Can a Texas county give a grant or financial aid to a school district or charter school?

TX AG Opinion GA-0664: Can a county grant funds to a school district or charter school?

Plain-English summary

A state representative asked whether the Texas Constitution prohibits a county from providing a grant or other financial assistance to a school district or charter school solely for educational purposes. The question was posed broadly, so the opinion answered it broadly, limiting it to independent school districts and open-enrollment charter schools.

The relevant provisions are article III, sections 51 and 52(a) of the constitution, which together restrict government grants of public money. Section 52(a) applies to counties and bars only gratuitous grants. A payment is not gratuitous if the county gets return consideration, and section 52(a) does not bar a payment that accomplishes a public purpose. The Texas Supreme Court uses a three-part test: the predominant purpose must be public, the county must keep control over the funds to ensure the purpose is met, and the county must receive a return benefit.

Courts have applied section 52(a) to bar a political subdivision from gratuitously granting its funds to another political subdivision, including a school district. The opinion concluded a county may not constitutionally make a gratuitous grant of its money to an independent school district. It then reasoned the same applies to an open-enrollment charter school, which is part of the public school system and treated as a political subdivision for various purposes; there was no basis to distinguish it from a school district.

A county may still transfer funds to another political subdivision to accomplish a county purpose, but only if the purpose is within the county's powers and the recipient is bound by statute or contract to use the funds for that purpose. Whether a given transfer serves a county purpose is for the commissioners court to decide first, subject to judicial review for abuse of discretion. Because a county's powers are limited to those granted or necessarily implied, and no constitution or statute gives counties general authority over K-12 education, the opinion concluded a court would likely find that granting county funds for the general purposes of a school district or charter school is outside the county's authority.

Currency note

This opinion was issued in 2008. 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.

The constitutional provisions and Education Code sections discussed here have been amended or reinterpreted over time. Confirm current law before relying on this analysis.

Who this opinion affected (as of 2008)

Counties and commissioners courts: The opinion told them they could not gratuitously grant county money to a school district or charter school, and could transfer funds only to accomplish a county purpose within county authority.

Independent school districts and open-enrollment charter schools: The opinion treated both as political subdivisions that may not receive gratuitous county grants under article III, section 52(a).

Anyone proposing a county-to-school funding arrangement: The opinion identified the two conditions for a lawful transfer (a county-purpose use within county powers, and a binding obligation on the recipient) and warned that general educational-purpose grants likely fall outside county authority.

Common questions

Can a county just give money to a local school district?
No, not as a gift. The opinion concluded article III, section 52(a) bars a county from gratuitously granting its funds to an independent school district or open-enrollment charter school.

Is there any way a county can pay a school?
Only to accomplish a county purpose, and only if the purpose is within the county's powers and the school is obligated by statute or contract to use the funds for that purpose.

Does the rule treat charter schools differently from regular school districts?
No. The opinion saw no basis to distinguish an open-enrollment charter school from an independent school district for purposes of the gratuitous-grant prohibition.

Who decides whether a transfer serves a county purpose?
The commissioners court decides in the first instance, subject to judicial review for abuse of discretion, but the opinion warned that a general educational-purpose grant likely exceeds county authority.

Background and statutory framework

Article III, sections 51 and 52 are complementary provisions on government grants of public money (Edgewood Indep. Sch. Dist. v. Meno, 917 S.W.2d 717, 739-40 (Tex. 1995)); section 52(a) bars a county from gratuitously granting public money or a thing of value (Tex. Const. art. III, §§ 51, 52(a)). A payment is not gratuitous if the county receives return consideration, and section 52(a) does not bar a payment accomplishing a public purpose, judged by a three-part test (predominant public purpose, retained public control, return benefit) (Tex. Mun. League Intergovernmental Risk Pool v. Tex. Workers' Comp. Comm'n, 74 S.W.3d 377, 383-84 (Tex. 2002)). Courts have barred gratuitous grants from one political subdivision to another, including school districts (Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 842 (Tex. 2000); Harris County Flood Control Dist. v. Mann, 140 S.W.2d 1098, 1104 (Tex. 1940); San Antonio Indep. Sch. Dist. v. Bd. of Trs. of San Antonio Elec. & Gas Sys., 204 S.W.2d 22, 25 (Tex. Civ. App.-El Paso 1947, writ ref'd n.r.e.)). An open-enrollment charter school is part of the public school system and treated as a political subdivision for various purposes (Tex. Educ. Code Ann. §§ 12.105, 12.1053(b)(2) (Vernon 2006); Tex. Loc. Gov't Code Ann. §§ 176.001-.012 (Vernon 2008)), and is not distinguishable from a school district for this purpose (Miller v. Davis, 150 S.W.2d 973, 978 (Tex. 1941); Am. Liberty Oil Co. v. State, 125 S.W.2d 1107, 1109 (Tex. Civ. App.-Texarkana 1939, no writ)). A county may transfer funds to another political subdivision to accomplish a county purpose only if the purpose is within county powers and the recipient is obligated to use the funds for it (State ex rel. Grimes County Taxpayers Ass'n v. Tex. Mun. Power Agency, 565 S.W.2d 258, 265-66 (Tex. Civ. App.-Houston [1st Dist.] 1978, writ dism'd)); a county has only powers granted or necessarily implied (City of San Antonio v. City of Boerne, 111 S.W.3d 22, 28 (Tex. 2003)), and none give it general K-12 authority.

Citations

Constitution and statutes:

• Tex. Const. art. III, §§ 51, 52(a)
• Tex. Educ. Code Ann. §§ 12.105, 12.1053(b)(2) (Vernon 2006)
• Tex. Loc. Gov't Code Ann. §§ 176.001-.012 (Vernon 2008)

Cases:

• Edgewood Indep. Sch. Dist. v. Meno, 917 S.W.2d 717, 739-40 (Tex. 1995)
• Tex. Mun. League Intergovernmental Risk Pool v. Tex. Workers' Comp. Comm'n, 74 S.W.3d 377, 383-84 (Tex. 2002)
• Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 842 (Tex. 2000)
• Harris County Flood Control Dist. v. Mann, 140 S.W.2d 1098, 1104 (Tex. 1940)
• San Antonio Indep. Sch. Dist. v. Bd. of Trs. of San Antonio Elec. & Gas Sys., 204 S.W.2d 22, 25 (Tex. Civ. App.-El Paso 1947, writ ref'd n.r.e.)
• Miller v. Davis, 150 S.W.2d 973, 978 (Tex. 1941)
• Am. Liberty Oil Co. v. State, 125 S.W.2d 1107, 1109 (Tex. Civ. App.-Texarkana 1939, no writ)
• State ex rel. Grimes County Taxpayers Ass'n v. Tex. Mun. Power Agency, 565 S.W.2d 258, 265-66 (Tex. Civ. App.-Houston [1st Dist.] 1978, writ dism'd)
• City of San Antonio v. City of Boerne, 111 S.W.3d 22, 28 (Tex. 2003)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0664
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2008/ga0664.pdf

Original opinion text

ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

September 12, 2008

The Honorable James L. Keffer
Chair, Committee on Ways and Means
Texas House of Representatives
Post Office Box 2910
Austin, Texas 78768-2910

Opinion No. GA-0664

Re: Whether a county may grant funds to a school district or charter school (RQ-0689-GA)

Dear Representative Keffer:

You ask whether the Texas Constitution prohibits a county from "providing a grant or any other financial assistance to a school district or charter school solely for educational purposes[.]" You pose the question broadly without specifying any particular kind of grant or assistance or a particular educational purpose that might be at issue. Accordingly, we address the question broadly.

You specifically reference Article III of the Texas Constitution. Request Letter, supra note 1, at 1. Article III, sections 51 and 52 are complementary provisions concerning governmental grants of public money. Edgewood Indep. Sch. Dist. v. Meno, 917 S.W.2d 717, 739-40 (Tex. 1995) (observing the complementary purposes of article III, sections 51 and 52 of the Texas Constitution). Article III, Section 51 prohibits the Legislature from granting or authorizing a grant of "public moneys to any individual, association of individuals, municipal or other corporations whatsoever," except for "cases of public calamity." TEX. CONST. art. III, § 51. Section 52(a) expressly pertains to counties, prohibiting the Legislature from authorizing a county and other political subdivisions "to grant public money or thing of value in aid of, or to any individual, association, or corporation whatsoever" with certain exceptions. Id. § 52(a). Your question most directly implicates article III, section 52(a). See Request Letter, supra note 1, at 1.

Article III, section 52(a) prohibits only gratuitous grants of public money by a political subdivision. See Tex. Mun. League Intergovernmental Risk Pool v. Tex. Workers' Comp. Comm'n, 74 S.W.3d 377, 383 (Tex. 2002) (emphasizing that "'to grant public money' [in article III, section 52(a)] means that the Legislature cannot require gratuitous payments"). A political subdivision's payment is not gratuitous if it receives return consideration. Id. Moreover, section 52(a) does not prohibit a political subdivision's payment if it accomplishes a public purpose. Id. at 383-84. The Supreme Court of Texas has established a three-part test to determine when a statute authorizing a payment of public money 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.

Id. at 384.

Section 52(a) has been construed to prohibit political subdivisions such as counties from gratuitously granting its funds to another political subdivision. See Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 842 (Tex. 2000) (determining that article III, sections 51 and 52 would not permit a city to gratuitously pay "the City's 'public money'" to a school district); Harris County Flood Control Dist. v. Mann, 140 S.W.2d 1098, 1104 (Tex. 1940) (holding that "under the plain terms of Section 52 of Article III, ... no part of the funds of Harris County can be pledged or used to pay the bonds of [the Harris County Flood] District"); San Antonio Indep. Sch. Dist. v. Bd. of Trs. of San Antonio Elec. & Gas Sys., 204 S.W.2d 22, 25 (Tex. Civ. App.-El Paso 1947, writ ref'd n.r.e.) (holding that under article III, sections 51 and 52 a "city cannot donate its funds to an independent municipal corporation such as an independent school district"). In two of these cases, the courts held that a political subdivision may not constitutionally make a gratuitous payment to an independent school district. See Fort Worth Indep. Sch. Dist., 22 S.W.3d at 842; San Antonio Indep. Sch. Dist., 204 S.W.2d at 25; see also Tex. Att'y Gen. Op. No. JM-1255 (1990) at 7 (advising that a city may not use its municipal bond powers to assist a school district in acquiring a school building). Consequently, we conclude that a county may not constitutionally make a gratuitous grant of its public money or other thing of value to an independent school district.

We have located no judicial decision that considers the constitutionality of a political subdivision granting its funds to a charter school. However, an open-enrollment charter school is a "part of the public school system of this state." TEX. EDUC. CODE ANN. § 12.105 (Vernon 2006). The Legislature has determined that an open-enrollment charter school is a "political subdivision" for various purposes. See, e.g., id. § 12.1053(b)(2) (concerning procurement of professional services); TEX. LOC. GOV'T CODE ANN. §§ 176.001-.012 (Vernon 2008) (providing for certain disclosure by local government officers and providing public access to certain information). Article III, section 52 of the Texas Constitution prohibits a gratuitous payment of public money to "any individual, association, or corporation whatsoever." TEX. CONST. art. III, § 52(a). We see no basis for distinguishing a charter school from an independent school district with respect to gratuitous payment of a county's public money. Cf. Miller v. Davis, 150 S.W.2d 973, 978 (Tex. 1941) (defining a "public corporation" as "one 'connected with the administration of the government, and the interests and franchises of which are the exclusive property and domain of the government itself'" (citation omitted)); Am. Liberty Oil Co. v. State, 125 S.W.2d 1107, 1109 (Tex. Civ. App.-Texarkana 1939, no writ) (holding that "[s]chool districts are local public corporations of the same general character as municipal corporations [and that they are] quasi-municipal corporations"). Consequently, a court would likely conclude that article III, section 52 applies to prohibit a county from gratuitously donating county funds to a charter school, the same as to an independent school district.

Although a county may not gratuitously contribute its funds to another political subdivision, it may transfer funds to another political subdivision to accomplish a county purpose. See State ex rel. Grimes County Taxpayers Ass'n v. Tex. Mun. Power Agency, 565 S.W.2d 258, 265-66 (Tex. Civ. App.-Houston [1st Dist.] 1978, writ dism'd) (holding that municipalities' contracts with authorized power agency to accomplish municipal purpose does not offend article III, section 52); see also Tex. Att'y Gen. Op. No. GA-0601 (2008) at 3 n.5 (stating that "[c]onsistent with article III, section 52(a) of the Texas Constitution, a county may transfer funds to another political subdivision only to accomplish a county purpose" (emphasis added)). But a political subdivision may pay or transfer its funds to another political entity only if two requirements are met: (1) the purpose of the payment or transfer must be within the political subdivision's powers, and (2) the political entity receiving the funds must be obligated by statute or contract to use the funds for that purpose. State ex rel. Grimes County Taxpayers Ass'n, 565 S.W.2d at 265.

Whether a particular transfer of county funds to another political subdivision serves a county purpose is for the commissioners court to determine in the first instance, subject to judicial review for abuse of discretion. See Tex. Att'y Gen. Op. No. GA-0552 (2007) at 2. A county's powers do not include all civic functions, however. A county, acting through its commissioners court, has only those powers expressly granted by the Texas Constitution or by statute or necessarily implied to accomplish the powers expressly conferred. See City of San Antonio v. City of Boerne, 111 S.W.3d 22, 28 (Tex. 2003). Neither the constitution nor any statute of which we are aware authorizes a county to expend county funds for purposes of an independent school district or an entity operating an open-enrollment charter school. Nor are we aware of a statute granting counties general responsibility or authority for elementary or secondary education in the county. While we do not rule out the possibility that a particular county purpose could be served by granting county money "solely for educational purposes," a court would likely conclude that a grant of county funds for the general purposes of an independent school district or charter school is not within the county's scope of authority.

SUMMARY

Article III, section 52(a) of the Texas Constitution does not permit a county to gratuitously grant county funds to an independent school district or open-enrollment charter school. A county may make a payment to such a school district or charter school only to accomplish a county purpose. A court would likely determine that a county does not have the authority to grant county funds for general purposes of an independent school district or open-enrollment charter school.

Very truly yours,

KENT C. SULLIVAN
First Assistant Attorney General

ANDREW WEBER
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

William A. Hill
Assistant Attorney General, Opinion Committee