# The Attorney General ofTexas September 10, 1979 MARK WHITE Attorney General
Honorable John J.Kavanagh, M.D. Commissioner Opinion No. MW-55 Texas Department ofMental Health and Mental Retardation Box12668 Austin, Texas 78711 Re: Authority of Department of Mental Health and Mental Retardation to pay community centers for start-up costs prior to receiving services. Dear Dr. Kavanagh: You ask whether afacility ofthe Texas Department ofMental Health and Mental Retardation isauthorized to contract with acommunity center created pursuant to article X47-203, V.T.C.S., toplan, develop, and provide community-based residential services. Although you have provided us with examples of specific contracts which illustrate your inquiry, neither your question nor our answer is specifically directed to the details of those contracts. The Texas Department of Mental Health and Mental Retardation consists of the Board of Mental Health and Mental Retardation, commissioners, staff members, and thirty facilities, including state hospitals. V.T.C.S. art. 5547-202, §2.01. All administrative, rule-making, and decisional powers granted by article 5547-202 are vested in the commissioner, subject to policies formulated by the board. V.T.C.S. art. 5547-202, §2&b). Section 2.13ofarticle 5547-202 provides asfollows:

The Department may cooperate, negotiate and contract with local agencies
... [and1 community centers
...to plan, develop and provide communitybased mental health and mental retardation services. Section 2.17(a)provides:

From funds available to it the Department is authorized to provide mental health and mental retardation services through the operation ofhalfway houses, community centers, and other mental health and mental retardation services programs.

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These provisions authorize the department to contract with community centers toprovide mental health and mental retardation services. Since section 2.llfb) vests the department’s administrative and decisional powers in the commissioner, subject to board policy, agreements between a facility of the department and acommunity center must have hisapproval. The contract terms must beconsistent with board policy. You next ask whether a facility of the Texas Department of Mental Health and Mental Retardation isauthorized topay the community center for start-up costs incurred prior to providing such services to clients as consideration for the center’s planning and developing such services. It is suggested that payment in advance of the provision of services violates article III,section 50ofthe Texas Constitution, which provides:

The Legislature shall have no power to give or to lend, or to authorize the giving orlending, ofthe credit ofthe State inaid of, or to any person, amociation or corporation, whether municipal or otho,,, or to pledge the credit of the State in any manner whatsoever, for the payment of the liabilities, present or prospective, ofany individual, association ofindividuals, municipal orother corporation whatsoever. Article III, section 52, a similar constitutional provision, prohibits the legislature from authorizing political subdivisions to lend their credit orgrant public money to individuals orcorporations. Inconstruing this provision, aTexas court stated asfollows:

Many cases could becited which involve anarrangement between two governmental entities inwhich one rendered agreed services to the other inexchange for money paid at adifferent time than when services were rendered,.
.. Two requirements must be met insuch a transaction. (11The purpose for which the obligation orpayment or transfer was made must be within the Dower of the entitv incurring the obligation or making the payment or transfer 01 funds. City of Aransas Pass v. Keeling, ll2 Tex. 339, 247 S.W. 818 (1923). (2)The political entity that receives the funds has to be obligated (by statute or contract1 to use the funds for the public purpose. Road District No. 4, Shelby County v. Alred [sic], 123 Tex. 77, 68S.W.2d 164(19341. State exrel. Grimes County Taxpayers Association v.Texas Municipal Power Agency, 565 S.W.2d 258, 265 (Tex. Civ. App. - Houston [lst Dist.1 1978, no writ). The court determined that payments by four cities to the Texas Municipal Power Agency were not grants, donaticns, or gratuities, but instead “‘.:ere payments made for services rendered and to be rendered.” Supra at 265. These payments donot violate article 3,section 52of the co::stitution. See also San Antonio River Authority v.Sheooerd, 299S.W.2d 920 (Tex. 1957) (county could pay tax money to reclamation authority to furnish flood control program over 30-year period); Attorney General Opinion H-74 (19731(Blind Commission may advance to its employees expenses to beincurred). Inour opinion, article III,section

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50 does not prohibit advance payment by one governmental entity for services which another governmental entity isobligated torender inthe future. Itis also suggested that the following statute presents the only instance in which one agency ofthe state may make anadvance payment toanother:

All State Agencies and Institutions are authorized to make advance payments to Federal and State Agencies for merchandise purchased from such agencies when advance payments willexpedite the delivery ofthe merchandise. V.T.C.S. art. 658a. In our opinion, this statute provides an exception to articles 655 through 658, V.T.C.S., relating to payment for goods and services purchased through the Board ofControl. These provisions require payment for goods and services only after they have been inspected by the recipient agency and the invoice has been approved by the Board of Control and the Comptroller. Webelieve these provisions and the exception found inarticle 658a apply only to services purchased through the Board of Control. We find no indication in sections Z.ll(b) and 2.17(a) of article 5547-202 that the department must work through the Board ofControl topurchase mental health and mental retardation services from a community center. Article 664-3, V.T.C.S., the State Purchasing Act of 1957,authorizes the Board ofControl to contract for “only services ofthe type heretofore contracted for by the State Board of Control.
...I’ Sec. 3(b). Cf. Attorney General Opinion M-316 (1968) (community centers may not make purchases through Board of Control). Wedonot believe that article 658a, V.T.C.S., bars the department from paying start-up costs prior to receiving mental health or mental retardation services from the community centers. Any contract must of course be properly entered into as stated in answer toyour first question. SUMMARY

The Texas Department of Mental Health and Mental Retardation may contract with community centers to provide community-based residential services. The department may pay the community centers their start-up costs incurred prior to providing such services to clients.

MARK WHITE Attorney General ofTexas JOHN TV.FAINTER, JR. First Assistant Attorney General TED L.HARTLEY Executive Assistant Attorney General

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Prepared bySusan Garrison Assistant Attorney General APPROVED: OPINION COMMITTEE C.Robert Heath, Chairman Martha Allen David B.Brooks Susan Garrison Rick Gilpin William GReid Bruce Youngblood

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