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June 16, 1967

Honorable Robert 9. Calvert Comptroller of Public Accounts Austin, Texae Opinion No. M-91 Re: Conetruction of Section 6 of Article IM of the Constitution of Texas relating to State partlclpatlon In programs financed with funds from private or federal sources for establlshlng and equipping facllltles for assisting handicapped lnDear Mr. Calvert: dlvlduals.

Your request for an opinion reads, In part, as follows:

“The following questions are being asked as a result of a newprocedure which the Texas Education Agency and the State Commission for the Blind desire to follow in the administering of the funds received from the Federal Government andthe 25s of the cost of approved projects to be absorbed by local and private organizations.

“Please advise as follows:

“(1) Does Section 6, Article XVIpermit the withdrawing of funds from the State Treasury In the form of a Grant in Aid before expenditures contemplated under the Grant in Aid are made?

“(2) Under the provisions of Section 6, Article XVI, If the fund8 provided for in this provision are placed In the State Treasury, do the departments have the right to withdraw funds from the State Treasury under anybasis other than reimbursement for expenditures covered by agreement between the State agency, Federal iovernment, andlocal or private organlzatlons?
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Hon. Robert 9. Calvert, page 2 (M-91)

RI)adoptedSection 6 of Article XVIof the Constitution of Texas,

by the electorate In 1966, reads as follows:

“(a) Noappropriation for private or lndlvldual purposes shall be made, unless authorized by this Constitution. Aregular statement, under oath, andanaccount of the receipts and expenditures of all public moneyshall be published annually, In such manneras shall be prescribed by law. f “(b) State agencies charged wlth’the responsibility of providing services to those whoare blind, crippled, or otherwise physically or mentally handicapped mayaccept money from private or federal sources, designated by the private or federal source as moneyto beused in and.establishlng andequipping facllltlee for asslstlng~thoee whoare bllnd~, crlppled, or otherwise physically or mentally handicapped In becoming gainfully employed, In rehabilitating andrestoring the handicapped, and In providing other services determined by the state agency to be essential for the better care andtreatment of the handlcapped. Moneyaccepted under this subsection Is state money. State agencies mayspend money accepted under this subsection, and no other money, for specific programs andprojects to be conducted by local level or other private, nonsectarian associations, groups, andnonprofit organizations, ln establishing andequipping facllltles for assisting those whoare blind, crippled, or otherwlse~physlcally or mentally handicapped In becoming gainfully employed, in rehabilitating andrestoring the handicapped, and in providing other service6 determined by the state agency to be essential for the better care or treatment of the handicapped.

“The state agencies maydeposit moneyaccepted under this subsection either in the state treasury or in other secure depositories. Themoneymaynot be expended for anypurpose other than the purpose for which It wasgiven. Notwithstanding any other provision of this Constitution, the state agencies mayexpend moneyaccepted under this subeection without the necessity of an appropriation, unless the Legislature, by law, requires that .the moneybe. expended only onappropriation. The Legislature may prohibit state agencies from accepting moneyunder
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this subsection or mayregulate the amountof money accepted, the waythe acceptance andexpenditure of the moneyis administered , Andy the purposes for which the state agencies mayexpend the money. Money accepted under this subsection for apurpose prohibited by the Legislature shall.be returned to the entity that gave the money.

“?hle subsection does not prohibit. state agencies authorized to render services to the handicapped from contracting with privately-owned or local facilities for necessary and essential services, subject to such conditions, stanflards, and procedures as may be prescribed by law. Theprovisions of Section 6 of Article XVIof the Constitution of Texas having been adopted at the general election ln 1966, there has not been an occasion for the judiciary of this State to construe Its provisions.

It Is noted that under the foregoing provisions, state agencies are specifically authorized to accept moneyfrom private or federal sources for the purposes of assisting physically or mentally handicapped lndlvlduals andare further authorized to spend the moneyaccepted for specific programs andprojects to be conducted by local level or other private, notiaectarlan assoclatlons, groups, and non-profit organizations for such purpose. The state agencies maydeposit such moneyeither In the State Treasury or other secure depositories. State agencies maycontract with privately ownedor local facllltles for necessary and essential services. The Legislature mayrequire that the moneybe expended only on appropriation. However, weare not aware of any statute enacted pursuant to this provision which requires the expenditure of moneyunder this Section to be pursuant to anappropriation.

In view of the explicit language of Section 6 of Article XVIof the Const~Ltutlon of Texas quoted above, It Is our opinion that your questions are General ‘a Opinion c-644 7overned by the authorities cited In Attorney 1966) wherein it washeld:

“You are therefore advised that it Is the opinion of this office that the Governor’s Committee on Aging maycontract.with religious Institutions for the performance of services that are within the scope of authority granted by Article 695k, Vernon’s Civil Statutes, andthe -414-Hon. Robert 9. Calvert, page 4 (M-91)

Texas State Plan for Implementing the Older Americans Act of 1965.

. . .” In Attorney

_ _ . _ . General’s Opinion C-644 this office relied on the landmark oplnlon by the SupremeCourt of Kentucky /Re Building Commission v. Effron, 310Ky. 355, 220S.W.2d 83b. (1

. wherein the Court stated:

“It Is well settled that a private agency ’ maybeutilized as the pipe-line through which apublic expenditure Is made, the test being not whoreceives the money, but the character of the use for which It IS expended.” (Emphasis aaded.) It Is well settled that tax moneyraised ostensibly for one purpose cannot be expended for another purpose, Carroll v. Williams, 202S.W. 504 (Tex.Sup. 1918). It Is our oplnlon th t this principle would apply to all public monies: Therefore, ionles acquired by this State pursuant to the provisions of Section 6 of Article XVImaybe expended only for the purposes set out therein. In fact, Section 6 of Article XVI specifically so states. Whenever the state agency acting pursuant to the provisions of Section 6 of Artlole XVIestablishes a local program andoperates through private, nonsectarian assoclatlons, groups, andnonprofit organizations, such state agency Is actually carrying out the provisions of Section 6 of Article XVI. Noprovision Is contained In the above quoted Section of our Constitution which requires the expenditure of such funds only on areimbursement basis. Onthe contrary, Section 6 of Article XVIspecifically Btates that the state agency Is authorized to contract with privately ownedor local facllltles for necessary and essential services. Therefore, the state agencies charged with responsibility of providing services to those physically or mentally handicapped maycause such programs to be locally administered through private, organizations. nonsectarian associations, groups, andnonprofit

This maybe accomplished through contracts for the purpose of establishing services determined bythe state agency to be essential for the better care andtreatment of the handicapped as specifically provided in the Constitution.

Your questions are therefore answered as follows: Section 6of Article XVIpermits the withdrawing of funds acquired pursuant thereto before expenditures are actually madeby the organization administering the program at the local level. Thewlthdrawing of such funds Is not limited to reimbursement for expenditures, but are governed by the agreement between the state agency, the federal andlocal or private organizations, provided the state agency determines In its discretion that such methodIs “essential for the better care andtreatment of the handicapped.”Hon. Robert S. Calvert, page 5 (N-91)

'SUMMARY Section 6 of Article XVI of the Cdnstltution of Texas authorizes state agencies charged with responsibility for providing services to those physically or mentally handicapped to spend money accepted under the provisions of Section 6 of Article XVIfor specific programs andprojects. Such programs maybe conducted by "local level or other private, nonsectarlannassoclatlons, groups, andnonprofit organizations in providing services determined by the state agency to be essential for the better care or treatment of the handicapped. It is not required that expenditure of state money be made only on areimbursement basis, but only that a contractual obligation pursuant to the provisions of Section 6 of Article XVIbe created.

General of Texas Prepared by John Reeves Assistant Attorney General APPROVED: OPINIONCOMMITTEE Hawthorne Phillips, Chairman W.V. Geppert, Co-Chairman Pat Bailey Dyer Moore Malcolm Quick Nell Wllllams STAFFLEGAL

ASSISTANT A. J. Carubbl, Jr.

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