Texas Attorney General Opinion: GA-78 Page: 4 of 6
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The Honorable C.E. "Mike" Thomas, III - Page 4
comparable constitutional provisions are intended "to prevent the application of public funds to
private purposes; in other words, to prevent the gratuitous grant of such funds to any individual,
corporation, or purpose whatsoever." Byrd v. City ofDallas, 6 S.W.2d 738, 740 (Tex. 1928).
However, spending public funds for a legitimate public purpose to obtain a clear public
benefit is not an unconstitutional grant of public funds. See Tex. Mun. League Intergovernmental
RiskPool v. Tex. Workers' Comp. Comm 'n, 74 S.W.3d 377, 383 (Tex. 2002); EdgewoodIndep. Sch.
Dist. v. Meno, 917 S.W.2d 717, 740 (Tex. 1995). Further, an expenditure to directly accomplish a
legitimate public purpose is constitutional even though it incidentally benefits a private interest. See,
e.g., Brazos River Auth. v. Carr, 405 S.W.2d 689, 693 (Tex. 1966) (exchange of state bonds for
corporate bonds to directly accomplish the purposes for which the authority was created was "not
rendered invalid by the fact that the method of handling the transaction is beneficial to the
corporation and its stockholders"); Barrington v. Cokinos, 338 S.W.2d 133, 139 (relocating railroad
tracks to eliminate railroad crossings did not violate prohibition against donations to corporations
in TEX. CONST. art. XI, 3); Graves v. Morales, 923 S.W.2d 754, 757 (Tex. App.-Austin 1996, writ
denied) (state payment of employee's occupation tax is not an unconstitutional transfer of funds for
private purpose); Young v. City of Houston, 756 S.W.2d 813, 814 (Tex. App.-Houston [1st Dist.]
1988, writ denied) (city's enforcement of private restrictive covenants serves a public purpose
despite private benefit); Tex. Att'y Gen. Op. No. H-403 (1974) (state agency may construct a
building on leased land even though building would become the property of the landowner on lease
termination).
Whether a legislative act serves a public purpose is, in the first instance, a determination the
appropriate legislative body must make. See Young, 756 S.W.2d at 814 (determining public purpose
of expenditure is primarily legislative function); City of Coleman v. Rhone, 222 S.W.2d 646, 649
(Tex. Civ. App.-Eastland 1949, writ ref'd) (determining public purpose of ordinance is, in first
instance, for municipal governing body). The Texas Supreme Court has stated a three-part test to
determine if a statute accomplishes a public purpose:
Specifically, the Legislature must: (1) ensure that the statute's
predominant purpose is to accomplish a public purpose, not to benefit
private parties; (2) retain public control over the funds to ensure that
the public purpose is accomplished and to protect the public's
investment; and (3) ensure that the political subdivision receives a
return benefit.
Tex. Mun. League, 74 S.W.3d at 383. This office has identified similar principles for determining
if a particular expenditure serves a public purpose: "In making an expenditure of county funds that
benefits a private person or entity,... a commissioners court will avoid violating article III, section
52 if it (i) determines in good faith that the expenditure serves a public purpose and (ii) places
3(...continued)
resources for private purposes. See, e.g., TEX. CONST. art. III, 50 (loan of state credit); id. art. III, 51 (legislative
grants); id. art. VIII, 3 (taxes for public purpose); id. art. XI, 3 (subscriptions or donations to corporations).(GA-0078)
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Texas. Attorney-General's Office. Texas Attorney General Opinion: GA-78, text, May 30, 2003; (https://texashistory.unt.edu/ark:/67531/metapth274973/m1/4/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.