Can a nonresident student in Texas pay in-state tuition by winning a competitive academic scholarship, and what rules can the state attach?

Plain-English summary

Texas charges out-of-state students much higher tuition than residents, but the Education Code carves out exceptions. One of them, section 54.064, lets a nonresident (or a foreign citizen) who wins a competitive academic scholarship of at least $200 pay the lower resident rate while the scholarship is in effect. The Texas State University System asked the Attorney General about two donor-funded scholarships at Southwest Texas State University and, more pointedly, whether the Higher Education Coordinating Board's rule putting conditions on that tuition break was valid.

The Attorney General focused on the rule rather than the two specific scholarships. The key part of the rule (19 Texas Administrative Code section 21.31) said a scholarship only qualifies a nonresident for the resident rate if it is "awarded for the purpose of encouraging academic excellence in the academic program in which the student is enrolled." The university system worried that this extra "academic excellence" condition went beyond what the statute allowed. The Attorney General disagreed. Section 54.064(a) itself tells the Board to develop criteria for deciding what counts as a competitive academic scholarship, so writing an "encouraging academic excellence" criterion was exactly the kind of thing the statute authorized. Because the rule did not exceed or contradict the statute, it was valid, and a nonresident whose scholarship did not meet the Board's criteria would not get the resident rate.

The opinion also cleaned up a technical problem. When the Board adopted the rule, it cited the wrong enabling statutes: one section that only sets out rulemaking procedure, and another that does not exist in the Civil Statutes (the corresponding Education Code section did not cover this kind of rule either). The Attorney General said citing the wrong authority did not, by itself, void the rule, because section 54.064(a) actually authorized it and the Administrative Procedure and Texas Register Act validates rules adopted in "substantial compliance." Mislabeling the authority was not fatal where real authority existed.

Currency note

This opinion was issued in 1993. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The Education Code residency and tuition provisions (sections 54.051, 54.052, and 54.064 in particular), the Coordinating Board rule in title 19 of the Administrative Code, and the former Administrative Procedure and Texas Register Act (V.T.C.S. art. 6252-13a, since recodified) have all been amended, renumbered, or repealed since 1993; confirm current law before relying on anything described here.

Background and statutory framework

Under section 54.051(c) of the Education Code, resident tuition at a general academic teaching institution was the greater of (1) $120 per semester or twelve-week summer session and $60 per six-week summer term, or (2) $32 per semester credit hour. Subsection (d) generally required a nonresident to pay an amount per semester credit hour equal to 100 percent of the total cost of education (section 54.052 supplied the general residence rules). Sections 54.055 through 54.064 set out exceptions, and section 54.064 was the one at issue: a nonresident (or foreign citizen) who holds a competitive academic scholarship of at least $200, awarded by an institution's scholarship committee and approved by the Coordinating Board under criteria developed by the Board, may pay resident tuition.

The validity question turned on the scope of agency rulemaking power. An agency has only the powers the statute confers, expressly or by necessary implication, and may not adopt rules that impose burdens or conditions exceeding or inconsistent with the statute (Kelly v. Industrial Accident Bd.; Attorney General Opinions JM-1102 and JM-1017). Applying that standard, the Attorney General read section 54.064(a)'s express grant of authority to "develop criteria" for identifying a competitive academic scholarship as covering the Board's definition in 19 Texas Administrative Code section 21.31(1), which requires that a qualifying scholarship be awarded to encourage academic excellence in the student's program. That criterion neither exceeded nor conflicted with the statute, so the rule was a valid exercise of delegated authority (section 54.064(a) validly delegates rulemaking power; see Southwestern Sav. & Loan Ass'n of Houston v. Falkner; Housing Auth. of City of Dallas v. Higginbotham; Oxford v. Hill; Williams v. State).

On the procedural challenge, the Board's adoption order cited Education Code section 61.027 (which only prescribes rulemaking procedure) and "section 52.54, Texas Civil Statutes" (a nonexistent statute; the Education Code's section 52.54 authorizes rules for the federal guaranteed loan program, not a chapter 54 tuition rule). The Attorney General agreed those cited statutes did not authorize the rule, but concluded the misstatement did not invalidate it: section 54.064(a) supplied the real authority, and section 5(e) of the Administrative Procedure and Texas Register Act (V.T.C.S. art. 6252-13a) validates rules adopted in substantial compliance with the act's requirements, even though section 5(c-1)(2) requires an agency to state the provision under which it adopts a rule.

Citations

• Educ. Code § 54.051(c), (d) (resident and nonresident tuition rates)
• Educ. Code § 54.052 (general rules for determining residence)
• Educ. Code § 54.064(a), (b) (resident tuition for nonresident holders of competitive academic scholarships; Board criteria; enrollment cap)
• Educ. Code § 95.34 (acceptance of gifts by the board of regents)
• Educ. Code § 61.027 (Coordinating Board rulemaking procedure)
• Educ. Code § 52.54 (rules for the federal guaranteed loan program)
• 19 Tex. Admin. Code § 21.31 (exemption from nonresident tuition for competitive academic scholarship recipients)
• V.T.C.S. art. 6252-13a, §§ 5(c-1)(2), 5(e) (Administrative Procedure and Texas Register Act; substantial-compliance validation)
• Kelly v. Industrial Accident Bd., 358 S.W.2d 874, 876-77 (Tex. Civ. App.-Austin 1962, writ ref'd)
• Southwestern Sav. & Loan Ass'n of Houston v. Falkner, 331 S.W.2d 917, 921 (Tex. 1960)
• Housing Auth. of City of Dallas v. Higginbotham, 143 S.W.2d 79, 87 (Tex. 1940)
• Oxford v. Hill, 558 S.W.2d 557, 560 (Tex. Civ. App.-Austin 1977, writ ref'd)
• Williams v. State, 514 S.W.2d 772 (Tex. Civ. App.-Beaumont 1974, writ ref'd n.r.e.)
• Attorney General Opinions JM-1102 (1989), JM-1017 (1989)

Common questions

Can a nonresident student pay Texas in-state tuition by winning a scholarship?
Under this opinion and section 54.064(a) of the Education Code, yes, if the scholarship is a competitive academic scholarship of at least $200, won in competition that includes Texas residents, awarded by the institution's scholarship committee, and approved by the Coordinating Board under the Board's criteria. The lower rate applies while the scholarship is in effect.

What extra condition did the Coordinating Board add, and was it allowed?
The Board's rule (19 Tex. Admin. Code § 21.31) required the scholarship to be awarded to encourage academic excellence in the student's academic program. The Attorney General concluded that condition was valid, because section 54.064(a) expressly lets the Board develop criteria for what counts as a competitive academic scholarship.

What happens if a scholarship does not meet the Board's criteria?
The opinion concluded a nonresident recipient is not eligible for resident tuition under section 54.064(a) if the scholarship does not comply with the Board's criteria, unless those criteria exceed or are inconsistent with the statute (which the Attorney General found they did not).

Did the Board void its own rule by citing the wrong statutes when it adopted it?
No. The Attorney General concluded that citing inappropriate authority did not, by itself, invalidate the rule, because section 54.064(a) actually authorized it and the Administrative Procedure and Texas Register Act validates rules adopted in substantial compliance.

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0249
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1993/dm0249.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, and a few heavily garbled spans are marked [. . .]; the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
Attorney General

September 3, 1993

Mr. Daniel S. Ouellette
Texas State University System
333 Guadalupe, Box 3810
Austin, Texas 78701-3942

Opinion No. DM-249

Re: Whether, under certain circumstances, a nonresident scholarship recipient is eligible for resident tuition rates under section 54.064 of the Education Code, and related questions (RQ number not legible in source scan)

Dear Mr. Ouellette:

You have asked about a scholarship recipient's eligibility for resident tuition under section 54.064 of the Education Code. You also inquire about the validity of section 21.31 of title 19, Texas Administrative Code. You state as follows:

The Board of Regents, Texas State University System, has accepted gifts of money from two donors. Both donors stipulated that the gift must be used for scholarships to [promote] academic excellence in the academic program in which the recipient is enrolled. Both donors required that students must apply and compete for the scholarships. The first donor specified that the recipient be a [. . .] student at [. . .] Texas State University. The second donor specified that the scholarship recipient be selected from students at SWT's music department who participate in an ensemble music [organization], such as the university marching band or symphony [orchestra].

The Board of Regents accepted both gifts under § 95.34 of the Education Code and asked Southwest Texas State University's scholarship committee to select the recipients. To be eligible for consideration, students must apply for the scholarships. ...

Texas residents and nonresidents will compete for the scholarships. We anticipate that some of the students selected will be nonresidents. ...

We believe that nonresident students selected for scholarships [under these circumstances] will be eligible for resident tuition because [they meet the terms] of the statute and the criteria developed by the Texas Higher Education Coordinating Board. However, the Executive Vice President at Southwest Texas State University has [received a communication from the] Coordinating Board [. . .] indicating that such students would not be eligible. [Emphasis added.]

Because we conclude that section 21.31 of title 19, Texas Administrative Code, is valid, we decline to answer your first question. Hence, this opinion will discuss only the validity of section 21.31 of title 19, Texas Administrative Code.

In general, pursuant to section 54.051(c) of the Education Code, tuition for a resident of the State of Texas at a general academic teaching institution is the greater of (1) $120 for each semester or twelve-week summer session and $60 for each six-week summer term; or (2) $32 per semester credit hour. On the other hand, subsection (d) of that section generally requires a nonresident student at a general academic teaching institution to pay an amount per semester credit hour equal to 100 percent of the total cost of education. See Educ. Code § 54.052 (providing general rules for determining residence or nonresidence). Sections 54.055 through 54.064 contain several limitations and exceptions to the general rule that a nonresident student must pay a higher tuition than a resident student. Your question requires us to construe section 54.064, which provides as follows:

(a) A student who holds a competitive academic scholarship of at least $200 for the academic year or summer for which the student is enrolled and who is either a nonresident or a citizen of a country other than the United States of America is entitled to pay the fees and charges required of Texas residents without regard to the length of time the student has resided in Texas. The student must compete with other students, including Texas residents, for the academic scholarship and the scholarship must be awarded by a scholarship committee [authorized by] the institution and be approved by the Texas Higher Education Coordinating Board under criteria developed by the Board.

(b) The total number of students at an institution paying resident tuition under this section for a particular [period] [. . .] at the institution for the same [period] of the preceding academic year. [Emphasis added.]

You believe that the two scholarships about which you inquire satisfy the requirements of section 54.064(a), which you list as: (1) award of a competitive academic scholarship; (2) a competitive pool that includes both residents and nonresidents; (3) the scholarship must be at least $200; (4) the scholarship must be [awarded by a scholarship committee and approved by the board]; [and that the number of] scholarship awards may not exceed five percent of the number of students [enrolled] for the same semester the preceding academic year. You state, however, that the board has added a requirement in its rule, found in title 19 of the Texas Administrative Code, section 21.31. The rule states in pertinent part:

Certain students receiving competitive academic scholarships may be exempted from paying nonresident tuition rates.

(1) To qualify for exemption from paying nonresident tuition rates a student must be awarded a competitive academic scholarship in the amount of $200 or more for the academic year, the summer session, or both by an official scholarship committee or committee of the public institution of higher education [the recipient] is attending. If nonresidents or foreign students, in competition with other students, including Texas residents, obtain these competitive academic scholarships, the student[s] may pay the same tuition as a resident of Texas during the registration period in which the competitive academic scholarship is in effect. At the time the competitive academic scholarship [award] is made, the [institution] must designate the term or terms in which the scholarship will be in effect. A competitive academic scholarship that qualifies [the recipient] for the [waiver] of the difference between the resident tuition and [the amount charged to] nonresident students shall be awarded for the purpose of encouraging academic excellence in the academic program in which the student is enrolled. Effective in the 1989-1990 academic year, institutions shall not waive nonresident tuition on the basis of competitive academic scholarships for more than 5.0% of its total enrollment in the [. . .] reporting [period or] term of the previous academic year. [Emphasis added.]

. . . .

An agency has only those powers conferred by [statute], together with those necessarily implied to carry out the express powers. The powers cannot be expanded beyond those [clearly] given. Attorney General Opinion JM-1102 (1989) at 2; JM-1017 (1989) at 3 (citing 2 Tex. Jur. 3d, Administrative Law § 2). The statute may authorize an agency to promulgate rules and regulations in aid of the statutory authority that the Legislature has conferred upon the agency. Kelly v. Industrial Accident Bd., 358 S.W.2d 874, 876 (Tex. Civ. App.-Austin 1962, writ ref'd) (citing 1 Tex. Jur. 2d Administrative Law § 11). The agency may not, however, promulgate rules and regulations that impose additional burdens, conditions, or restrictions that exceed or are inconsistent with the statutory provisions. Id. at 876-77; Attorney General Opinion JM-1017 at 3 (citing Kelly v. Industrial Accident Bd.).

[Footnote: We conclude that section 54.064(a) of the Education Code validly delegates authority to the board to promulgate rules and regulations. See, e.g., Southwestern Sav. & Loan Ass'n of Houston v. Falkner, 331 S.W.2d 917, 921 (Tex. 1960); Housing Auth. of City of Dallas v. Higginbotham, 143 S.W.2d 79, 87 (Tex. 1940); Oxford v. Hill, 558 S.W.2d 557, 560 (Tex. Civ. App.-Austin 1977, writ ref'd); Williams v. State, 514 S.W.2d 772 (Tex. Civ. App.-Beaumont 1974, writ ref'd n.r.e.).]

[Section 54.064(a) authorizes the board to develop criteria for use in determining whether a scholarship is a competitive] academic scholarship that qualifies its recipient for resident tuition rates. To that end, section 54.064(a) expressly authorizes the board to develop criteria for the board's use in determining whether a scholarship is a competitive academic scholarship for purposes of waiving the difference between the tuition charged to resident and nonresident students. The board has developed such criteria in title 19 Texas Administrative Code, section 21.31(1). In our opinion, by defining "competitive academic scholarship" in section 21.31(1) as a scholarship that is "awarded for the purpose of encouraging academic excellence in the academic program in which the student is enrolled," the board validly has developed a criterion in accordance with section 54.064(a) of the Education Code. We do not believe that the regulatory criterion exceeds or is inconsistent with section 54.064(a). Consequently, we believe that the board acted within its authority under section 54.064(a) when it promulgated this rule.

You also question the validity of title 19 of the Texas Administrative Code, section 21.31, on procedural grounds. The board adopted section 21.31 "under the Texas Education Code, § 61.027 and § 52.54, Texas Civil Statutes." Tex. Higher Educ. Coordinating Bd., 16 Tex. Reg. 3254 (1991); see also Tex. Higher Educ. Coordinating Bd., 16 Tex. Reg. 1341 (1991) (proposing section 21.31). Section 61.027 of the Education Code provides as follows:

The board shall adopt and publish rules and regulations in accordance with and under the conditions applied to other agencies by the Administrative Procedure and Texas Register Act [article 6252-13a, V.T.C.S.], to effectuate the provisions of this chapter. The board shall grant any institution of higher education a hearing upon request and after reasonable notice. Minutes of [the] meetings shall be available in the board's office for public inspection.

Section 61.027 merely prescribes a procedure by which the board must promulgate rules; it does not in and of itself authorize the board to promulgate rules. Section 52.54, V.T.C.S., the other statute the board cites, is a nonexistent statute. Section 52.54 of the Education Code, to which the board may have meant to refer, provides as follows:

(a) The board shall adopt and publish rules and regulations to effectuate the purposes of this chapter in accordance with and under the conditions applied to other agencies by [V.T.C.S. art. 6252-13a].

(b) The board may adopt rules and regulations necessary for participation in the federal guaranteed loan program provided by the Higher Education Act of 1964 (Public Law 89-329). [Footnotes omitted.]

Obviously, section 52.54(a) does not authorize the board to promulgate a rule under chapter 54. In addition, we are not aware that the promulgation of title 19 of the Texas Administrative Code, section 21.31, was necessary to comply with the federal guaranteed loan program. We therefore agree that the statutes the board cited as authority to promulgate title 19 of the Texas Administrative Code, section 21.31, do not so authorize.

However, we believe that section 54.064(a) of the Education Code itself authorizes the board to promulgate section 21.31, because section 54.064(a) authorizes the board to develop criteria for its use in evaluating scholarships. We note that section 5(c-1)(2) of the Administrative Procedure and Texas Register Act ("APTRA"), V.T.C.S. article 6252-13a, to which the board is required to adhere, see Educ. Code § 61.027, requires an agency finally adopting a rule "concisely to state in its order" the particular [statutory] provision[s] "under which" the agency adopts the rule and "how the agency interprets these provisions as authorizing or requiring the rule." On the other hand, section 5(e) of APTRA validates any agency rule that is adopted "in substantial compliance" with section 5. You suggest that the board's citation of two inappropriate sections of the Education Code invalidates section 21.31 of title 19, Texas Administrative Code, as a matter of law. While we do not condone an agency's citation of inappropriate [statutes], we cannot conclude that such an error by itself, where the agency is [otherwise] authorized to promulgate the rule, invalidates a rule as a matter of law.

SUMMARY

A nonresident scholarship recipient is ineligible for resident tuition under section 54.064(a) of the Education Code if the scholarship does not comply with the criteria that the Texas Higher Education Coordinating Board has developed to determine whether a scholarship is a competitive academic scholarship, unless the criteria exceed or are inconsistent with section 54.064(a). The board's promulgation of section 21.31 of title 19, Texas Administrative Code, which provides that "[a] competitive academic scholarship [that] qualifies the holder [for resident tuition rates] shall be awarded for the purpose of encouraging academic excellence in the academic program in which the student is enrolled," does not exceed the board's authority under section 54.064(a) of the Education Code, nor is it inconsistent with section 54.064(a) of the Education Code. Furthermore, we cannot conclude that section 21.31 of title 19 of the Texas Administrative Code is invalid as a matter of law based on the fact that the board, in its order finally adopting the rule, cited inappropriate statutes as authorizing the board to promulgate the rule.

DAN MORALES
Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Attorney General for Litigation

RENEA HICKS
State Solicitor

MADELEINE B. JOHNSON
Chair, Opinion Committee