Untitled Texas Attorney General Opinion
KP-0091
Tex. Att'y Gen.Jul 2, 2016Background
- Bandera County Auditor asked whether the county may provide financial assistance to the Boys and Girls Clubs of Bandera County without violating Texas Constitution art. III, § 52(a).
- Article III, § 52(a) generally prohibits counties from lending credit or granting public money or things of value to private parties, but permits expenditures if they serve a public purpose.
- The Attorney General applied the Texas Supreme Court’s three-part test from Tex. Mun. League Intergov’t Risk Pool: (1) public purpose, (2) public control of funds, (3) return benefit to the political subdivision.
- The opinion noted Family Code § 264.006 authorizes commissioners courts to provide services and support to children in need of protection and care; similar prior AG opinions authorized county transfers to nonprofits when they provide such services.
- The Boys and Girls Clubs provide after-school programs and supervision; if those services meet the statutory definition of children in need of protection and care, § 264.006 could authorize funding, subject to the constitutional three-part test.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether county may fund a private nonprofit without violating art. III, § 52(a) | County: funding is allowed when it furthers a statutory public purpose (e.g., services to children) | Opponent: § 52(a) bars grants of public money to private entities absent constitutional exceptions | Allowed if transfer satisfies three-part test: public purpose, public control, return benefit |
| Whether Family Code § 264.006 authorizes funding to Boys and Girls Clubs | County: § 264.006 empowers commissioners court to fund services/support for children in need of protection/care | Opponent: statute may not cover the organization’s actual services | § 264.006 can authorize funding to the extent the organization actually provides covered services (fact-specific) |
| What control is required over transferred funds | County: contracting and conditions can provide sufficient control | Opponent: unconditional grants would violate the control requirement | Counties must retain public control (e.g., contractual requirements) to protect the public purpose and investment |
| What counts as a return benefit to the county | County: nonmonetary accomplishment of public purpose suffices | Opponent: must be a tangible return to avoid unconstitutional grant | Return need not be monetary; achieving the county’s public purpose satisfies the requirement |
Key Cases Cited
- Byrd v. City of Dallas, 6 S.W.2d 738 (Tex. 1928) (art. III, § 52 aims to prevent gratuitous grants of public funds)
- Edgewood Indep. Sch. Dist. v. Meno, 917 S.W.2d 717 (Tex. 1995) (public funds may be spent for legitimate public purposes even if private parties incidentally benefit)
- Tex. Mun. League Intergov't Risk Pool v. Tex. Workers' Comp. Comm'n, 74 S.W.3d 377 (Tex. 2002) (articulated three-part test for transfers to private entities)
- Comm'rs Ct. of Titus Cty. v. Agan, 940 S.W.2d 77 (Tex. 1997) (review of commissioners court decisions for abuse of discretion)
- Key v. Comm'rs Ct. of Marion Cty., 727 S.W.2d 667 (Tex. App.—Texarkana 1987, no writ) (contractual conditions discussed in context of control over transferred funds)