Court Opinion

ID: 4129787
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:56:24.818284+00
Date Added: 2024-06-11T14:33:57.219202
License: Public Domain

Office of toe Plttornep @eneral
                                         &tate of fllexae
DAN MORALES
 ATTORNEY
      GENERAL                                 May 17,1996

     Dr. Barry B. Thompson                                Opiion No. DM-394
     chanceuor
     Texas A&M Univksity System                           Re: Whether the City of College
     301 Tarrow, 7th Floor                                Station may expend iimds on behalf of
     College Station, Texas 77843-l 122                   the George Bush Library at Texas A&M
                                                          University (RQ-849)

     Dear Dr. Thompson:

             On behrdfof the City of College Station (the “city”), you ask whether the city may
     spend public money, includmg hotel-motel occupancy taxes, on the George Bush Library
     (the “library”), now under construction on the Texas A&M University campus in College
     Station. See House Comm. on Land and Resource Management, Bill Analysis, S.B. 1018,
     74th Leg., R.S. (1995); see ako Educ. Code 5 8624(a). You state as follows:

                The George Bush Library Committee is seeking a financial
                commitment of $50,000.00 per year from the City of College Station,
                Texas. College Station is a chartered home-rule municipal corpora-
                tion. The George Bush Library will be located in the corporate limits
                of College Station, Texas. In addition to being a center for research
                and scholarship,it is anticipated that the library will attract tourists to
                College Station.
             You raise the following legal issues: whether the city has a legitimate public
     purpose for spending public funds on the George Bush Library, whether a requirement
     that the library stay open in each year that is iknded constitutes adequate control to
     establish the public purpose, and whether the city is authorized to expend hotel-motel
     occupancy funds on the library.1

             Article III, section 52 of the Texas Constitution provides in part:
                    Except as otherwise provided by this section, the Legislature
                shall have no power to authorize any county, city, town or other

               ‘You do not inquireaboutlegal issues raised by a city’sattemptto contractto provideS50,OOO
                                                                                                        a
     year in fuhue years. See Tcx. Con% art. XI, 8 6; McNeil/ Y. CUy O/ Wcrco,33 S.W. 322,324 (Tcx. 1895)
     (municipal obligations not payable from curtent revenues are subject to anick XI, section 5 of Texas
     Qmstitution); Ciy of Wichita F&s Y. Kemp Pub. Librmy Ed. of Trustees, 593 S.W.Zd 834, 837 (XX.
     Civ. App.-Rm Wozth 1980, writ ret-d n.r.e.) (same); see aim Clear L&e City Water Auth. v. Clear Lake
     Ori/. Co., 549 S.W.Zd 385, 390 (Tex. 1977) (amtracts that contemplate aucwsaix pcrfomlances and
     which are indcfudtc in duration can lx temhatcd a1 will ofeither party).
Dr. Barry B. Thompson - Page 2                  (DM-394)

                Except as otherwise provided by this section, the Legislature
           shah have no power to authorize any county, city, town or other
           political corporation or subdivision of the State to lend its credit to
           or grant public money or thing of value in aid of, or to any
           individual, association or corporation whatsoever, or to become a
           stockholder in any such corporation, association, or company.
        This provision does not prevent the City of College Station Tom spending its
funds to carry out a municipal purpose, even if another entity also benefits from the
expenditure. Barrington v. Cokinos, 338 S.W.2d 133, 140 (Tex. 1960); see State ex rel.
Grimes County Taapqvers Ass ‘n v. Texas Mm. Power Agency, 565 S.W.Zd 258, 268
(T’ex.Civ. App.-Houston [Ist Dist.] 1978, writ dism’d). The city must receive adequa:::
consideration for the funds it provides the university, and con&actual or other controis
must be in place to ensure that the public purpose will be carried out. See Attorney
Genera) Gpinions DM-317 (1995), JM-1030 (1989), JM-324 (1985), MW-423 (1982),
H-l 123 (1978). The governing body of the City of College Station would otdinarily have
discretion to determine, subject to judicial review, whether the proposed expenditum
serves a public purpose, whether the city receives adequate consideration for its
expenditure, and whether them ate sufficient controls to ensure that the public purpose
will be carried out. Attorney General opinions DM-317 (1995), DM-256 (1993).
However, the agreement described in your lcttcr may be too general for the city
govermnent to make this decision. Since the $50,000 is apparently not designated for a
specific program or function of the library; it may bc difficult to determine whether this
expenditure will actually benefit the city.s The “control” you describe, that the library
will be open in each year that it is funded, does not state how may days of openness per
year will be secured by the $50,000 or how the city will enforce the openness requirement
attributable to its expcnditurc. Accordingly, the city council would be well advised to
determine what city purpose or purposes will be served by the library, and lit the use of
city funds to such purposes, subject to controls to ensure that the city purposes am carried
out.

        We now consider whether the city may spend hotel-motel occupancy tax fimds on
the library. Tax Code chapter 351 authorizes a municipality to adopt an ordinance
imposing the tax. See Tax Code 4 351.002. Section 351.101(a) of the Tax Code provides
that
                [r]evenue from the municipal hotel occupancy tax may be used
           only to promote tourism and the convention and hotel industry, and
           that use is limited to the following:

        2Attomey GeneralopinionV-953 concluded that a county could not donate public money to an
incotpomted public &cccl~braty, but it could coneact for library privileges 6um a library. Attomey
Gmaml Opinion V-953 (1949) at 4.

                                                p.   2160
Dr. Barry B. Thompson - Page 3               (DM-394)

                   (1) the acquisition of sites for and the consuuction,
               improvemet& enlarging, equipping, rcpabing, operation,
               and maintenance of convention center facilities or visitor
               information centers, or both;
                    (2) the fimishing of facilities, personnel, and
               materials for the registration of convention delegates or
               lxqistmts;
                   (3) advertising and conducting solicitations and pm-
               motional programs to attract tourists and convention
               delegates or registrants to the municipality or its vicinity;
                  (4) the encouragement, promotion, improvement, and
              application of the arts, including instrumental and vocal
              music, dance, drama, folk art, creative writing, architecture,
              design and allied fields, painting, sculpture, photography,
              graphic and mail arts, motion pictures, radio, television,
              tape and sound recording, and other arts related to the
              presentation, performance, execution and exhibition of
              these major art forms; and
                   (5) historical restoration and preservation projects or
              activities or advertising and conducting solicitations and
              promotional programs to encourage tourists and convention
              delegates to visit preserved historic sites or museums:
                      (A) at or in the immediate vicinity of
                   convention center facilities or visitor information
                   centers; or
                      (B) located elsewhere in the municipality or its
                   vicinity that would be frequented by tourists and
                   convention delegates.
        Section 35 1.101 sets out the exclusive purposes for which the tax may be spent.
Attorney Genera) opinion M-965 (1988) at 6. You do not identify any specific function
of the George Bush Library for which funds contributed by College Station will be used,
and your do not explain how the expenditure of the tax funds will carry out any of the
five specific purposes enumerated in section 351.101 of the Government Code. The
proposed expenditurc is not within the purposes set out in section 351.101(a)(l), (2), or
(4). Although section 35 1.101(3)might authorize expenditures for advertising tbe library
to attract tourists to College Station, no such liitation appears to apply to the proposed
expenditure. Finally, if the library could be characterized as a museum, section
351JOl(5) would authorize the expenditure of hotel tax funds to conduct “solicitations
and promotional pmgrams to encourage tourists end convention delegates” to visit it, but

                                            p.   2161
Dr. Barry B. Thompson - Page 4               (DM-394)

again, you have not indicated that the proposed expenditure would be subject to this
limitation. The City of College Station may spend funds raised under chapter 35 1 of the
Tax Code on the George Bush Library only if such limitations are imposed.

                                   SUMMARY

               Tbe City of College Station may, witbout violating article III,
          section 52 of the Texas Constitution, spend public funds on the
          George Bush Library to be established by Texas A&M University
          only if there is a city purpose for the expenditure, if the city receives
          adequate consideration for the expenditure, and if suflicient wntrols
          are attached to the tmmaction to ensure that the public purpose will
          be carried out. Hotel-motel occupancy taxes raised by the city under
          chapter 351 of the Tax Code may be spent only for the purposes
          expressly set out.in section 351.101 of the code. No showing has
          been made that the tax funds pmposed for allocation to the George
          BushLibrarywiIlbeusedforanypurposestatedinsection351.101.

                                                         DAN MORALES
                                                         Attomey GeneraJof Texas

JORGE VEGA
First Assistant Attorney General

SARAH J. SHIRLEY
Chair, Opiion Committee

Prepared by Susan L. Garrison
Assistant Attorney General

                                             p.   2162