Can a Texas district attorney sign a multiyear equipment lease that binds county funds?

Plain-English summary

A newly elected district attorney found that his predecessor had signed a 51-month lease, back in November 1997, for a postal-meter system, with payments coming out of county funds allocated to the DA's office. The new DA thought the equipment exceeded the office's needs and wanted to cancel the lease with 14 months left, but the leasing company would not agree. He asked the Attorney General whether he was bound by the long-term lease.

The Attorney General concluded he was not bound, but on a more basic ground than the one the DA raised. The DA had framed the question as whether a successor in office is stuck with a contract his predecessor signed. The opinion did not reach that question, because it concluded the contract was void from the start: the district attorney never had authority to sign a contract that commits county funds. As a general rule of Texas county government, unless a particular county officer is specifically authorized by statute, only the county commissioners court can enter a contract that binds the county. The lease here was signed by the district attorney, not by or for the commissioners court, and no statute, including section 41.107 of the Government Code (which lets the commissioners court furnish supplies and equipment for the prosecutor's office), gave the DA power to contractually bind those county funds. The commissioners court also cannot delegate its contracting power to the DA without statutory authority, and none existed here.

The opinion added a second, independent reason the lease was invalid. Article XI, section 7 of the Texas Constitution bars a county from incurring "debt" unless it simultaneously provides for levying and collecting a tax sufficient to pay the interest and build a sinking fund. Texas courts treat a multiyear contract requiring future county payments as creating prohibited debt unless the contract lets the county terminate at the end of each year. This form lease did neither: it had no tax-and-sinking-fund provision and no annual out, so it created an unconstitutional debt and was invalid as a matter of law. The opinion noted that this office usually avoids construing contracts because of the fact questions involved, but here the contract was void on its face as a matter of law.

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.

What the opinion meant for those who asked

District and county attorneys (what the opinion held for them): The opinion held that a district attorney could not sign a contract binding county funds, even funds allocated to the prosecutor's own office under section 41.107. A lease the DA signed in that capacity was void, so the office was not obligated to keep paying on it.

County commissioners courts (what the opinion held for them): The opinion reaffirmed that the commissioners court is generally the only county body that can execute a contract binding the county, and that it cannot delegate that contracting power to another officer without statutory authority.

Vendors leasing equipment to county offices (what the opinion held for them): The opinion treated a multiyear lease signed by a county officer who lacked contracting authority, and lacking either a tax-and-sinking-fund provision or an annual termination right, as void and unenforceable against the county.

Common questions

Who can sign a contract that binds a Texas county?
The opinion explained that, unless a statute specifically gives another county officer the power, only the county commissioners court may enter a contract that binds the county.

Could the district attorney bind funds that were budgeted to the DA's own office?
No. The opinion concluded that section 41.107 lets the commissioners court furnish equipment and supplies for the prosecutor's office, but it does not let the district attorney contractually commit those county funds.

Why was the postal-meter lease void?
The opinion gave two reasons: the DA had no authority to sign a contract binding county funds, and the multiyear lease created an unconstitutional debt under article XI, section 7 because it lacked both a tax-and-sinking-fund provision and a right to cancel at the end of each year.

What makes a multiyear county contract create unconstitutional "debt"?
The opinion explained that, under article XI, section 7 and case law, a multiyear contract requiring future county payments creates prohibited debt unless the county either funds it with a designated tax and sinking fund or keeps the right to terminate at the end of each year.

Did the AG decide whether a new official is stuck with a predecessor's contracts?
No. The opinion expressly declined to reach that question, because it found this particular contract void from the outset.

Background and statutory framework

The contract authority rule comes from long-standing Texas law that the commissioners court, not individual county officers, holds the county's power to contract absent a specific statutory grant. Anderson v. Wood, 152 S.W.2d 1084 (Tex. 1941). Section 41.107 of the Government Code lets a commissioners court furnish supplies, equipment, and other items necessary for a prosecuting attorney's office and pay the office's operating expenses, but does not give the prosecutor independent contracting power over those funds. Tex. Gov't Code Ann. § 41.107 (Vernon 1988). A district attorney holds only the powers the Legislature has delegated. Tex. Const. art. V, § 21; Tex. Gov't Code Ann. §§ 43.121(d), 45.125 (Vernon 1988 & Supp. 2001). The opinion distinguished special funds a prosecutor does control, such as asset-forfeiture and hot-check funds and certain state money for the prosecutor's use, none of which applied to bind general county funds here. Tex. Code Crim. Proc. Ann. arts. 59.06(b), (c)(1), (d), 102.007 (Vernon Supp. 2001); Tex. Gov't Code Ann. §§ 46.002(1), .004(a) (Vernon Supp. 2001). The county's general delegation provisions for contracting did not authorize this arrangement. Tex. Loc. Gov't Code Ann. §§ 262.001, .011, .0115 (Vernon 1999).

The constitutional-debt analysis rests on article XI, section 7, which forbids a county to incur debt without simultaneously providing a tax to pay interest and a sinking fund, as construed by case law treating annually terminable multiyear contracts as not creating debt. Tex. Const. art. XI, §§ 7, 5; City of Bonham v. S.W. Sanitation, Inc., 871 S.W.2d 765 (Tex. App.-Texarkana 1994, writ denied).

Citations

Constitutional and statutory provisions:

• Tex. Const. art. XI, §§ 7, 5
• Tex. Const. art. V, § 21
• Tex. Gov't Code Ann. § 41.107 (Vernon 1988)
• Tex. Gov't Code Ann. §§ 43.121(d), 45.125 (Vernon 1988 & Supp. 2001)
• Tex. Gov't Code Ann. §§ 46.002(1), .004(a) (Vernon Supp. 2001)
• Tex. Code Crim. Proc. Ann. arts. 59.06(b), (c)(1), (d), 102.007 (Vernon Supp. 2001)
• Tex. Loc. Gov't Code Ann. §§ 262.001, .011, .0115 (Vernon 1999)

Cases:

• Anderson v. Wood, 152 S.W.2d 1084 (Tex. 1941)
• City of Bonham v. S.W. Sanitation, Inc., 871 S.W.2d 765 (Tex. App.-Texarkana 1994, writ denied)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/john-cornyn/jc-0395
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2001/jc0395.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

July 10, 2001

The Honorable Sky Sudderth
District Attorney
35th Judicial District
Brown County Courthouse
Brownwood, Texas 76801

Opinion No. JC-0395

Re: Whether a district attorney may, by contract, bind the use of county funds, and related question (RQ-0347-JC)

Dear Mr. Sudderth:

Unless a particular county officer is specifically authorized to do so by law, only a county commissioners court may enter a contract that binds the use of county funds. See Anderson v. Wood, 152 S.W.2d 1084, 1085 (Tex. 1941). Your predecessor in office leased a postal-meter system for fifty-one months, and you indicate that the lease payments are made from county funds. With fourteen months left on the lease, you wish to terminate the lease and stop making lease payments, and you ask whether you are bound by this long-term lease. See Request Letter, note 1, at 1. You are not bound by the lease; your predecessor in office had no authority to enter into a contract purporting to bind the expenditure of county funds.

Additionally, because the multiyear form contract your predecessor signed neither provides for levying and collecting a tax to pay the interest and to create a sinking fund nor permits the county to terminate the contract at the end of each year, it creates an unconstitutional debt. See TEX. CONST. art. XI, § 7; Contract attached to Request Letter, supra note 1, at 1. Under article XI, section 7 of the Texas Constitution, a multiyear contract requiring expenditures of county funds that is not accompanied by the levy and collection of designated taxes must allow the county to terminate the contract at the end of each year. See TEX. CONST. art. XI, § 7 (prohibiting county generally from incurring debt); City of Bonham v. S.W. Sanitation, Inc., 871 S.W.2d 765, 768 (Tex. App.-Texarkana 1994, writ denied) (defining "debt" and indicating that multiyear contract that provides right to terminate at the end of each year does not create debt).

Soon after you took office on January 1, 2001, you discovered that your predecessor had signed, in November 1997, a fifty-one month lease for a postal-meter system. See Request Letter, supra note 1, at 1; Contract attached to Request Letter, supra note 1. Believing that the leased equipment exceeds your office's needs, you sought to terminate the lease with fourteen months remaining. Request Letter, supra note 1, at 1. The lessor did not agree to the termination. See id.

You accordingly ask whether a long-term lease agreement that a previous elected officeholder entered binds the current elected officeholder. Id. You appear to question whether, solely because your predecessor signed the contract and you have subsequently replaced him, you may terminate the agreement. We do not reach this question because we conclude the former district attorney had no authority to enter into the contract.

The contract at issue here warrants some description. It is a form contract between Pitney Bowes Credit Corporation as lessor and "Lee Haney, District Attorney Brown County" as lessee. Contract attached to Request Letter, supra note 1. It lists the equipment to be leased and includes a checklist for items or services that are to be included in the lease payments. See id. In a fill-in-the-blanks format, the contract states that the initial lease term is for "51" months, with lease payments to be paid quarterly. Id. Finally, the lessee acknowledges the information contained in a pre-printed paragraph, including that "[t]his form contains all applicable terms and conditions relating to the leasing of the equipment and to the provision of . . . services." Id. Your predecessor in office signed the contract in his capacity as district attorney. See id.

This office generally does not construe a contract because of the fact issues that normally accompany contract interpretation. See Tex. Att'y Gen. Op. Nos. JC-0032 (1999) at 4 (stating that interpreting contract is beyond this office's purview); DM-383 (1996) at 2 (same); DM-192 (1992) at 10 (same). But in this case we conclude that the contract is void as a matter of law.

The district attorney had no authority to enter into a contract requiring the expenditure of county funds. This contract was signed by the district attorney, not by or on behalf of the county commissioners court. See id. Furthermore, we understand that the lease payments were made from county funds allocated to the district attorney's office under section 41.107 of the Government Code. Under section 41.107, a county commissioners court may "furnish . . . supplies[] and . . . other items and equipment that are necessary to carry out the official duties of the prosecuting attorney's office and may pay the expenses incident to the operation of the office." TEX. GOV'T CODE ANN. § 41.107(a) (Vernon 1988); see also Telephone Conversation II, supra note 3. Unless another county official is vested by law with the authority to enter into a contract that binds the county, only the county commissioners court may do so. See Anderson, 152 S.W.2d at 1085; Tex. Att'y Gen. Op. Nos. JC-0364 (2001) at 11, JC-0214 (2000) at 7. A county commissioners court may not delegate its power to contract without statutory authority to do so. See Tex. Att'y Gen. Op. No. JC-0100 (1999) at 2. Neither section 41.107 nor any other law applicable to district attorneys specially authorizes a district attorney to contractually bind expenditures of county funds under section 41.107. See TEX. GOV'T CODE ANN. § 41.107(a) (Vernon 1988); see also TEX. CONST. art. V, § 21 (indicating that district attorney has only those powers that legislature has delegated); TEX. GOV'T CODE ANN. § 43.121(d) (Vernon Supp. 2001) (indicating that Thirty-fifth Judicial District Attorney's specific duties are same as Brown County Attorney's duties); 45.125 (Vernon 1988) (reserving statute for Brown County Attorney); cf. TEX. CODE CRIM. PROC. ANN. art. 59.06(b), (c)(1), (d) (Vernon Supp. 2001) (creating forfeiture fund over which prosecutor has sole control); id. art. 102.007 (creating hot-check fund over which prosecutor has sole control); TEX. GOV'T CODE ANN. §§ 46.002(1), .004(a) (Vernon Supp. 2001) (directing deposit of state money for prosecutor's use). Nor does any statute authorize a commissioners court to delegate to the district attorney the commissioners court's power to bind, by contract, expenditures from county funds allocated to the prosecutor's office. Cf. TEX. LOC. GOV'T CODE ANN. §§ 262.001, .011, .0115 (Vernon 1999) (permitting county to delegate contracting authority in certain circumstances).

In addition, as an instrument that purports to bind the county, the contract creates a debt in violation of article XI, section 7 of the Texas Constitution. Under article XI, section 7, a county may not incur debt for any purpose "in any manner" unless the county simultaneously creates the debt and provides for levying and collecting "a sufficient tax to pay the interest thereon and provide at least two per cent . . . as a sinking fund." TEX. CONST. art. XI, § 7; cf. id. art. XI, § 5 (prohibiting municipality to create "debt"). With respect to the postal-meter system lease at issue here, the county has not provided for levying and collecting taxes to pay the interest and to create a sinking fund. See TEX. CONST. art. XI, § 7. A county that enters a multiyear contract without simultaneously providing for levying and collecting designated taxes has created a debt unless the contract gives the county a right to terminate it at the end of each year. See City of Bonham, 871 S.W.2d at 768. Because this formulaic, multiyear postal-meter system lease contract does not provide the county a right to terminate the agreement at the end of each year or provide for levying and collecting a tax to pay the interest and to create a sinking fund, as article XI, section 7 of the Texas Constitution requires, it is unconstitutional and invalid as a matter of law.

SUMMARY

A district attorney may not enter into a multiyear contract for office equipment that requires the expenditure of county funds and that does not permit the county to terminate the contract at the end of each year. Only a county commissioners court may execute a contract that binds the county. Additionally, a multiyear contract that does not either provide for levying and collecting a tax to pay the interest and to create a sinking fund or permit the county to terminate the contract at the end of each year violates article XI, section 7 of the Texas Constitution.

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

Kymberly K. Oltrogge
Assistant Attorney General, Opinion Committee