THE 

op TEXAS 

Hon. James B. Pattison, Chairman 

Committee on Public Health 

House of Representatives 

52118 Legislature 

Austin, Texas Opinion Ho. V-1163 

Re: 

Bear Mr. Pattison: 

Const?.tIltionality of 

ccanmittee amendment to 

House Bill 151 to establish a scholarship 

program of loans from 

State PunUs to mealcal 

students. 

Your request for an opinion relates to the constitutionality of a law now In effect in the State of 

Mississippi which provides for loans and scholarships to 

students desiring to study medicine. 

You state that House Bill 151 Is now being considered by your committee and that you contemplate substituting in lieu thereof the Misslsslppl plan, which for 

the purposes of this discussion is designated as House 

Bill 431. You desire to know the constitutlonalltg of 

such a law under the Texas Constitution. 

House Bill Ao. 431 (Mississippi) provides for 

the creation of a board to be known as the State f+Iedfcal 

Education Board and provides for the appointment and the 

terms of office of the members thereof. The act provides 

for the employment of the neoessarg personnel to carry 

out the terms of such act and provides a procedure for 

granting loans or scholarships to students who are bona 

fide students and residents of the State of Mississlppl 

and who desire to become physicians. The purpose of the 

loan is to enable an applicant to obtain a standard fouryear medical eclucation which will qualify such applicant 

to become a licensed practicing physician and surgeon. 

Applicants may receive a loan or scholarship in an amount 

not to exceed 5,000.00, to be paid in annual installments 

not exceeding D 1250.00 per annum. These loans or scholarships are conditioned so that the full amount shall be 

repaid to the State of Mississippi, with four per cent 

Interest from the date of each payment by the State. 

287’ 
288 

Hon. James B. Pattison, page 2 (V-1163) 

Section 9 of the proposed House Bill 431 pro- 

. a vides that all payments of funds for loans or scnolarships thereunder shall be made by requisition of the 

Board signed by the Chairman and Secretary, and directed to the Auditor of Public Accounts, who shall thereupon issue a warrant on the Treasury of the State of 

Mississippi for the amount fixed in the requisition and 

payable to the person designated thereon, which warrant 

upon presentation shall be paid by the treasurer out of 

any funds appropriated by the Legislature for the purposes provided for under this act. The purpose and intent of the act was to meet the emergency existing in 

the State of Mlssisslppi from the shortage of doctors in 

the State by Increasing the number of medical students 

from Mississippi in the various medical schools and inducing such graduates of medical schools to return to 

Mississippi for the practice of their profession. 

You have informed us that the adaptation of the 

Mississippi plan as a substitute for House Bill 151 will 

provide for an appropriation of State funds by the Legislature. 

The question presented for determination is 

whether the proposed bill contravenes the p~ovlsions of 

Section 50 of Article III of the Constitution of Texas, 

which provides: 

‘The Legislature shall have no power 

to give or to lend, or to authorize the glving or lendlng, of the credit of the State 

in aid of, or to any person, association or 

corporation, whether municipal or other, or 

to pledge the credit of the State in any manner whatsoever, for the payment of the liabilities, present or prospective, of any 

individual, association of individuals, 

municipal or other corporation whatsoever.” 

In Sannock County v. Citizens Bank & Trust Co., 

53 Idaho 159, 22 P.2d 674, 680 (19X), the Supreme Court 

of Idaho was construing the provisions in the Idaho Constitution which said that no couutx shall “lend, or 

pledge the credit or faith thereof or “loan its credit” 

to any lnalviaual, association, or corporation. The 

court stated: 

"In interpreting the sections of the 

Constitution in question, the language 

employed must be taken and understood in 
289 

Hon. James B. Pattison, page 3 (V-1163) 

its natural, ordinary, general, and popular sense. In the popular sense, 

lending or l&&L& money or credit is at 

once understood to mean a transaction 

creating the customary relation of borrower and lender, in which the money is borrowed for a fixed time, and the borrower 

promises to repay the amount borrowed at 

a stated time in the future, with Interest at a fixed rate. And that is the 

sense, then, in which the language employed in those sections must be unaerst00a, and so understood, no county, for 

example, shall lend or pledge its credit 

or faith, directly or indirectly, or in 

any manner which would create the customary relation of borrower and lender." 

It is our opinion that the expenditure lnValved in the plan under consideration creates the 

customary relationship of borrower and lender and is 

therefore a lending of the State's credit within the 

meaning of Section 50 of Article III of the Constitution of Texas. 

In construing the provisions of Section 50 

and kindred provisions found in Sections 51 and 52 of 

Article III of the Constitution, the courts of this 

State have held that the Legislature is prohibited 

from authorizing the lending of credit or the making 

of arants which are not for a nubllc. OF aovernmental. 

purpose. Bexar County v. Linden, 116 Tex‘: 339, 220 S:W. 

761 (1920); Road M t 19 0. 4. Shelby County v. Allrea, 

115 S.W.2a 702 (Tex.Clv.App. ?$3 

123 Tex. 77, 68 S.Wy2; 164 (1 4 ; Seydler v. B order, 

, error ref.). If the 

expenditures are for a pubiic purpose, they are not lnvalid because private persons are benefited therefrom. 

Alameda County v. Janssen, 16 Cal.2a 276, 106 P.2d 11, 

50 A L R 1141 (1940) However, the carrying out of 

a gov&&ntal fun&Lo: must be the primary object of 

the grant of credit. Where the expenditure is dlrectly In aid of an individual In his private affairs and 

results in a benefit to the public only indirectly, it 

is not made for a public purpose. 

Certainly the preservation and promotion of 

the health of the citizens of the State and the eaucatlon of physicians are matters of public concern. But 

House Bill No. 431 goes far beyond the providing of instruction and training for physicians. We cannot escape 
Hon. James. B. Pattison, page 4 (V-1163) 

the conclusion that the direct benefits of this bill 

are conferred upon the individuals who are the recipients of the loans, and that the benefits to the public, 

in the absence of an emergency not hers presented, are 

too indirect to bring it within the orbit of a governmental function. 

We have not found any decision in this State 

in which the question of the constitutionality of loans 

to individuals for .an analogous purpose was presented. 

In several States, the courts have held statutes authorizing loans to individuals to be unconstitutional, 

even though the Legislature had enacted the statutes in 

an effort to promote the general welfare. On the other 

hand, the courts of some States have taken a broader 

view of the scope of public purposes and have upheld 

loans and grants to individuals in various circumstanaes 

where the court thought the Legislature was justified in 

considering the public good benefited thereby. However, 

we believe that the decisions of the Texas courts in 

other situations indicate that the meaning of public 

purpose cannot be broadened to this extent. 

This office, in holding that there was no 

statutory authority for the creation of a student loan 

fund out of funds appropriated to the Texas State Univemitg for Negroes, stated that the presence of such 

statutory authority would raise serious constitutional 

questions, In view of Section 50 of Article III of the 

Constitution. Lee Letter Opinion to W. R. Banks, dated 

June 3, 1950. 

When a proposal for making loans to World War 

II veterans for purchase of land was before the Legislature it was apparently deemed necessary by the Lagislature to amend the State Constitution before such loans 

could be made. It is our opinion that a similar constitutional amendment would be necessary in order for 

the %llssissippi Plan” to be valid in this State. 

SUMMARY 

The “Mississippi Plan” providing for 

loans from State funds to students aesirlng 

to study medicine cannot be validly adopted 
Hon. James B. Pattison, page 5 P-1163) 

by the Legislature in the absence of a 

constitutional amendment specifically 

authorizing such plan. 

APPROVZD: 

J. C. Davis, Jr. 

County Affairs Division 

Jesse P. Luton 

Reviewing Assistant 

Charles D. Mathews 

First Assistant 

BWzmw 

Yours very truly, 

PRICE DARIEL 

Attorney General 

Bs 

Burnell Waldrep 

Assistant