The Attorney General of Texas 

September 10, 1979 

MARK WHITE 

Attorney General 

Honorable John J. Kavanagh, M.D. 

Commissioner 

Opinion No. MW- 5 5 

Texas Department of Mental Health 

and Mental Retardation 

Box 12668 

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 a facility of the Texas Department of Mental Health 

and Mental Retardation is authorized to contract with a community center 

created pursuant to article X47-203, V.T.C.S., to plan, 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 2.13 of article 5547-202 provides as follows: 

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 of halfway 

houses, community centers, and other mental health 

and mental retardation services programs. 

P. 173 

. . 
Honorable John J. Kavanagh, M.D. - Page Two (HW-55) 

These provisions authorize the department to contract with community centers to provide 

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 a community center must 

have his approval. The contract terms must be consistent with board policy. 

You next ask whether a facility of the Texas Department of Mental Health and 

Mental Retardation is authorized to pay 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 50 of the Texas Constitution, which provides: 

The Legislature shall have no power to give or to lend, or to 

authorize the giving or lending, of the credit of the State in aid 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, of any individual, association of individuals, municipal 

or other corporation whatsoever. 

Article III, section 52, a similar constitutional provision, prohibits the legislature from 

authorizing political subdivisions to lend their credit or grant public money to individuals 

or corporations. In construing this provision, a Texas court stated as follows: 

Many cases could be cited which involve an arrangement between 

two governmental entities in which one rendered agreed services to 

the other in exchange for money paid at a different time than when 

services were rendered,. . . Two requirements must be met in such 

a transaction. (11 The purpose for which the obligation or payment 

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, 68 S.W.2d 164 (19341. 

State ex rel. 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 do not violate article 3, section 52 of 

the co::stitution. See also San Antonio River Authority v. Sheooerd, 299 S.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 be incurred). In our opinion, article III, section 

P. 174 
Honorable John J. Kavanagh, M.D. - Page Three (MW-55) 

50 does not prohibit advance payment by one governmental entity for services which 

another governmental entity is obligated to render in the future. 

It is also suggested that the following statute presents the only instance in which one 

agency of the state may make an advance payment to another: 

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 will expedite 

the delivery of the 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 of Control. 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. We believe these provisions and the exception 

found in article 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 of Control to purchase 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 of Control to contract for “only services of the 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). We do not 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 to your 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 of Texas 

JOHN TV. FAINTER, JR. 

First Assistant Attorney General 

TED L. HARTLEY 

Executive Assistant Attorney General 

P. 175 

. . 
Honorable John J. Kavanagh, M.D. - Page Four (MW-55) 

Prepared by Susan Garrison 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

C. Robert Heath, Chairman 

Martha Allen 

David B. Brooks 

Susan Garrison 

Rick Gilpin 

William G Reid 

Bruce Youngblood 

p. 176 

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