Untitled Texas Attorney General Opinion ( 2009 )

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
June 17, 2009
The Honorable Jim Pitts Opinion No. GA-0721
Chair, Committee on Appropriations
Texas House of Representatives Re: Whether the Hall County Hospital District may
Post Office Box 2910 contribute funds for the construction of a building to
Austin, Texas 78768-2910 house emergency service vehicles operated by the
City of Turkey (RQ-0772-GA)
Dear Representative Pitts:
Your predecessor asked about the authority of the Hall County Hospital District (the
"District") to contribute funds for the construction of a building to house emergency service vehicles
operated by the City of Turkey.! The request letter informs us that the county does not have a
hospital and that the District contracts with the cities of Memphis and Turkey to provide mobile
emergency medical services. Request Letter at 1. According to the letter, the District wishes to
contribute money to the City of Turkey to house a new ambulance that provides services to a portion
of Hall County. Id. The request letter asserts that: (1) "a new building is necessary to accomplish
the hospital district purposes o.f providing medical care to the district's needy inhabitants and
providing for the operation of a mobile emergency medical service," and (2) "the district will retain
public control over the contributed funds through the contract the hospital district has with the city
for the provision of the mobile emergency medical services." Id. at 2.
A special district such as a hospital district board "may exercise only such powers as have
been expressly delegated to it by the Legislature, or which exist by clear and unquestioned
implication." Tri-City Fresh Water Supply Dist. No.2 v. Mann, 142 S.W.2d 945, 946 (Tex. 1940);
see also Jackson County Hosp. Dist. v. Jackson County Citizens for Continued Hosp. Care, 669
S.W.2d 147, 154 (Tex. App.-Corpus Christi 1984, no writ) (applying the Tri-City standard to
determine a hospital district board's powers). The District's enabling legislation requires the District
to assume "full responsibility ... for furnishing medical and hospital care for the district's needy
inhabitants," and states that the District "may operate or provide for the operation of a mobile
emergency medical service." Act of May 25, 1987, 70th Leg., R.S., ch. 1017, § 5.02,1987 Tex. Gen.
ISee Request Letter at 1-2 (available at http://www.texasattomeygeneral.gov).
The Honorable Jim Pitts - Page 2 (GA-0721)
Laws, 3430, 3433 (the "Act,,).2 The District is governed by a board of directors which must manage,
control, and administer the funds and resources of the District. Id. §§ 4.01(a), 5.03, at 3431,3433.
Under the plain language of the Act, the board has discretion to "provide for the operation" of a
mobile emergency medical service. Id. § 5.02, at 3433.
Moreover, the board has the authority to determine in the fIrst instance what is ~ecessary to
provide for the operation of such service. See Jackson County Hosp. Dist., 669 S.W.2d at 154
(determining that hospital district board's managerial responsibilities authorized it to discontinue
emergency room services); Tex. Att'y Gen. Op. No. GA-0472 (2006) at 2 (advising that a hospital
district having discretionary authority to provide ambulance services necessarily has the authority
to determine the scope of those services). Thus, under the Act, the board has the discretion to
determine in the fIrst instance whether an expenditure of District funds to construct a building to
house the City of Turkey's emergency service vehicl~ is necessary to provide for the operation of a
mobile emergency medical service.
Next we must consider whether such a contribution to the City of Turkey would be
constitutional. Texas Constitution article III, section 52 prohibits the Legislature from authorizing
a political subdivision to "lend its credit or to grant public money or thing of value in aid of, or to
any individual, association, or corporation whatsoever." TEx. CONST. art. III, § 52(a). Article III,
section 52(a) prohibits the gratuitous application of public money by a political subdivision. Tex.
Mun. League Intergov'tl Risk Pool v. Tex. Workers' Compo Comm'n,.74 S.W.3d 377, 383 (Tex.
2002); State ex reI. Grimes County Taxpayers Ass 'n V. Tex. Mun. Power Agency, 565 S.W.2d 258,
265 (Tex. Civ.App.-Houston [lstDist.] 1978, writdism'd). The Court in Texas Municipal League
explained that article III, section 52(a) does not prohibit an expenditure of public money that
"(1) serves a legitimate public purpose; and (2) affords a clear public benefIt received in return."
Tex. Mun. League, 74 S.W.3d at 383. In that opinion, the court established a three-part test to
determine whether a statute requiring an expenditure is for a public purpose under article III, section
52(a):
SpecifIcally, the Legislature must: (1) ensure that the statute's
predominant purpose is to accomplish a public purpose, not to benefIt
private parties; (2) retain public control over the funds to ensure that
the public purpose is accomplished and to protect the public's
investment; and (3) ensure that the political subdivision receives a
return benefIt.
Id. at 384.
2See also TEX. CONST. art. IX, §§ 9 (authorizing the creation of hospital districts), 9A (authorizing the
Legislature to promulgate "provisions necessary to regulate the provision of health care to residents"); TEx. HEALTH &
SAFETY CODE ANN. ch. 286 (Vernon 2001 & Supp. 2008) ("Hospital Districts Created by Voter Approval").
The Honorable Jim Pitts - Page 3 (GA-0721)
While Texas Municipal League concerned payments from a political subdivision to a private
party, article ill, section 52 has also been construed to prohibit one political subdivision from
gratuitously granting its funds to another political subdivision. 3 The provision does not, however,
preclude a political subdivision from paying public funds to another political subdivision in order
to serve a purpose within the powers of the political subdivision making the grant. See Grimes
County Taxpayers Ass'n, 565 S.W.2d at 265-66 (holding that a political subdivision may payor
transfer its funds to another political entity if(1) the purpose of the payment or transfer is within the
political subdivision's powers, and (2) the political entity receiving the funds is obligated by statute
or contract to use the funds for that purpose).
Whether a political subdivision's expenditure comports with the requirements of article ill,
section 52 of the Texas Constitution is for the governing body of the political subdivision to decide
in the first instance. See, e.g., Tex. Att'y Gen. Op. Nos. GA-0706 (2009) at 2 (stating that "[t]he
factual determination regarding whether a public expenditure satisfies [the Texas Municipal League]
test is for the governing body of the political subdivision in the first instance"), GA-0664 (2008) at
4 (stating that "[w]hether a particular transfer of county funds to another political subdivision serves
a county purpose is for the commissioners court to determine in the first instance"); see also
Barrington v. Cokinos, 338 S.W.2d 133, 142 (Tex. 1960) ("[A] court has no right to substitute its
judgment and discretion for the judgment and discretion of the governing body upon whom the law
visits the primary power and duty to act."). Thus, to determine if the contemplated expenditure is
constitutional under article III, section 52, the District's board of directors must consider whether
(1) the predominant purpose of the expenditure is to accomplish an authorized public purpose, (2)
there are sufficient controls to ensure the public purpose is accomplished and the public investment
is protected, and (3) that the District receives a return benefit. See Tex. Mun. League, 74 S.W.3d at
383 (setting forth public-purpose criteria); Grimes County Taxpayers Ass'n, 565 S.W.2d at 265
(stating that, for a political subdivision's payment to another political subdivision, the expenditure
must be within the powers of the entity making the payment).
3See, e.g., Fort Worth Indep. Sch. Dist. v. City o/Fort Worth, 22 S.W.3d 831,842 (Tex. 2000) (detennining
that article III, sections 51 and 52 would not pennit a city to gratuitously pay ''the City's 'public money'" to a school
district); Harris County Flood Control Dist. v. Mann, 140 S.W.2d 1098, 1104 (Tex. 1940) (holding that ''under the plain
tenns of Section 52 of Article III, ... no part of the funds of Harris County can be pledged or used to pay the bonds of
[the Harris County Flood] District"); San Antonio Indep. Sch. Dist. v. Ed. o/Trs. o/San Antonio Elec. & Gas Sys., 204
S. W.2d 22,25 (Tex. Civ. App.-EI Paso 1947, writ refd n.r.e.)(stating that under article III, sections 51 and 52, a "city
cannot donate its funds to an independent municipal corporation such as an independent school districf').
The Honorable Jim Pitts - Page 4 (GA-0721)
SUMMARY
The Hall County Hospital District has express authority to
provide for the operation of a mobile emergency medical service.
The District's board of directors has the discretion to determine in the
first instance whether an expenditure of District funds to construct a
building to house the City of Turkey's emergency service vehicle is
necessary to provide for the operation of a mobile emergency medical
service and whether such an expenditure comports with the
requirements of article III, section 52(a) of the Texas Constitution.
Attorney General of Texas
ANDREW WEBER
First Assistant Attorney General
JONATHAN K. FRELS
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
William A. Hill
Assistant Attorney General, Opinion Committee