    The Attorney                General of Texas
                       December         8,    1978




Honorable   Ben F. McDonald,      Jr.                 Opinion No. H- 1275
Executive   Director
Texas Department    of Community        Affairs       Re:     Authority     of the Texas
Box 13166, Capitol Station                            Department         of    Corn munitg
Austin, Texas 78’7ll                                  Affairs    to expend appropriated
                                                      state    funds    on public    works
                                                      programs.

Dear Mr. McDonald:

      You have requested  our opinion regarding the authority    of the Texas
Department   of Community   Affairs to expend appropriated    funds on public
works programs.

        You state that the City of Raymondville,   pursuant to section 304 of the
Public Works and Economic Development        Act of 1965, 42 U.S.C., section 3153,
has recently     applied for federal funding of a sewer lift system to serve a
nearby farm labor camp. The farm labor camp is at present being upgraded
under a grant from the Farmers Home Administration.        An estimated    $100,000
has been budgeted       for the sewer lift system,   of which $15,000 has been
allocated for services and the remainder for construction    costs.

       As a condition to the expenditure        of federal funds under section 304,
the state must provide matching funds equal to 25 percent              of the federal
contribution.     The state’s portion may derive from any state source, but may
not include contributions      by local governments    or by private organizations    or
individuals.    Thus, in order to make maximum use of the federal grant and lo
fund the sewer lift system in the full amount of $100,000, the state must
contribute    $20,000. You indicate, however, that in past projects funded under
section 304, the Department        of Community     Affairs “has abided by the policy
of contracting       to reimburse      local governments     for only the costs of
professional     services,”   in this case $15,000.        The department      has not
heretofore     committed     state funds for the reimbursement        of construction
costs. You ask whether it is prohibited from doing so.

       In order to justify the expenditure       of state funds for a particular
project, the project must be statutorily   authorized   and must also be supported
by a specific   appropriation.    Attorney    General Opinion H-944 (197’7). In




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Honorable    Ben F. McDonald,      Jr.      -    Page2       (H-1275)



addition,   the funds may be expended only in furtherance                 of a valid public purpose.
Attorney    General Opinion H-1042 (19’77); Letter Advisory              No. 107 (1975).

       The Department    of Community           Affairs   is empowered     to

             (3) provide financial aid to local governments  and combina-
             tions    of local  governments     for programs   which   are
             authorized such assistance.

V.T.C.S. art. 4413(201), S 4. Furthermore,            the department      may

             apply for contract          for, receive and expend for its purposes
             any appropriations          or grants from the State of Texas, the
             federal government,          or any other source, public or private.

E section 13. In our opinion, these provisions furnish ample statutory authority for
the department  to expend state funds for the construction  of a sewer system to be
owned and operated by a city government.

       The current   appropriations     act allocates    a total of $59,617,590 to the
department    for “Community     Assistance and Resource Utilization”    for fiscal 1979,
including  $1,358,911 for “Community        and Local Development.”       Of the entire
amount, the sum of $710,549 is to be financed from general revenue funds.            Acts
1977, 65th Leg., ch. 872, at 2851. We believe that these items of appropriation
furnish sufficient  basis for the department        to expend funds thereunder    for the
sewer lift project you have described.

       Finally, it is also our view that the department           is not prohibited   from
expending state funds for this purpose by virtue of article 3, section 51 of the Texas
Constitution.     If the project has a proper public purpose, any incidental benefit to
individuals    does not invalidate  the expenditure    of state funds.   State v. City of
Austin, 331 S.W.2d 737 (Tex. 1960); Barrington         v. Cokinos, 338 S.W.2d 133 (Tex.
 1960). In our opinion, the construction   of a sewer lift system for a farm labor camp
could be found to serve a valid public purpose of the State of Texas. See Housing
Authority     of City of Dallas v. Higginbotham,     143 S.W.2d ‘79 (Tex. 1940);Attorney
General Opinions H-403, H-257 (1974); H-109 (1973); Letter Advisory No. 107 (1975).
We conclude therefore that the Department         of Community Affairs is not prohibited
from expending state matching funds for the construction          of a sewer lift system,
owned and operated by a city, and serving a farm labor camp.

                                           SUMMARY

             The Department    of Community     Affairs is not prohibited
             from expending state matching funds for the construction     of
             a sewer lift system, owned and operated       by the City of
             Raymondville,  and serving a farm labor camp.




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Honorable   Ben F. McDonald,   Jr.   -   Page 3        (H-1275)




                                               Attorney    General   of Texas




us
APPROVED:




DAVID M. KENDALL, First Assistant


 cgRg&g&
 Opinion Committee    ’




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