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The Honorable Curtis Wilkinson Opinion No. H-914
County Attorney
County of Lamb Re: May Lamb County
I'.0. Box 946 finance a proposed revenue
Littlefield, Texas 79339 bond feasibility study for
the Lamb County Hospital
Authority.
Dear Mr. Wilkinson:
You advise that in 1974 the Lamb County Commissioners
Court passed an order creating the Lamb County Hospital
Authority, pursuant to article 4494r, V.T.C.S. The appointed
board of directors for the Authority has requested that the
county pay for a study to determine if there is a financially
attractive basis upon which hospital revenue bonds might be
sold by the Authority to finance the erection, furnishing
and operation of a hospital.
Unless such a study is conducted which confirms that it
is economically feasible to construct and operate a hospital
in Lamb County, a good rating for the proposed bonds cannot
be obtained. Such studies are statutorily sanctioned. See
Hospital Broject Financing Act, V.T.C.S. art. 4437e-2, 9-
3(c) (4). The directors of the Authority propose to repay
the county from anticipated bond sale proceeds. According
to your letter, the study is expected to cost between ten
thousand and forty thousand dollars. You ask:
Does the Lamb County Commissioners Court
have legal authority to expend public funds
for a feasibility study preparatory to the
Lamb County Hospital Authority issuing
revenue bonds?
p. 3835
The Honorable Curtis Wilkinson - page 2 (H-914)
The Lamb County Hospital-Authority is "a body politic
and corporate and a political subdivision of the State."
V.T.C.S. art. 4494r, 6 3; Thomas v. Howard County Hospital
Authority, 489 S.W.2d 403 (Tex.CE. App. -- Eastland 19721,
writ ref'd n.r.e., 498 S.W.2d 146 (Tex. Sup. 1973). It is
an entity distinct and separate from the county. Attorney
General Opinion M-260 (1968). Cf. Attorney General Opinion
H-554 (1975). The statute underwhich it was created denies
it taxing power but it is empowered to raise funds by issuing
revenue bonds and may accept donations, gifts and endowments.
V.T.C.S. art. 4494r, 69 1, 7, 19.
While one political subdivision may not constitutionally
make a gift of its public funds to another political subdivision
or lend it its credit, Tex. Const. art. 3, 9 52, a county is
not prohibited by the Constitution from expending its funds
for a proper public purpose merely because the expenditure
will incidentallv benefit another political subdivision.
See Harris County Flood Control Dist. v. Mann, 140 S.W.2d
1098 (Tex. Sup. 1940). Cf. Barrington v. Cokinos, 338
S.W.2d 133 (Tex. Sup. 19irm. In Dancy c Davidson, 183
S.W.2d 195 (Tex. Civ. App. -- San Anton= 1944, writ ref'd),
it was held that article 5, section 18 of the Texas Constitution
and article 2351, section 7, V.T.C.S., authorized the Cameron
County Commissioners Court to make expenditures for the
purchase of a public building to house a state public health
unit serving the county, as well as other state and federal
agencies serving the county. The Court stressed that the
agencies and offices were'performing governmental and public
functions which benefitted the entire county.
The public health of the populace is, of course, a
proper concern of the Lamb County Commissioners Court.
Article 4418f, V.T.C.S., specifies:
The Commissioners Court of any County shall
have the authority to appropriate and
expend money from the general revenues of
its County for and in behalf of public
health and sanitation within its County.
It seems clear that the Lamb County Commissioners Court
might have expended county funds to pay for a feasibility
study before it created the hospital Authority. The erection,
furnishing, and operation of a county public hospital is a
proper public function benefiting the entire county which
it might have undertaken itself. V.T.C.S. art. 4478: art.
4418f; Se dler v. Border, 115 S.W.Zd 702 (Tex. Civ. App.
1938, no
5- writ . The creation of the Authoritv did not
withdraw from the commissioners court the power to respond
P. 3836
The Honorable Curtis Wilkinson - page 3 (H-914)
to the public health needs of the county, [Compare Tex.
Const., arts. 9, 99 4, 9 and 13; Attorney General
Opinions C-772 , C-646 (1966)] and under the facts presented
to us, if the Commissioners Court of Lamb County determines
that it is in the best interests of the county to undertake
and pay for a hospital revenue bond feasibility study, we
cannot say the Texas Constitution forbids it.
The Interlocal Cooperation Act, article 4413(32c),
V.T.C.S., authorizes "the fullest possible range of inter-
governmental contracting authority at the local level" to
improve the efficiency and effectiveness of local governments.
See also V.T.C.S. art. 4434: Attorney General Opinion C-772
--
(1966). The County Hospital Authority Act, article 4494r,
requires bonds issued under it to specify that holders of
the bonds shall never have the right to demand payment out
of money raised or to be raised by taxes, but it does not
forbid the use of tax money to aid the Authority. It does
not repeal article 4418f.
SUMMARY
The Lamb County Commissioners Court has
legal authority to expend public funds
for a feasibility study preparatory to
the Lamb Count? Hospital Authoritv issuing
revenue bonds.- -
ery truly yours,
Attorney General of Texas
C. ROBERT HEATH. Chairman
Opinion Committee
jwb
P. 3837