RonorableGary Garrison Ector CountyAttorney Courthouse,Room 218 Odessa,Texas 79761 OpinionNo. JM-716
Re: Whether a cotmissionerscourt may grant federal revenue sharing funds to a chamber of cormnerce for use in recruitingnewbusinesses
Dear Mr. Garrison:
You ask whether Ector County may donate federal revenue sharing funds to the Greater Odessa Chamber of Commerce to be used to recruit new business to the area.

- The Revenue Sharing Act, which was codified as chapter 67 of

title 31 of the United States Code, was repealed as part of the Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L. No.. 99-272, 914001, 100 Stat. 327 (1986). The legislation repealing the act provided inpart:

Amounts paid to units of general local government from the Trust Fund shallbe used, obligated, or appropriated by the units of general local government before October 1, 1987, and shall continue to be subject to the termsof theRevenue SharingAct. Pub. L. 99-272, 014001(a)(5), 100 Stat. 327, 328 (1986). Thus, the repealedprovisionsof theRevenue SharingAct still govern theuse of any revenue sharingmoney available to Ector County. The Revenue SharingAct provided, at 31U.S.C. section 6704, that a county could not spend revenue sharing funds unless it was acting within its authorityunder state law:

(a) Under regulations of the Secretary of the Treasury, a State government or unit of general local govermnent qualifies for payment under this chapter for an entitlement period only after establishing to the satisfaction of the Secretary that --

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. . . . (3) the government will expend the payments received under the laws and procedures applicable to the expenditureof revenues of the government. Article III, section 52, of the Texas Constitution prohibits a county from donating funds to a private associationor corporation:

(a) Except as otherwise provided by this section, the Legislature shall have no power to authorize any county, city9 town or other political corporation or subdivision of the State to lend its credit or to grant public money or thing of value in aid of, or to any individual, association or corporation whatso.zvrr, or to become a stockholder in such corporation, associationor company. That provisiondoes not prevent counties from contractingwith private corporations. Attorney General Opinion JM-65 (1983). gather, it requires that a county contract with a private corporation serve a public purpose and that the county receive adequate consideration. Attorney General Opinion MW-373 (1981). Furthermore, a county contractwith a private corporationeust provide sufficientassurance that the public purposeswill be accomplished. Id.; Attorney General Opinion H-912 (1976). As indicated, article IIIzection 52, applies to revenue sharing funds as well as other county funds. See Attorney General Opinion Nos. MW-329 (1981) (countymay not contribze federal revenue sharing funds to a nonprofit corporation organized for the purpose of traininghandicapped adults);E-1189 (1978) (countymay not make unconditional grant of federal revenue sharing funds to private daycare);H-1010 (1977) (under certain circumstances,countymay loan federal revenue sharing funds to a medical student in exchange for promise that student will provide certain services to county); H-127 (1973) (countynay use federal revenue sharing funds to contractwith a private entity toprovide a recreation facility for the aged). This office has stated that paying dues to a private corporation such as a chamber of commerce in order to secure "general benefits resulting from encouragementof private industry and business" is not sufficiently "insulated from the abuses" that article III, section 52, was designed to prevent. Attorney General Opinion H-397 (1974). In contrast, this office has held that a county may contract with a private corporation for specific business and industrial development servicesas long as the county receivesadequate considerationand the contract provides adequate assurance that the public purpose will be accomplished. Attorney General Opinion JM-516 (1986); see also

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Canalesv. Laughlin, 214 S.W.Zd 451 (Tex. 1948) (countyhas only those powers conferredupon it specificallyor by necessary implication). Some of the informationyou submitted to us suggests that Ector Countywould simplybe donatingmoney to theGreater Odessa Chamber of Commerce to support the chamber'scurrent efforts to recruitbusiness. Such a donation, unaccompanied by specific contractualprovisions to insure that the county would receive adequate consideration and that the public purpose would be met, would be impermissible. Attorney GeneralOpinion E-397 (1974).
SUMMARY
A county may contract with a private corporation such as a chamber of commerce for the provision of business and industrial development services if the county receives adequate consideration and if the contract provides adequate assurance that the public purpose will be accomplished. A county may not, ,however,simply donatemoney to a chamberof commarce.

JIM MA'iTOX Attorney General of Texas JACKHIGHTOWER First AssistantAttorney General
MART KELLER ExecutiveAssistantAttorney General
JUDGE ZOLLIE STEARLEY SpecialAssistantAttorney General
RICK GILPIN Chairman,Opinion Committee Preparedby SarahWoelk AssistantAttorneyGeneral

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