September I?, 1970

Dr. J. E. Peavy, M. D. Opinion No. M-693 Commissioner of Health Texas State Department Re: Whether a corporation may of Health participate in the collection, 1100West 49th Street handling, storage and disposal Austin, Texas 78756 of "municipal solid waste" as such term is used in Section 3aofArticle 4411-7, V.C.S. Dear Doctor Peavy: and other related questions.

You have requested our opinion as toproper statutory construction of certain statutes relating to the powers of corporations and particularly as to their powers to contract for services under the Solid Waste Disposal Act. (Chap. 405, page 1320,Acts of the blst Leg., Regular Session: Article 4477-7, Vernon's Civil Statutes). Your questions are as follows: "(1) May a corporation legally participate in the collection, handling, storage, and disposal of "municipal solidwaste" as that term is used in Section 3(a) ofArticle 4477-7, V.A.T.S.?

"(2) Ifyour answer to the above question is in the affirmative, under which of the following Acts should such a corporation be organized and operate: (a) The Texas Miscellaneous Corporation Laws Act; (b) The Texas Business Corporation Act: (c) The Texas Non..ProfitCorporation Act; (d) A corporation such as Bolivar Peninsula Water Supply Corporation chartered under Article l434a?

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”(3) Ifyour answer toquestion number (1)above is in the affirmative, may a county, incorporated city or other political subdivision, or combination thereof, legally contract with such corporation for the services described in the SolidWaste Disposal~Act?"

In answer to question (l),Section 3ofArticle 4477-7, speaks generally of state duties toplan, and th~ereisno reasonwhy a corporation as such could not perform solid, ; waste disposal services if the corporation ,isnot otherwi,se disqualified in law orby the provisions of its charter." H.&T.C.R. Co. v. Diamond-Press-Brick Co., 111Tex. 18, 222 S:W.-204 (1920). -----

Your question (2)requires several answers.~Under question 2(a), the Texas Miscellaneous Corporation Laws Act, (Art.1302-1.01 through 1302-6.26, V.C.S., Acts of the 57th Leg., 1961, chap. 205, page 408, effective August 28, 1961) does not empower or authorize corporate purposes: it isdemonstrative of a convenient way to codify miscellaneous statutes relating to certain corporations.
Byquestion 2(c), you askwhether non-profit corporat~ions chartered under theNon-Profit Corporation Act'can perform solidwaste disposal services; We know of no legal reason .' why such anon-profit corporation would~be unable to engage in solidwaste disposal work if its charter soprovides and the law does not prohibit it from suchwork.
By question 2(d) you mention Bolivar Peninsula Water Supply Corporation, which was chartered on October 26, 1967, pursuant toArticle 1434a, Vernon's Civil Statutes. The Bolivar Peninsula W.S.C. cannot amend so as toperform solid waste disposal because it can only act under authority of Art. 1434a; it cannot add solidwaste disposal purposes by amendment. Attorney General Opinion No. O-3433 (1941). The Texas Business Corporation Act has no application to such a corporation created by special law. Tri-County Electric Cooperative, Inc., v. Clair, 217 S.W.2d 681 (Tex.Civ.App. 1949, error ref. n.r.e.1.

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Dr. J. E. Peavy, M. D., page 3 (M-693)

The last question we are considering is 2(b)which inquires as towhether aprivate corporation chartered under the Texas Business Corporation Act can perform solidwaste disposal services. Such apurpose would be a lawful purpose and this corporation formed forprofit could act just as an individual person might act. Sec. 2(1),of the Texas Business Corporation Act (Actsof the 54th Leg., 1955, chap. 64,page 239), states in substance thatwith certain named exceptions (notmaterial here) "corporations forprofit may be organized under thisAct for any lawful purpose orpurposes, which purposes shall be fully stated in the articles of incorporation". Such aprofit corporation has the same liberty to contract as an individual. 2Texas Law Review 366 (1924); 12 Texas Law Review 101 (1933). A private corporation is generally any corporation not classed aspublic, and is one created forprivate, as distinguished from apublic purpose. Miller v. Davis, 136 Tex. 299, 150 S.W.2d 973 (1941), 136A.L.R. 177.
With respect to the third question, we must observe that the same rules of lawwhich relate to public service franchises ingeneral apply to contracts where aprofit corporation or anon-profit corporation performs solid waste disoosal services. For example. nomonovolv or exclusive-franchise canbe created-in.violation ofArt. I, Sec. 26,Texas Constitution; City of Brenham v. Brenham, Water Co., 67Tex. 542, 4 S.W. 14: 3 (1887);Edwards County Jennings, 89Texas 620, 35 S.W. 1053 (1896). Generally, the courts ofTexas have held that city collection and disposal of garbage is a "corporate governmental function" and that the City of Dallas could grant a contract for a reasonable period, (inthis case 15years) for the exclusive privilege of buying allwet garbage. Gardner v. City of Dallas, 81Fed.2d 425, cert.den. 298 U.S. 668 (1936):and this riaht canbe exclusive because it amounts to~appointment of-an officer deemed necessary to protect the public health. City of Breckenridge v. McMullen, 258 S.W. 1099 (Tex.Civ.App. 1923 nowrit): 73Tex.Cr.Reo. 208, 163 S.W. 968'(1914): InRe London, 40Tex. Jur.2d 70, Municipal Corporations, Sec. 390;Wichita Falls v. Kemp Hotel Operating Co., 162 S.W.2d 150 (Tex.Civ.App., 1942, affirmed inKemp Hotel Operating Co. v. City of,Wichita Falls,

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141Tex. 90, 170 S.W.2d 217 (1943). No injunction will lie to stop such contract: Cheek v. Beckworth, 292 S.W.2d 158, (Tex.Civ.App., 1956, error ref. n.r.e.).

Inview of the foregoing, we answer the third question in the affirmative.

SUMMARY -------

A profit or non-profit Texas corporation may perform solid waste disposal services under Texas laws. Corporations chartered under Article 1434a,V.C.S. cannot amend to include waste disposal purposes. A county, incorporated city or other political subdivision, or combination thereof, may legally contract with such corporations for the services described in the Solid Waste Disposal Act. :

Prepared by Roger B. Tyler Assistant Attorney General

APPROVED: OPINION COMMITTEE

Kerns Taylor, Chairman W. E.Allen, Co-Chairman
Bill Corbusier Harold Kennedy James Broadhurst James M. Mabry

MEADE F. GRIFFIN Staff Legal Assistant

ALRED WALKER Executive Assistant

NOLA WHITE First Assistant
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