Can a Texas county reimburse a city for the cost of gifts the city already gave to legislators?

Plain-English summary

A county prosecutor asked whether Upshur County could reimburse the City of Gilmer for half the cost of golf towels the city had given to legislators in connection with Upshur County Day at the State Capitol. The Attorney General concluded the county could not make that payment.

The towels, inscribed with the City of Gilmer logo, were prepared at the direction of the city and the Gilmer Industrial Foundation and handed out to legislators during the trip. The city then asked the county to pay back $443.77, half the cost. The opinion framed the question narrowly: not whether the county could have decided in advance to spend public funds for this purpose, but whether it could reimburse the city for a completed expenditure.

The commissioners court controls how county funds are spent, but that power is subject to constitutional limits. Article III, section 52 bars a county from granting public money or a thing of value to any individual, association, or corporation, including another local government, unless the spending carries out a county purpose. Here, the city council presumably decided the towels served a city purpose, but the commissioners court was never involved and never determined that the spending served a county purpose. The city had already given the towels away, so the transaction had run its course. Paying the city now would not advance the original purpose; it would only replenish the city's treasury, making the "reimbursement" an unconstitutional donation of county funds.

The opinion added a second, independent bar: article III, section 53, which prohibits a county from granting extra compensation after service has been rendered and bars paying a claim that is not based on a valid contract. The towels were produced under an agreement between the city and the Gilmer Industrial Foundation, and the county was never a party to it. Because there was no valid contract between the city and the county, section 53 also barred the county from paying. The opinion concluded the county could not reimburse the city for any part of the towel cost.

Currency note

This opinion was issued in 2001. Subsequent statutory amendments, court decisions, or later Attorney General opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The constitutional provisions discussed here remain in the Texas Constitution, but later cases and opinions may have refined how the public-purpose and after-the-fact-payment rules apply, so verify current law before relying on this analysis.

What the opinion meant for those who asked

The requesting county prosecutor and the commissioners court (what the opinion held): The opinion told the county it could not reimburse the city for the towels. The payment would be an unconstitutional donation under article III, section 52 and was also barred by article III, section 53 because there was no valid county contract behind the claim.

Cities and other local governments seeking reimbursement (what the opinion held for them): The opinion treated an after-the-fact reimbursement of a completed expenditure by another government as a donation, not a shared cost, where the paying government never decided in advance that the spending served its own purpose and was not a party to the underlying contract.

Commissioners courts generally (what the opinion held for them): The opinion underscored that a county may contribute funds to another local government only to carry out a county purpose, and that the purpose determination must precede the spending, not be supplied after the transaction has run its course.

Common questions

Can a county pay a city back for gifts the city gave to legislators?
The opinion concluded no, at least not after the fact. Because the city had already given the towels away and the county never decided the spending served a county purpose, reimbursing the city would be an unconstitutional gift of public funds.

Why does it matter that the payment came after the gift?
The opinion explained that once the transaction has run its course, a payment no longer advances the original purpose; it only refills the city's treasury. That makes it a donation barred by article III, section 52, rather than a shared expenditure for a county purpose.

What is the contract problem under section 53?
The opinion noted the county was never a party to the agreement to make the towels, so there was no valid contract between the city and the county. Article III, section 53 bars a county from paying a claim that is not based on a valid contract.

Could the county have funded this if it had acted in advance?
The opinion did not decide that. It expressly limited itself to the after-the-fact reimbursement and did not consider whether the county could have agreed in advance to spend public funds for the purpose.

Background and statutory framework

The commissioners court exercises the county's authority to contract and to determine how county funds are spent, subject to constitutional limits. Canales v. Laughlin, 214 S.W.2d 451, 455 (Tex. 1948); Anderson v. Wood, 152 S.W.2d 1084, 1085 (Tex. 1941); Weber v. Sachse, 591 S.W.2d 563, 565 (Tex. Civ. App.-Dallas 1979, writ dism'd). Article III, section 52 provides that a county may not grant public money or a thing of value to any individual, association, or corporation, a term that includes municipal and political corporations. Tex. Const. art. III, § 52; San Antonio Indep. Sch. Dist. v. Bd. of Trs. of the San Antonio Elec. & Gas Sys., 204 S.W.2d 22, 25 (Tex. Civ. App.-El Paso 1947, writ ref'd n.r.e.). A county may contribute funds to another local government only to carry out a county purpose. Bexar County Hosp. Dist. v. Crosby, 327 S.W.2d 445 (Tex. 1959); State ex rel. Grimes County Taxpayers Ass'n v. Tex. Mun. Power Agency, 565 S.W.2d 258, 266 (Tex. Civ. App.-Houston [1st Dist.] 1978, writ dism'd). The opinion noted, without deciding, the line of authority on a government's power to spend to promote itself. Bland v. City of Taylor, 37 S.W.2d 291 (Tex. Civ. App.-Austin 1931), aff'd, Davis v. City of Taylor, 67 S.W.2d 1033 (Tex. 1934).

Article III, section 53 provides that a county or municipal corporation has no authority to grant extra compensation to a public servant or contractor after service has been rendered, and bars a county from paying a claim based on an alleged contract where the county lacked authority to contract or failed to comply with applicable laws. Shelby County v. Gibson, 44 S.W. 302 (Tex. Civ. App. 1898, writ ref'd); Harlingen Indep. Sch. Dist. v. C.H. Page & Bro., 48 S.W.2d 983, 986 (Tex. Comm'n App. 1932, judgm't adopted). The towels at issue were given out in connection with Upshur County Day, recognized by House resolution. Tex. H.R. 419, 77th Leg., R.S. (2001).

Citations

Constitutional provisions:

• Tex. Const. art. III, § 52
• Tex. Const. art. III, § 53

Cases:

• Bland v. City of Taylor, 37 S.W.2d 291 (Tex. Civ. App.-Austin 1931), aff'd, Davis v. City of Taylor, 67 S.W.2d 1033 (Tex. 1934)
• Canales v. Laughlin, 214 S.W.2d 451 (Tex. 1948)
• Anderson v. Wood, 152 S.W.2d 1084 (Tex. 1941)
• Weber v. Sachse, 591 S.W.2d 563 (Tex. Civ. App.-Dallas 1979, writ dism'd)
• San Antonio Indep. Sch. Dist. v. Bd. of Trs. of the San Antonio Elec. & Gas Sys., 204 S.W.2d 22 (Tex. Civ. App.-El Paso 1947, writ ref'd n.r.e.)
• Bexar County Hosp. Dist. v. Crosby, 327 S.W.2d 445 (Tex. 1959)
• State ex rel. Grimes County Taxpayers Ass'n v. Tex. Mun. Power Agency, 565 S.W.2d 258 (Tex. Civ. App.-Houston [1st Dist.] 1978, writ dism'd)
• Shelby County v. Gibson, 44 S.W. 302 (Tex. Civ. App. 1898, writ ref'd)
• Harlingen Indep. Sch. Dist. v. C.H. Page & Bro., 48 S.W.2d 983 (Tex. Comm'n App. 1932, judgm't adopted)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/john-cornyn/jc-0432
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2001/jc0432.pdf

Original opinion text

Best-effort transcription from the official scanned PDF. Minor character-level errors from the source OCR have been corrected; the linked PDF is authoritative.

OFFICE OF THE ATTORNEY GENERAL - STATE OF TEXAS

JOHN CORNYN

November 6, 2001

The Honorable Tim Cone
Criminal District Attorney
Upshur County Justice Center
405 North Titus Street
Gilmer, Texas 75644

Opinion No. JC-0432

Re: Whether Upshur County may pay the City of Gilmer for half the cost of golf towels given to members of the legislature in connection with Upshur County Day (RQ-0401-JC)

Dear Mr. Cone:

On behalf of the Upshur County Commissioners Court and the Upshur County Auditor, you ask whether the county may reimburse the City of Gilmer for half of the cost of golf towels given to legislators in connection with Upshur County Day. Upshur County may not reimburse the City of Gilmer for half the city's cost for the golf towels already given to legislators by the city.

Several officials from Upshur County and the City of Gilmer, its county seat, attended Upshur County Day in Austin.[1] See Tex. H.R. 419, 77th Leg., R.S. (2001) (resolution recognizing April 11, 2001, as Upshur County Day at the State Capitol). During this trip, golf towels prepared at the direction of the City of Gilmer and the Gilmer Industrial Foundation and inscribed with a five-color City of Gilmer logo were given as gifts to legislators.[2] The City of Gilmer sought reimbursement from the county in the amount of $443.77, half of the cost of the towels. See Request Letter, note 1, at 1. You question whether this payment would be an authorized expenditure of public funds.

The issue before us is whether Upshur County may reimburse the city for an expenditure it made in the past. Thus, we need not consider whether Upshur County could have decided in advance to spend public funds for this purpose. See generally Bland v. City of Taylor, 37 S.W.2d 291 (Tex. Civ. App.-Austin 1931), aff'd, Davis v. City of Taylor, 67 S.W.2d 1033 (Tex. 1934) (authority of city to spend money to advertise itself and promote growth and development); Tex. Att'y Gen. Op. Nos. JC-0212 (2000) (whether city may join with local school district in sending high school musical groups to out-of-state performances); JM-220 (1984) (authority of local governments to spend money for sesquicentennial celebration).

The commissioners court exercises the county's authority to contract and to determine how county funds will be spent. Canales v. Laughlin, 214 S.W.2d 451, 455 (Tex. 1948); Anderson v. Wood, 152 S.W.2d 1084, 1085 (Tex. 1941); Weber v. Sachse, 591 S.W.2d 563, 565 (Tex. Civ. App.-Dallas 1979, writ dism'd). Its authority to spend public funds is subject to constitutional limits. A county may not "grant public money or thing of value in aid of, or to any individual, association or corporation whatsoever." Tex. Const. art. III, § 52. A "corporation" within this provision includes municipal and political corporations. See San Antonio Indep. Sch. Dist. v. Bd. of Trs. of the San Antonio Elec. & Gas Sys., 204 S.W.2d 22, 25 (Tex. Civ. App.-El Paso 1947, writ ref'd n.r.e.) (city could not lend or donate public funds to school district, which was a separate municipal corporation). A county may not contribute its funds to another local government, unless it is to carry out a county purpose. See Bexar County Hosp. Dist. v. Crosby, 327 S.W.2d 445 (1959); State ex rel. Grimes County Taxpayers Ass'n v. Tex. Mun. Power Agency, 565 S.W.2d 258, 266 (Tex. Civ. App.-Houston [1st Dist.] 1978, writ dism'd).

The Gilmer City Council, in deciding to buy golf towels to give to legislators, presumably determined that a public purpose of the city would be served by the expenditure, but the commissioners court was not involved in this decision and did not determine whether an expenditure for this purpose would serve a county purpose. The city carried out its purpose by giving the towels away in connection with Upshur County Day, and the transaction has run its course. A transfer of funds from Upshur County to Gilmer at this point would not contribute to the original purpose of the transaction, but would only replenish the city's treasury for part of the city's expenditure for this purpose. The "reimbursement" to Gilmer would amount to an unconstitutional donation of county funds to the city, in violation of article III, section 52 of the Texas Constitution.

Article III, section 53 of the Texas Constitution also bars Upshur County from making payment to the city. Article III, section 53 provides that a county or municipal corporation has no authority to grant extra compensation to a public servant or contractor after service has been rendered. After the county has entered into a contract and work under it has begun, this provision bars a county from paying the contractor more than it agreed in the contract to pay him. See Shelby County v. Gibson, 44 S.W. 302 (Tex. Civ. App. 1898, writ ref'd). If a county attempts to enter into a contract but lacks authority to do so, or fails to comply with applicable laws, this constitutional provision bars the county from paying a claim based on the alleged contract. See Harlingen Indep. Sch. Dist. v. C.H. Page & Bro., 48 S.W.2d 983, 986 (Tex. Comm'n App. 1932, judgm't adopted).

In this case, the towels were produced at the direction of the City of Gilmer and the Gilmer Industrial Foundation, and Upshur County was not a party to this agreement. The Upshur County Commissioners Court did not contract to pay $443.77 or any other amount in exchange for having a specific number of golf towels prepared, and thus there is no valid contract under which the county could make payment for the towels. Because the city's request for "reimbursement" is not based on a valid contract between the city and Upshur County, article III, section 53 bars Upshur County from making payment to the city. Upshur County may not reimburse the City of Gilmer for any of the city's cost for the golf towels given to legislators by the city in connection with Upshur County Day.

                                  SUMMARY

            Article III, sections 52 and 53 of the Texas Constitution bar Upshur County from reimbursing the City of Gilmer for half the city's cost for golf towels given to legislators in connection with Upshur County Day.

                                         JOHN CORNYN
                                         Attorney General of Texas

HOWARD G. BALDWIN, JR.
First Assistant Attorney General

NANCY FULLER
Deputy Attorney General - General Counsel

SUSAN D. GUSKY
Chair, Opinion Committee

Susan L. Garrison
Assistant Attorney General, Opinion Committee