Can a Texas school district spend money on a private foundation's safety program?

Texas AG Opinion JC-0113: Schools, the Gift Clause, and "Texas Safe Sports Week"

Plain-English summary

A state representative asked whether the Texas Constitution's gift clause (article III, section 52) stops a school district from taking part in "Texas Safe Sports Week," a program run by the Kent Waldrep National Paralysis Foundation. The program aimed to give educational materials to schools and athletic staff, raise awareness about the risks and benefits of athletics, and raise money for research into preventing and rehabilitating athletic injuries. The request was prompted by a 1986 opinion (JM-431) that had said a county could not use public funds or personnel to collect money for the Red Cross.

The Attorney General concluded that section 52 does not bar a district from spending district funds or resources on the program, provided the board of trustees does two things: first, determines that any expenditure connected to the program serves a necessary school district purpose, and second, places sufficient controls on the spending to ensure that purpose is carried out. This tracks a long line of opinions holding that the gift clause does not forbid a public expenditure that incidentally benefits a private entity if the governing body makes a good-faith public-purpose finding and imposes controls, subject to judicial review. School districts are separately limited by statute to spending funds for purposes necessary in the conduct of the public schools (Education Code section 45.105(c)).

The opinion drew a clear line at outright gifts. Section 52 prohibits unconditional gifts or donations to private entities, because by definition a no-strings gift lacks the controls needed to ensure a public purpose. So a district may not simply donate district funds or resources to the Foundation. But it may spend funds or use resources in connection with the Foundation's fundraising activities if the board finds the activities serve a necessary school district purpose, such as student education or instruction, and imposes sufficient controls to ensure that purpose is achieved.

Currency note

This opinion was issued in 1999. 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.

Common questions

Could a school district participate in Texas Safe Sports Week?
Yes, within limits. The opinion concluded that the gift clause did not bar participation if the board of trustees found a necessary school district purpose and imposed sufficient spending controls.

What two findings did the board have to make?
The board had to determine that the expenditure served a necessary school district purpose, and it had to place sufficient controls on the expenditure to ensure that purpose was carried out.

Could the district just donate money to the Foundation?
No. The opinion was explicit that section 52 prohibits unconditional gifts or donations to private entities, because such gifts lack the controls needed to ensure a public purpose.

Why does the gift clause allow some spending that benefits a private group?
Because the constitution does not bar an expenditure that benefits a private interest if it is made to directly accomplish a legitimate public purpose, with a clear public benefit received in return.

Are there other limits on how school districts spend?
Yes. Education Code section 45.105(c) limits a board to spending local school funds for purposes necessary in the conduct of the public schools.

Background and statutory framework

Article III, section 52(a) bars the Legislature from authorizing a political subdivision to grant public money or a thing of value to an individual, association, or corporation, and section 51 contains a parallel bar; both aim to prevent the gratuitous application of public funds to private parties (Byrd v. City of Dallas; Graves v. Morales). But a transfer of funds for a public purpose, with a clear public benefit received in return, is not a prohibited gift (Edgewood Indep. Sch. Dist. v. Meno). The opinion followed the established two-part test from a line of opinions (including DM-394, DM-256, JM-1146, JM-551, and H-966): a public-purpose finding plus sufficient controls, subject to judicial review. For school districts, the board must find a valid school district purpose and impose controls, and is statutorily limited to expenditures necessary in the conduct of the public schools (Educ. Code § 45.105(c); JM-1265). The opinion catalogued authorities holding that unconditional gifts violate section 52 (including Kordus v. City of Garland and opinions JM-431, MW-329, H-1189, H-397, and M-661), and noted that the "donation" label is a misnomer for expenditures that in fact require a public purpose and controls. The bottom line: no unconditional donation to the Foundation, but conditional, controlled expenditures serving a school district purpose are permissible.

Citations

Statutes and authorities:

• Tex. Const. art. III, §§ 51, 52, 52(a)
• Tex. Educ. Code Ann. § 45.105(c) (Vernon Supp. 1999)
• Tex. Att'y Gen. Op. Nos. M-661 (1970), H-397 (1974), H-966 (1977), H-1189 (1978), MW-329 (1981), JM-431 (1986), JM-551 (1986), JM-1146 (1990), JM-1265 (1990), DM-256 (1993), DM-394 (1996)
• Tex. Att'y Gen. Op. Nos. O-1001 (1939), O-5563 (1943), O-7197 (1946)
• Tex. Att'y Gen. LO-93-93, LO-96-035

Cases:

• Byrd v. City of Dallas, 6 S.W.2d 738 (Tex. 1928)
• Graves v. Morales, 923 S.W.2d 754 (Tex. App.-Austin 1996, writ denied)
• Edgewood Indep. Sch. Dist. v. Meno, 917 S.W.2d 717 (Tex. 1995)
• Kordus v. City of Garland, 561 S.W.2d 260 (Tex. Civ. App.-Tyler 1978, writ ref'd n.r.e.)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/john-cornyn/jc-0113
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1999/jc0113.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

OFFICE OF THE ATTORNEY GENERAL, STATE OF TEXAS
JOHN CORNYN

September 22, 1999

The Honorable Barry B. Telford
Chair, Committee on Calendars
Texas House of Representatives
P.O. Box 2910
Austin, Texas 78768-2910

Opinion No. JC-0113

Re: Whether article III, section 52 of the Texas Constitution precludes a school district from participating in "Texas Safe Sports Week" (RQ-0056)

Dear Representative Telford:

You ask whether article III, section 52 of the Texas Constitution precludes a school district from participating in "Texas Safe Sports Week," a program sponsored by a private foundation. We conclude that article III, section 52 does not preclude a school district from expending school district funds or other resources on "Texas Safe Sports Week" activities if the school district board of trustees (i) determines that any expenditure in connection with the program serves a necessary school district purpose and (ii) places sufficient controls on such expenditures to ensure that the school district purpose is carried out.

With your request, you attach a letter from the Kent Waldrep National Paralysis Foundation (the "Foundation") explaining that the purpose of "Texas Safe Sports Week" is to "provide educational materials to school administrations [and] athletic staffs;" "to create a public awareness that there is a risk involved in all life activities" and of "the benefits of athletics in the educational setting;" and "to raise funds for research into the prevention and rehabilitation of athletic injury." Letter from Kent Waldrep, President and CEO, Kent Waldrep National Paralysis Foundation, to Honorable John Cornyn, Attorney General (Apr. 1, 1999) (on file with Opinion Committee). Your request letter indicates that the Foundation is particularly concerned about Attorney General Opinion JM-431, a 1986 opinion of this office that concludes that article III, section 52 precludes a county commissioner from using county funds or personnel to collect funds for the American Red Cross for earthquake victims. See Tex. Att'y Gen. Op. No. JM-431 (1986) at 2-3. It also concludes, however, that incidental use of space in the county courthouse for aid collection efforts does not violate article III, section 52. See id. at 4. Based on the description of "Texas Safe Sports Week" and your reference to Attorney General Opinion JM-431, we gather that your primary concern is whether school districts may use school district funds and other resources, including personnel and property, to raise funds for the Foundation in light of article III, section 52.

Article III, section 52(a) prohibits the legislature from authorizing any political subdivision of the state "to lend its credit or to grant public money or thing of value in aid of, or to any individual, association or corporation whatsoever." TEX. CONST. art. III, § 52(a). A similar provision in article III, section 51 states that "[t]he Legislature shall have no power to make any grant or authorize the making of any grant of public moneys to any individual, association of individuals, municipal or other corporations whatsoever." Id. § 51. The purpose of article III, sections 51 and 52 is the same - to prevent the gratuitous application of public funds to private individuals or entities. See Byrd v. City of Dallas, 6 S.W.2d 738, 740 (Tex. 1928); Graves v. Morales, 923 S.W.2d 754, 757 (Tex. App.-Austin 1996, writ denied). But the constitution does not bar a governmental expenditure that benefits a private interest if it is made for the direct accomplishment of a legitimate public purpose. See Byrd, 6 S.W.2d at 740. "A transfer of funds for a public purpose, with a clear public benefit received in return, does not amount to a lending of credit or grant of public funds in violation of article III, sections 51 and 52." Edgewood Indep. Sch. Dist. v. Meno, 917 S.W.2d 717, 740 (Tex. 1995).

Attorneys General have long opined that sections 51 and 52 do not preclude the state or a political subdivision from making an expenditure of public money that benefits a private person or entity if the appropriate governing body (i) determines in good faith that the expenditure serves a public purpose and (ii) places sufficient controls on the transaction to ensure that the public purpose is carried out. See, e.g., Tex. Att'y Gen. Op. Nos. DM-394 (1996), DM-256 (1993) at 2-3, JM-1146 (1990), JM-551 (1986), H-966 (1977). In the case of independent school districts, the board of trustees must determine that an expenditure serves a valid school district purpose, and must impose sufficient controls, subject to judicial review. See Tex. Att'y Gen. Op. No. DM-256 (1993) at 2-3 (an independent school district board of trustees must determine in first instance that provision of assistance to nonprofit foundation serves a school district purpose under article III, section 52); Tex. Att'y Gen. LO-93-93, at 2-3 (an independent school district board of trustees must determine in first instance that the use of school district general funds to award college scholarships to high school graduates based on academic ranking serves a school district purpose under article III, section 52). In addition, a board of trustees is limited by statute to expending school district funds for "purposes necessary in the conduct of the public schools," TEX. EDUC. CODE ANN. § 45.105(c) (Vernon Supp. 1999) (local school funds may be used for "purposes necessary in the conduct of the public schools determined by the board of trustees"); Tex. Att'y Gen. Op. No. JM-1265 (1990) at 3 (opining that term "necessary" in predecessor to section 45.105(c) of the Education Code "appears to mean appropriate or conducive to the conduct of a public school rather than indispensable thereto"), and must use school property for school purposes, see Tex. Att'y Gen. Op. No. DM-256 (1993) at 3.

Accordingly, we conclude that article III, section 52 does not preclude a school district from expending school district funds and other resources on "Texas Safe Sports Week" activities if the school district board of trustees (i) determines that any expenditure in connection with the program serves a necessary school district purpose and (ii) places sufficient controls on such expenditures to ensure that the school district purpose is carried out. We caution, however, that judicial and attorney general opinions construe article III, section 52 to preclude political subdivisions from making unconditional gifts or donations to private entities - expenditures which, by definition, lack sufficient controls to ensure that an authorized public purpose is achieved. See, e.g., Kordus v. City of Garland, 561 S.W.2d 260 (Tex. Civ. App.-Tyler 1978, writ ref'd n.r.e.) (holding that taxpayer had standing to bring action against city to enjoin it from making donations to private corporation in violation of article III, section 52) (citing Tex. Att'y Gen. Op. No. H-397 (1974)); Tex. Att'y Gen. Op. Nos. JM-431 (1986) (county may not donate funds or personnel to raise funds for American Red Cross for earthquake victims); MW-329 (1981) (concluding that because a county not authorized to provide assistance to the disabled and therefore could not contract for such services, a contribution to a nonprofit organization organized to provide such assistance would violate article III, section 52); H-1189 (1978) (unconditional grant of funds by county to private day care would constitute a donation of public funds in violation of article III, section 52); H-397 (1974) (county may not pay dues to chamber of commerce); M-661 (1970) (county may not offer grant of public funds to private religious charitable institutions); Tex. Att'y Gen. LO-96-035, at 2 (because article III, section 52 prohibits "outright gifts and donations to private entities," county may not donate county tax funds to nonprofit industrial development organization).[1] This construction is of long-standing. See, e.g., Tex. Att'y Gen. Op. Nos. O-7197 (1946) (county may not donate county funds to the building within that county of a privately-chartered cooperative hospital); O-5563 (1943) (county may not contribute to private charitable institutions, including homes for the elderly and homes for impoverished children); O-1001 (1939) (county may not contribute public funds to Tuberculosis Association, American National Red Cross or to any other private charitable organization). Thus, article III, section 52 prohibits school districts from donating school district funds or other resources to the Foundation. But a school district may expend school district funds or other resources in connection with the fund raising activities of the Foundation if the board of trustees (i) determines that the activities serve a necessary school district purpose, such as student education or instruction, and (ii) imposes sufficient controls to ensure that the school district purpose is achieved.

[1] See also Tex. Att'y Gen. LO-96-035, at 2 n.1 (noting that while some attorney general opinions have concluded that certain types of "donations" are permissible under article III, section 52, use of the term "donation" in connection with those expenditures is a misnomer given that the opinions require those expenditures to serve a public purpose and to include sufficient controls to ensure public purpose is achieved).

SUMMARY

Article III, section 52 of the Texas Constitution does not preclude a school district from expending school district funds or other resources on "Texas Safe Sports Week" activities if the school district board of trustees (i) determines that any expenditure in connection with the program serves a necessary school district purpose and (ii) places sufficient controls on such expenditures to ensure that the school district purpose is carried out.

Yours very truly,

JOHN CORNYN
Attorney General of Texas

ANDY TAYLOR
First Assistant Attorney General

CLARK KENT ERVIN
Deputy Attorney General - General Counsel

ELIZABETH ROBINSON
Chair, Opinion Committee

Mary R. Crouter
Assistant Attorney General - Opinion Committee