Untitled Texas Attorney General Opinion ( 2014 )

GREG
0
ATTORNEY GENERAL OF TEXAS
ABBOTT
Aprilll, 2014
The Honorable Joseph Deshotel Opinion No. GA-1050
Chair, Committee on Land and
Resource Management Re: Whether section 505.152 of the Local
Texas House ofRepresentatives Government Code authorizes an economic
Post Office Box 2910 development corporation to fund certain
Austin, Texas 78768-2910 entertainment projects (RQ-1156-GA)
Dear Representative Deshotel:
You ask whether certain projects would qualify for use as "entertainment" under section
505.152 ofthe Local Government Code. 1 Chapters 501 to 505 ofthe Local Government Code
authorize municipalities to create entities commonly referred to as economic development
corporations. See TEX. Loc. Gov'T CoDE ANN. §§ 501.001-505.355 (West Supp. 2013). Many
provisions in those chapters specify and limit the kinds of projects that a particular development
corporation, depending on its authority, may fund. /d. § 501.002(13) (defining "project"). You
ask about a Type A corporation, which is governed by Chapter 504 of the Local Government
Code. /d. §§ 504.001-.353. Along with the specific projects authorized by chapter 504, section
504.152 permits an election procedure whereby the voters of a municipality may authorize the
use of sales and use tax for projects permitted under chapter 505. /d. § 504.152; see also id
§ 50 1.002(16). Section 505.152, titled "Projects Related to Recreational or Community
Facilities," provides:
For purposes of this chapter, "project" includes land, buildings,
equipment, facilities, and improvements found by the board of
directors to be required or suitable for use for professional and
amateur sports, including children's sports, athletic, entertainment,
tourist, convention and public park purposes and events, including
stadiums, ball parks, auditoriums, amphitheaters, concert halls,
parks and park facilities, open space improvements, museums,
exhibition facilities, and related, store, restaurant, concession, and
1
See Letter from Honorable Joseph Deshotel, Chair, House Comm. on Land & Res. Mgmt., to Honorable
Greg Abbott, Tex. Att'y Gen. at 2-3 (Oct. 8, 2013), http://www.texasattomeygeneral.gov/opin ("Request Letter").
The Honorable Joseph Deshotel - Page 2 (GA-1050)
automobile parking facilities, related area transportation facilities,
and related roads, streets, and water and sewer facilities, and other
related improvements that enhance any of the items described by
this section.
!d. § 505.152. You ask whether specific types of projects would qualify as "entertainment
projects" under this provision? Request Letter at 2-3.
You first ask whether "fund[ing] building renovations and equipment upgrades for a local
radio station qualifies as an entertainment project under section 505.152." !d. at 3. You question
whether the statute should be construed to authorize only projects to fund recreational and
community facilities "that are open and ... accessible for public use." !d. At the outset, we note
that whether a particular project or specific expenditure is authorized under the Act involves fact
issues that may not be resolved in the opinion process and that are matters for the board of
directors to determine in the first instance. Tex. Att'y Gen. Op. No. GA-0819 (2010) at 3. Thus,
we cannot advise whether a specific economic development corporation may fund a particular
project; however, we can answer your general questions about the construction of section
505.152.
Section 505.152 authorizes projects "suitable for use for ... entertainment ... , including"
a list of specific facilities. TEX. Loc. Gov'T ANN. § 505.152 (West Supp. 2013). Under the
Code Construction Act, use of the term "including" should not be interpreted as "creat[ing] a
presumption that components not expressed are excluded." TEX. Gov'T CODE ANN.
§ 311.005(13) (West 2013). To be included within a statute's illustrative list, however, an
unenumerated object must be like the objects enumerated. Cnty. of Harris v. Eaton, 573 S.W.2d
177, 179 (Tex. 1978) (construing a statute that lists specific examples to include others "of the
same kind or class as the ones expressly mentioned"). "[W]hen words of a general nature are
used in connection with the designation of particular objects ... or things, the meaning of the
general words will be restricted to the particular designation." Hi/co Elec. Co-op., Inc. v.
Midlothian Butane Gas Co., 111 S.W.3d 75, 81 (Tex. 2003).
While section 505.152 authorizes projects for purposes of "entertainment," a more
general term, it narrows that authorization by designating particular types of projects that could
be funded, "including stadiums, ball parks, auditoriums, amphitheaters, concert halls, parks and
park facilities, open space improvements, museums [and] exhibition facilities." TEX. Loc.
Gov'T CODE ANN. § 505.152 (West Supp. 20 l3). The enumerated projects are each unique, but
they share certain characteristics. They are all spaces or facilities that are open and accessible to
2
You ask only about the types of projects authorized under section 505.152 of the Local Government Code,
and this opinion is limited accordingly. The authority of a particular development corporation may be further
limited by the resolution creating the corporation or ballot language restricting the use of taxes. See TEX. Loc.
GOV'T CODE ANN.§ 504.152(b) (West Supp. 2013).
The Honorable Joseph Deshotel - Page 3 (GA-1050)
the public ·and where members of the community may gather for events or recreation. While the
statute may authorize other projects not expressly listed, any unenumerated projects must be like
those enumerated. Eaton, 573 S.W.2d at 179. With regard to your question, a court could
conclude that funding for a private radio station's equipment upgrades and building renovations
is not "of the same kind or class" of project as those projects expressly authorized in section
505.152 and that section 505.152 therefore does not authorize an economic development
corporation to fund that type of project. 3 We note, however, that the Legislature granted the
board of directors of an economic development corporation broad discretion in determining
whether a specific project is "required or suitable for use for ... entertainment," and it is for the
board to decide in the first instance.
You also ask whether funding "improvements for a city owned pavilion qualifies as an
entertainment project under section 505.152." Request Letter at 3. You describe a specific
pavilion at issue that "has been and continues to be used for public community events," like the
Southeast Texas Mardi Gras and the Zachary Breaux Jazz Festival, and that city residents may
rent for family gatherings, school functions and other privately-held events. /d. at 3--4. As you
describe it, the pavilion appears to be a community facility that would be open to the public,
similar to the recreational or community facilities that are expressly authorized in section
505.152. A court would likely conclude that section 505.152 authorizes the project. This office,
however, cannot perform the factual inquiry and review necessary to confirm that an economic
development corporation is authorized to fund a particular project.
3
An economic development corporation's authority to grant public funds to a private corporation is limited
by ati icle Ill, section 52 ofthe Texas Constitution, which precludes political sttbdivi sions from using public fund s
for private purposes. TEX. CONST. art. III, § 52(a). The exas Supreme Court has explained that the grant of public
fund s that benefit a private entity will avoid violating thi s section if it satis fies a three-part test: (1) the predominant
purpose of the expenditure is to accompli h a public purpose, not to benefit pri vate patties; (2) there are adequate
public contr Is in place to ensure that the pub lic purpose is accomplished and to protect the public's investment; and
(3) the politica l subdivi sion is rece iving adequate cons ideration. Tex. Mun. League lntergov 'tl Risk Pool v. Tex.
Workers· Camp. Comm 'n, 74 S, W.3 d 377, 384 (Tex. 2002). Thus, if an economic development corporation decides
to provide funds to a private entity, it must ensure that these requirements are met. ee Tex. Att'y Gen. Op. No. JC-
0362 (200 1) at 6 (requiring "a contract or other arrangement sufficient to ensure that the funds are used for the
purposes authorized, consistent with the constitutional restrictions on the expenditure of public funds").
The Honorable Joseph Deshotel - Page 4 (GA-1050)
SUMMARY
A court could conclude that funding for a private radio
station's building renovations and equipment upgrades is not of the
same kind or class of project as those projects expressly authorized
in section 505.152 ofthe Local Government Code and that section
505.152 therefore does not authorize an economic development
corporation to fund that proposed project. The Legislature granted
the board of directors of an economic development corporation
broad discretion in determining whether a specific project is
"required or suitable for use for ... entertainment," and it is for the
board to decide in the first instance.
A court would likely conclude that funding for a city
owned pavilion is of the same kind or class of project as those
projects expressly authorized in section 505.152.
Attorney General ofTexas
DANIEL T. HODGE
First Assistant Attorney General
JAMES D. BLACKLOCK
Deputy Attorney General for Legal Counsel
VIRGINIA K. HOELSCHER
Chair, Opinion Committee
Virginia K. Hoelscher
Assistant Attorney General, Opinion Committee