JIM MATTOX Attorney-General

Supreme Court Building P. 0. Box 12548 Austin, TX. 78711. 2548 5121475-2501 Telex 9101974.1387 Telecopier 512l475.0296

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# The Attorney General of Texas

July 11, 1986

Honorable CarlosVaLdez OpinionNo. JM-516 Nueces CountyAttorxsy Courthouse,Room 205 Re: Validity of a contractbetween Corpus Christi,Texw 78401 NUSCSS County and an economic development corporation
Dear Mr. Valdez:
You have requested an opinion on the followingquestion:

Taking into consideration the fact that a county camlotbe a dues-payingmember of a chamber of commer':e.

doesNueces Countyhave the authority to contra':t

for business or industrialdevelopment services with a corporation that will in essence be an age:Y:y

of a chamber of commerce?
A county's aut:horityto 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 establishedunder 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 forbusiness or industrialdevelopment services.
You are conwrned, however, about the relevance of a 1974 attorney general ol'inionthat concluded that a county could not pay dues to a chamber o:F commerce. Attorney General OpinionH-397 (1974). In that opinion, th:Ls officeheld that article III, section 52, of the Texas Constitution ,prohibitsa 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 ,othewiseprovided by this section, the Legislatwre shall have no power to authorize any county, cLty, town or other political corporation or subdivision of the State to lend its credit or

p. 2366HonorableCarlosValdez. - Page 2 (JM-516)

to grantpublicmoney or thing of value in aid of, or to any individual, association or corporation whatsoever, or to become a stockholder in such corporation,associationor 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 GeneralOpinionH-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 commercedid not adequately assure that any public purpose would be accomplished and therefore that the dues would be, in essence, a gift to theprivate corporation.
A contract for sp&if:.c servicespresents a different situation. For purposes of article III, section 52, the differencebetweenpaying dues to an organization that may provide general benefits to the .countyand contractingwith an organization for specific services is analogous to the difference 'between donatingcounty 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 countymay contractwith a private corporation forbusiness and industrialdevelopment 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 receivesadequateconsidirationandwhether a contrabtprovides adequateassurance that itspublic purposewill be accomplishedare questions of fact thatwould depend on the nature of any particular contract. SUMMARY

A county has rx~thorityto 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. 2367Honorable CarlosValdes - Pa:Se3 (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 FirstAssistantAttorney General
MARY KELLER ExecutiveAssistantAttorney General
RICK GILPIN Chairman,Opinion Committee Preparedby SarahWoelk AssistantAttorney General

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