Paxton: City resources can be used by chamber of commerce free of charge if council agrees

By Angela Underwood | Feb 20, 2018

AUSTIN – Government property and resources can be used for commerce events if the city council approves, according to the attorney general.

AUSTIN – Government property and resources can be used for commerce events if the city council approves, according to the attorney general.  

Attorney General Ken Paxton has returned his opinion on a 2017 question posed to him by Hale County Attorney James Tirey regarding the city of Petersburg authorizing its employees, equipment and property to be used free of charge by the Petersburg Area Chamber of Commerce (PACC) for annual fundraising activities.

In a Feb. 15 response, Paxton detailed his answer to the Type-A general law municipality question in in a four-page memorandum to Tirey regarding Petersburg’s involvement with PACC for Christmas on the Plaza and Petersburg Days, two annual events that include parades, vendors, a barbecue cook-off, motorcycle fun run and shopping on Main Street, both of which are “ways to promote the community,” according to Tirey.

Paxton immediately cites the Texas Constitution for clarity before he offers his answer.

“Except as otherwise provided by this section, the Legislature shall have no power to authorize any county, city, town or other political corporation or 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 ....” Paxton writes in the opinion.

However, Paxton then refers to Edgewood Indep. Sch. Dist. v. Meno 1995 to note a Constitutional clause that “spending public funds for a legitimate public purpose to obtain a clear public benefit is not an unconstitutional grant of public funds,” according to the opinion.

From there Paxton applies the Texas Supreme Court three-part test to decipher public possessions satisfying Article III section 52(a) as seen in Tex. Mun. League Intergov 'ti Risk Pool v. Tex. Workers' Comp. Comm'n 2002, which was a case involving a school district supplying its resources for charitable cause.

“Regarding the first prong, general-law municipalities may exercise only that power specifically conferred on them by statute or the constitution,” Paxton writes in the opinion, citing the Town of Lakewood Vill. v. Bizios 2016 as precedent.

The attorney general then cites State ex rel. Grimes Cty. Taxpayers Ass 'n v. Tex. Mun. Power Agency 1978 to explain a Petersburg would be allowed to offer its resources “to the extent a municipal expenditure or use of resources serves one of the municipality's powers or functions, it serves the public purpose of the municipality,” according to the opinion.

Based on precedent Tex. Att’y Gen. Op. 2016, the second and third prong of the test also detail that if in fact Petersburg also prospered from the two annual events that supplying its resources is allowed. Paxton again cited another attorney general opinion, Tex. Att’y Gen. Op. 2003, to note ultimately “whether a particular expenditure or use of public resources satisfies the three-part test is for the city council in the first instance and subject to judicial review for abuse of discretion,” according to the opinion.

“Accordingly, we cannot conclude as a matter of law that the use of city employees, equipment and supplies, and facilities and property by the Chamber for the community events is unconstitutional,” Paxton writes, citing yet another precedent in Tex. Att’y Gen. Op. 2015.

“Yet, should the city council find that the use of city resources for the chamber's events serve a public purpose of the municipality, Article III, Section 52(a) authorizes the use of resources in this way,” Paxton concluded, authorizing Petersburg to continue to contribute to the PACC’s annual events if criteria are met.

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