The Honorable Lynn Nabers Opinion No. H-868
Chairman
Health and Welfare Committee Re: Constitutionality
House of Representatives of the Texas Community
P. 0. Box 2910 Development Act of 1975,
Austin, Texas 78767 article 12691-4, V.T.C.S.
Dear Representative Nabers:
You have requested our opinion regarding the constitu-
tionality of a portion of article 12691-4, V.T.C.S., the
Texas Community Development Act of 1973. That statute
authorizes a municipality to establish "community development
programs," which may include
interim assistance and financing the rehab-
ilitation of privately owned properties
when incidental to other activities.
Sections 4(b), (4).
Article 12691-4 is designed to implement the federal Housing
and Community Development Act of 1974, 42 U.S.C. 99 5301,
et seq. Funding is primarily provided by the federal govern-
i&t, and section 4(c) of the Texas statute, while authorizing
a municipality to "provide for and implement programs to
provide financing for the rehabilitation of privately owned
buildings through the use of loans and grants from [the] Act,"
prohibits a municipality "from providing municipal property
or funds for private purposes." You ask whether these
provisions contravene article 3, section 52 of the Texas
Constitution, which declares, in pertinent part:
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The Honorable Lynn Nabers - page 2 (H-868)
[Tlhe 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 12691-4 specifically prohibits the use of munici-
pal funds or property for private purposes. The purpose of
the statute is described in section 2:
[Tlhe development of viable urban communities
by providing decent housing and a suitable
living environment, and by expanding economic
opportunities for eligible persons as defined
by the federal Housing and Community Development
Act of 1974 . . . a
The statute then declares that
the objectives of such activities are
matters of public interest and legitimate
public purposes for municipalities within
this state.
It is well established that "the constitutionality of a
statute must be sustained unless its invalidity is apparent
beyond a reasonable doubt.“ State v. City of Austin, 331
S.W.Zd 737, 747 (Tex. Sup. 1960). me Legizature's deter-
mination of what constitutes a public use or a public purpose
is entitled to great weight, as the Supreme Court of Texas
has recognized in upholding the validity of the Texas Urban
Renewal Act, article 12691-3, V.T.C.S., and the Texas Housing
Authorities Act, article 1269k, V.T.C.S., over objections
that they contravened article 3, section 52. Davis v. City
of Lubbock, 326 S.W.2d 699, 709-10 (Tex. Sup. 1959);Tousing
EII;=;~Y~;;~C~;;;~P: D;&aiz ~Q~~$$~~~~~~r~4~os.~;I:d 79,
--
(1975).
p. 3660
‘.
The Honorable Lynn Nabers - page 3 (H-868)
It has been observed that Texas courts generally will
uphold transactions in which a municipality uses a private
agency to accomplish a proper public purpose if: (1)
accomplishment of the public purpose is the predominant
purpose of the transaction; (2) there is sufficient assurance
through statutory or contractual requirements or through
continuing supervision by the municipality that the public
purpose will be accomplished; (3) there is sufficient pro-
tection of the handling of public money; and (4) there is
adequate consideration passing to the municipality. Willatt,
Constitutional Restrictions on Use of Public Money and
Public Credit, 38 Tex. B.J. 413, 421 (1975).
It has also been noted that a public benefit, if
adequate, may serve as consideration. Attorney General
Opinion H-416 (1974). Also, see Texas Cent. Ry. v. Bowman,
79 S.W. 295, 297 (Tex. Sup. 1904),where, anotE& context,
it is said:
The power of the Legislature to devote the
general property of the state to public
purposes without other compensation than
such as arises from the advantages resulting
from such use of it is . . . expressly
recognized . . . .
We believe the transactions contemplated by article
12691-4 can meet article 3, section 52 standards, although
in p;irticular instances the statute could be applied in an
unconstitutional manner. Whether a specific application is
constitutional is a question which must be resolved on the
facts of the particular case. While we cannot and do not
pass on every conceivable application of the statute, it is
our opinion that the Texas Community Development Act of 1975
would be held to be constitutional on its face.
SUMMARY
The Community Development Act of 1975,
article 12691-4, V.T.C.S., is not
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The Honorable Lynn Nabers - page 4 (H-868)
violative of article 3, section 52
of the Texas Constitution.
Very truly yours,
ttorney General of Texas
APPROVED:
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p. 3662