Untitled Texas Attorney General Opinion

The Attorney General of Texas
JIM MATTOX July 11, 1986
Attorney-General
Supreme Court Building Honorable Carlos VaLdez Opinion No. JM-516
P. 0. Box 12548
Austin, TX. 78711. 2548
Nueces County Attorxsy
5121475-2501 Courthouse, Room 205 Re: Validity of a contract between
Telex 9101974.1387 Corpus Christi, Texw 78401 NUSCSS County and an economic
Telecopier 512l475.0296 development corporation
714 Jackson, Suite 700
Dear Mr. Valdez:
Dallas, TX. 752U2609
214/742-8944 You have requested an opinion on the following question:
4824 Alberta Ave., Suite 160
Taking into consideration the fact that a
El Paso, TX. 799052793
county camlot be a dues-paying member of a chamber
91515333404 of commer':e.does Nueces County have the authority
to contra':tfor business or industrial development
services with a corporation that will in essence
,p’?l Texas. Suite 700 be an age:Y:yof a chamber of commerce?
,uston, TX; 77002.3111
713&z?-5886
A county's aut:hority to enter into a contract is limited to
authority conferred on it, either expressly or by reasonable
006 Broadway, Suite 312 implication, by thf! constitution or statutes. Canales v. Laughlin,
Lubbock, TX. 794013479 214 S.W.2d 451, 45:) (Tex. 1948). A county has authority to promote
006/747-5239
the development of businesses and industries in the county through a
county industrial commission established under article 1581g-2.
4309 N. Tenth. Suite S V.T.C.S., or through a board of development established under article
McAllen, TX. 78501.1885 2352d. V.T.C.S. A county may contract for services that the county
512VS82.4547
is authorized to perform itself. Attorney General Opinion JM-65
(1983). Therefore, under articles 1581g-2 and 2352d. a county has
200 Main Plaza, Suite 400 authority to contra<:11
for business or industrial development services.
San Antonio, TX. 78205.2797
512/2254191 You are conwrned, however, about the relevance of a 1974
attorney general ol'inion that concluded that a county could not pay
An Equal Opportunity/
dues to a chamber o:Fcommerce. Attorney General Opinion H-397 (1974).
Affirmative Action Employer In that opinion, th:Lsoffice held that article III, section 52, of the
Texas Constitution ,prohibits a county from becoming a dues-paying
member of a private corporation such as a chamber of commerce.
Article III. section 52, provides, in part:
Except as ,othewise provided by this section, the
Legislatwre shall have no power to authorize any
county, c Lty, town or other political corporation
or subdivision of the State to lend its credit or
p. 2366
Honorable Carlos Valdez.- Page 2 (JM-516)
to grant public money or thing of value in aid of,
or to any individual, association or corporation
whatsoever, 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). Rather,
it prohibits gifts to a private corporation. As a corollary, it
requires that a county contract with a private corporation serve a
public purpose and that the county receive adequate consideration.
Attorney General Opinion NW-373 (1981). Also, such a contract must
provide sufficient assurance that the public purposes will be
accomplished. &, * Attorney General Opinion H-912 (1976).
In Attorney General )pinion H-397 this office concluded 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 busir.ess"was not "sufficiently insulated from
the abuses" that article :LII. section 52, was designed to prevent.
Implicit in that conclusion is a determination that paying dues to a
chamber of commerce did not adequately assure that any public purpose
would be accomplished and therefore that the dues would be, in
essence, a gift to the private corporation.
A contract for sp&if:.c services presents a different situation.
For purposes of article III , section 52, the difference between paying
dues to an organization that may provide general benefits to the
.county and contracting with an organization for specific services is
analogous to the difference 'betweendonating county funds to a private
hospital and contracting with a private hospital for specific
services. In Attorney General Opinion JM-65 (1983) we held that
although a county could not donate funds to a private hospital, it
could contract with a private hospital for specific services.
Similarly, we think that a county may contract with a private corpora-
tion for business and industrial development services. Of course, the
county must receive adequnte consideration, and the contract m&.t
provide adequate assurance that the public purpose will be accom-
plished. Whether a county receives adequate considiration and whether
a contrabt provides adequate assurance that its public purpose will be
accomplished are questions of fact that would depend on the nature of
any particular contract.
SUMMARY
A county has rx~thorityto promote the develop-
ment of business and industry in the county under
article 15818-2, V.T.C.S., and article 2352d.
V.T.C.S. A county may contract with a private
corporation such as a chamber of commerce for the
p. 2367
Honorable Carlos Valdes - Pa:Se3 (JM-516)
provision of busLness 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.
JIM MATTOX
Attorney General of Texas
JACK HIGHTOWER
First Assistant Attorney General
MARY KELLER
Executive Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Sarah Woelk
Assistant Attorney General
p. 2368