THE A~TO~P~EY GENE&AL 

OF TEXAS 

May 14, 1987 

Honorable Kent A. Caperton 

Chairman 

Jurisprudence Committee 

Texas State .Senate 

P. 0. Box 12068 

Austin, Texas 78711 

Dear Senator Caperton: 

Opinion No. m-697 

Re: Whether a county may enter 

into a lease-purchase agreement 

for the purpose of constructing 

or purchasing a county jail 

You ask whether Texas counties may enter into lease-purchase 

agreements to purchase or build county jail's. You also ask whether 

special legislative .authorization is necessary to vest this power in 

county government. 

A county-has authority to purchase a jail from current revenues 

of the year, if relevant statutory requirements are followed. See 

Dancy V. Davidson, 183 S.W.2d 195 (Tex. Civ. App. - San Autonio 1944, 

writ sef'd). A lease-purchase agreement enables the purchaser to 

spread the purchase price over a number of years. while receiving 

immediate use of the property being purchased. A typical leasepurchase contract might require the county to make stated payments 

over a term of years and then transfer ownership of the property to 

the county upon payment in full or upon payment of an additional 

stated sum. See. e.g., Sumetlfn V. Fowlor, 229 S.W.2d 75 (Tex. Civ. 

APP. - Amarillo 1950, 110 writ); Attorney General Opinion Nos. O-1680, 

O-1627 (1940') (describing lease-purchase contra&). Thus, your 

question involves the authority of a county commissioners court to 

comic revenues of future years to the acquisition of a jail, thereby 

preventing future courts from allocating those funds to other county 

purposes. See generally Gulf Bitulithic Co. V. Nueces County, 11 

S.U.2d 305, judgmt adopted (Tex. Conm'n App. 1928). 

A commissioners court has only those powers that the constitution 

and statutes have specificallv co;ferred won it. but the court has 

broad discretion inmexercising expressly 'gianted powers. Canales v. 

Laughlin. 214 S.W.2d 451 (Tex. 1948); Anderson v. Wood, 152 S.W.2d 

1084 (Tex. 1941). 

Counties have the .exptess power and duty to provide jails. 

Article XI, section 2. of the Texas Constitution states that "[tlhe 

construction of jails . . . shall be provided for by general laws." 

Cf. Tax. Const. art. 

laws). 

III. $56 (prohibition against local and special 

Article 2351, V.T.C.S., states that: 

p. 322% 
Honorable Kent A. Caperton - Page 2 UN-697)- 

Each commissioners court shall: 

. . . . 

7. Provide and keep in repair court houses, 

jails and all necessary public buildings. 

V.T.C.S. art. 2351, 57; see also V.T.C.S. arts. 1603 (county 

commissioners court shall provide a jail); 2370b (commissioners court 

may purchase, construct, or otherwise acquire new jail building); 5115 

(cornmissioners court shall provide safe and suitable jails). Article 

VIII. section 9, of the Texas Constitution fixes a limit on county 

taxes for various purposes, including roads, bridges, and ocher 

permanent improvements. 

We have found no statute which expressly authorizes the comuissioners court to acquire a jail under a lease-purchase contract. It 

has been suggested that article 2368a.2. V.T.C.S., the Public Property 

Finance Act, authorizes this methbd of acquiring a jail. Rowever, 

article 2368a.2, V.T.C.S.. applies to personal property and not real 

property. V.T.C.S. art. 2368a.2, 53(11) (definition of "property"). 

Moreover, the Act also states: 

Notwithstanding any contrary provision, this 

Act does not apply to a contract solely for the 

construction of improvements to real property. 

V.T.C.S. art. 23688.2. 59. 

Counties have express authority to finance the acquisition of a 

jail by issuing bonds. & V.T.C.S. arts. 718; 23720; see also 

Lasater V. Lopez. 217 S.W. 373 (Tex. 1919) (county may issue bonds 

only if it has express legislative authority). Cf. Attorney General 

Opinion a-642 (1987) (authority of a joint city-county hospital is 

inapplicable because that opinion relied on the power of the home rule 

city in question to' borrow funds). Article 2368a.l. V.T.C.S., 

authorizes counties to issue certificates of obligation to pay for the 

construction of public works, including jails. V.T.C.S. art. 2368a.l. 

SS3, 7A. 

Counties also have implied power to issue interest bearing 

warrants payable over a period of years to finance jails, courthouses, 

roads, and other public improvements. Adams v. McGill, 146 S.W.2d 332 

(Tax. Civ. App. - El Paso 1940, writ raf’d); see Lasater v. Lopez. 

217 S.W. 373 (Tax. 1919); Stratton V. Comissio~'s Court of Kinney 

$y$' 

137 S.W. 1170 (Tex. Civ. App. - San Antonio 1911. writ 

. The power to issue warrants has been implied from the 

statutory authority to make such improvements. Adam v. McGill, 

supra. In Lasater V. Lopez. supra, the Texas Supreme Court discussed 

the reasons for implying the power to issue warrants in payment of 

public works. 

p, 3229 
Honorable Kent A. Caperton - Page 3 (JM-697) 

. 

In Lasater. the supreme court considered whether a county had 

authority to pay for road construction by issuing interest bearing 

warrants maturing over 16 l/2 years without an election. The Act of 

April 28, 1903, authorized the commissioners court to issue bonds for 

public road consrruction upon prior authorization by vote of property 

tax paying residents. Acts 1903, 28th Leg., 1st C.S., ch. II, at 9 

(now codified as V.T.C.S. art. 718). A taxpayer argued that the 

commissioners court was attempting to issue bonds without holding the 

elecrion required by statute. 

The supreme court rejected the argument. It pointed out that 

bonds were negotiable 'instruments and therefore differed significanrly 

from warrants, which could sot be negotiated. It also noted that a 

county had express statutory authority to build roads and other 

permanent improvements, and to levy a tax to pay for those projects. 

V.T.C.S. arts. 2351, $3; 2352 (formerly codified as T.ex. Rev. Civ. 

Stat. arts. 2241 and 2242 (1911)). The court held that counties had 

implied authority to issue warrants in payment for public works as a 

necessary means of implementing the express statutory authority to 

build them and tax for that purpose. The authority to pay for roads 

by issuing warrants p.redated the 1903 act and was not ImpLiedly 

repealed by that act. The court stated as follows: 

[T]he use of bonds for the construction of county 

public improvements was unknowo in the laws of the 

State under the present Constitution until 1881. 

and in respect to county roads was not authorized 

until 1903. At the time of the passage of the Act 

of April 28, 1903. granting authority for their 

use for county road purposes, Commissioner's 

Courts bad the &doubted power, within the limits 

of lawful taxation and by observance of the 

constitutional requirement relative to the 

creation of county indebtedness, to provide for 

the building of such roads by the issuance of 

interest bearing county warrants. They had 

possessed it since the original Act of 1876 

providing for their organization. This authority, 

where it was necessary for the county to use its 

credit for the purpose, was but a part of the 

power reposed in those courts to lay out and 

establish the roads, and proceeded, as well, from 

their duty to establish them by:constructing them 

as durably as poSsible within the county's 

resources or limits of taxation. It was a means 

for executing the general power expressly granted. 

a lawful means because appropriate to that end. 

(Emphasis added). 

217 S.W. at 376. 

p. 3230 
Honorable Kent A. Caperton - Page 4 (JM-697) 

. 

Thus, in Lasater v. Lopez, the supreme court found that counties 

had implied authdrity to use their credit to finance public works. 

There was a compelling case in favor of such implied authority because 

the county would otherwise have no means of allocating the cost of 

essential public works beyond the current budget year. Prior to 1903, 

the commissioners courts 

were empowered to establish the roads . . . they 

could create a lawful interest bearing debt for 

the purpose; they had no power to issue negotiable 

securities in the name of the county; therefore, 

thiy were remitted to the issuance of instruments 

such as warrants, of nonnegotiable character, as 

proper evidence of the debt. 

217 S.W. at 376. The supreme court also characterized the county's 

power to issue warrants as "an important public power of long 

existence and continued legislative sanction. . . ." Id. In summary. 

it was not merely useful, but essential for countiesto have this 

implied power, and there was strong evidence that the legislature 

intended counties to have it. The court's dicta, however, indicated 

that the county's implied power to contract on its credit was not 

limited io the issuance of warrants. 

In San Antonio River Authority v. Sheppard. 299 S.W.2d 920 (Tex. 

1957) the supreme court again discussed a county's implied authority 

to contract OKI its general credit, this time for flood control. 

Article VIII, section l-a, of the Texas Constitution authorizes the 

counties to levy ad valorem taxes for flood control. Article 7048a. 

V.T.C.S., now section 4.103 of article 6702-1, V.T.C.S., was enacted 

in 1949 as an &abling act under article VIII, section l-a, of the 

constitution. Section 7 of the act stated that before the coastitutionally authorized tax could be levied, it must be "submitted to a 

vote of the qualified property taxpaying voters of such county." See 

V.T.C.S. art. 6702-l. 54.103(h). The maximum rate of the tax G 

subject to approval by the voters, and the tax rate could be changed 

by future elections. except that it could not be reduced to aa extent 

that would impair any bonds or warrants issued by the commissioners 

court. 299 S.W.Zd at 922 (discussing sections 7 and 10 of former 

article 7048a. V.T.C.S.). Bexar County approved a tax of 15~ on each 

$100 valuation. The commissioners court of Bexar County contracted 

with the San Antonio River Authority to carry out flood control work 

OII the San Antonio River in Bexar County. As consideration. the 

county agreed to pay over to the river authority the proceeds of its 

fifteen cent flood control tax for the next 30 years. The river 

authority sought to issue bonds secured by the Bexar County tax but 

the Attorney General declined to approve them. 299 S.W.2d at 923. 

The Attorney General argued that Bexar County's contract with the 

river authority attempted to deprive the voters of their statutory 

right to change the amount of the tax by future elections. Only bonds 

p. 3231 
Honorable Kent A.-Caperton - Page 5 (JM-697) 

and warrants issued by the county were expressly protected from 

impairment caused by reducing the tax. 299 S.W.Zd at 924. 

The court determined that the county had implied authority to 

incur the future obligations embodied in the contract. 299 S.W.2d at 

925. It construed the express authority to issue bonds and warrants 

as "an additional power and not the exclusive method of creating an 

obligation." citing Lasater v. Lopez for this construction. 299 

S.W.2d at 925. The opinion in San Antonio River Authority v. Sheppard 

quotes the following language from Lasater v. Lopez: 

[I]n the absence of express declaration the Legislature is uot to be credited with the purpose of 

forcing a bond issue upon the people of a county 

every time it is necessary for the county to 

create an interest bearing debt of deferred 

maturity, however small., for road improvement. 

299 S.W.2d at.925, 

1919). The court 

stated as follows: 

quoting Lasater v. Lopes, 217 S.W. 373. 377 (Tex. 

in San Antonio River Authority v. Shepperd also 

Prom the powers thus expressly given to engage 

in flood control programs and to expend mosey 

therefor, the law Implies the power to use the 

general credit of the county to accomplish the 

desired end. . . . 

299 S.W.Zd at 925. It distinguished between borrowing money and 

obtaining property or labor ou credit, in that borrowed money could be 

diverted from its legitimate purpose, but there was no such danger 

where authorized services or improvemeats were obtained on credit. 

Id. (citing Adams v. McGill, 146 S.W.2d at 332). The court concluded 

that the commissioners court could contract ou the general credit of 

the county to carry out flood control, and that such contract might 

legally involve the county's credit for a number of years. Since the 

commissioners court had legal authority to make the contract at the 

time of the tax election, the voters’ right to change the rate could 

be limited by the contract. 

The court in San Antonio River Authority v. Shepperd did uot 

base the couuty's implied authority to obligate its tax revenues on 

necessity or on St&g evidence -of legislative approval of this 

authority. It refers to au implied power to use the general credit of 

the county to carry out its express power to engage in flood control 

programs. See also State v. Texas Municipal Power Agency. 565 S.W.2d 

258 (Tex. Civ. App. - Houston [lst Dist.] 1978, uo writ). Nonetheless, we believe it is siguificaut that San Antonio River Authority v. 

Shepperd, like Lasater v. Lopes, involved a constitutional authority 

to tax for a particular kind of public improvement. We need not 

p. 3232 
Honorable Kent A. Caperton - Page 6 (JM-697) 

detenaiue the scope of the county's authority to use its credit co 

carry out authorized functions. 

Based on Lasater v. Lopez and San Antonio River Authority v. 

Shepperd, we believe that the county has implied authority to use its 

credit to finance the'purchase or construction of a jail, a public 

work which the constitution regards as essential. See Tex. Const. 

art. XI, 52; see also Tex. Const. art. VIII, 99. Thexgislacure has 

moreover enacted statutory requirements for the condition of jails, 

and has established the Coamissioa on Jail Standards with authority to 

promulgate and enforce minimum standards for the construction and 

maintenance of county jails. V.T.C.S. arts. 5115; 5115.1. 59. 

Counties have also been sued in federal court to compel them to 

operate jails in accord with constitutional requirements. See, e.g., 

Vest v. Lubbock County Comeissioaers Court, 444 F. Supp. 824 (N. D. 

Tax. 1977). Given the totality of circumstances. we believe a Texas 

court would hold that a, county has implied authority to finance jail 

acquisition or coastruccion by methods in addition to chose expressly 

authorized by statute and sanctioned by supreme court opinion. In 

particular, we believe a coUuty has implied authority to enter into a 

lease-purchase contract co build or acquire a jail, aesuming 

compliance with all applicable coastitutional and 

provisions. : 

statutory 

In concluding that a county has implied authority to acquire a 

jail through a lease-purchase contract erteuding beyond the preseat 

budget year, we do not approve or coammnt ou the term of any 

particular proposed contract. The review of contracts is not an 

appropriate function for the opinion process. Nor will we set out the 

provisioas that such a contract must or may include. The adoption of 

detailed guidelines and limitations ou a county's power to acquire a 

jail by lease-purchase contract is a matterfor the legislature, if it 

wishes to act. See V.T.C.S. art. 2368a.2. We are merely expressing 

the opinioa thatacounty could enter into a lease-purchase contract 

for a county jail that would pass muster with the Texas courts, 

assmaiug compliance with all relevant constitutional and statutory 

provisions. See, e.g.. Tax. Consc. art. III, 552; Attorney General 

Opinion Nos. JM-274. JM-220 (1984) (county funds and county credit may 

be used only to accomplish authorized county purpose): Tax. Const. 

art. XI, 57 (if county creates debt, it must establish a sinking 

fund). 

As previously noted, the legislature has enacted article 2368a.2. 

V.T.C.S., which expressly authorizes counties to acquire personal 

property by lease-purchase. We do not believe the enactment of this 

statute negates a county’s implied authority to acquire a jail by 

lease-purchase contract. Article 2360a.2. V.T.C.S., authorizes various 

political subdivisions, not only counties, to lease or lease-purchase 

personal property. It establishes a procedure whereby the validity of 

a contract may become "incontestable for any cause," and provides 

that contracts entered into pursuant to the statute are legal and 

p. 3233 
Eouorable Kent A. Caperton - Page 7 (JM-697) 

authorized investments for certain enumerated financial institutions 

and sinking funds of governmental bodies. See V.T.C.S. art. 2368a.2. 

516. 7. The legislature may have excludedreal property and the 

improvement of real property from article 2368a.2 because it did not 

want all of these provisions to apply to contracts for the acquisition 

or improvement of real property. It may uot haye wished to accord all 

political subdivisions the power to lease-purchase real property. 

Article 2368a.2, V.T.C.S., is broad in scope, and the fact chat it is 

inapplicable to contracts for real property does not negate a county's 

implied authority to purchase or construct a jail on a lease-purchase 

contract. See Dancy V. Davidson. 183 S.W.2d 195. 200 (Tax. Civ. 

APP. - 

San ~onio 1944. writ ref'd) (legislature did not intend to 

restrict the grant of power under article 2351, section 7, by the 

subsequently enacted article 1605a. which then authorized a county 

with a city other than the county seat with a population of 20,000 to 

provide au office building in a city other than the county seat). 

SUMMARY 

A Texas county has implied authority to build 

or purchase a. jail by lease-purchase contract. 

All applicable constitutional and statutory provisions must be complied with. The review .of 

contracts is uot au appropriate function for the 

opinion process. 

Attorney General of Texas 

JACRHIGETOWER 

First Assistant Attorney General 

MARY KELLER 

Executive Assistant Attorney General 

JDDGE ZOLLIE STEARLRT 

Special Assistant Attorney General 

RICR GILPIN 

Ch&mau, Opiuion Committee 

Prepared by Susan L. Garrisou 

Assistant Attorney General 

p. 3234