Court Opinion

ID: 4130753
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:08:01.709423+00
Date Added: 2024-06-11T14:33:01.677129
License: Public Domain

Ronorable Gary Garrison            Opinion No. JM-716
    Ector County Attorney
    Courthouse, Room 218               Re: Whether a cotmissioners court
    Odessa, Texas   79761              may grant federal revenue sharing
                                       funds to a chamber of cormnercefor
                                       use in recruiting new businesses

    Dear Mr. Garrison:

         You ask whether Ector County may donate federal revenue sharing
    funds to the Greater Odessa Chamber of Commerce to be used to recruit
    new business to the area.

         The Revenue Sharing Act, which was codified as chapter 67 of
    title 31 of the United States Code, was repealed as part of the
-   Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L. No..
    99-272, 914001, 100 Stat. 327 (1986). The legislation repealing the
    act provided in part:

                 Amounts paid to units of general local govern-
              ment from the Trust Fund shall be used, obligated,
              or appropriated by the units of general local
              government before October 1, 1987, and shall
              continue to be subject to the terms of the Revenue
              Sharing Act.

    Pub. L. 99-272, 014001(a)(5), 100 Stat. 327, 328 (1986). Thus, the
    repealed provisions of the Revenue Sharing Act still govern the use of
    any revenue sharing money available to Ector County.

         The Revenue Sharing Act provided, at 31 U.S.C. section 6704, that
    a county could not spend revenue sharing funds unless it was acting
    within its authority under state law:

                 (a) Under regulations of the Secretary of the
              Treasury, a State government or unit of general
              local govermnent qualifies for payment under this
              chapter for an entitlement period only after
              establishing to the satisfaction of the Secretary
              that --

                                  p. 3328
Honorable Gary Garrison - Page 2   ,(JM-716)

             . . . .

             (3) the government will expend the payments
          received under the laws and procedures applicable
          to the expenditure of revenues of the government.

     Article III, section 52, of the Texas Constitution prohibits a
county from donating funds to a private association or corporation:

             (a) Except as otherwise provided by this
          section, the Legislature shall have no power to
          authorize any county, city 9 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 whatso.zvrr, or to
          become   a   stockholder in    such corporation,
          association or company.

That provision does not prevent counties from contracting with private
corporations. Attorney General Opinion JM-65 (1983). gather, it
requires that a county contract with a private corporation serve a
public purpose and that the county receive adequate consideration.
Attorney General Opinion MW-373 (1981).        Furthermore, a county
contract with a private corporation eust provide sufficient assurance
that the public purposes will be accomplished. Id.; Attorney General
Opinion H-912 (1976). As indicated, article IIIzection     52, applies
to revenue sharing funds as well as other county funds. See Attorney
General Opinion Nos. MW-329 (1981) (county may not contribze federal
revenue sharing funds to a nonprofit corporation organized for the
purpose of training handicapped adults); E-1189 (1978) (county may not
make unconditional grant of federal revenue sharing funds to private
daycare); H-1010 (1977) (under certain circumstances, county may loan
federal revenue sharing funds to a medical student in exchange for
promise that student will provide certain services to county); H-127
(1973) (county nay use federal revenue sharing funds to contract with
a private entity to provide a recreation facility for the aged).

     This office has stated that paying dues to a private corporation
such as a chamber of commerce in order to secure "general benefits
resulting from encouragement of private industry and business" is not
sufficiently "insulated from the abuses" that article III, section 52,
was designed to prevent. Attorney General Opinion H-397 (1974). In
contrast, this office has held that a county may contract with a
private corporation for specific business and industrial development
services as long as the county receives adequate consideration and the
contract provides adequate assurance that the public purpose will be
accomplished. Attorney General Opinion JM-516 (1986); see also

                               p. 3329
Honorable Gary Garrison - Page 3     (JM-716)

Canales v. Laughlin, 214 S.W.Zd 451 (Tex. 1948) (county has only those
powers conferred upon it specifically or by necessary implication).

     Some of the information you submitted to us suggests that Ector
County would simply be donating money to the Greater Odessa Chamber of
Commerce to support the chamber's current efforts to recruit business.
Such a donation, unaccompanied by specific contractual provisions to
insure that the county would receive adequate consideration and that
the public purpose would be met, would be impermissible. Attorney
General Opinion E-397 (1974).

                              SUMMARY

             A county may contract with a private corpora-
          tion such as a chamber of commerce for the pro-
          vision of business and industrial development
          services if the county receives adequate con-
          sideration and if the contract provides adequate
          assurance that the public purpose will be
          accomplished. A county may not, ,however, simply
          donate money to a chamber of commarce.

                                         JIM     MA'iTOX
                                         Attorney General of Texas

JACK HIGHTOWER
First Assistant Attorney General

MART KELLER
Executive Assistant Attorney General

JUDGE ZOLLIE STEARLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Sarah Woelk
Assistant Attorney General

                               p. 3330