Untitled Texas Attorney General Opinion

287’
THE
op TEXAS
Hon. James B. Pattison, Chairman
Committee on Public Health
House of Representatives
52118 Legislature
Austin, Texas Opinion Ho. V-1163
Re: Const?.tIltionality of
ccanmittee amendment to
House Bill 151 to es-
tablish a scholarship
program of loans from
State PunUs to mealcal
Bear Mr. Pattison: students.
Your request for an opinion relates to the con-
stitutionality of a law now In effect in the State of
Mississippi which provides for loans and scholarships to
students desiring to study medicine.
You state that House Bill 151 Is now being con-
sidered by your committee and that you contemplate sub-
stituting in lieu thereof the Misslsslppl plan, which for
the purposes of this discussion is designated as House
Bill 431. You desire to know the constitutlonalltg of
such a law under the Texas Constitution.
House Bill Ao. 431 (Mississippi) provides for
the creation of a board to be known as the State f+Iedfcal
Education Board and provides for the appointment and the
terms of office of the members thereof. The act provides
for the employment of the neoessarg personnel to carry
out the terms of such act and provides a procedure for
granting loans or scholarships to students who are bona
fide students and residents of the State of Mississlppl
and who desire to become physicians. The purpose of the
loan is to enable an applicant to obtain a standard four-
year medical eclucation which will qualify such applicant
to become a licensed practicing physician and surgeon.
Applicants may receive a loan or scholarship in an amount
not to exceed 5,000.00, to be paid in annual installments
not exceeding D1250.00 per annum. These loans or scholar-
ships are conditioned so that the full amount shall be
repaid to the State of Mississippi, with four per cent
Interest from the date of each payment by the State.
288
Hon. James B. Pattison, page 2 (V-1163)
Section 9 of the proposed House Bill 431 pro-
vides that all payments of funds for loans or scnolar- . a
ships thereunder shall be made by requisition of the
Board signed by the Chairman and Secretary, and direct-
ed to the Auditor of Public Accounts, who shall there-
upon issue a warrant on the Treasury of the State of
Mississippi for the amount fixed in the requisition and
payable to the person designated thereon, which warrant
upon presentation shall be paid by the treasurer out of
any funds appropriated by the Legislature for the pur-
poses provided for under this act. The purpose and in-
tent of the act was to meet the emergency existing in
the State of Mlssisslppi from the shortage of doctors in
the State by Increasing the number of medical students
from Mississippi in the various medical schools and in-
ducing such graduates of medical schools to return to
Mississippi for the practice of their profession.
You have informed us that the adaptation of the
Mississippi plan as a substitute for House Bill 151 will
provide for an appropriation of State funds by the Leg-
islature.
The question presented for determination is
whether the proposed bill contravenes the p~ovlsions of
Section 50 of Article III of the Constitution of Texas,
which provides:
‘The Legislature shall have no power
to give or to lend, or to authorize the glv-
ing or lendlng, of the credit of the State
in aid of, or to any person, association or
corporation, whether municipal or other, or
to pledge the credit of the State in any man-
ner whatsoever, for the payment of the lia-
bilities, present or prospective, of any
individual, association of individuals,
municipal or other corporation whatsoever.”
In Sannock County v. Citizens Bank & Trust Co.,
53 Idaho 159, 22 P.2d 674, 680 (19X), the Supreme Court
of Idaho was construing the provisions in the Idaho Con-
stitution which said that no couutx shall “lend, or
pledge the credit or faith thereof or “loan its credit”
to any lnalviaual, association, or corporation. The
court stated:
"In interpreting the sections of the
Constitution in question, the language
employed must be taken and understood in
289
Hon. James B. Pattison, page 3 (V-1163)
its natural, ordinary, general, and popu-
lar sense. In the popular sense,
lending or l&&L& money or credit is at
once understood to mean a transaction
creating the customary relation of borrow-
er and lender, in which the money is bor-
rowed for a fixed time, and the borrower
promises to repay the amount borrowed at
a stated time in the future, with Inter-
est at a fixed rate. And that is the
sense, then, in which the language em-
ployed in those sections must be unaer-
st00a, and so understood, no county, for
example, shall lend or pledge its credit
or faith, directly or indirectly, or in
any manner which would create the custo-
mary relation of borrower and lender."
It is our opinion that the expenditure ln-
Valved in the plan under consideration creates the
customary relationship of borrower and lender and is
therefore a lending of the State's credit within the
meaning of Section 50 of Article III of the Constitu-
tion of Texas.
In construing the provisions of Section 50
and kindred provisions found in Sections 51 and 52 of
Article III of the Constitution, the courts of this
State have held that the Legislature is prohibited
from authorizing the lending of credit or the making
of arants which are not for a nubllc. OF aovernmental.
purpose. Bexar County v. Linden, 116 Tex‘: 339, 220 S:W.
761 (1920); Road M t 190. 4. Shelby County v. Allrea,
123 Tex. 77, 68 S.Wy2; 164 (1 4 ; Seydler v. Border,
115 S.W.2a 702 (Tex.Clv.App. ?$3 , error ref.). If the
expenditures are for a pubiic purpose, they are not ln-
valid because private persons are benefited therefrom.
Alameda County v. Janssen, 16 Cal.2a 276, 106 P.2d 11,
50 A L R 1141 (1940) However, the carrying out of
a gov&&ntal fun&Lo: must be the primary object of
the grant of credit. Where the expenditure is dlrect-
ly In aid of an individual In his private affairs and
results in a benefit to the public only indirectly, it
is not made for a public purpose.
Certainly the preservation and promotion of
the health of the citizens of the State and the eauca-
tlon of physicians are matters of public concern. But
House Bill No. 431 goes far beyond the providing of in-
struction and training for physicians. We cannot escape
Hon. James. B. Pattison, page 4 (V-1163)
the conclusion that the direct benefits of this bill
are conferred upon the individuals who are the recipi-
ents of the loans, and that the benefits to the public,
in the absence of an emergency not hers presented, are
too indirect to bring it within the orbit of a govern-
mental function.
We have not found any decision in this State
in which the question of the constitutionality of loans
to individuals for .an analogous purpose was presented.
In several States, the courts have held statutes au-
thorizing loans to individuals to be unconstitutional,
even though the Legislature had enacted the statutes in
an effort to promote the general welfare. On the other
hand, the courts of some States have taken a broader
view of the scope of public purposes and have upheld
loans and grants to individuals in various circumstanaes
where the court thought the Legislature was justified in
considering the public good benefited thereby. However,
we believe that the decisions of the Texas courts in
other situations indicate that the meaning of public
purpose cannot be broadened to this extent.
This office, in holding that there was no
statutory authority for the creation of a student loan
fund out of funds appropriated to the Texas State Uni-
vemitg for Negroes, stated that the presence of such
statutory authority would raise serious constitutional
questions, In view of Section 50 of Article III of the
Constitution. Lee Letter Opinion to W. R. Banks, dated
June 3, 1950.
When a proposal for making loans to World War
II veterans for purchase of land was before the Legis-
lature it was apparently deemed necessary by the Lagis-
lature to amend the State Constitution before such loans
could be made. It is our opinion that a similar con-
stitutional amendment would be necessary in order for
the %llssissippi Plan” to be valid in this State.
SUMMARY
The “Mississippi Plan” providing for
loans from State funds to students aesirlng
to study medicine cannot be validly adopted
Hon. James B. Pattison, page 5 P-1163)
by the Legislature in the absence of a
constitutional amendment specifically
authorizing such plan.
APPROVZD: Yours very truly,
J. C. Davis, Jr. PRICE DARIEL
County Affairs Division Attorney General
Jesse P. Luton
Reviewing Assistant
Bs
Charles D. Mathews Burnell Waldrep
First Assistant Assistant
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