Untitled Texas Attorney General Opinion, JM-274

Untitled Texas Attorney General Opinion

JM-274

| Tex. Att'y Gen. | Jul 2, 1984

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Case Information

*1 The Attome,)/ General of Texas Dlzcember 27. 1984 JIM MAllOX

Attorney General Opinion No. JM-274 Ronorable Jay T. Kfmbrough

Supreme Court BuildIn Bee County Attorney P. 0. Box 12545 Re: Whether the Bee County Room #204, Courthov se Austin. TX. 78711. 2549 51214752501 Beeville, Texas 78102 Community Action Agency may Telex 91OlS74-1357 receive Interest free TeIecoDier 51214750288 is a depos-

itory for Bee County 714 Jackson. Suite 700 Dsllar. TX. 752024506 Dear Mr. Kimbrough: 2141742-0944

You ask whether the Bee County Comnity Action Agency [hereinafter Agency] may receive interest-free loan from a bank 4824 Alberta Ave., Suit4 1.50 is a depository Apparently. the bank in El Paso, TX. 799052793 91515~3dS4 question

credit with the b,%nk. You refer to the Agency as a not-for-profit agency but indicate organized by the Bee County it Jo1 Texas, Suite 700 Commissioners Court and funded through various government programs. Houston. TX. 77002-3111 Regardless of whether the county is even authorized to organize this 713l2255888 Agency. we conclude that such an Agency cannot receive in the instances described herein. 806 Broadway. Suite 312 Lubbock, TX. 79401-3479 The basis this conclusion differs according to whether 8061747.5239 Agency is an indepmsndent entity or whether it is an “extension” of the county. Because 1,t is unclear which type of entity is presently 4309 N. Tenth. Suite B question, each deserves analysis. McAllen. TX. 78x)l.lSSS 5121682.4547 the Agent:? in question is an “extension” the county, receive inl:erest-free loans because the county itself cannot 2&l Main Plaza. Salt0 400 An agency or arm of a local governmental such loant;. San Antonio. TX. 782052797 has no greater pov’er than the local governmental entity which creates 51212254191 the agency. Attorney General Opinion JM-220 Counties possess

only the powers expressly or by necessary implication by the Texas Constitut:ion or statutes. _Canales v. Laughlin, 214 S.W.?d An Equal OPPOftUnitYl Aftirmstive Action Employer 451 (Tex. Counties lack authority eo borrow money except

through issuance of bonds, certificates of. obligation, or forms of indebtedness which are specifically by law. See Tex. Const. art. XI, 57; Brown v. Jefferson County, 406 S.W.Zd 185 1966) ; see also Tex. Const. art. 552-b; art. VIII, 59 -mm (because ere limited in property taxes they may levy, power to incur debt limited); see generally V.T.C.S. arts. 701 g -, 2368a.l; cf. V.T.C.S. arts. 1644~. 1644c-1. Accordingly, *2 (JPI-274) honorable Jay T. Kimbrough

Agency cannot receive loans from Bee County’s depository bank. the Agency independent the t la.nd ,

If, on not-for-profit legal entity with which the county merely contracts, a, for the delivery of certain authorized social services on an contract basis, then the Texas Constitution may prohibit the Agency is a private, not-for-profit in question. and thus not connected to the county, it would be free to seek from any bank, subject to limitations applicable to not-for-profit corporations and associations which are not issue here. Apparently, the bank in, question c,redit with the bank. If the county acts,

in this manner, as a guaran:or these loans, the Texas Constitution prevents from to any individual, association, or cclrporation. Art. III, §52(a).

Article III. section 52(e) provides

Pxcept as otherwis~z provided by this section, Legislature shall have no power to authorize any town or other political corporation county, city, or subdivision of t!ae State to lend its or to grant public money or thing of value in aid of, or to individr~~l. association or corporation or to become a stockholder in such whatsoever, corporation, assoc:i.ation or company. (Emphasis added).