### TEE ATTORNEY GENERAL OF TEXAS

October 7, 1988

Honorable Tim Curry Opinion No. JM-964 Criminal District Attorney 200West Belknap Street Re: Authority ofacounty to Fort Worth, Texas 76196 make mortgage payments on behalf of its indigent residents (RQ-1413)
Dear Mr. Curry:
You ask whether counties maymake mortgage payments onbehalf of their indigent residents. Your question is prompted by anadministrative rule adopted by the Texas Department ofHuman Services pursuant to chapter 34of the Human Resources Code. Two issues must be considered: whether the county has statutory authority toprovide such financial assistance andwhether such statutory authority is consistent with provisions ofthe Texas Constitution that require public funds to **be** spent for public purposes. Attorney General Opinion JM-942 (1988). Counties in Texas are limited to exercising those powers that are specifically conferred on them by statute orthe constitution, but they have broad discretion in exercising express powers. Canales v. Lauchlin 214 S.W.Zd 451 (Tex. 1948). The statutory authority for &he expenditure about which you inquire is found inchapter 34of the Human Resources Code. That chapter requires the Texas Department ofHuman Services (theDepartment) to establish a fund to assist local communities in meeting the needs of individuals and families for temporary emergency relief. Hum. Res. Code 534.003(a). The services are funded 50percent with local funds and 50percent with matching state funds. The statute authorizes acounty commissioners court toapply for agrant toadminister the program on behalf ofthe county. Id. 5034.002-04. The county must submit to the Department a plan forproviding emergency relief, which must include a description of the target population, eligibility criteria to receive services, the nature and scope ofbenefits to beprovided, methods of administration, and a budget

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that contains the sources of local matching funds. 534.006(a), (b). The Department shall adopt rules es?% blishing criteria fordetermining whether acounty or other applicant qualifies for a grant-in-aid. Id. §34.004 (d). The Department isalso required to develop standards and procedures for the program that permit all counties in the state toparticipate. L 534.004(f).
The statute is intended to enable local governments to aid needy individuals, including homeless persons. The legislature has acknowledged that local government and nonprofit programs arepresently overburdened and that the inability toadequately assist homeless and needy residents causes family, social, and economic instability, as set out inthe purpose clause ofchapter 34.

(a) The legislature finds that: (1) economic and demographic changes have created rapid increases inthe number ofneedy persons who are homeless orwithout other necessities ofbasic existence; (2) local governments and nonprofit service organizations are unable to meet the increased financial burden caused by those changes in various areas of the state: and (3) the dramatic nature ofthe emergency relief needs invarious localities has contributed to family instability and threatened the social and economic stability of those communities. (b) The intent of this chapter is to serve apublic purpose and the goals of the state byproviding state money tomatch local and any federal money available to provide emergency relief toneedy persons.
Hum. Res. Code !j34.001. Section 34.007 establishes procedures and guidelines for counties to follow indetermining eligibility and the frequency and duration of benefits under the program. A county may not set the eligibility level at "less than 75 percent ofthe federal poverty level based onthe Federal Office ofManagement and Budget Poverty Index ineffect at ,

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the time the plan issubmitted to the Department." Id. s34.007(c). Assistance "may include the provision of utilities, food, housinq and clothing toneedy persons." Id. S34.007(d) (emphakis added). pursuant to section 34.004 ofchapter 34, the Department adopted the following rules for provision ofhousing assistance under the program:

[T]he [county, other political subdivision, ornon-profit corporation] may deliver the following services: (1) mass shelter -- purchasing cots and blankets and renting space; (2) emergency rent -- paying for one month only toprevent eviction and toprovide housing for the homeless; (3) mortgage assistance --paying for one month only prevent eviction 'or closure . . . .:"
40T.A.C. S10.4304(b). Chapter 34 authorizes the provision of temporary, emergency housing assistance. Iiomelessness is not a prerequisite to assistance. Rather, prevention ofhomelessness and promotion of stability are primary purposes of the statute's enactment. These purposes are SSNSd by the provision ofonemonth's mortgage assistance to aperson or family on the verge of homelessness through eviction or foreclosure ontheir home. This form ofassistance allows the family time to take measures .toprevent eviction or foreclosure orto find other housing. Wedo not see that making amortgage payment is significantly different from making arent payment for individuals inthis situation. Indigents donot need tobe totally impoverished before assistance may beprovided. Attorney General Opinion O-2474 (1940)'. The legislature, inenacting chapter 34, clearly did not intend that afamily must betotally destitute in order to qualify for housing assistance. Instead, one

1. According to the Department, VlosureV8 isa typographical error inthe rule asadopted. The Department interprets the rule as applying to "foreclosure.!'



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specific restriction the legislature places onthe administration ofthe program isthat the eligibility requirement cannot be set lower than at 75percent ofthe poverty level established by federal guidelines.
"It is not an invalid delegation of legislative authority togrant toan administrative body the right to make rules toput into effect completed laws." c Housing
87 (Tex. lz40). 'nota 143 S.W.Zd 79 The Department rule allowing counties t; make mortgage payments on behalf of indigent residents directly achieves the stated goal of chapter 34of the Human Resources Code. The statutory authority of chapter 34, tobe valid, must be consistent with provisions of the Texas Constitution prohibiting expenditures of public funds for

Article 3,section 52, private purposes. ofthe Texas Constitution provides: (a) Except asotherwise provided by this

section, the Legislature shall have no power to authorize any county, city, town or other political corporation or subdivision of the State to lend its credit ortogrant 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 3,section 51places asimilar prohibition ondirect legislative grants to individuals or corporations for private purposes. Inour-opinion, the expenditure of state and county funds for the purpose ofmaking asingle mortgage payment on behalf of an indigent resident is constitutionally permissible.

The intent ofthe provisions ofarticle 3,sections 51 and 52 is to "prevent the application of public funds to private purposes.l@ Bvrd v. Citv of Dallas, 6S.W.2d 738, 740 (Tex. 1928). On the other hand, expenditures made for the direct accomplishment of legitimate public purposes are not unlawful simply because private business may benefit. Barrinoton v. Cokinos, 338 S.W.2d 133, 140 (Tex. 1960).
The final determination of what isa proper public purpose is a question for the courts: a declaration ofpublic purpose is legislative Hisainbotham, tobegiven great weight. 143 S.W.2d 79, 83 '(Tex. 1940). The

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legislative determination will not be overturned absent a court finding of arbitrariness or lack of due process. State v. Citv of A!&$& 331 S.W.2d 737, 743 (Tex.- 1960); Attorney General Opinion'JM-805 (1987).
In~iaoinboth~, sunra, the supreme court held that the purposes served by the Texas Housing Authorities Law, clearance of slums and construction of low-rent housing, are proper purposes for which use of public funds may authorized. 143 S.W.2d 79at 85. The stated purpose of diminishing the adverse impact ofhomelessness articulated insection 34.001 ofthe Human Resources Code issimilar to the legislative statement of purpose considered by the Hiosinbotham court. &.g j& at 81, 82. The purposes SSNSd by slum clearance and housing development are not rendered constitutionally impermissible because personal gain to some private individual results. Davis v. Citv ofLubbock, 326 S.W.Zd 699 (Tex. 1959). Thus, we do not believe the purposes stated in chapter 34are per se unconstitutional merely because aproperty owner or financial institution might ultimately benefit from the receipt of one rent or mortgage payment.
A government entity may contract with a private institution or another political subdivision in order to provide for public or governmental programs for proper public purposes. Attorney General Opinion JM-65 (1983). Whether a particular expenditure which benefits individual is permissible under the constitution must Z determined on a case-by-case basis. CornDare Attorney General Opinion JM-103 (1983) (permitting a county to contract for the operation of arecreation center tobeused by elderly residents) & Attorney General Opinion MW-22 (1979) (concluding that authorization of utility bill payments onbehalf of elderly persons violates the constitution). In order tobe constitutionally permissible, an expenditure ofpublic funds must be for apublic purpose and must include controls to ensure that the public purpose is carried out. See Attorney General Opinions MW-373 (1981); MW-423 (1982); JM-157 (1984); JM-768 (1987). The expenditures authorized by chapter 34 meet both these requirements.
Apublic purpose is served when temporary emergency assistance is provided to needy families and individuals living in the community. The obvious societal costs of homelessness make housing development and housing assistance ofparticular public concern. Expenditures made pursuant to

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chapter 34 appear likely to produce savings in existing social welfare and housing programs. Controls established by chapter 34 ensure that funds authorized by the statute will be used to carry out the public purpose expressed **by** the legislature. Counties may receive agrant-in-aid only ifthey provide evidence showing aneed for assistance inaccordance with the Department's rules. Hum. Res. Code §34.004(c). The counties must also provide adetailed plan forproviding emergency relief. Id. 534.006 (a), (b)- Restrictions on administrative costs, auditing provisions, and reporting requirements also help ensure that the public purpose justifying the emergency assistance program will be carried out.
SUMMARY
Acounty may make mortgage payments on behalf of indigent residents to prevent eviction or foreclosure as part of a temporary emergency relief program for needy persons approved 2,;:; D;;art$enkh;f Human Services under Human Resources Code. Very truly yo , 

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- JIM MATTOX Attorney General ofTexas
MARYKKLLER First Assistant Attorney General
LOUMCCREARY Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLKY Special Assistant Attorney General
RICK GILPIN Chairman, Opinion Committee Prepared **by** Karen C.Gladney Assistant Attorney General

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