Texas Attorney General Opinion: MW-290 Page: 2 of 4
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Honorable Joe Resweber - Page Two (l- 290)
The county may use public funds to improve leasehold estates without violating
article Il, section 52 of the Texas Constitution, which provides in pertinent part:
[TI he Legislature shall have no power to authorize any
county... 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.
In Attorney General Opinion H-403 (1974), this office held that the similar language of
article III, section 50 of the constitution did not prohibit a state agency from
constructing a building on leased land, if the expenditure was for a proper public
purpose and made in exchange for adequate public benefits. See also Attorney General
Opinion HI-416 (1974) (Texas Aeronautics Commission may make grant for improvement
of municipal airport located on leased land). We believe the reasoning of Attorney
General Opinion H-403 applies to the improvement of leasehold estates by the county.
See also Attorney General Opinion H-445 (1974) (county may use bond proceeds to
enlarge hospital and lease back to private, non-profit corporation)
You express concern that the improvements financed out of bond proceeds would
be subject to the mortgage of the Center Pavilion Hospital However, by the terms of
section 6(b) of the lease agreement, any improvements removeable without damage to
the building are not subject to the lien of the mortgage. Second, this is an authorized
county mortgage under article 4494r-2, V.T.C.S., and, as such, clearly comes within
the purview of the language in article 2370b as to buildings "otherwise acquired" by the
county.
You also ask the following question:
Can Harris County expend county funds other than bond
proceeds to remodel or improve portions of the Center Pavilion
Hospital building?
We believe the county may use funds other than bond proceeds to remodel or improve
portions of the Center Pavilion Hospital building. See V.T.C.S. art. 2370b, SI; Attorney
General Opinion H-403 (1974).
You enclose a copy of the lease agreement between Harris County Hospital
District as lessor and Harris County as lessee and ask whether it is a valid binding
lease for Harris County. In approving the bond issue incident to the Center Pavilion
Project, the attorney general's office in effect passed on the validity of the underlying
lease agreement. This question asks our office to review its official action in
approving bonds under article 4398, V.T.C.S., which we believe is inappropriate for us
to do. Consequently, we will not address this question.
You next ask whether the county auditor may properly certify that funds are or
will be available to make payments on the lease as the debt matures. As to the firstp. 926
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Texas. Attorney-General's Office. Texas Attorney General Opinion: MW-290, text, January 5, 1981; (https://texashistory.unt.edu/ark:/67531/metapth272135/m1/2/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.