JIM MATTOX 

Attorney-General 

Supreme Court Building 

P. 0. Box 12548 

Austin, TX. 78711. 2548 

5121475-2501 

Telex 9101974.1387 

Telecopier 512l475.0296 

714 Jackson, Suite 700 

Dallas, TX. 752U2609 

214/742-8944 

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El Paso, TX. 799052793 

91515333404 

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,uston, TX; 77002.3111 

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006 Broadway, Suite 312 

Lubbock, TX. 794013479 

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McAllen, TX. 78501.1885 

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San Antonio, TX. 78205.2797 

512/2254191 

An Equal Opportunity/ 

Affirmative Action Employer 

The Attorney General of Texas 

July 11, 1986 

Honorable Carlos VaLdez Opinion No. JM-516 

Nueces County Attorxsy 

Courthouse, Room 205 Re: Validity of a contract between 

Corpus Christi, Texw 78401 NUSCSS County and an economic 

development corporation 

Dear Mr. Valdez: 

You have requested an opinion on the following question: 

Taking into consideration the fact that a 

county camlot be a dues-paying member of a chamber 

of commer':e. does Nueces County have the authority 

to contra':t for business or industrial development 

services with a corporation that will in essence 

be an age:Y:y of a chamber of commerce? 

A county's aut:hority to enter into a contract is limited to 

authority conferred on it, either expressly or by reasonable 

implication, by thf! constitution or statutes. Canales v. Laughlin, 

214 S.W.2d 451, 45:) (Tex. 1948). A county has authority to promote 

the development of businesses and industries in the county through a 

county industrial commission established under article 1581g-2. 

V.T.C.S., or through a board of development established under article 

2352d. V.T.C.S. A county may contract for services that the county 

is authorized to perform itself. Attorney General Opinion JM-65 

(1983) . Therefore, under articles 1581g-2 and 2352d. a county has 

authority to contra<:11 for business or industrial development services. 

You are conwrned, however, about the relevance of a 1974 

attorney general ol'inion that concluded that a county could not pay 

dues to a chamber o:F commerce. Attorney General Opinion H-397 (1974). 

In that opinion, th:Ls office held that article III, section 52, of the 

Texas Constitution ,prohibits a county from becoming a dues-paying 

member of a private corporation such as a chamber of commerce. 

Article III. section 52, provides, in part: 

Except as ,othewise provided by this section, the 

Legislatwre shall have no power to authorize any 

county, c Lty , town or other political corporation 

or subdivision of the State to lend its credit or 

p. 2366 
Honorable Carlos Valdez. - Page 2 (JM-516) 

to grant public money or thing of value in aid of, 

or to any individual, association or corporation 

whatsoever, or to become a stockholder in such 

corporation, association or company. 

That provision does not prevent counties from contracting with 

private corporations. Attorney General Opinion JM-65 (1983). Rather, 

it prohibits gifts to a private corporation. As a corollary, it 

requires that a county contract with a private corporation serve a 

public purpose and that the county receive adequate consideration. 

Attorney General Opinion NW-373 (1981). Also, such a contract must 

provide sufficient assurance that the public purposes will be 

accomplished. &, * Attorney General Opinion H-912 (1976). 

In Attorney General )pinion H-397 this office concluded that 

paying dues to a private corporation such as a chamber of commerce in 

order to secure "general benefits resulting from encouragement of 

private industry and busir.ess" was not "sufficiently insulated from 

the abuses" that article :LII. section 52, was designed to prevent. 

Implicit in that conclusion is a determination that paying dues to a 

chamber of commerce did not adequately assure that any public purpose 

would be accomplished and therefore that the dues would be, in 

essence, a gift to the private corporation. 

A contract for sp&if:.c services presents a different situation. 

For purposes of article III , section 52, the difference between paying 

dues to an organization that may provide general benefits to the 

.county and contracting with an organization for specific services is 

analogous to the difference 'between donating county funds to a private 

hospital and contracting with a private hospital for specific 

services. In Attorney General Opinion JM-65 (1983) we held that 

although a county could not donate funds to a private hospital, it 

could contract with a private hospital for specific services. 

Similarly, we think that a county may contract with a private corporation for business and industrial development services. Of course, the 

county must receive adequnte consideration, and the contract m&.t 

provide adequate assurance that the public purpose will be accomplished. Whether a county receives adequate considiration and whether 

a contrabt provides adequate assurance that its public purpose will be 

accomplished are questions of fact that would depend on the nature of 

any particular contract. 

SUMMARY 

A county has rx~thority to promote the development of business and industry in the county under 

article 15818-2, V.T.C.S., and article 2352d. 

V.T.C.S. A county may contract with a private 

corporation such as a chamber of commerce for the 

p. 2367 
Honorable Carlos Valdes - Pa:Se 3 (JM-516) 

provision of busLness and industrial development 

services if the county receives adequate consideration and if the contract provides,adequate 

assurance that the public purpose will be 

accomplished. 

JIM MATTOX 

Attorney General of Texas 

JACK HIGHTOWER 

First Assistant Attorney General 

MARY KELLER 

Executive Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Sarah Woelk 

Assistant Attorney General 

p. 2368