GENERAL 

AUSTIN. TREXAS 787ll 

May 20, 1974 

The Honorable Joe Resweber 

County Attorney 

Harris County Courthouse 

Houston, Texas 77002 

Opinion No. H- 310 

Re: May Harris County Commissioner 8 court constitutionally 

issue revenue bonds under Clean 

Atr Financing Act? 

Dear Mr. Resweber: 

You have requested our opinion as to whether the Harris County 

Commissioner’s Court, acting as the “governing body” of an “issuer” 

(as those terms are used by the Texas Clean Air Financing Act), may 

authorize issuance of “revenue” bonds to finance ,the acquisition or 

construction of an air control facility. 

The Texas Clean Air Financing Act, newly enacted in 1973, is 

codified as Article 4477-Sa, V. T. C. S. Generally, it cbnplements the 

Texas Clean Air Act. Art. 4477-5, V. T. C. S., and provides a means 

by which local governmental units may finance the construction of air 

pollution control facilities by issuing tax-exempt bonds to be repaid or 

retired out of the revenues of the new facilities, or of certain public 

systems, and not out of tax revenues. See $ 5 (h). Section 4 (a) of the 

Clean Air Financing Act reads: 

“Sec. 4 (a). Each issuer is authorized to acquire, 

construct, and improve, or cause to be acquired, constructed, and improved, control facilities. The issuer’ 

is also authorized to acquire real property as deemed 

appropriate by the issuer for the control facilities. 

Such control facilities may be located upon property 

oked by the issuer or upon property. of another person 

or persons. The issuer is authorized to enter into leases 

p. 1431 
-\ The Honorable Joe Reswebar page 2 (H-310) 

or other contracts with persons whereby such persons 

shall use or acquire control facilities of the issuer. 

The issuer is authorized to sell such facilities to any 

person or persons including a person or persons using 

such facilities, such sale to be by installment payments 

or otherwise and upon such conditions as the issuer deems 

desirable. ” 

The definition of “governing body, ‘I with reference to an issuer, 

expressly includes a commissioners court [ § 3(6)]. The term “issuer” 

expressly includes a county [ 5 3(7)]. If a county is to be the issuer, the 

control facilities must be located wholly or partially within its boundaries 

t § 4(d)]. 

Your request.. letter to us states: 

“The peril upon which. the Commissioners Court 

hesitates relates to whether or not this Act would violate 

Texar Constitutional Law inasmuch as it may be 

viewed as authorizing the granting of. public credit in 

aid OT an individual, association or corporation. ‘I 

. Article 11, 5 3, of the Constitution, whtch har been a part of the 

Constitution of Texas since it was adopted in 1076 readr: 

“No county, city, or other municipal corporation 

shall hereafter become a subscriber to the capital’ 

of any private corporation or association, or make 

any appropriation or donation to the same, or in 

anywise loan its credit; but this shall not affect any 

obligation heretofore undertaken pursuant to law. ” 

Article 3, $ 52, of the Constitution presently reads: 

“(a) Except as otherwise provided by this section, 

the Legislature shall have no power to authorize any 

i . . . . 

p. 1432 

. 
. . . 

The Honorable Joe Resweber page 3- (&310) ‘.’ 

county. city, town or other political corporation or 

subdivision of the State to lend its credit or to-grant 

public money or thing of values in aid of; or to any 

individual, aseociation or corporatton whatsoever; 

or to become a stockholder in such corporation, ar#ociation ore company. ” 

This section, lastamended in 1970, contains no express authorization to issue bonds for the construction, maintenance or operation of air 

pollution control facilities, but the absence of such a constitutional 

authorization for tax bonds is held not determinative of the power of a 

political subdivision to issue revenue bonds.. Atkinson v. City of. Dallas, 

353 S. W. 2d 275 (Tex. Civ. App. --Dallae 1961, error ref’d, nt r. e.~). 

Cf. Lower Colorado River Author.ity v. McGraw, 83 S. W. 2d 629 (Tex 

1935). The reason is that revenue bonds do not pledge to bondholders the 

full resources of government (the public~.credit) for their repayment. 

Only certain revenues, excluding taxes, arc pledged to repay them, and 

the governmental issuer of the bonds has no liability if the pledged revenues prove inzufficient. 

Section 5 (h) of the Clean Air Financing Act specifies: 

“All such bonds or notes shall be special obligations 

payable solely from the revenues pledged to their 

payment and shall not be considered general obligations 

of the governing body, an issuer, or the State of Texas. 

The holder of the bonds shall never have the right to 

demand payment from moneys derived by taxation or 

any other revenues of the issuer except those revenues 

pledged to the payment of the bonds or notes. ” 

You have not provided us particulars, so we cannot specifically 

answer in response to the Harris County plans as to whether those plans 

amend or would not constitute an improper lending of credit or an improper 

grant. Generally it can be said that when a public body properly issues 

revenue bonds to construct a revenue producing facility to be owned by it, 

p. 1433 
. . 

The Honorable Joe Resweber, page 4 (H-310) 

the operation of which io reasonably necessary or desirable for the health 

and welfare of its general constituency, the courtr will ordinarily conchidthat the public body’s expenditure is for a proper public purpose and not an 

improper grant or an improper loan of credit to the unerl of the facility 

from which the revenue is derived, and this, even if some private corporation is incidentally benefited. See Braaos River Authority v. Carr, 405 

S. W. 2d 689 (Tex. 1966); Atkinson v. City of Dallas, 353 S. W. 2d 275 (Tex. 

Civ.App. Dallas, 1961, error ref’d, n. r. e.). 

We can advise, therefore, than an improper grant of public funds 

does not necessarily occur just because a public body accomplishes its 

purpose through the agency of a private person or organization. See 

Barrington v. Cokinos, 338 S. W. 2d 133 (Tex. 1960); State v. City ofAustin, 

331 S. W. 2d 737 (Tex. 1960). These cases hold that the State, where it 

exercises its police powero, has discretion to share the expenses where 

the public purpose is served and there is no net gain to the individual. And 

see, Brazes River Authority v. Carr, 405 S. W. 2d 689 (Tex. 1966). 

In this area, the constitutional rertri ctionr on “grants” of public 

money or thingr of value to individual or corporations and those restrictions on “lending the public credit” are analyzed by Texas courts in the 

same way. A “public benefit” is presumed to flow from the utilization of 

public funds or credit for a proper “public purpose. ” The existence of a 

proper public purpose in any given case must be measured by the specific 

plans and arrangement called for in such care. In each instance it is a 

mixed question of law and fact which can be ultimately and finally determined only by the courts, though much deference will be given to,legislative expressions on the matter. See Davis v. City of Lubbock, 326 

S. W. 2d 699 (Tex. 1959). Compare State ex rel Hammermill Paper CO. 

v. La Plante, 205 N. W. 2d 784 (Win. 1973) with State v. City of York, 

82 N. W. 2d 269 (Neb. 1957) and with Cosentino v. City of Omaha, 183 

N. W. 2d 475 (Neb. 1971). The courts would undoubtedly give considerable 

weight to the fict that the Legislature has specifically provided that “the 

c 

p. 1434 
.a - 

. 

, ’ 

The Honorable Joe Reswiber page 5 (H-310) 

holder of the bonds shall never have the right to demand payment from 

moneys derived by taxation or any other revenues of the issuer except 

those revenues pledged to, the payment of the bonds or notes. ” 

We are of~the,opinion that, generally, a commissioners court may 

issue revenue bonds under the Clean Air Financing Act, Art< 4477-5a, 

V. T. C. S. However, it is possible that the facts,of a particular case will 

cause the issuing of such bonds to be unconstitutional. Travelers’ Ins. 

Co. v. Marshall, 76 S. W. 2d 1007, lOlO,(Tex. 1934). 

In answer to your inquiry, therefore, we can only reply that, 

generally the Harris County Commissioners Court may legally and 

constitutionally authorize the issuance of revenue bonds to finance the 

acquisition or construction of an air control facility. However,~ not 

every arrangement made purportedly for that purpose would be legal. 

or constitutional. The details of the written arrangement would control. 

SUMMARY 

Generally a commissioners court may issue 

revenue bonds under the Clean Air Financing Act, 

but whether a specific issue is valid will depend 

on the specific arrangements of each case. Much 

reliance will be placed on the legislative mandate 

that the bonds provide that their repayment be made 

solely from revenues of the issuers and not from 

monies derived from taxes. 

Very truly yours, 

JOHN L. HILL 

Attorney General of Texas 

p. 1435 
. . . . 

‘. 

* 

The Honorable Joe Rcaweber page 6 (H-310) 

p. 1436