may make such a request along with the budget which they submit, based upon the provisions of said subsection 19. "In addition to the questions of policy which are involved in the handling of the foes which have been collected and the levying of the foes for the school year 1940-41, it occurs to me that there may be some legal questions involved. It seems that the foes might be considered voluntary payments, which the University would have no authority to return to the students even though the "fee" might finally be held void by the appellate courts. Therefore, I shall appreciate your answer to the following questions: "1. If the Board of Directors of the Texas Union should call upon the Auditor of the University of Texas to make available for expenditure, under its control and subject to

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its order, the foes which have been collected and impounded by him for the first semester of the school year 1939-40, would it be his duty to do so?

1. If the Board of Directors of the Texas Union should call upon the Auditor to make available for expenditure under its control and subject to its order, the fees which have been collected and impounded by him for the second semester, would it be his duty to do so?

2. If your answer to question No. 2 is in the affirmative, should he include all of the second semester fees and now held by him, or should he retain those paid under protest, even though no suit has been filed for their recovery?

3. In your opinion, does subsection 19 of the current appropriations bill require that the Board of Regents levy a Texas Union fee, or is it within the discretion of the Board of Regents as to whether or not they levy same?

The case of Homer Price Rainey et al vs. James L. Halone, decided by our Court of Civil Appeals for the Third Supreme Judicial District on May 15, 1940, involved the validity of student fees account Texas Union, and that court reversed the judgment of the trial court and rendered the cause in favor of the appellant, upon the ground that the payment and recovery of such fees came within the scope of Article 7087b of Vernon's Revised Civil Statutes.

Article 7087b insofar as is pertinent provides: ^[2] Sec. 1. Any person, firm or corporation who may be required to pay to the head of any department of the State Government any occupation, gross receipt, franchise, license or other privilege tax or fee, and who believes or contends that the same is unlawful and that such public official is not lawfully entitled to demand or collect the same shall, neverthe-

*5 1088, be required to pay such amount as such public official charged with tho collection thereof may deem to be due the state, and shall be entitled to accompany such payment with a written protest, setting out fully and in detail each and every ground or reason why it is contended that such demand is unlawful or unauthorized. "Sec. 2. Upon the payment of such taxos or feos, accompanied by such written protest, the taxpayer shall have ninety (90) days from said date within which to file suit for the recovery thereof in any court of competent jurisdiction in Travis County, Texas, and none other. Such suit shall be brought against the public official charged with the duty of collecting such tax or fees, the State Treasurer and the Attorney General. The issues to be determined in such suit shall be only those arising out of the grounds or reasons set forth in such written protest as originally filed. The right of appeal shall exist as in other casos provided by law. Provided, however, where a class action is brought by any taxpayer all other taxpayers belonging to the class and represented in such class action who have properly protested as herein provided shall not be required to file separate suits but shall be entitled to and governed by the decision rendered in such class action. "Sec. 3. It shall be the duty of such public official to transmit daily to the State Treasurer all money so received, with a detailed list of all those remitting same, and he shall inform the state Treasurer in writing that such money was paid under protest as hereinabove provided. A deposit receipt shall be issued by the comptroller for the daily total of such remittances from each department; and the cashier of the Treasury Department shall keep a cash book to be called 'Suspense Cash Book,' in which to enter such deposit receipts. Upon the receipt of such money by the State Treasurer it shall be his duty and

*6 he is hereby required to immodately and forthwith place the same in state depositories bear. ing interest in the same manner as any other funds of the state required to be placed in such depositories at interest, and the state treasurer shall further be required to allocate whatever interest is earned on such funds and to credit the amount thereof to such suspense account until the status of such money is finally determined as herein provided. Sec. 4. If suit is not brought within the time and within the manner herein provided, or in the event it finally be determined in such suit that the sums of money so paid or any portion thereof, together with the pre rate interest earned thereon, belong to the state, then and in that event it shall be the duty of the state Treasurer to transfer such money from the suspense account to the proper fund of the state by placing the portion thereof belonging to the state in such fund by the issuance of a deposit warrant. When such deposit warrant or warrants are issued, they shall be entered in the cash book, and the proper fund to which such money is so transferred shall be properly erodited therewith. In the event, however, that suit is brought by such taxpayer within the time and within the manner hereinabove provided, and it be finally determined that such money so paid by such taxpayer, or any part thereof, was unlawfully demanded by such public official and that the same belongs to such taxpayer, then and in that event it shall be the duty of the state Treasurer to refund such amount, together with the pre rate interest earned thereon, to such taxpayer by the issuance of a refund warrant, the same to be issued in separate series and to be used for making such refunds, to be styled and designated 'Tax Refund Warrants' and such warrants shall be written and signed by the Comptroller and counteraligned by the State Treasurer and charged against the suspense account, as hereinabove provided, and shall then be returned to the Comptroller and delivered by him to the persons entitled to receive the same.

*7 It will be seen the statute requires one paying such fees under protest to do so in writing, "setting out fully and in detail each and every ground or reason why it is contended that such demand is unlawful or unauthorised", (Sec. 1) and "the issues to be determined in such suit (to recover) shall be only those arising out of the grounds or reasons set forth in such written protest as originally filed." (Sec. 2)

It will further be seen that in any event the taxpayer shall have ninety days from the date of payment within which to file suit for the recovery of such payment. (Sec. 3)

The writing by the student paying such fees upon the receipt and the carbon copies of the words "Paid under protest" could not in any event be construed to be even a substantial compliance with the statute immediately above quoted, requiring the statement of the grounds of illegality and lack of authority affecting the collection of the fee. So that, all such fees heretofore collected from students under the circumstances stated by you should be dealt with in the usual course without regard to such endorsement upon the receipts, and as though no protest whatever had been made. In other words, it will be the duty of the University Auditor, upon request of the Texas Union Board, to make available all such fees collected for 7839-1940. This, we believe, answers your questions 1, 2 and 3.

Subsection (19) of the general provisions of House Bill No. 288, the Appropriation Bill for Institutions of Higher Learning for the current blemnism, is as follows:

"The Board of Regents of the University of Texas is hereby authorized to levy a compulsory student fee not to exceed one Dollar (£1) per student for each semester of the Long Session and not to exceed Fifty Cents (804) per student for each term of the Summer Session, or any fractional part thereof as may in their discretion be just and necessary, for the sole purpose of operating, maintaining and improving the Texas Union; provided, however, that the amount of this fee may be changed at any time by the Board

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Honorable Homer P. Rainey - rags

of Rogonts within the 11mits heroinbefore fixed in order that suffiofent funds to support the Union may be raised and yet insuring that no surplus, other than the oustomary reserves, shall over be acoumalated. "The Auditor of The Univeraity of Texas 18 hereby directed to colleot the foos provided for above and shall oredit the money recoived from the said foos to an account to be known as the student Union foe Account; provided, however, that said money shall be used exclusively for the purpose of operating, maintaining and improving the Texas Union and shall be placed under the control and subject to the order of the Board of Directors of the Texas Union. "The Board of Directors of the Texas Union shall annually subwit a complete and itemised budget to the Board of Rogonts of The University of Texas, said budget to be accompanied by a full and complete report of all activities conducted during the past year and all expenditures made incident thereto. The Board of Rogonts shall make such changes in the budget as it doens necessary before approving sams, and shall then lety the student foos under the provisions of this Soction in such amount as will be sufficient to meet the budgetary needs of the Union within the atatutory limits herein fixed."

To are of the opinion the authority of the Board of Rogonts to levy a compulsory student foe known as the "Student Union Feo," is permissive or dixcretionary with the Board and not compulsory, or mandatory.

Very truly yours