Texas Attorney General Opinion: GA-0848 Page: 1 of 5
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ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
March 14. 2011
Ms. Gail Lowe, Chair Opinion No. GA-0848
State Board of Education
1701 North Congress Avenue Re: Whether the State Board of Education may
Austin, Texas 78701-1494 contract to pay attorney fees out of the corpus of the
Permanent School Fund without an appropriation
specifically for that purpose (RQ-0920-GA)
Dear Ms. Lowe:
You ask whether the State Board of Education (the "Board") may contract to pay attorney
fees out of amounts recovered for the Permanent School Fund (the "PSF") without an appropriation
specifically for that purpose and, if so, whether the Board may contract to pay a contingency fee
without following the process provided in chapter 2254 of the Government Code .' As you explain,
the Board is responsible for investing and managing the PSF. Request Letter, supra note 1, at 1-3;
see also TEX. CONST. art. VII, 2, 4, 5 (establishing the PSF, authorizing the Board to direct the
investment of proceeds in the PSF, and providing for the use, distribution, management, and
investment of assets in the PSF). Your fiduciary counsel has advised "that ascertaining whether [the
Board has] suffered an economic loss, as a result of the decline in value of assets it currently holds
or in the past held, caused by improper action or inaction of a third party, is a proper and necessary
part of discharging its fiduciary duty in monitoring and overseeing its assets." Request Letter, supra
note 1, at 2. You contemplate directing your fiduciary counsel to evaluate potential claims and,
where appropriate, the Board would contract with outside counsel to pursue litigation to recover
amounts due to the PSF. Id. You wish to know if the Board is authorized to contract to pay for such
legal services out of any amounts recovered, without a specific legislative appropriation for that
purpose. Id. You also wish to know if the Board is authorized to agree to pay such attorney fees on
a contingency basis without following the procedures provided in chapter 2254 of the Government
Code. Id. at 3.2
An administrative agency such as the Board has only those powers expressly or impliedly
conferred by statute or the constitution. Tex. Mun. PowerAgency v. Pub. Util. Comm'n of Tex., 253
'See Letter from Gail Lowe, Chair, Texas State Board of Education, to Honorable Greg Abbott, Attorney
General of Texas at 2-3 (Sept. 23, 2010) (on file with the Opinion Committee, also available at http://www
.texasattorneygeneral.gov) [hereinafter Request Letter].
2You acknowledge that any contract to utilize outside counsel would be subject to approval by this office. Id.
at 3; TEX. GOV'T CODE ANN. 402.0212(a) (West 2005).
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Texas. Attorney-General's Office. Texas Attorney General Opinion: GA-0848, text, March 14, 2011; (https://texashistory.unt.edu/ark:/67531/metapth275744/m1/1/: accessed April 23, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.