THE AYITORNEP GENERAL 

OFTEXAS 

Amwm~. T.!SLAS 78’711 

October 15, 1973 

The Honorable Jimmie D. Oglesby 

County Attorney 

Permian Building 

317 West Texas 

Midland, Texas 78701 

Dear Mr. Oglesby: 

Opinion No. H- 127 

Re: Use of Federal Revenue 

Sharing Funds to contract 

with a private non-profit 

corporation for the creation and maintenance of 

a rdcreation center for the 

indigent aged 

You have asked our opinion as to whether a county may use federal 

revenue sharing funds for purposes authorized under the Federal statute 

“but not authorized under the State Constitution or statutes. ” You state 

that thecommissioners court has been approached by a group of interested 

citizens who have asked that federal revenue sharing funds be contributed 

toward the creation and maintenance ,of a recreation center for the aged. 

The center will be operated by a private non-profit corporation which is to 

charge small annual dues to those who can afford to pay and will provide 

social and recreational services to all senior citizens, whether they be 

indigent or not. 

The facts would seem to raise two questions: (1) Is the suggested 

use one which would be authorized under the Federal law and (2) Is it in 

fact one which is authorized under the State constitution and statutes. 

The State and Local Fiscal Assistance Act of 1972 (31 U. S. C., 5 1221) 

authorizes the county, as a local government, to, use revenue sharing funds 

to create, maintain and operate a recreation center for the aged. Section 

1222 provides: 

“(a) In general -- Funds received by units of 

local government under this subchapter may be used 

only for priority expenditures. For purposes of this 

chapter, the term ‘priority expenditures’ means only-- 

p. 613 
The Honorable Jimmie D. Oglesby, page 2 (H-127) 

“(1) ordinary and necessary maintenance and 

operating expenses for -- 

I’.. . * 

“(E) recreation . . . . 

. . ., 

. . . . 

l’(C) social services for the poor or aged. . . . I’ 

The rules and regulations published by the Office of Revenue Sharing 

in the Federal Register of Tuesday, April 10. 1973 (Volume 38, No. 68,: 

pp. 9132-9143), likewise approve the use of revenue sharing funds for such 

purposes (31 C. F. R., $51.31), and th e 1 egislative history of the act is replete 

with references to the basic purpose of the legislation as providing “additional help for the states and localities in a form which will give them greater 

flexibility in the use of the funds. . . .‘I (Senate Report No. 92-1050, August 

16, 1972). 

Pursuant to The State and Local Fiscal Assietance Act, the Secretary 

of the Treasury has issued a regulation [ 31 C. F. R. $ 51.40(c)] providing 

that a government which receives entitlement funde under the Act. shall provide for the expenditure of those funds in accordance with the law and procedures applicable to the expenditure of its own revenues. 

Funds received under the State and Local Fiscal Assistance Act may 

not be used for a purpose not authorized by that Act or by the Constitution 

and statutes of Texas. However, it is our opinion that the creation and maintenance of a recreation center for the aged may be authorized under state law. 

We recognize that the county and its governing body, the commissioners 

court, can exercise only such power as the Constitution and statutes of the 

State of Texas have specifically conferred upon it and that the commissioners 

court does not have any general authority over county business. Canales v, 

Laughlin, 214 S. W. 2d 451, (Tex. 1948); Clark v. Finley, 54 S. W. 343, 347 

(Tex. 1889); Article 5, § 18. Texas Constitution. 

p. 614 
The Honorable Jimmie D. Oglesby, page 3 (H-127) 

The general grant of powers to the commissioners courts is found 

in Article 2351, Vernon’s Texas Civil Statutes. It does not authorize the 

construction or maintenance of recreational facilities per se. It does 

authorize the commissioners to “provide and keep . . . all necessary 

public buildings, ” and directs them to “provide for the support of paupers. ” 

We find authorization in Article 1015c-1, V. T. C. S., which, after 

defining a governing body as including a county commissioners court, provides 

“Sec. 3. Any government unit may establish, 

provide, acquire; maintain, construct, equip, operate, and supervise recreational facilities and programs. . . .‘I 

The Act specifically provides that the costs and expenses of carrying 

out the provisions quoted above may be paid from the general revenues of 

the county or from other revenue, including grants, and authorizes joint 

action by two or Moore governmental units in the maintenance of the facility. 

This has been held to authorize a county, for instance, to establish and 

maintain a public golf course on land owned by a city. Attorney General 

Opinion M-804 (1971). 

It is our opinion, therefore, that the county may, itself, construct 

and maintain a recreational facility for the use of the public and primarily 

for the use of the aged, under reasonable regulations. It may use federal 

revenue sharing funds for these purposes. The only remaining question is 

whether the Constitution or statutes prohibit a county from achieving these 

purposes through an agreement with a private non-profit corporation. 

Section 52 of Article 3 of the Constitution of Texas provides in subsection (3): 

“Except as otherwise provided by this section, 

the Legislature shall have no power to authorize any 

county, city, town or other political corporation or 

subdivision of the State to lend its credit or to grant 

p. 615 
The Honorable Jimmie D. Oglesby. Page 4 (H-127) 

public money or anything of value in aid of, or to 

any individual, association or corporation whatsoever, 

or to become a stockholder in such corporation, association or company. ” 

The current construction of this provision,is that it does not prohibit the Legislature from authorizing a county, city or other political 

corporation or subdivision to spend its funds with private corporations 

for the achievement of public purposes, See, for example, State v. City 

of Austin, 331 S. W. 2d 737 (Tex. 1960) and Bullock v. Calvert, 480 S. W. 

2d 367 (Tex. 1972). 

It is not unusual for political subdivisions to contract with private 

corporations to perform services or functions which the governmental 

unit might have provided itself. For instance, in Attorney General Opinion C-246 (1964), it was held, after a very thorough discussion of the law, 

that a commissioners court could contract with a private entity for the 

care of indigent aged in a private facility. In Attorney General Opinion 

C-334 (1964), it was held that a hospital district could pay private hospitals 

for the care of indigent patients. 

In Attorney General Opinion M-843 (1971). it was held that Potter 

County could contract with a ‘private non-profit institution for the care 

and supervision of juvenile delinquents. Other examples might be cited 

but we deem the foregoing amply sufficient to support our conclusion that 

a county may contract with a private non-profit corporation for the purpose 

of creating and maintaining a recreational center designed for aged persons 

under the same terms and conditions that the county itself could create a.nd 

maintain such a center. 

SUMMARY 

A county ‘may accept and use Federal revenue sharing 

funds to contract with a private non-profit corporation to 

construct, operate and maintain a recreationalfacility designed primarily for the aged. 

I/ Attorney General of Texas 

p. 616 
The Honorable Jimmie D. Oglesby, page 5 (H-127) 

APPROVED: 

p. 617