ATTORNEY GENERAL OF TEXAS GREG ABBOTT

The Honorable Jim Pitts Chair, Committee on Appropriations Texas House ofRepresentatives Post Office Box 2910 Austin, Texas 78768-2910

Dear Representative Pitts: June 17, 2009

Opinion No. GA-0721
Re: Whetherthe Hall County Hospital Districtmay contribute funds for the construction ofabuildingto house emergency service vehicles operated by the City ofTurkey (RQ-0772-GA)

Your predecessor asked about the authority of the Hall County Hospital District (the "District")to contribute funds for the constructionofabuildingto houseemergency service vehicles operated by the City of Turkey.! The request letter informs us that the county does not have a hospital and that the District contracts with the cities ofMemphis and Turkey to provide mobile emergency medical services. Request Letter at 1. According to the letter, the District wishes to contribute moneyto the City ofTurkeyto house a new ambulance thatprovides services to aportion ofHall County. Id. The request letter asserts that: (1) "anew building is necessary to accomplish the hospital district purposes o.f providing medical care to the district's needy inhabitants and providing for the operation ofa mobile emergency medical service," and (2) "the district will retain public control over the contributed funds through the contract the hospital district has with the city for the provision ofthe mobile emergency medical services." Id. at 2.
A special district such as a hospital district board "may exercise only such powers as have been expressly delegated to it by the Legislature, or which exist by clear and unquestioned implication." Tri-City Fresh Water SupplyDist. No.2 v. Mann, 142 S.W.2d 945, 946 (Tex. 1940); see also Jackson County Hosp. Dist. 

### v. Jackson County Citizensfor Continued Hosp. Care, 669 S.W.2d 147, 154 (Tex. App.-Corpus Christi 1984, no writ) (applying the Tri-City standard to determine ahospital districtboard'spowers). TheDistrict'senabling legislationrequires the District to assume "full responsibility

... for furnishing medical and hospital care for the district's needy inhabitants," and states that the District "may operate or provide for the operation of a mobile emergencymedical service." Act ofMay 25, 1987, 70thLeg., R.S., ch. 1017, 

### § 5.02,1987 Tex. Gen.

ISee Request Letter at 1-2 (available athttp://www.texasattomeygeneral.gov).The Honorable Jim Pitts

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Laws, 3430, 3433 (the "Act,,).2 The Districtis governedby a board ofdirectors whichmustmanage, control, and administer the funds and resources ofthe District. 

### Id. §§ 4.01(a), 5.03, at 3431,3433. Under the plain language ofthe Act, the board has discretion to "provide for the operation" ofa mobile emergency medical service. 

### Id. § 5.02, at 3433. Moreover, the board has the authority to determine in the fIrst instance what is**~ecessary** to provide for the operation of such service. 

### See Jackson County Hosp. Dist., 669 S.W.2d at 154 (determining that hospital district board's managerial responsibilities authorized it to discontinue emergency room services); Tex. Att'y Gen. Op. No. GA-0472 (2006) at 2 (advising that a hospital district having discretionary authority to provide ambulance services necessarily has the authority to determine the scope ofthose services). Thus, under the Act, the board has the discretion to determine in the fIrst instance whether an expenditure ofDistrict funds to construct a building to house the City ofTurkey's emergency service**vehicl~** is necessary to provide for the operation ofa mobile emergency medical service.
Next we must consider whether such a contribution to the City of Turkey would be constitutional. Texas Constitution article III, section 52 prohibits the Legislature from authorizing a political subdivision to "lend its credit or to grant public money or thing ofvalue in aid of, or to any individual, association, or corporation whatsoever." 

### TEx. CONST. art. III, 

### § 52(a). Article III, section 52(a) prohibits the gratuitous application ofpublic money by a political subdivision. 

### Tex. Mun. League Intergov'tl Risk Pool v. 

### Tex. Workers' Compo Comm'n,.74 S.W.3d 377, 383 (Tex. 

### 2002); State ex reI. Grimes County Taxpayers Ass 'n V. 

### Tex. Mun. PowerAgency, 565 S.W.2d 258, 265 (Tex. Civ.App.-Houston [lstDist.] 1978, writdism'd). The Courtin 

### Texas MunicipalLeague explained that article III, section 52(a) does not prohibit an expenditure of public money that 

### "(1) serves a legitimate public purpose; and (2) affords a clear public benefIt received in return." 

### Tex. Mun. League, 74 S.W.3d at 383. In that opinion, the court established a three-part test to determine whether a statute requiring an expenditure is for apublic purpose under article III, section 52(a):



### Id. at 384. SpecifIcally, the Legislature must: (1) ensure that the statute's predominantpurposeisto accomplishapublicpurpose, nottobenefIt private parties; (2) retain public control overthe funds to ensure that the public purpose is accomplished and to protect the public's investment; and (3) ensure that the political subdivision receives a return benefIt.

2See also TEX. CONST. art. IX, §§ 9 (authorizing the creation of hospital districts), 9A (authorizing the Legislature to promulgate "provisions necessary to regulate the provision ofhealth care to residents"); TEx. HEALTH & SAFETY CODE ANN. ch. 286 (Vernon 2001 & Supp. 2008) ("Hospital Districts Created by Voter Approval").The Honorable Jim Pitts

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While Texas MunicipalLeague concernedpayments from a political subdivisionto aprivate party, article 

### ill, section 52 has also been construed to prohibit one political subdivision from gratuitously granting its funds to another political subdivision. 3 The provision does not, however, preclude a political subdivision from paying public funds to another political subdivision in order to serve a purpose within the powers ofthe political subdivision making the grant. See Grimes County Taxpayers Ass'n, 565 S.W.2d at 265-66 (holding that a political subdivision may payor transfer its funds to anotherpolitical entity if(1) the purpose ofthe payment ortransfer is withinthe political subdivision'spowers, and (2) the political entity receiving the funds is obligatedby statute or contract to use the funds for that purpose).
Whether a political subdivision's expenditure comports with the requirements ofarticle 

### ill, section 52 ofthe Texas Constitution is for the governing body ofthe political subdivision to decide in the first instance. See, e.g., Tex. Att'y Gen. Op. Nos. GA-0706 (2009) at 2 (stating that "[t]he factual determinationregardingwhetherapublicexpenditure satisfies [the TexasMunicipalLeague] test is for the governing body ofthe political subdivision inthe first instance"), GA-0664 (2008) at 4 (statingthat "[ w]hethera particulartransfer ofcounty funds to anotherpolitical subdivision serves a county purpose is for the commissioners court to determine in the first instance"); see also Barrington v. Cokinos, 338 S.W.2d 133, 142 (Tex. 1960) ("[A] court has no right to substitute its judgment and discretion for thejudgmentand discretion ofthe governing body upon whom the law visits the primary power and duty to act."). Thus, to determine ifthe contemplated expenditure is constitutional under article III, section 52, the District's board ofdirectors must consider whether (1) the predominant purpose ofthe expenditure is to accomplish an authorized public purpose, (2) there are sufficient controls to ensure the public purpose is accomplished andthe public investment is protected, and (3) that the Districtreceives a return benefit. See Tex. Mun. League, 74 S.W.3d at 383 (setting forth public-purpose criteria); Grimes County Taxpayers Ass'n, 565 S.W.2d at 265 (stating that, for a political subdivision's payment to another political subdivision, the expenditure must be within the powers ofthe entity making the payment).

3S

ee, e.g., Fort Worth Indep. Sch. Dist. v. City o/Fort Worth, 22 S.W.3d 831,842 (Tex. 2000) (detennining that article III, sections 51 and 52 would not pennit a city to gratuitously pay ''the City's 'public money'" to a school district); Harris CountyFloodControlDist. v. Mann, 140 S.W.2d 1098, 1104 (Tex. 1940) (holdingthat ''underthe plain tenns ofSection 52 ofArticle III,

... no part ofthe funds ofHarris County can be pledged orused to pay the bonds of [the Harris County Flood] District"); SanAntonioIndep. Sch. Dist. v. Ed. o/Trs. o/SanAntonioElec. & Gas Sys., 204 S.W.2d 22,25 (Tex. Civ. App.-EIPaso 1947, writrefdn.r.e.)(statingthatunder article III, sections 51 and 52, a "city cannot donate its funds to an independent municipal corporation such as an independent school districf').The Honorable Jim Pitts

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### SUMMARY
The Hall County Hospital District has express authority to provide for the operation of a mobile emergency medical service. The District'sboardofdirectors has the discretionto determine inthe first instance whether an expenditure ofDistrict funds to construct a building to house the City ofTurkey's emergency service vehicle is necessary to provide for the operationofa mobile emergencymedical service and whether such an expenditure comports with the requirements ofarticle III, section 52(a) ofthe Texas Constitution.

ANDREW WEBER First Assistant Attorney General
JONATHAN K. FRELS Deputy Attorney General for Legal Counsel
NANCY S. FULLER Chair, Opinion Committee
William A. Hill Attorney General ofTexas

Assistant Attorney General, Opinion Committee