# 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 ofthe Texas Aeronautics Commission to assist in development 

### ofa 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 ona municipal airfield. The field is located on land one-half ofwhich is owned by the city inquestion and the other one half ofwhich is leased from a county school district holding it for invertment purposes. The present lease ie for at least 20years.

Articles 46c to 46c-7, V. T. C.S., establish theAeronautics 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 ofairports. ” Criteria to be coneidered in determining whether or not a grant or loan is tobe made are stated as follows: (1)The need for anairport or facility or improvement of existing facility in the locality in the light of existing airports or facilities in the area and in light ofthe overall needs’ of the state, and (2) The financial needs of the community with priority given to areas 

### ofgreatest need. (3) Loans shall be made in lieu of

### grants whenever feasible. Prior toapproving 

### any loan or grant the Commission ohall require that:

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

(1) The airport or faciity remain in the control ofthe political subdivisioaor political subdivisions involved for at least 20yers, and (2) The political subdiision disclose the source ofall funds for the projedand its ability tofinance and operate the project, d (3) All loans shall beasinterest at the rate ofat least three per-cent per illzlumand have aterm ofnot longer than 20years, and (4) At least fifty percst of the total project cost be provided from sources o&r than the State ofTexas, 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 inAttorney Genewl Opinion C-511 (1965)where it was held that, under Sections 50, 51and52 ofArticle 3 ofthe Constitution the grant or loan ofpublic money to impPve leased land would be unconstitutional. Very recently we had occasion toreview Opinion C-511in another context and concluded that it went too fan Insofar as Opinion C-511indicates that a public expenditure for the erectioror maintenance ofa public facility on leased property is violative ofthe Cwtitution for the sole reason that the land is leased, it has been overruledby Attorney General Opinion H-403 (1974). Article 3,Sections 50, 51and 52,and Article &Section 3ofthe Texas Constitution do prohibit loans and grantsof state funds for private purposes, but an expenditure made for a proper pullic purpose andfor an adequate consideration or public benefit is valid taenthough private persons **are** incidentally benefited. Barrington v. Gkinos, 338S.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 aproper one uponwhich to base a public expenditure, butwe think expenditure of state funds pursuant toArticle 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** animproper grant to **a** municipality in violation **of** Article 3, Sections 50and 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 ofthe state,” and the municipalities may be considered agents ofthe state to accomplish the purpose. See. State v. City **of** Austin, 331 S.W. 2d 737 (Tex. 1960); Jones v. Alexander, 59S.W. 2d 1080 (Tex. 1933); Jefferson County v. Board of County and District Road Indebtedness, 182S.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 ofimprovements ona municipal airfield located or partially located on land leased for 

### aperiod 

### ofat least twenty 

### yearn if all statutory raquirements are met and if the grant or loan is made for what is determined 

### to be

### aproper public purpose andfor anadequate consideration (quid pro quo) or publtc benefit. Attorney General Opinions H-403 (1974). M-512 (1969). SUMMARY

The Texas Aeronautics Commission is notprohibited from making grants **or** loans offunds, for **a** proper public purpoee and for anadequate consideration or public benefit, to establish, construct, reconstruct or enlarge municipal airports located onland leased for a period ofat least twenty years. Very truly yours,

Attorney General of Texas

p. 1942