Court Opinion

ID: 4131855
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:20:18.993492+00
Date Added: 2024-06-11T14:33:31.500979
License: Public Domain

The Attorney                General of Texas
                                            July    8,   1980

MARK WHITE
Attorney General
                   Honorable Gerald R. Brown                    Opinion No. NW206
                   Executive Director
                   Texas Industrial Commission                  Re: Texas Industrial Commission
                   Box 12728, Capitol Station                   Economic Development Fund
                   Austin, Texas 787ll

                   Dear Mr. Brown:

                           You inform us that the Texas Industrial        Commission (TIC) is
                   considering establlshirg an Economic Development Fund for the purpose of
                   receiving and expendirg private contributions.       The TIC would use the
                   contributions to pay travel, entertainment,  and other expenses necessary for
                   activities   designed to attract business and industry to Texas.       Article
                   5190 l/2, V.T.C.S., reads in pertinent part:

                                  (a) Additional   &ties   of the Commission   in
                              addition to its other duties, the State Industrial
                              Commission is hereby authorized to plan, organize
                              and operate a program for attracting and locating
                              new industries in the State of Texas.

                                  (b) The Industrial Commission may accept con-
                              tributions from private sources, all of which may be
                              deposited in a bank or banks to be used at the
                              discretion of the Commission in compliance with the
                              wishes of the donors.

                          You first ask whether the commission may depceit funds donated from
                   private sources in banks, rather than the state treasury, and expend them
                   without specific legislative appropriation.  Article 5190 l/2, V.T.C.S., clearly
                   authorizes the commission to deposit such funds in banks! rather than the
                   state treasury, and to spend them without specific legislative eppropriation.
                   See generally Letter Advisory No. 132 (1977). However, the legislature has
                   authority to appropriate such funds even though they are held outside of the
                   treasury. See Attorney General Opinion H-1167 (1978); Letter Advisory No.
                   132 (1977). x     also General Appropriations Act, Acts 1979, 66th Leg., ch.
                   843, art. V, SS18,19 at 2911.

                          You next ask under what conditions, if any, such funds may be
                   expended for travel and entertainment in attempting to attract business and
                   industry to Texas. The contributions accepted by the Commission pursuant

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Honorable Gerald R. Brown - Page Two        (MW-20 6 1

to article 5190 l/2, V.T.C.S., are public funds. Attorney General Opinion WW-534
(1958). Thev mav not. therefore. be soent in a manner inconsistent with article III.
section 51 ‘bf the Texas Constitution- which orohibits gratuitous &nations to eny
individual, assoc: iation of individuals or corporation.  Road District No. 4, Shelby
County v.~Allred, 68 S.W.2d 164 (Tex. 1934). There must be en adequate return to the
state, either in the accomplishment of a public purpose or in the receipt of something
equivalent in value. See State v. City of Dallas, 319 S.W.2d 767 (Tex. Civ. App. -
 Austin 1958) aff’d 331 ST. 2d 737 (Tex. 1960); Attorney General Opinion H-416 (1974).

       However, an expenditure for a legitimate public purpose is not rendered unlawful
because a privately owned business may be benefited thereby. Barrington v. Cokinos,
338 S.W.2d 133 (Tex. 1960). The Texas courts have held permissible municipal
expenditures designed to advertise and promote the growth of a city. Bland v. Cit of
Taylor, 37 S.W.2d 291 (Tex. Civ. App. - Austin 1931) aff’d Davis v. Clt.w o Ta lor, 67
S.W.2d 1033 (Tex. 1934). Private citizens may be provided transportation       at public
expense, where there is an official business purpose for doing so. Attorney General
Opinion H-1089 (1977). In Attorney General Opinion G-4167 (1941), this office approved
certain expenditures for public relations which the University of Texas made. One
expense account included an item for the “cultivation of officiaLs of Rockefeller
Foundation and General Education Board.”           Presumably, this item covered the
entertainment   of private individuals. Thus, there is authority for the use of public
funds to provide travel and entertainment     to private individuals, and for the use of
public funds to encourage local development.     Attorney General Opinion G-4167 (1941)
developed a test designed to show whether expenses were incurred for state business,
defined as follows:

                ‘State business’ signifies the accomplishment of a govern-
           mental function; it requires that the means and method adopted
           be reasonably necessary; it implies that the particular govern-
           mental function involved be one directly entrusted to the
           institution or department assuming its accomplishment.

       Article 5190 l/2, V.T.C.S., describes a governmental function which is entrusted
to the Commission. See Tex. Const. art. XVI S56; Bland v. City of Taylor, slqra. The
Commission may mxnated            funds for travel and entertainment where reasonably
necessary to the attainment        of the purposes set out in article 5190 l/2.      The
reasonableness of a particular expenditure is for the Commission to decide in the first
instance. -See Attorney General Opinion H-1260 (1978).

       You inform us that some of the private funds donated will very likely come from
individals    and entities interested   in the issuance of revenue bonds under the
Development Corporation Act of 1979. That Act vests in the TIC the responsibility for
approving certain leases, sales and loan agreements in conjunction with the issuance of
such bonds, as well as the bonds themselves. You ask whether the statutory provisions
dealing with gifts to public servants end official misconduct preclude donations to the
fund, if established, from such persons. Donations under article 5190 l/2, V.T.C.S., are
not made to individual commissioners.      However, under certain circumstances it is

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        Honorable Gerald R. Brown - Page Three        (NW-2 0 6 )

        conceivable    that conditions attached to them could cause them to benefit          the
        commissioners.     Article 6252-9b, V.T.C.S., provides in section 8(a) as follows:

                        No state officer or state employee should accept or solicit
                   any gift, favor, or service that might reasonably tend to
                   influence him in the discharge of his official duties or that he
                   knows or should know is being offered him with the intent to
                   influence his official conduct.

        Whether any particular donation would cause a violation of this provision is a fact
        question for the commission to resolve in the first instance. See Attorney General
        opinions H-1223 (1978); H-688 (1975). See also Meyers v. Walker-76   S.W. 305 (Tex.
        Civ. App. - Eastland 1925, no writ).

                                            SUMMARY

                      The Texas Industrial Commission may deposit in banks funds
                  donated from private sources under article 5190 l/2, V.T.C.S.
                  Such funds may be spent for travel and entertainment            in
                  attempting    to attract business and industry to Texas where
                  reasonably necessary to that purpose. Whether donations from
                  individuals interested in the issuance of revenue bonds under the
                  Development Corporation Act of 1979 would Involve the com-
                  mission in violations of the state ethics law would depend on the
                  facts of each case.

                                                 verYm~r

                                                      MARK      WHITE
                                                      Attorney General of Texas

        JOHN W. FAINTER, JR.
        First Assistant Attorney General

        TED L. HARTLEY
        Executive Assistant Attorney General

        Prepared by Susan Garrison
        Assistant Attorney General

        APPROVED:
        OPINION COMMITTEE

        C. Robert Heath, Chairman
        Jon Bible
        Susan Garrison
        Rick Gilpin
        Iris Jones

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