Case Information
*1 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 Nueces County Attorxsy Austin, TX. 78711. 2548 Courthouse, Room 205 Re: Validity of a contract between 5121475-2501 Corpus Christi, Texw 78401 County and an economic NUSCSS Telex 9101974.1387 development corporation Telecopier 512l475.0296 Dear Mr. Valdez: 714 Jackson, Suite 700 Dallas, TX. 752U2609
You have requested an opinion on the following question: 214/742-8944 4824 Alberta Ave., Suite 160 [91515333404] El Paso, TX. 799052793 county camlot be a dues-paying member of a chamber to contra':t for business or industrial development of commer':e. does Nueces County have the authority Taking into consideration the fact that a services with a corporation that will in essence ,p’?l Texas. Suite 700 be an age:Y:y of 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 implication, by thf! constitution or statutes. Canales v. Laughlin, 006 Broadway, Suite 312 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. V.T.C.S., or through a board of development established under article 4309 N. Tenth. Suite S 2352d. V.T.C.S. A county may contract for services that the county McAllen, TX. 78501.1885 512VS82.4547 is authorized to perform itself. Attorney General Opinion JM-65
(1983) . Therefore, under articles 1581g-2 and 2352d. a county has authority to contra<:11 for business or industrial development services. 200 Main Plaza, Suite 400 San Antonio, TX. 78205.2797 You are conwrned, however, about the relevance of a 1974 512/2254191
attorney general ol'inion that concluded that a county could not pay dues to a chamber o:F commerce. Attorney General Opinion H-397 (1974). An Equal Opportunity/ In that opinion, th:Ls office held that article III, section 52, of the Affirmative Action Employer 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 *2 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 'between donating 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~thority to 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 *3 Honorable Carlos Valdes - Pa:Se 3 (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