Untitled Texas Attorney General Opinion ( 2004 )

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
April 8,2004
The Honorable Bryan Goertz Opinion No. GA-01 76
Bastrop County Criminal District Attorney
804 Pecan Street Re: Whether article XI, section 7 of the Texas
Bastrop, Texas 78602 Constitution bars a county from agreeing to
indemnify an appraisal district for the costs of
litigation arising from the appraisal district’s
performance of 9-l-l services for the county
(RQ-0122-GA)
Dear Mr. Goertz:
You ask whether Bastrop County may agree to indemnify the Bastrop Central Appraisal
District (the “BCAD”) for the costs of litigation arising out of the appraisal district’s performing
services for the county under an interagency contract.*
Bastrop County participates in a regional 9-l-l plan established under Health and Safety
Code chapter 771. SeeT~x. HEALTH&SAFETY CODE ANN. $0 771.055.058 (Vemon2003); 1 TEX.
ADMIN. CODE ch. 25 1 (2003).2 The county has contracted with the BCAD for assistance with 9-l-l
addressing, database program management, and office space. See Request Letter, supra note 1, at
1. Under the agreement, BCAD assigns two full-time employees to work exclusively on functions
designed to get emergency services quickly to county residents, and the county agrees to compensate
BCAD in an amount not to exceed $99,956.00. Id. See Tex. Att’y Gen. LO-95-035 (authority of
appraisal district to maintain and provide location information for providing 9-l -1 service). The
BCAD employees do not become county employees. See Request Letter, supra note 1, at 1.
Your question relates to the following contract provision:
14.1. At its sole expense, the County shall defend BCAD, its
officers, employees, and agents against any claim, suit or
‘Letter from Honorable Bryan Goertz, Criminal District Attorney, Bastrop County, to Honorable Greg Abbott,
Texas Attorney General (Oct. 9,2003) (on file with Opinion Committee, also avadable at http://www.oag.state.tx.us)
[hereinafter Request Letter].
2See also Interlocal Contract for Rental of Offrce Space[,] Performance of 9-l-l Addressing Responsibilities
and Enhanced 9-l -1 Database Program, at art. VI (attachment to Request Letter) [hereinafter Contract].
The Honorable Bryan Goertz - Page 2 (GA-0176)
administrative proceeding arising out of an act or omission of the
County’s officers, employees, or agents under this contract. County
shall be solely responsible for all costs, expenses, and damages
associated with any litigation which may arise from the installation,
operation, or administration of 9- 1- 1 services in Bastrop County, so
long as BCAD is performing its duties in good faith under this
contract. Neither BCAD nor any other taxing unit in Bastrop County
shall be responsible for any such costs, expenses or damages.
Contract, supra note 2, art. 14. You are concerned that article 14 provides for an indemnification
prohibited by article XI, section 7 of the Texas Constitution. You ask the following question:
Does Article XI, Section 7 of the Texas Constitution prohibit a
commissioners court from agreeing, under a contract between the
county and the Bastrop Central Appraisal District, that the county be
solely responsible for all costs, expenses, and damages associated
with any litigation which might arise from the installation, operation
or administration of 9-l - 1 services in Bastrop County so long as
BCAD is performing its duties in good faith under this contract?3
This office does not construe contracts, but we will address a public entity’s authority to
agree to a particular contract term, if the question can be answered as a matter of law. See Tex. Att’y
Gen. Op. Nos. GA-0078 (2003) at 2, JC-0532 (2002) at 1.
Article XI, section 7 provides in pertinent part as follows:
[N]o debt for any purpose shall ever be incurred in any manner by any
city or county unless provision is made, at the time of creating the
same, for levying and collecting a sufficient tax to pay the interest
thereon and provide at least two per cent (2%) as a sinking fund;
TEX. CONST. art. XI, 0 7.
A “debt” within this provision includes any pecuniary obligation imposed by contract, except
one that at the time of the agreement the parties reasonably expected to be satisfied out of current
revenues for the year or a fund within the county’s imrnediate control. See Tex. &New Orleans R.R.
Co. v. Galveston County, 169 S.W.2d 713,715 (Tex. 1943), McNeil1 v. City of Waco, 33 S.W. 322,
323 (Tex. 18951, City of Bonham v. Southwest Sanitation, Inc., 871 S.W.2d 765,768 (Tex. App.-
Texarkana 1994, writ denied). In Texas & New Orleans Railroad Co. v. Galveston County, the
‘Letter from Honorable Bryan Goertz, Criminal District Attorney, Bastrop County, to Honorable Greg Abbott,
Texas Attorney General (Oct. 23,2003) (on file with Opinion Committee).
The Honorable Bryan Goertz - Page 3 (GA-0176)
Supreme Court of Texas addressed Galveston County’s agreement to indemnify private railway
companies for their liability in using a causeway and drawbridge built jointly by the county and the
railway companies. The court observed that when the parties made the agreement they could not
determine when such liability might arise or what its extent would be and held that the county’s
agreement to indemnify the railway companies created a debt within article XI, section 7. See Tex.
& New Orleans R.R. Co., 169 S.W.2d at 715. Because the county had not, at the time it made the
agreement, provided “for levying and collecting a sufficient tax to pay the interest thereon and
provide at least two per cent (2%) as a sinking fund” to pay the debt, the indemnity agreement was
invalid. Id. .
In Brown v. Jefferson County, 406 S.W.2d 185 (Tex. 1966), the Supreme Court of Texas
addressed an agreement between the United States and Jefferson County for financing and
constructing a bridge. See id. at 186. Upon completion, the county would assume all obligations
of ownership, operation, and maintenance of the new bridge. See id. at 188. The county also agreed
to hold and save the United States free from damages resulting from construction of the project, and
the commissioners court had by resolution provided for levying and collecting a tax to pay interest
upon and creating a sinking fund for retiring any debt arising from the hold and save harmless
provision. See id. The court held that the agreement and the resolution complied with article XI,
section 7 of the Texas Constitution. See id. Although the “hold and save harmless” provision
created an indeterminate future liability to a third party, the county could agree to it if it levied the
tax and established the sinking fund required by the constitution. See id. See generaZZy Tex. Att’y
Gen. Op. No. DM-467 (1998) at 5.
In surnmary, a county’s agreement to indemnify a third party for damages arising from the
third party’s acts creates a debt within article XI, section 7 of the Texas Constitution. A county may
undertake such obligation only by providing, at the time the debt is created, for levying and
collecting a tax in compliance with article XI, section 7. To the extent that article 14 of the contract
requires Bastrop County to indemnify BCAD, its officers, and employees for actions taken by those
third parties in performing their contractual duties, the county may not agree to it absent compliance
with the procedures in article XI, section 7. See TEX. CONST. art. XI, 9 7.
We are informed that the contract is renewed on an annual basis,4 but this fact does not
change our conclusion, because an action taken under the contract in one year may result in litigation
in a future year. The parties cannot, at the time of the agreement, reasonably expect the costs of
litigation and associated damages to be satisfied out of “current revenues for the year” or a fund
within the county’s immediate control. See Tex. & New Orleans R.R. Co., 169 S.W.2d at 715;
McNeil& 33 S.W. at 324.
4See Request Letter, supra note 1, at 2; see also Brief from Kirk Swinney, Attorney for BCAD, McCreary,
Veselka, Bragg & Allen, P.C., to Honorable Greg Abbott, Texas Attorney General at 2 (Nov. 26,2003) (on file with
Opinion Committee).
The Honorable Bryan Goertz - Page 4 (GA-0176)
A brief submitted by the Commission on State Emergency Communications points out two
provisions that are relevant to your concern about liability in connection with providing 9-l-l
services.’ The Health and Safety Code includes the following provision:
(b) A member of the commission or of the governing body of
a public agency is not liable for any claim, damage, or loss arising
from the provision of 9- 1- 1 service unless the act or omission causing
the claim, damage, or loss violates a statute or ordinance applicable
to the action.
TEX.HEALTH& SAFETY CODE ANN. 9 771.053(b) (Vernon 2003). Section 771.001 defines a“public
agency” as “the state, a municipality, a county, an emergency communication district, a regional
planning commission, an appraisal district, or any other political subdivision or district that
provides, participates in the provision of, or has authority to provide fire-fighting, law enforcement,
ambulance, medical, 9- 1- 1, or other emergency services.” Id. 9 77 1 .001(7) (emphasis added).
The Texas Tort Claims Act, TEX. CIV. PRAC. & REM. CODE ANN. ch. 101 (Vernon 1997 &
Supp. 2004), provides as follows:
(a) In this section, “9- 1- 1 service” and “public agency” have
the meanings assigned those terms by Section 77 1.001, Health and
Safety Code.
(b) This chapter applies to a claim against a public agency
that arises from an action of an employee of the public agency or a
volunteer under direction of the public agency and that involves
providing 9- 1- 1 service or responding to a 9- 1- 1 emergency call only
if the action violates a statute or ordinance applicable to the action.
Id. 0 101.062 (Vernon 1997) (emphasis added). See City of Galveston v. Whitman, 919 S.W.2d 929,
932 (Tex. App.-Houston [14th Dist.] 1996, writ denied) (emergency service dispatchers were
immune from suit brought under Tort Claims Act because the city, the dispatchers’ employer, was
immune from suit). You may wish to consider these statutory limits on liability in relation to your
contract with BCAD.
‘Brief from Paul Mallett, Executive Director, Commission on State Emergency Communications, to Opinion
Committee, Office of the Attorney General (Nov. 25,2003) (on file with Opinion Committee). The Commission on State
Emergency Communications administers the implementation of statewide 9-l-l service. See TEX. HEALTH & SAFETY
CODE ANN. $77 1.05 1 (Vernon 2003).
The Honorable Bryan Goertz - Page 5 (GA-0176)
SUMMARY
Article XI, section 7 of the Texas Constitution prohibits
Bastrop County from indemnifying the Bastrop Central Appraisal
District, its officers, and its employees for their actions in performing
9-l-l services for the county under contract unless the county, at the
time of contracting, levies and collects a tax as required by the
constitutional provision.
Attomewneral of Texas
BARRY R. MCBEE
First Assistant Attorney General
DON R. WILLETT
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
Susan L. Garrison
Assistant Attorney General, Opinion Committee