MARK WHITE 

Attorney General 

The Attorney General of Texas 

July 8, 1980 

Honorable Gerald R. Brown 

Executive Director 

Texas Industrial Commission 

Box 12728, Capitol Station 

Austin, Texas 787ll 

Opinion No. NW206 

Re: Texas Industrial Commission 

Economic Development Fund 

Dear Mr. Brown: 

You inform us that the Texas Industrial Commission (TIC) is 

considering establlshirg an Economic Development Fund for the purpose of 

receiving and expendirg private contributions. The TIC would use the 

contributions to pay travel, entertainment, and other expenses necessary for 

activities designed to attract business and industry to Texas. Article 

5190 l/2, V.T.C.S., reads in pertinent part: 

(a) Additional &ties of the Commission in 

addition to its other duties, the State Industrial 

Commission is hereby authorized to plan, organize 

and operate a program for attracting and locating 

new industries in the State of Texas. 

(b) The Industrial Commission may accept contributions from private sources, all of which may be 

deposited in a bank or banks to be used at the 

discretion of the Commission in compliance with the 

wishes of the donors. 

You first ask whether the commission may depceit funds donated from 

private sources in banks, rather than the state treasury, and expend them 

without specific legislative appropriation. Article 5190 l/2, V.T.C.S., clearly 

authorizes the commission to deposit such funds in banks! rather than the 

state treasury, and to spend them without specific legislative eppropriation. 

See generally Letter Advisory No. 132 (1977). However, the legislature has 

authority to appropriate such funds even though they are held outside of the 

treasury. See Attorney General Opinion H-1167 (1978); Letter Advisory No. 

132 (1977). x also General Appropriations Act, Acts 1979, 66th Leg., ch. 

843, art. V, SS18,19 at 2911. 

You next ask under what conditions, if any, such funds may be 

expended for travel and entertainment in attempting to attract business and 

industry to Texas. The contributions accepted by the Commission pursuant 

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to article 5190 l/2, V.T.C.S., are public funds. Attorney General Opinion WW-534 

(1958). Thev mav not. therefore. be soent in a manner inconsistent with article III. 

section 51 ‘bf the Texas Constitution- which orohibits 

individual, assoc: 

gratuitous &nations to eny 

iation of individuals or corporation. Road District No. 4, Shelby 

County v.~ Allred, 68 S.W. 2d 164 (Tex. 1934). There must be en adequate return to the 

state, either in the accomplishment of a public purpose or in the receipt of something 

equivalent in value. See State v. City of Dallas, 319 S.W. 2d 767 (Tex. Civ. App. - 

Austin 1958) aff’d 331 ST. 2d 737 (Tex. 1960); Attorney General Opinion H-416 (1974). 

However, an expenditure for a legitimate public purpose is not rendered unlawful 

because a privately owned business may be benefited thereby. Barrington v. Cokinos, 

338 S.W. 2d 133 (Tex. 1960). The Texas courts have held permissible municipal 

expenditures designed to advertise and promote the growth of a city. Bland v. Cit of 

Taylor, 37 S.W. 2d 291 (Tex. Civ. App. - Austin 1931) aff’d Davis v. Clt .w o Ta lor, 67 

S.W. 2d 1033 (Tex. 1934). Private citizens may be provided transportation at public 

expense, where there is an official business purpose for doing so. Attorney General 

Opinion H-1089 (1977). In Attorney General Opinion G-4167 (1941), this office approved 

certain expenditures for public relations which the University of Texas made. One 

expense account included an item for the “cultivation of officiaLs of Rockefeller 

Foundation and General Education Board.” Presumably, this item covered the 

entertainment of private individuals. Thus, there is authority for the use of public 

funds to provide travel and entertainment to private individuals, and for the use of 

public funds to encourage local development. Attorney General Opinion G-4167 (1941) 

developed a test designed to show whether expenses were incurred for state business, 

defined as follows: 

‘State business’ signifies the accomplishment of a governmental function; it requires that the means and method adopted 

be reasonably necessary; it implies that the particular governmental function involved be one directly entrusted to the 

institution or department assuming its accomplishment. 

Article 5190 l/2, V.T.C.S., describes a governmental function which is entrusted 

to the Commission. See Tex. Const. art. XVI S56; Bland v. City of Taylor, slqra. The 

Commission may mxnated funds for travel and entertainment where reasonably 

necessary to the attainment of the purposes set out in article 5190 l/2. The 

reasonableness of a particular expenditure is for the Commission to decide in the first 

instance. See Attorney General Opinion H-1260 (1978). 

- 

You inform us that some of the private funds donated will very likely come from 

individals and entities interested in the issuance of revenue bonds under the 

Development Corporation Act of 1979. That Act vests in the TIC the responsibility for 

approving certain leases, sales and loan agreements in conjunction with the issuance of 

such bonds, as well as the bonds themselves. You ask whether the statutory provisions 

dealing with gifts to public servants end official misconduct preclude donations to the 

fund, if established, from such persons. Donations under article 5190 l/2, V.T.C.S., are 

not made to individual commissioners. However, under certain circumstances it is 

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Honorable Gerald R. Brown - Page Three (NW-2 0 6 ) 

conceivable that conditions attached to them could cause them to benefit the 

commissioners. Article 6252-9b, V.T.C.S., provides in section 8(a) as follows: 

No state officer or state employee should accept or solicit 

any gift, favor, or service that might reasonably tend to 

influence him in the discharge of his official duties or that he 

knows or should know is being offered him with the intent to 

influence his official conduct. 

Whether any particular donation would cause a violation of this provision is a fact 

question for the commission to resolve in the first instance. See Attorney General 

opinions H-1223 (1978); H-688 (1975). See also Meyers v. Walker-76 S.W. 305 (Tex. 

Civ. App. - Eastland 1925, no writ). 

SUMMARY 

The Texas Industrial Commission may deposit in banks funds 

donated from private sources under article 5190 l/2, V.T.C.S. 

Such funds may be spent for travel and entertainment in 

attempting to attract business and industry to Texas where 

reasonably necessary to that purpose. Whether donations from 

individuals interested in the issuance of revenue bonds under the 

Development Corporation Act of 1979 would Involve the commission in violations of the state ethics law would depend on the 

facts of each case. 

verYm~r 

MARK WHITE 

Attorney General of Texas 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

TED L. HARTLEY 

Executive Assistant Attorney General 

Prepared by Susan Garrison 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

C. Robert Heath, Chairman 

Jon Bible 

Susan Garrison 

Rick Gilpin 

Iris Jones 

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