OF TEXAS 

AUSTIN. TIZXAS 78711 

October 8, 1974 

The Honorable Charlee A. Murphy 

Executive Director 

Texas Aeronautics Commission 

P. 0. Box 12607, Capitol Station 

Austin, Texas 78711 

Opinion No. H- 416 

Re: Authority of the Texas 

Aeronautics Commission to 

assist in development of a 

municipal airport the property 

for which in leased to the city. 

Dear Mr. Murphy: 

The Texae Aeronautics Commission has received a request for 

financial aid to make improvements on a municipal airfield. The field 

is located on land one-half of which is owned by the city in question and 

the other one half of which is leased from a county school district holding 

it for invertment purposes. The present lease ie for at least 20 years. 

Articles 46c to 46c-7, V. T. C. S., establish the Aeronautics Commission. Article 46c-6, Subdivision 10, authorizes the Commission to 

grant or lend funds to, among others, incorporated cities in the state 

“for the establishment, construction, reconstruction, enlargement or 

repair of airports. ” Criteria to be coneidered in determining whether 

or not a grant or loan is to be made are stated as follows: 

(1) The need for an airport or facility or improvement of existing facility in the locality in the light of 

existing airports or facilities in the area and in light 

of the overall needs’ of the state, and 

(2) The financial needs of the community with 

priority given to areas of greatest need. 

(3) Loans shall be made in lieu of grants whenever 

feasible. Prior to approving any loan or grant the 

Commission ohall require that: 

p. 1940 
The Honorable Charles A. AMurphy page2 (H-416) 

(1) The airport or faciity remain in the control 

of the political subdivisioaor political subdivisions 

involved for at least 20 yers, and 

(2) The political subdiision disclose the source 

of all funds for the projedand its ability to finance 

and operate the project, d 

(3) All loans shall beas interest at the rate of at 

least three per-cent per illzlum and have a term of not 

longer than 20 years, and 

(4) At least fifty percst of the total project cost be 

provided from sources o&r than the State of Texas, and 

(5) The project be adeyately planned. 

You have asked our opinion as towhether you may legally make a 

grant or loan when a portion of the real rtate upon which improvements 

are to be located is leased. 

Almost the identical question waspresented to this office some years 

ago and was anewered in Attorney Genewl Opinion C-511 (1965) where it 

was held that, under Sections 50, 51 and52 of Article 3 of the Constitution 

the grant or loan of public money to impPve leased land would be unconstitutional. 

Very recently we had occasion toreview Opinion C-511 in another 

context and concluded that it went too fan Insofar as Opinion C-511 indicates 

that a public expenditure for the erectioror maintenance of a public facility 

on leased property is violative of the Cwtitution for the sole reason that 

the land is leased, it has been overruledby Attorney General Opinion H-403 

(1974). Article 3,Sections 50, 51 and 52,and Article &Section 3 of the Texas 

Constitution do prohibit loans and grantsof state funds for private purposes, 

but an expenditure made for a proper pullic purpose and for an adequate 

consideration or public benefit is valid taen though private persons are 

incidentally benefited. Barrington v. Gkinos, 338 S. W. Zd 133 (Tex. 1960). 

p. 1941 
.’ 

The Honorable Charles A. Murphy, page 3 (H-416) 

As we said in Opinion H-403, not every public purpose is a proper 

one upon which to base a public expenditure, but we think expenditure of 

state funds pursuant to Article 46c-6. V. T. C. S., in order to improve 

municipal airport facilities within the state is prima facie for a proper 

public purpose and not an improper grant to a municipality in violation 

of Article 3, Sections 50 and 51. It serves a state purpose, and not 

merely a local one, The Commiseion is directed to make its dectsions 

“in the light of the overall needs of the state,” and the municipalities 

may be considered agents of the state to accomplish the purpose. See. 

State v. City of Austin, 331 S. W. 2d 737 (Tex. 1960); Jones v. Alexander, 

59 S. W. 2d 1080 (Tex. 1933); Jefferson County v. Board of County and 

District Road Indebtedness, 182 S. W. 2d 908 (Tex. 1944). 

Accordingly, it is our opinion that the Texas Aeronautics Commission 

might legally make a grant or loan pursuant to Article 46~~6 for the 

making of improvements on a municipal airfield located or partially 

located on land leased for a period of at least twenty yearn if all statutory raquirements are met and if the grant or loan is made for what is 

determined to be a proper public purpose and for an adequate consideration 

(quid pro quo) or publtc benefit. Attorney General Opinions H-403 (1974). 

M-512 (1969). 

SUMMARY 

The Texas Aeronautics Commission is not prohibited from making grants or loans of funds, for a 

proper public purpoee and for an adequate consideration or public benefit, to establish, construct, reconstruct or enlarge municipal airports located on land 

leased for a period of at least twenty years. 

Very truly yours, 

Attorney General of Texas 

p. 1942