DAN MORALES

ATTORNEY GENERAL 

## Office of toe Plttornep @eneral &tate of fllexae May 17,1996

Dr. Barry B. Thompson chanceuor Texas A&MUnivksity System 301 Tarrow, 7thFloor College Station,Texas 77843-l 122 Opiion No. DM-394

Re: Whether the City of College Station may expend iimds on behalf of the George Bush Library at Texas A&M University (RQ-849)

Dear Dr. Thompson:
On behrdf

ofthe City of CollegeStation (the “city”), you ask whether the city may spend publicmoney, includmghotel-moteloccupancy taxes, on the George Bush Library (the “library”),now under construction on the Texas A&M Universitycampusin College Station. SeeHouse Comm.on Land and ResourceManagement,BillAnalysis, S.B. 1018, 74th Leg., R.S. (1995);see ako Educ. Code 5 8624(a). You state as follows:

The George Bush Library Committee is seeking a financial commitmentof $50,000.00peryear fromthe City ofCollege Station, Texas. College Station is a chartered home-rule municipalcorporation. The GeorgeBushLibrarywillbe located in the corporate limits of College Station, Texas. In additionto being a center for research and scholarship,it is anticipatedthat the librarywill attract tourists to CollegeStation.
You raise the following legal issues: whether the city has a legitimate public purpose for spendingpublic funds on the George Bush Library, whether a requirement that the library stay open in each year that is iknded constitutes adequate control to establish the public purpose, and whether the city is authorized to expend hotel-motel occupancyfundson the library.1

ArticleIII, section 52 ofthe Texas Constitutionprovidesinpart: Except as otherwise provided by this section, the Legislature shall have no power to authorize any county, city, town or other

‘You do notinquire

about legal issues raisedby acity’s

attempt ocontract oprovide S50,OOO a year in fuhue years. See Tcx. Con% art. XI, 8 6; McNeil/ Y.CUyO/ Wcrco, 33 S.W. 322,324 (Tcx. 1895) (municipal obligations not payable from curtent revenues are subject to anick XI, section 5 of Texas Qmstitution); Ciy of Wichita F&s Y. Kemp Pub. Librmy Ed. of Trustees, 593 S.W.Zd 834, 837 (XX. Civ. App.-Rm Wozth 1980, writ ret-d n.r.e.) (same); see aim Clear L&e City Water Auth. v. Clear Lake Ori/. Co., 549 S.W.Zd 385, 390 (Tex. 1977) (amtracts that contemplate aucwsaix pcrfomlances and which are indcfudtc in duration can lx temhatcd a1will ofeither party).Dr. Barry B. Thompson - Page 2 (DM-394)

Except as otherwise provided by this section, the Legislature shah have no power to authorize any county, city, town or other political corporation or subdivision of the State to lend its credit to
or grant public money or thing of value in aid of, or to any individual, association or corporation whatsoever, or to become a stockholderin any such corporation,association,or company. This provision does not prevent the City of College Station Tom spending its funds to carry out a municipal purpose, even if another entity also benefits from the expenditure. Barrington v. Cokinos, 338 S.W.2d 133, 140 (Tex. 1960);see State ex rel. Grimes County TaapqversAss ‘n v. Texas Mm. Power Agency, 565 S.W.Zd258, 268 (T’ex. Civ. App.-Houston [Ist Dist.] 1978,writ dism’d). The city must receive adequa::: consideration for the funds it provides the university, and con&actualor other controis must be in place to ensure that the public purpose will be carried out. See Attorney Genera) Gpinions DM-317 (1995), JM-1030 (1989), JM-324 (1985), MW-423 (1982), H-l 123(1978). The governingbody ofthe City of College Station would otdinarily have discretion to determine, subject to judicial review, whether the proposed expenditum
serves a public purpose, whether the city receives adequate consideration for its expenditure, and whether them ate sufficient controls to ensure that the public purpose will be carried out. Attorney General opinions DM-317 (1995), DM-256 (1993). However, the agreement described in your lcttcr may be too general for the city govermnentto make this decision. Since the $50,000 is apparently not designated for a specific program or function of the library; it may bc difficult to determine whether this expenditure will actually benefit the city.s The “control” you describe, that the library will be open in each year that it is funded, does not state how may days of openness per year will be securedby the $50,000or howthe city will enforcethe opennessrequirement attributable to its expcnditurc. Accordingly, the city council would be well advised to determine what city purpose or purposeswill be servedby the library, and lit the use of city funds to such purposes, subject to controlsto ensurethat the city purposes am carried out.

We now considerwhetherthe city may spendhotel-motel occupancy tax fimds on the library. Tax Code chapter 351 authorizes a municipality to adopt an ordinance imposing the tax. See Tax Code 4 351.002. Section 351.101(a)of the Tax Codeprovides that [r]evenuefrom the municipal hotel occupancy tax may be used

only to promote tourism and the convention and hotel industry, and that use is limitedto the following:

2Attomey General

opinion V-953 concluded that a county could not donate public money to an incotpomted public &cccl~braty, but it could coneact for library privileges 6um a library. Attomey Gmaml Opinion V-953 (1949) at 4.

p. 2160Dr. Barry B. Thompson - Page 3 (DM-394)

(1) the acquisition of sites for and the consuuction, improvemet& enlarging, equipping, rcpabing, operation, and maintenance of convention center facilities or visitor informationcenters,or both; (2) the fimishing of facilities, personnel, and materials for the registration of convention delegates or lxqistmts; (3) advertising and conducting solicitations and pmmotional programs to attract tourists and convention delegatesor registrantsto the municipality or its vicinity; (4) the encouragement,promotion, improvement, and application of the arts, including instrumental and vocal music, dance, drama, folk art, creative writing, architecture, design and allied fields, painting, sculpture, photography, graphic and mail arts, motion pictures, radio, television, tape and sound recording, and other arts related to the presentation, performance, execution and exhibition of these major art forms; and (5) historical restoration and preservation projects or activities or advertising and conducting solicitations and promotionalprogramsto encouragetourists and convention delegatesto visit preservedhistoric sites or museums: (A) at or in the immediate vicinity of convention center facilities or visitor information centers;or (B) located elsewherein the municipality or its vicinity that would be frequented by tourists and conventiondelegates.
Section 35 1.101 sets out the exclusive purposes for which the tax may be spent. Attorney Genera)opinion M-965 (1988) at 6. Youdo not identify any specific function of the George Bush Library for which funds contributedby College Station will be used, and your do not explain how the expenditure of the tax funds will carry out any of the five specific purposes enumerated in section 351.101 of the Government Code. The proposed expenditurc is not within the purposes set out in section 351.101(a)(l), (2), or (4). Although section 35 1.101(3)might authorizeexpendituresfor advertising tbe library to attract tourists to College Station, no such liitation appears to apply to the proposed expenditure. Finally, if the library could be characterized as a museum, section 351JOl(5) would authorize the expenditure of hotel tax funds to conduct “solicitations and promotional pmgrams to encouragetourists end convention delegates” to visit it, but

p. 2161Dr. Barry B. Thompson - Page 4 (DM-394)

again, you have not indicated that the proposed expenditure would be subject to this limitation. The City of College Station may spend funds raised under chapter 351 of the Tax Code on the GeorgeBush Library only if such limitations are imposed.

SUMMARY

Tbe City of College Station may, witbout violating article III, section 52 of the Texas Constitution, spend public funds on the George Bush Library to be established by Texas A&M University only ifthere is a city purpose for the expenditure, ifthe city receives adequate considerationfor the expenditure, and if suflicient wntrols
are attached to the tmmaction to ensure that the public purpose will be carriedout. Hotel-motel occupancy taxes raised by the city under chapter 351 of the Tax Code may be spent only for the purposes expressly set out.in section 351.101 of the code. No showing has been made that the tax funds pmposed for allocation to the George BushLibrarywiIlbeusedforanypurposestatedinsection351.101.

DAN MORALES Attomey GeneraJofTexas

JORGEVEGA First Assistant Attorney General

SARAHJ. SHIRLEY Chair, Opiion Committee Preparedby Susan L. Garrison Assistant Attorney General

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