Untitled Texas Attorney General Opinion ( 1981 )

The Attorney General of Texas
May 29, 1981
Honorable John A. Traeger Opinion No. ``-347
Chairman
Committee on Intergovernmental Re: Whether Interlocal Cooperation
Relations Act allows local governments
Texas State Senate to enter into interlocal contracts
Austin, Texas 787ll to provide all forms of insurance
Dear Senator Traeger:
You ask two questions regarding the Interlocal Cooperation Act,
article 4413(32c), V.T.C.S. Your first question is as follows:
Under the Interlocal Cooperation Act, do ‘local
governments,’ acting together, have the statutory
authority to purchase insurance to cover the
governmental functions and services covered under
section 3(2) of the Interlocal Cooperation Act?
The Interlocal Cooperation Act permits local governments to contract
for the nerformance of governmental services. Local government is defined
as follows:
a county; a home rule city or a city, village, or town
organized under the general laws of this state; a
special district; a school district; a junior college
district; any other legally constituted political
subdivision of the State of Texas or any adjoining
state; or a combination of political subdivisions.
sec. 3(l).
Governmental functions and services is defined as follows:
all or part of any function or service included within
the following general areas: police protection and
detention services; fire protection; streets, roads, and
drainage; public health and welfare; Parks;
recreation; library services; museum services; waste
disposal; planning; engineering; administrative
functions; and such other governmental functions
which are of mutual concern to the contracting
parties. (Emphasis added).
See. 3(2).
D. 1149
Honorable John A. Traeger - Page Two @a+3471
The term administrative functions includes purchasing. Sec. 3(3). The contracts may
be “for the performance of any governmental functions or services which all parties to
the contract are legally authorized to perform. . . .” Sec. 4(b).
Since the statute expressly authorizes interlocal contracts for the purpose of
purchasing, we believe that local governments may contract together to purchase an
insurance contract covering risks which each party to the contract has independent
authority to insure against.
We cannot, however, say that each kind of local government has authority to
insure against risks arising out of all governmental functions and services listed in
section 3(2). The Texas Tort Claims Act authorizes political subdivisions to purchase
insurance to protect against claims brought thereunder. V.T.C.S. art. 6252-19, S9.
Article 3.51-2(a), V.T.C.S., Insurance Code, authorizes political subdivisions to
purchase group life, health, and accident insurance to cover employees. See also
V.T.C.S. art. 1937 (county must purchase errors and omissions policy for count-
Where, however, no statute authorizes a political subdivision to purchase a particular
kind of insurance, the decision as to the authority to do so has always been made on a
case-by-case basis. See, e.g., Attorney General Opinions H-1300 (1978) (county may
purchase a nonassessable policy from a recipriocal insurance exchange); H-958 (19771
(county may purchase insurance coverage for reserve deputy sheriffs limited to risk of
loss for medical expenses voluntarily assumed under article IlI, section .52e of the
Texas Constitution); H-70 (1973) (school district may purchase insurance to indemnify
district against litigation expenses and damages where district is not immune).
We therefore, cannot conclude that each local government could contract under
article 44l3(32c), V.T.C.S., to purchase jointly with another political subdivision
insurance to cover risks arising out of the enumerated governmental functions and
services. Where, however, a statute or other law clearly provides that a county, for
example, may purchase a particular kind of insurance, then it may purchase it jointly
with another county under the Interlocal Cooperation Act.
Your second question is as follows:
Under the, Interlocal Cooperation Act, do ‘local governments’
have the statutory authority to form self-insurance pools as
they have done in the workers’ compensation and health fields
to cover risks inherent in providing governmental functions and
services?
Self Insurance is a function of local governments if they do not purchase
insurance. See V.T.C.S. arts. 6252-19, 6252-19b; Attorney General Opinion H-887
(19761. We have local governments may contract to form self insurance pools to
cover risks which each member is authorized to protect against. We express no opinion
as to how such an insurance pool should be structured, and how obligations may be
allocated among the members. See Attorney General Opinion H-1300 (1978). Nor can
we state that each local government may join a pool to insure against each
governmental function &fined in section 3(2), in the absence of additional facts. Any
agreement must of course be consistent with constitutional provisions.
p. 1150
Honorable John A. Traeger - Page Three (Rw-347)
SUMMARY
Under the Interlocal Cooperation Act, local governments
may act together to purchase insurance and form self insurance
pools to cover governmental functions and services which each
contracting local government has statutory or other legal
authority to insure.
MARK WHITE
Attorney General of Texas
JOHN W. FAINTER, JR.
First Assistant Attorney General
RICHARD E. GRAY III
Executive Assistant Attorney General
Prepared by Susan L. Garrison
Assistant Attorney General
APPROVED:
OPINION COMMlTTEE
Susan L. Garrison, Chairman
James Allison
Rick Gilpin
Jim Moellinger
p. 1151