The Honorable Lynn Nabers 

Chairman 

Health and Welfare Committee 

House of Representatives 

P. 0. Box 2910 

Austin, Texas 78767 

Opinion No. H-868 

Re: Constitutionality 

of the Texas Community 

Development Act of 1975, 

article 12691-4, V.T.C.S. 

Dear Representative Nabers: 

You have requested our opinion regarding the constitutionality of a portion of article 12691-4, V.T.C.S., the 

Texas Community Development Act of 1973. That statute 

authorizes a municipality to establish "community development 

programs," which may include 

interim assistance and financing the rehabilitation of privately owned properties 

when incidental to other activities. 

Sections 4(b), (4). 

Article 12691-4 is designed to implement the federal Housing 

and Community Development Act of 1974, 42 U.S.C. 99 5301, 

et seq. 

i&t, 

Funding is primarily provided by the federal governand section 4(c) of the Texas statute, while authorizing 

a municipality to "provide for and implement programs to 

provide financing for the rehabilitation of privately owned 

buildings through the use of loans and grants from [the] Act," 

prohibits a municipality "from providing municipal property 

or funds for private purposes." You ask whether these 

provisions contravene article 3, section 52 of the Texas 

Constitution, which declares, in pertinent part: 

p. 3659 
The Honorable Lynn Nabers - page 2 (H-868) 

[Tlhe Legislature shall have no power to 

authorize any county, city, town or other 

political corporation or subdivision of 

the State to lend its credit or to grant 

public money or thing of value in aid of, 

or to any individual, association or 

corporation whatsoever, or to become a 

stockholder in such corporation, association, 

or company. 

Article 12691-4 specifically prohibits the use of municipal funds or property for private purposes. The purpose of 

the statute is described in section 2: 

[Tlhe development of viable urban communities 

by providing decent housing and a suitable 

living environment, and by expanding economic 

opportunities for eligible persons as defined 

by the federal Housing and Community Development 

Act of 1974 . . . a 

The statute then declares that 

the objectives of such activities are 

matters of public interest and legitimate 

public purposes for municipalities within 

this state. 

It is well established that "the constitutionality of a 

statute must be sustained unless its invalidity is apparent 

beyond a reasonable doubt.“ 

S.W.Zd 737, 747 (Tex. Sup. 

State v. City of Austin, 331 

1960). me Legizature's determination of what constitutes a public use or a public purpose 

is entitled to great weight, as the Supreme Court of Texas 

has recognized in upholding the validity of the Texas Urban 

Renewal Act, article 12691-3, V.T.C.S., and the Texas Housing 

Authorities Act, article 1269k, V.T.C.S., over objections 

that they contravened article 3, section 52. Davis v. City 

of Lubbock, 326 S.W.2d 699, 709-10 (Tex. Sup. 1959);Tousing 

EII;=;~Y~;;~C~;;;~P: D;&aiz ~Q~~$$~~~~~~r~4~os.~;I:d 79, 

(1975). 

-- 

p. 3660 
‘. 

The Honorable Lynn Nabers - page 3 (H-868) 

It has been observed that Texas courts generally will 

uphold transactions in which a municipality uses a private 

agency to accomplish a proper public purpose if: (1) 

accomplishment of the public purpose is the predominant 

purpose of the transaction; (2) there is sufficient assurance 

through statutory or contractual requirements or through 

continuing supervision by the municipality that the public 

purpose will be accomplished; (3) there is sufficient protection of the handling of public money; and (4) there is 

adequate consideration passing to the municipality. Willatt, 

Constitutional Restrictions on Use of Public Money and 

Public Credit, 38 Tex. B.J. 413, 421 (1975). 

It has also been noted that a public benefit, if 

adequate, may serve as consideration. Attorney General 

Opinion H-416 (1974). Also, see Texas Cent. Ry. v. Bowman, 

79 S.W. 295, 297 (Tex. Sup. 1904),where, anotE& context, 

it is said: 

The power of the Legislature to devote the 

general property of the state to public 

purposes without other compensation than 

such as arises from the advantages resulting 

from such use of it is . . . expressly 

recognized . . . . 

We believe the transactions contemplated by article 

12691-4 can meet article 3, section 52 standards, although 

in p;irticular instances the statute could be applied in an 

unconstitutional manner. Whether a specific application is 

constitutional is a question which must be resolved on the 

facts of the particular case. While we cannot and do not 

pass on every conceivable application of the statute, it is 

our opinion that the Texas Community Development Act of 1975 

would be held to be constitutional on its face. 

SUMMARY 

The Community Development Act of 1975, 

article 12691-4, V.T.C.S., is not 

pw 3661 
- 

The Honorable Lynn Nabers - page 4 (H-868) 

violative of article 3, section 52 

of the Texas Constitution. 

APPROVED: 

Very truly yours, 

ttorney General of Texas 

jwb 

p. 3662