The Attorney General of Texas
July 8, 1980
MARK WHITE
Attorney General
Honorable Gerald R. Brown Opinion No. NW206
Executive Director
Texas Industrial Commission Re: Texas Industrial Commission
Box 12728, Capitol Station Economic Development Fund
Austin, Texas 787ll
Dear Mr. Brown:
You inform us that the Texas Industrial Commission (TIC) is
considering establlshirg an Economic Development Fund for the purpose of
receiving and expendirg private contributions. The TIC would use the
contributions to pay travel, entertainment, and other expenses necessary for
activities designed to attract business and industry to Texas. Article
5190 l/2, V.T.C.S., reads in pertinent part:
(a) Additional &ties of the Commission in
addition to its other duties, the State Industrial
Commission is hereby authorized to plan, organize
and operate a program for attracting and locating
new industries in the State of Texas.
(b) The Industrial Commission may accept con-
tributions from private sources, all of which may be
deposited in a bank or banks to be used at the
discretion of the Commission in compliance with the
wishes of the donors.
You first ask whether the commission may depceit funds donated from
private sources in banks, rather than the state treasury, and expend them
without specific legislative appropriation. Article 5190 l/2, V.T.C.S., clearly
authorizes the commission to deposit such funds in banks! rather than the
state treasury, and to spend them without specific legislative eppropriation.
See generally Letter Advisory No. 132 (1977). However, the legislature has
authority to appropriate such funds even though they are held outside of the
treasury. See Attorney General Opinion H-1167 (1978); Letter Advisory No.
132 (1977). x also General Appropriations Act, Acts 1979, 66th Leg., ch.
843, art. V, SS18,19 at 2911.
You next ask under what conditions, if any, such funds may be
expended for travel and entertainment in attempting to attract business and
industry to Texas. The contributions accepted by the Commission pursuant
P. 663
Honorable Gerald R. Brown - Page Two (MW-20 6 1
to article 5190 l/2, V.T.C.S., are public funds. Attorney General Opinion WW-534
(1958). Thev mav not. therefore. be soent in a manner inconsistent with article III.
section 51 ‘bf the Texas Constitution- which orohibits gratuitous &nations to eny
individual, assoc: iation of individuals or corporation. Road District No. 4, Shelby
County v.~Allred, 68 S.W. 2d 164 (Tex. 1934). There must be en adequate return to the
state, either in the accomplishment of a public purpose or in the receipt of something
equivalent in value. See State v. City of Dallas, 319 S.W. 2d 767 (Tex. Civ. App. -
Austin 1958) aff’d 331 ST. 2d 737 (Tex. 1960); Attorney General Opinion H-416 (1974).
However, an expenditure for a legitimate public purpose is not rendered unlawful
because a privately owned business may be benefited thereby. Barrington v. Cokinos,
338 S.W. 2d 133 (Tex. 1960). The Texas courts have held permissible municipal
expenditures designed to advertise and promote the growth of a city. Bland v. Cit of
Taylor, 37 S.W. 2d 291 (Tex. Civ. App. - Austin 1931) aff’d Davis v. Clt.w o Ta lor, 67
S.W. 2d 1033 (Tex. 1934). Private citizens may be provided transportation at public
expense, where there is an official business purpose for doing so. Attorney General
Opinion H-1089 (1977). In Attorney General Opinion G-4167 (1941), this office approved
certain expenditures for public relations which the University of Texas made. One
expense account included an item for the “cultivation of officiaLs of Rockefeller
Foundation and General Education Board.” Presumably, this item covered the
entertainment of private individuals. Thus, there is authority for the use of public
funds to provide travel and entertainment to private individuals, and for the use of
public funds to encourage local development. Attorney General Opinion G-4167 (1941)
developed a test designed to show whether expenses were incurred for state business,
defined as follows:
‘State business’ signifies the accomplishment of a govern-
mental function; it requires that the means and method adopted
be reasonably necessary; it implies that the particular govern-
mental function involved be one directly entrusted to the
institution or department assuming its accomplishment.
Article 5190 l/2, V.T.C.S., describes a governmental function which is entrusted
to the Commission. See Tex. Const. art. XVI S56; Bland v. City of Taylor, slqra. The
Commission may mxnated funds for travel and entertainment where reasonably
necessary to the attainment of the purposes set out in article 5190 l/2. The
reasonableness of a particular expenditure is for the Commission to decide in the first
instance. -See Attorney General Opinion H-1260 (1978).
You inform us that some of the private funds donated will very likely come from
individals and entities interested in the issuance of revenue bonds under the
Development Corporation Act of 1979. That Act vests in the TIC the responsibility for
approving certain leases, sales and loan agreements in conjunction with the issuance of
such bonds, as well as the bonds themselves. You ask whether the statutory provisions
dealing with gifts to public servants end official misconduct preclude donations to the
fund, if established, from such persons. Donations under article 5190 l/2, V.T.C.S., are
not made to individual commissioners. However, under certain circumstances it is
P. 664
- ,
Honorable Gerald R. Brown - Page Three (NW-2 0 6 )
conceivable that conditions attached to them could cause them to benefit the
commissioners. Article 6252-9b, V.T.C.S., provides in section 8(a) as follows:
No state officer or state employee should accept or solicit
any gift, favor, or service that might reasonably tend to
influence him in the discharge of his official duties or that he
knows or should know is being offered him with the intent to
influence his official conduct.
Whether any particular donation would cause a violation of this provision is a fact
question for the commission to resolve in the first instance. See Attorney General
opinions H-1223 (1978); H-688 (1975). See also Meyers v. Walker-76 S.W. 305 (Tex.
Civ. App. - Eastland 1925, no writ).
SUMMARY
The Texas Industrial Commission may deposit in banks funds
donated from private sources under article 5190 l/2, V.T.C.S.
Such funds may be spent for travel and entertainment in
attempting to attract business and industry to Texas where
reasonably necessary to that purpose. Whether donations from
individuals interested in the issuance of revenue bonds under the
Development Corporation Act of 1979 would Involve the com-
mission in violations of the state ethics law would depend on the
facts of each case.
verYm~r
MARK WHITE
Attorney General of Texas
JOHN W. FAINTER, JR.
First Assistant Attorney General
TED L. HARTLEY
Executive Assistant Attorney General
Prepared by Susan Garrison
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
C. Robert Heath, Chairman
Jon Bible
Susan Garrison
Rick Gilpin
Iris Jones
P. 665
Untitled Texas Attorney General Opinion
Combined Opinion