TEE ATTORNEY GENERAL
OF TEXAS
October 7, 1988
Honorable Tim Curry Opinion No. JM-964
Criminal District Attorney
200 West Belknap Street Re: Authority of a county to
Fort Worth, Texas 76196 make mortgage payments on
behalf of its indigent re-
sidents (RQ-1413)
Dear Mr. Curry:
You ask whether counties may make mortgage payments
on behalf of their indigent residents. Your question is
prompted by an administrative rule adopted by the Texas
Department of Human Services pursuant to chapter 34 of the
Human Resources Code. Two issues must be considered:
whether the county has statutory authority to provide such
financial assistance and whether such statutory authority is
consistent with provisions of the Texas Constitution that
require public funds to be spent for public purposes.
Attorney General Opinion JM-942 (1988).
Counties in Texas are limited to exercising those
powers that are specifically conferred on them by statute
or the constitution, but they have broad discretion in
exercising express powers. Canales v. Lauchlin 214 S.W.Zd
451 (Tex. 1948). The statutory authority for &he expendi-
ture about which you inquire is found in chapter 34 of the
Human Resources Code. That chapter requires the Texas
Department of Human Services (the Department) to establish a
fund to assist local communities in meeting the needs of
individuals and families for temporary emergency relief.
Hum. Res. Code 5 34.003(a).
The services are funded 50 percent with local funds
and 50 percent with matching state funds. The statute
authorizes a county commissioners court to apply for a grant
to administer the program on behalf of the county. Id.
50 34.002-04. The county must submit to the Department a
plan for providing emergency relief, which must include a
description of the target population, eligibility criteria
to receive services, the nature and scope of benefits to
be provided, methods of administration, and a budget
P. 4906
Honorable Tim Curry - Page 2 (JM-964)
,
that contains the sources of local matching funds.
5 34.006(a), (b). The Department shall adopt rules es?%
blishing criteria for determining whether a county or other
applicant qualifies for a grant-in-aid. Id. § 34.004 (d).
The Department is also required to develop standards and
procedures for the program that permit all counties in the
state to participate. L 5 34.004(f).
The statute is intended to enable local governments to
aid needy individuals, including homeless persons. The
legislature has acknowledged that local government and
nonprofit programs are presently overburdened and that the
inability to adequately assist homeless and needy residents
causes family, social, and economic instability, as set out
in the purpose clause of chapter 34.
(a) The legislature finds that:
(1) economic and demographic changes
have created rapid increases in the number
of needy persons who are homeless or with-
out other necessities of basic existence;
(2) local governments and nonprofit
service organizations are unable to meet
the increased financial burden caused by
those changes in various areas of the
state: and
(3) the dramatic nature of the emer-
gency relief needs in various localities
has contributed to family instability
and threatened the social and economic
stability of those communities.
(b) The intent of this chapter is to
serve a public purpose and the goals of the
state by providing state money to match local
and any federal money available to provide
emergency relief to needy persons.
Hum. Res. Code !j 34.001.
Section 34.007 establishes procedures and guidelines
for counties to follow in determining eligibility and the
frequency and duration of benefits under the program. A
county may not set the eligibility level at "less than 75
percent of the federal poverty level based on the Federal
Office of Management and Budget Poverty Index in effect at
P. 4907
Honorable Tim Curry - Page 3 (JM-964)
the time the plan is submitted to the Department." Id.
s 34.007(c). Assistance "may include the provision of
utilities, food, housinq and clothing to needy persons."
Id. S 34.007(d) (emphakis added). pursuant to section
34.004 of chapter 34, the Department adopted the following
rules for provision of housing assistance under the program:
[T]he [county, other political subdivision,
or non-profit corporation] may deliver the
following services:
(1) mass shelter -- purchasing cots and
blankets and renting space;
(2) emergency rent -- paying for one
month only to prevent eviction and to provide
housing for the homeless;
(3) mortgage assistance -- paying for one
month only prevent eviction 'or
closure . . . .:"
40 T.A.C. S 10.4304(b).
Chapter 34 authorizes the provision of temporary,
emergency housing assistance. Iiomelessness is not a pre-
requisite to assistance. Rather, prevention of homelessness
and promotion of stability are primary purposes of the
statute's enactment. These purposes are SSNSd by the
provision of one month's mortgage assistance to a person or
family on the verge of homelessness through eviction or
foreclosure on their home. This form of assistance allows
the family time to take measures .to prevent eviction or
foreclosure or to find other housing. We do not see that
making a mortgage payment is significantly different from
making a rent payment for individuals in this situation.
Indigents do not need to be totally impoverished before
assistance may be provided. Attorney General Opinion O-2474
(1940)'. The legislature, in enacting chapter 34, clearly
did not intend that a family must be totally destitute in
order to qualify for housing assistance. Instead, one
1. According to the Department, VlosureV8 is a typo-
graphical error in the rule as adopted. The Department
interprets the rule as applying to "foreclosure.!'
P. 4908
Honorable Tim Curry - Page 4 (JM-964)
specific restriction the legislature places on the adminis-
tration of the program is that the eligibility requirement
cannot be set lower than at 75 percent of the poverty level
established by federal guidelines.
"It is not an invalid delegation of legislative
authority to grant to an administrative body the right to
make rules to put into effect completed laws." Housing
c 'n ot a 143 S.W.Zd 79
87 (Tex. lz40). The Department rule allowing counties t;
make mortgage payments on behalf of indigent residents
directly achieves the stated goal of chapter 34 of the Human
Resources Code.
The statutory authority of chapter 34, to be valid,
must be consistent with provisions of the Texas Constitution
prohibiting expenditures of public funds for private
purposes. Article 3, section 52, of the Texas Constitution
provides:
(a) Except as otherwise provided by this
section, the Legislature shall have no power
to authorize any county, city, town or other
political corporation or subdivision of the
State to lend its credit or 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.
Article 3, section 51 places a similar prohibition on direct
legislative grants to individuals or corporations for
private purposes. In our-opinion, the expenditure of state
and county funds for the purpose of making a single mortgage
payment on behalf of an indigent resident is constitu-
tionally permissible.
The intent of the provisions of article 3, sections 51
and 52 is to "prevent the application of public funds to
private purposes.l@ Bvrd v. Citv of Dallas, 6 S.W.2d 738,
740 (Tex. 1928). On the other hand, expenditures made for
the direct accomplishment of legitimate public purposes are
not unlawful simply because private business may benefit.
Barrinoton v. Cokinos, 338 S.W.2d 133, 140 (Tex. 1960).
The final determination of what is a proper public
purpose is a question for the courts: a legislative
declaration of public purpose is to be given great weight.
Hisainbotham, 143 S.W.2d 79, 83 '(Tex. 1940). The
P. 4909
. Honorable Tim Curry - Page 5 (JM-964)
legislative determination will not be overturned absent a
court finding of arbitrariness or lack of due process.
State v. Citv of A!&$& 331 S.W.2d 737, 743 (Tex.- 1960);
Attorney General Opinion'JM-805 (1987).
In ~iaoinboth~, sunra, the supreme court held that the
purposes served by the Texas Housing Authorities Law,
clearance of slums and construction of low-rent housing,
are proper purposes for which use of public funds may
authorized. 143 S.W.2d 79 at 85. The stated purpose of
diminishing the adverse impact of homelessness articulated
in section 34.001 of the Human Resources Code is similar to
the legislative statement of purpose considered by the
Hiosinbotham court. &.g j& at 81, 82. The purposes SSNSd
by slum clearance and housing development are not rendered
constitutionally impermissible because personal gain to some
private individual results. Davis v. Citv of Lubbock, 326
S.W.Zd 699 (Tex. 1959). Thus, we do not believe the
purposes stated in chapter 34 are per se unconstitutional
merely because a property owner or financial institution
might ultimately benefit from the receipt of one rent or
mortgage payment.
A government entity may contract with a private
institution or another political subdivision in order to
provide for public or governmental programs for proper
public purposes. Attorney General Opinion JM-65 (1983).
Whether a particular expenditure which benefits
individual is permissible under the constitution must Z
determined on a case-by-case basis. CornDare Attorney
General Opinion JM-103 (1983) (permitting a county to
contract for the operation of a recreation center to be used
by elderly residents) & Attorney General Opinion MW-22
(1979) (concluding that authorization of utility bill
payments on behalf of elderly persons violates the constitu-
tion). In order to be constitutionally permissible, an
expenditure of public funds must be for a public purpose and
must include controls to ensure that the public purpose is
carried out. See Attorney General Opinions MW-373 (1981);
MW-423 (1982) ; JM-157 (1984); JM-768 (1987). The
expenditures authorized by chapter 34 meet both these
requirements.
A public purpose is served when temporary emergency
assistance is provided to needy families and individuals
living in the community. The obvious societal costs of
homelessness make housing development and housing assistance
of particular public concern. Expenditures made pursuant to
Pm 4910
Honorable Tim Curry - Page 6 (JM-964)
--,
chapter 34 appear likely to produce savings in existing
social welfare and housing programs.
Controls established by chapter 34 ensure that funds
authorized by the statute will be used to carry out the
public purpose expressed by the legislature. Counties may
receive a grant-in-aid only if they provide evidence showing
a need for assistance in accordance with the Department's
rules. Hum. Res. Code § 34.004(c). The counties must also
provide a detailed plan for providing emergency relief. Id.
5 34.006 (a), (b) - Restrictions on administrative costs,
auditing provisions, and reporting requirements also help
ensure that the public purpose justifying the emergency
assistance program will be carried out.
SUMMARY
A county may make mortgage payments on
behalf of indigent residents to prevent
eviction or foreclosure as part of a
temporary emergency relief program for needy
persons approved 2,;:; D;;art$enkh;f Human
Services under Human
Resources Code.
l-I.--k
Very truly yo ,
.
-
JIM MATTOX
Attorney General of Texas
MARYKKLLER
First Assistant Attorney General
LOU MCCREARY
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLKY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Karen C. Gladney
Assistant Attorney General
P. 4911