Court Opinion

ID: 4130275
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:02:23.757827+00
Date Added: 2024-06-11T14:26:52.800793
License: Public Domain

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    d1.X   PLvrrox                             July 27, 1990
    *.l"l.o~NEY
              DESERAL

                     Honorable George Pierce            Opinion WO. JM-1194
                     Chairman
                     Committee on Urban Affairs         Re: Authority of a munici-
                     Texas House of Representatives     pality to advance compensa-
                     P. 0. Box 2910                     tion to an employee
                     Austin, Texas   78768-2910         (RQ-1924)

                     Dear Representative   Pierce:

                          You ask:

                             May a municipality advance compensation   in
                             the form of cash or other property        to
                             employees to be fully earned within one year
                             on terms agreeable to the municipality?

                          Given such a general question,       we are, of course,
                     limited to a general answer. However,     while we cannot fully
                     and finally answer your question, we      can say with a fair
                     degree of certainty that a court would    disapprove of such an
                     expenditure of public funds.

                          Cities generally have control over their finances. See
                     Local Gov't Code 85 101.002   (type A cities), 101.022   (home
                     rule cities). Cities also have control over the compensa-
                     tion and conditions of employment of their employees.      See
                     Bvrd v. Citv of Dallas, 6 S.W.2d 738 (Tex. 1928).    However,
                     a city's expenditure of public funds is subject to constitu-
                     tional restrictions.

                          The Texas Constitution is replete with provisions  that
                     prohibit the grant of public funds and the lending of public
                     credit to private individuals or organizations.     Specifi-
                     cally, article III, section 52(a) reads:

                                Except as otherwise provided by this sec-
                             tion, 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 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

                                                     P. 6304
Honorable George Pierce - Page 2   (JM-1194)

        such corporation,   association  or company.
        However, this section does not prohibit   the
        use of public funds or credit for the payment
        of nremiums on nonassessable life, health, or
        accident  insurance   policies  and   annuity
        contracts  issued by    a mutual    insurance
        company authorized  to do business   in this
        State.

Tex. Con&. art. III, § 52(a); see also &    55 50  (prohibi-
tion on the lending of the credit of the state),           51
(prohibition on the grant of public moneys to individuals
and corporations); j&    art. VIII, § 3 (levy of taxes for
public purposes   only); id. art. XI, 5 3 (prohibition on
political subdivisions' subscribing to private capital,   and
appropriation or loaning of credit to same): ia. art. XVI,
§ 6 (prohibition on appropriation for private     purposes).
But see Tex. Const. art. III, §§ 52-a   (allowing grants of
public money   for economic development),   52(e)   (allowing
political subdivisions   to invest funds as authorized     by
law).

     One constitutional scholar has analyzed the meaning   of
the term "lend its credit" found in section 52(a) and the
variations  of the term found in other        constitutional
provisions as follows:

            Section 50 states that the legislature may
        not   'give' the credit of the state        to
        anybody, 'lend* the credit of the state to
        anybody, or 'pledge' the credit of the state
        for anybody. . . . This is an involved and
        somewhat imprecise way of saying that the
        state mav not aid anvbodv bv lendina him
        money.

1 G. Braden, The Constitution of the State of Texas: An
Annotated and Comnarative   Analvsis   225  (1977) (emphasis
added); see also Brazoria Countv v. Perry, 537 S.W.2d 89
(Tex. Civ. APP- - Houston     [lst Dist.] 1976, no writ):
Attorney General  Opinion JM-533    (1986).   An advance  of
salary is clearly a loan and, thus, a lending of credit
within the constitutional prohibition.

     While the language found in section 52(a) only denies
the legislature   the power to authorize a political      sub-
division to "lend its credit," cases decided thereunder
and other constitutional    analyses    make it clear     that
the constitutional   prohibition    also applies    indirectly
to political subdivisions.    See, e.a., Storrie   v. Houston
Cite St. Rv. Co., 46 S.W. 796     (Tex. 1898); Braden,  sunra:

                             p. 6305
l
     Honorable George Pierce - Page 3   (JM-1194)
(I

.

     Willatt, Constitutional Restrictions on Use of Public     Money
     and Public Credit, 38 Tex. Bar J. 413 (May 1975).

          The constitutional provisions cited above signify that
     the law generally abhors the expenditure of public funds for
     private purposes. In Brazoria C&zuntv v. Perry, sunra, the
     court addressed  article  III, section 52, and succinctly
     restated the rule as follows:

                The clear purpose of this constitutional
             provision   is to    prevent the  gratuitous
             application of funds to private use.   [Cita-
             tions omitted.] The Constitution does not,
             however,   invalidate an expenditure    which
             incidentally benefits a private interest if
             it is made for the direct accomplishment
             of a legitimate public purpose.
537 S.W.2d at 90-91; see also Barrinaton   v. Cokinos    338
     S.W.Zd 133, 140 (Tex. 1960); podson V.  rshall 118    i.W.2d
     621 (Tex. Civ. App. - Waco 1938, writ dismjd); Attorney
     General Opinions  JM-1146  (1990); JM-551, JM-431    (1986);
     MW-89 (1979); WW-790 (1960).

          The requirement stated in the Brazoria County case that
     the expenditure must be made "for the direct accomplishment
     of a legitimate  public purpose"  leads us to doubt that a
     court would approve the salary advance about which you ask.
     Your unadorned question offers no implicit public purpose;
     however, the determination   of a public purpose and the
     establishment of a cuid nro QUO are legislative   functions.
     See, e.a., Youna v. City of Houston, 756 S.W.2d 813, 814
     (Tex. App. - Houston [lst Dist.] 1988, writ denied); Dodson,
     sunra; Attorney  General Opinions JM-1146    (1990); MW-373
     (1981).

                            SUMMARY

                A city may not ordinarily advance     salary
             to its employees.

                                        JIM     MATTOX
                                        Attorney General of Texas

     MARY KELLER
     First Assistant Attorney General

                                  p. 6306
                                                 L
Honorable George Pierce - Page 4     (JM-1194)

                                                 .

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOUIE STEAKLEY
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Karen C. Gladney
Assistant Attorney General

                               P. 6307