Can Tennessee give state gasoline tax revenue to a private property owners association to maintain private roads that the public uses?

Subject

Opinion No. 13-32, Allocation of State Gasoline Tax Revenue to Private Property Owners Association, April 24, 2013

Plain-English summary

Sen. Doug Overbey asked whether Tennessee could allocate part of its gasoline tax revenue to a private property owners association to maintain private roads open to travel by the general public. The Attorney General concluded that such legislation would be constitutionally defensible under Article II, Sections 24 and 31, of the Tennessee Constitution.

The opinion explains that public money must serve a public purpose. Building and maintaining roads used by the public serves that purpose even when the roads are privately owned. It quotes Tennessee cases saying that incidental private benefit does not defeat a primarily public purpose, and that the recipient's private status does not decide the question. The end served by the appropriation matters.

The answer addresses roads open to public travel. The opinion says it knows of no other constitutional concern with the proposed allocation. It does not require the General Assembly to make particular legislative findings about public use.

Currency note

This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later AG 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.

What this means for you

If you are evaluating a proposal to use state gasoline tax revenue for privately owned roads, this opinion focuses on whether the roads are open to travel by the general public and whether maintenance serves a public purpose. It does not decide a proposal for roads closed to the public or set an additional legislative-findings condition.

Common questions

Does private ownership of the road make the allocation unconstitutional?

The Attorney General said no for roads open to public travel. It relied on Tennessee cases holding that public use, rather than state ownership or the recipient's status, controls the public-purpose analysis.

Can nearby property owners benefit from the road work?

Yes, if the activity's primary purpose is public. The opinion quotes Pack for the rule that incidental private benefit does not deprive an activity of its public nature.

Did the opinion require a legislative finding that the roads serve the public?

No. The question specified roads open to travel by the general public, and the opinion held that maintaining them is a public purpose. It does not prescribe findings or a particular legislative record.

Did the Attorney General decide whether current gasoline tax law already pays private associations?

No. The opinion states that Tennessee law at the time did not provide such an allocation and assesses whether a new provision would be constitutional.

Citations

Tenn. Code Ann. §§ 67-3-201(a), 67-3-901; Tenn. Const. art. II, §§ 24, 31. Cases: Pack v. Southern Bell Tel. & Tel. Co., 215 Tenn. 503, 387 S.W.2d 789 (1965); Bedford County Hospital v. Browning, 189 Tenn. 227, 225 S.W.2d 41 (1949); Hager v. Kentucky Children's Home Society, 119 Ky. 235, 83 S.W. 605 (1904); Minneapolis Gas Co. v. Zimmerman, 253 Minn. 164, 91 N.W.2d 642 (1958). Prior AG opinions: Op. 12-07 (Jan. 13, 2012); Op. 00-104 (June 1, 2000); Op. 83-489 (Nov. 10, 1983).

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2013/op13-032.pdf

Original opinion text

S T A T E O F T E N N E S S E E
OFFICE OF THE
ATTORNEY GENERAL
PO BOX 20207
NASHVILLE, TENNESSEE 37202

April 24, 2013

Opinion No. 13-32

Allocation of State Gasoline Tax Revenue to Private Property Owners Association

QUESTION

Would allocating a portion of the state gasoline tax revenue to a private property owners association for the purpose of maintaining private roads that are open to travel by the general public be constitutionally permissible?

OPINION

Yes. The building and maintenance of roads used by the public is a public purpose, even if the roads are privately owned, so that allocation of State revenues for those purposes is permissible under Article II, Sections 24 and 31, of the Tennessee Constitution.

ANALYSIS

The General Assembly has imposed a privilege tax on all gasoline imported into or manufactured or produced in Tennessee. Tenn. Code Ann. § 67-3-201(a). A portion of the gasoline tax revenue is allocated to counties and municipalities for the building and maintenance of roads, bridges, and other public ways. Tenn. Code Ann. § 67-3-901. Tennessee law does not currently provide for the allocation of any part of the gasoline tax revenue to a private property owners association for the purpose of maintaining private roads that are open to the public. The question presented is whether such a provision, if enacted, would be constitutional.

As noted in a recent opinion of this Office, Tennessee courts have interpreted Article II, Sections 24 and 31, of the Tennessee Constitution, to prohibit the appropriation of public monies for other than public purposes. See Tenn. Att'y Gen. Op. No. 12-07, at 3 (Jan. 13, 2012). Tennessee courts have reviewed the "public purpose" provision under Article II, Section 31, but do not appear to have done so with regard to Article II, Section 24. See Tenn. Att'y Gen. Op. No. 00-104, at 2 (June 1, 2000). Nonetheless, this Office previously opined that the "public purpose" requirement of Article II, Section 31, is applicable to Article II, Section 24. Id. (citing Tenn. Att'y Gen. Op. 83-489 (Nov. 10, 1983)).

The Tennessee Supreme Court has long acknowledged that the building and maintenance of public roads is a public purpose. Pack v. Southern Bell Tel. & Tel. Co., 215 Tenn. 503, 510, 387 S.W.2d 789, 792 (1965). Because an activity may serve a public purpose even though a private person benefits from it, it is not necessary that the State own the roads being built and maintained. As the Tennessee Supreme Court explained:

What is a 'public purpose' that will justify the expenditure of public money is not capable of a precise definition, but the courts generally construe it to mean such an activity as will serve as a benefit to the community as a body and which, at the same time, is directly related to the functions of government.

The mere fact that some private interest may derive an incidental benefit from the activity does not deprive the activity of its public nature if its primary purpose is public.

Id. at 515-16, 387 S.W.2d at 794 (quoting Minneapolis Gas Co. v. Zimmerman, 253 Minn. 164, 91 N.W.2d 642 (1958)). The public purpose test "is not authorization or retention of title by the State, but rather the right of use by the State for its benefit." Bedford County Hospital v. Browning, 189 Tenn. 227, 235, 225 S.W.2d 41, 44 (1949) (emphasis in original). The Court in Bedford observed that

the vital point in all such appropriations is whether the purpose is public; and that, if it is, it does not matter whether the agency through which it is dispensed is public or is not; that the appropriation is not made for the agency, but for the object which it serves; the test is in the end, not in the means.

Id., 225 S.W.2d at 45 (quoting Hager v. Kentucky Children's Home Society, 119 Ky. 235, 83 S.W. 605 (1904)). Accordingly, "the true test of public purpose as regards the expenditure of public funds is in the end or total result, and definitely not the element of State control or use." Pack, 387 S.W.2d at 795.

This Office is unaware of any other constitutional concerns with legislation providing that a portion of gasoline tax revenue be allocated to a private property owners association to maintain private roads open to public travel. Accordingly, such legislation is constitutionally defensible.

ROBERT E. COOPER, JR.
Attorney General and Reporter

WILLIAM E. YOUNG
Solicitor General

NICHOLAS G. BARCA
Assistant Attorney General

Requested by:
The Honorable Doug Overbey
State Senator
4 Legislative Plaza
Nashville, Tennessee 37243-0208