The Attorney General of Texas
September 10, 1979
MARK WHITE
Attorney General
Honorable John J. Kavanagh, M.D. Opinion No. MW-5 5
Commissioner
Texas Department of Mental Health Re: Authority of Department of
and Mental Retardation Mental Health and Mental
Box 12668 Retardation to pay community
Austin, Texas 78711 centers for start-up costs prior to
receiving services.
Dear Dr. Kavanagh:
You ask whether a facility of the Texas Department of Mental Health
and Mental Retardation is authorized to contract with a community center
created pursuant to article X47-203, V.T.C.S., to plan, develop, and provide
community-based residential services. Although you have provided us with
examples of specific contracts which illustrate your inquiry, neither your
question nor our answer is specifically directed to the details of those
contracts.
The Texas Department of Mental Health and Mental Retardation
consists of the Board of Mental Health and Mental Retardation,
commissioners, staff members, and thirty facilities, including state
hospitals. V.T.C.S. art. 5547-202, § 2.01. All administrative, rule-making,
and decisional powers granted by article 5547-202 are vested in the
commissioner, subject to policies formulated by the board. V.T.C.S. art.
5547-202, § 2&b). Section 2.13 of article 5547-202 provides as follows:
The Department may cooperate, negotiate and
contract with local agencies . . . [and1 community
centers . . . to plan, develop and provide community-
based mental health and mental retardation services.
Section 2.17(a) provides:
From funds available to it the Department is
authorized to provide mental health and mental
retardation services through the operation of halfway
houses, community centers, and other mental health
and mental retardation services programs.
P. 173
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Honorable John J. Kavanagh, M.D. - Page Two (HW-55)
These provisions authorize the department to contract with community centers to provide
mental health and mental retardation services. Since section 2.llfb) vests the
department’s administrative and decisional powers in the commissioner, subject to board
policy, agreements between a facility of the department and a community center must
have his approval. The contract terms must be consistent with board policy.
You next ask whether a facility of the Texas Department of Mental Health and
Mental Retardation is authorized to pay the community center for start-up costs incurred
prior to providing such services to clients as consideration for the center’s planning and
developing such services. It is suggested that payment in advance of the provision of
services violates article III, section 50 of the Texas Constitution, which provides:
The Legislature shall have no power to give or to lend, or to
authorize the giving or lending, of the credit of the State in aid of,
or to any person, amociation or corporation, whether municipal or
otho,,, or to pledge the credit of the State in any manner
whatsoever, for the payment of the liabilities, present or
prospective, of any individual, association of individuals, municipal
or other corporation whatsoever.
Article III, section 52, a similar constitutional provision, prohibits the legislature from
authorizing political subdivisions to lend their credit or grant public money to individuals
or corporations. In construing this provision, a Texas court stated as follows:
Many cases could be cited which involve an arrangement between
two governmental entities in which one rendered agreed services to
the other in exchange for money paid at a different time than when
services were rendered,. . . Two requirements must be met in such
a transaction. (11The purpose for which the obligation or payment
or transfer was made must be within the Dower of the entitv
incurring the obligation or making the payment or transfer 01
funds. City of Aransas Pass v. Keeling, ll2 Tex. 339, 247 S.W. 818
(1923). (2) The political entity that receives the funds has to be
obligated (by statute or contract1 to use the funds for the public
purpose. Road District No. 4, Shelby County v. Alred [sic], 123
Tex. 77, 68 S.W.2d 164 (19341.
State ex rel. Grimes County Taxpayers Association v. Texas Municipal Power Agency, 565
S.W.2d 258, 265 (Tex. Civ. App. - Houston [lst Dist.1 1978, no writ). The court
determined that payments by four cities to the Texas Municipal Power Agency were not
grants, donaticns, or gratuities, but instead “‘.:ere payments made for services rendered
and to be rendered.” Supra at 265. These payments do not violate article 3, section 52 of
the co::stitution. See also San Antonio River Authority v. Sheooerd, 299 S.W.2d 920 (Tex.
1957) (county could pay tax money to reclamation authority to furnish flood control
program over 30-year period); Attorney General Opinion H-74 (19731 (Blind Commission
may advance to its employees expenses to be incurred). In our opinion, article III, section
P. 174
Honorable John J. Kavanagh, M.D. - Page Three (MW-55)
50 does not prohibit advance payment by one governmental entity for services which
another governmental entity is obligated to render in the future.
It is also suggested that the following statute presents the only instance in which one
agency of the state may make an advance payment to another:
All State Agencies and Institutions are authorized to make
advance payments to Federal and State Agencies for merchandise
purchased from such agencies when advance payments will expedite
the delivery of the merchandise.
V.T.C.S. art. 658a. In our opinion, this statute provides an exception to articles 655
through 658, V.T.C.S., relating to payment for goods and services purchased through the
Board of Control. These provisions require payment for goods and services only after they
have been inspected by the recipient agency and the invoice has been approved by the
Board of Control and the Comptroller. We believe these provisions and the exception
found in article 658a apply only to services purchased through the Board of Control. We
find no indication in sections Z.ll(b) and 2.17(a) of article 5547-202 that the department
must work through the Board of Control to purchase mental health and mental retardation
services from a community center. Article 664-3, V.T.C.S., the State Purchasing Act of
1957, authorizes the Board of Control to contract for “only services of the type heretofore
contracted for by the State Board of Control. . . .I’ Sec. 3(b). Cf. Attorney General
Opinion M-316 (1968) (community centers may not make purchases through Board of
Control). We do not believe that article 658a, V.T.C.S., bars the department from paying
start-up costs prior to receiving mental health or mental retardation services from the
community centers. Any contract must of course be properly entered into as stated in
answer to your first question.
SUMMARY
The Texas Department of Mental Health and Mental Retardation
may contract with community centers to provide community-based
residential services. The department may pay the community
centers their start-up costs incurred prior to providing such
services to clients.
MARK WHITE
Attorney General of Texas
JOHN TV.FAINTER, JR.
First Assistant Attorney General
TED L. HARTLEY
Executive Assistant Attorney General
P. 175
. .
Honorable John J. Kavanagh, M.D. - Page Four (MW-55)
Prepared by Susan Garrison
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
C. Robert Heath, Chairman
Martha Allen
David B. Brooks
Susan Garrison
Rick Gilpin
William G Reid
Bruce Youngblood
p. 176
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Untitled Texas Attorney General Opinion
Combined Opinion