                                             May IO,2000



The Honorable Chris D. Prentice                Opinion No. JC-0219
Hale County Attorney
500 Broadway, Suite #80                        Re: Whether local governments that operate utilities
Plainview, Texas 79072                         or sanitary landfills may enter into an interlocal
                                               cooperation contract whereby the parties to the contract
                                               would agree to collect unpaid fees owed to the other
                                               parties and to refuse service to customers who owe fees
                                               to the other parties (RQ-0165-JC)


Dear Mr. Prentice:

         You ask whether local governments that operate utilities or sanitary landfills may enter into
an interlocal cooperation contract under the Interlocal Cooperation Act, TEX. GOV’T CODEANN. ch.
791 (Vernon 1994 & Supp. 2000), whereby the parties to the contract would agree to collect unpaid
fees owed to the other parties and to refuse service to customers who owe fees to the other parties.
Because an agreement between local governments to withhold services from third parties is not an
agreement between local governments to provide to each other “a governmental function or service
that each party to the contract is authorized to perform individually,“see id. 5 791 .Ol l(c)(2) (Vernon
Supp. 2000), such an agreement is not authorized under the Interlocal Cooperation Act.

        You describe the contemplated interlocal cooperation contract as follows: Local govem-
ments “that own and operate a utility system or a sanitary landfill . . . [would] enter into agreements
with other similarly situated [entities] to collect unpaid utility and landfill service fees.” Letter from
Honorable Chris D. Prentice, Hale County Attorney, to Office of Attorney General of Texas, at 2
(Dec. 15,1999) (on tile with the Opinion Committee) [hereinafter “Request Letter”]. More specitic-
ally,

                [t]he agreements would require each participating Local [G]ovem-
                ment to collect unpaid utility and landfill service fees owed another
                participating Local Government from a customer requesting service
                from it. The requesting customer would be denied service until the
                outstanding balance with the other participating Local Government
                had been remitted.        The collecting     entity would retain a
                predetermined amount of the sum collected as cost of the service
                performed pursuant to the agreement.
The Honorable   Chris D. Prentice   - Page 2      (JC-0219)




Id. YOU also inform us that the entities participating in the contract would exchange information
“via a confidentially secure Internet connection and common computer software.” Id. You note that
while a government-operated       utility is generally prohibited from disclosing information in a
customer’s account record if the customer requests the information be kept confidential, this
prohibition does not prohibit disclosure of such information to another utility. Id. at 4. See TEX.
UTIL. CODE ANN. $9 182.052, ,054 (Vernon 1998).

         We gather from the citations provided in your legal brief that the participating local
governments would include cities, which are authorized to operate water, sewer, gas or electric
utility systems under chapter 402 of the Local Government Code, and cities, counties, and other
entities operating solid waste disposal systems under chapter 364 of the Health and Safety Code,
See Request Letter at 2 n.2. As we understand it, the participating entities could be located all over
the state and would not necessarily have overlapping jurisdictions. The Interlocal Cooperation Act
authorizes local governments to agree “to perform governmental functions and services” “that each
party to the contract is authorized to perform individually.” TEX. GOV’T CODE ANN. 9: 79 1.O1 1(a),
(c)(2) (Vernon Supp. 2000). Thus, before turning to your question, we examine the authority of
these entities individually to provide utility and landfill services and collect payment therefore.

         Section 402.001 of the Local Government Code authorizes a municipality to operate a water,
sewer, gas or electric utility system inside or outside the municipal boundaries, see TEX. Lot. GOV’T
CODE ANN. $402.001(a), (b) (Vernon 1999), and to “regulate the system in amanner that protects
the interests of the municipality,” id. $402.001(b). A municipality may sell services to any person
outside its boundaries and may contract with persons outside its boundaries to permit them to
connect with those utility systems on terms the municipality considers to be in its best interest. Id.
§ 402.001(c). Section 402.0025 provides that a municipality may not require a customer to pay for
utility service previously tkmished to another customer at the same service connection or require a
customer’s bill to be guaranteed by a third party as a condition of connecting or continuing service.
See id. 5 402,0025(a), (b). A municipality may require varying utility deposits for customers. See
id. $402.0025(c).    Furthermore, a municipality may by ordinance impose a lien against an owner’s
property for delinquent bills. See id. 5 402.0025(d).        Chapter 402 does not provide any other
mechanism for collecting delinquent payments.

         Chapter 364 ofthe Health and Safety Code, the County Solid Waste Control Act, is intended
to authorize cooperative efforts by counties and various “public agencies,” including municipalities,
special districts, other political subdivisions and state agencies, “for the safe and economical
collection, transportation, and disposal of solid waste to control pollution in this state.” TEX.
HEALTH & SAFETY CODE ANN. 5 364.002 (Vernon 1992); see also id. $5 364.001 (providing that
chapter may be cited as the “County Solid Waste Control Act”); 364.003 (defining “public agency”).
As this office has recognized, chapter 364 delegates to cities, counties and other political
subdivisions police power to protect public health and safety by providing for garbage collection and
waste disposal. See Tex. Att’y Gen. LO-97-037, at 1 (“The regulation of garbage collection and
waste disposal, which implicates public health and safety, is a police power vested in the state. The
The Honorable Chris D. Prentice      - Page 3       (JC-0219)




legislature has delegated this power to municipalities, counties, and other public agencies pursuant
to chapter 364 of the Health and Safety Code.“) (citations and footnote omitted).

        Under chapter 364, a public agency or county may offer solid waste disposal service to
persons in its territory, require the use of the service by those persons, and charge fees for the
service. See TEX. HEALTH & SAFETYCODE ANN. 5 364.034(a)(l), (2) (3) (Vernon 1992). Section
364.034(b) provides that a public agency or county may suspend service to a person who is
delinquent in payment of solid waste disposal service fees until the delinquent fee is fully paid. See
id. 5 364.034(b). This provision authorizes a public agency or county to suspend service to a person
who is delinquent in payment of solid waste disposal service fees provided by the agency or county.
It does not authorize a public agency or county to suspend service to a person who is delinquent in
paying for services provided by another agency or county.

         In addition to these statutes authorizing cities and other entities to take certain actions against
persons who are delinquent in paying for services, courts have recognized that cities have implied
authority, based on their police power to protect public health and safety, to enforce ordinances
related to garbage collection. In City ofBreckenridge v. Cozarf, 478 S.W.2d 162 (Tex. Civ. App.-
Eastland 1972, writ refd n.r.e.), the court considered the authority of a home-rule city to enforce an
ordinance that provided that the city would discontinue water service to customers who refused to
pay for garbage collection service. The court concluded that the city ordinance was a valid and
reasonable exercise of the city’s inherent police power to protect public health and safety. See id.
at 165. In reaching this conclusion, the court relied heavily on a Kentucky case that concluded that
a similar ordinance was permissible because the city provided water, sewer, and garbage disposal
services for health and sanitation purposes and the services were “‘closely related from a sanitation
standpoint.“’ Id. (citing Cuss@ v. City ofBowling Green, 368 S.W.2d 318 (KY. Ct. App. 1963)).
The court also noted that since the trial of the lawsuit, the Texas Legislature had enacted a statute,
the statutory predecessor to section 364.034(b) of the Health and Safety Code, that expressly
permitted a public agency or county to enforce collection of solid waste disposal fees by
“‘suspend[ing] service from any or all other utilities owned or operated by it to any person who
may become delinquent in payment of solid waste disposal service fees.“’ Id. (citing former article
4477-8, section 13 of the Revised Civil Statutes).

         More recently, in Grothues v. City of Helotes, 928 S.W.2d 725 (Tex. App.-San Antonio
1996, no writ), the court concluded that a general-law city may enforce payments to its garbage-
collection franchise by fining residents who refuse to pay. A resident contended that the city was
not authorized to enact an ordinance imposing tines for failure to pay garbage-collection     fees and
that it was limited to suspending the service of residents who refused to pay for garbage-collection
service, as provided in section 364.034(b) of the Health and Safety Code. See id. at 727-28. The
court concluded that suspension of service was not the only means available to the city to encourage
payment of delinquent garbage-collection bills: “The legislature and the courts have long recogniz-
ed the importance of garbage disposal to the enhancement of health and safety. The enforcement
of a comprehensive garbage collection plan such as the City has adopted is clearly within the police
power granted to all municipalities.” Id. at 729.
The Honorable   Chris D. Prentice   - Page 4       (X-0219)




          In sum, a municipality that operates a water, gas, sewer, or electric utility under chapter 402
of the Local Government Code may require varying utility deposits for customers and may by
ordinance impose a lien against an owner’s property for delinquent bills. See TEX. Lot. GOV’T
CODE ANN. 5 402.0025(c), (d) (Vernon 1999). A county or other public agency, including a city,
providing solid waste disposal services under chapter 364 of the Health and Safety Code may
suspend service to a person who is delinquent in payment of solid waste disposal service fees until
the delinquent fee is fully paid. See TEX. HEALTH & SAFETY CODE ANN. 5 364.034(b) (Vernon
 1992). A city, and other entities exercising health and sanitation police powers delegated by the
state, may also suspend other health and sanitation related services it provides, such as water or
sewer service, until the delinquent solid waste disposal fee is paid. See City of Breckenridge v.
Cozart, 478 S.W.2d 162; see also Tex. Att’y Gen. LO-97-037, at 1 (recognizing that the regulation
of garbage collection and waste disposal implicates public health and safety and is a police power
vested in the state that the legislature has delegated to municipalities, counties, and other public
agencies pursuant to chapter 364 ofthe Health and Safety Code). Finally, a city may, in the exercise
of its municipal police power, impose tines against customers who refuse to pay garbage collection
 fees. See Grothues v. City ofHelotes, 928 S.W.2d 725. We also note that some utilities at issue in
your request may be governed by sources of law not mentioned in your letter, such as chapter 13 of
the Water Code, and regulations promulgated by state agencies, such as the Texas Natural Resource
 Conservation     Commission.     See, e.g., TEX. WATER CODE ANN. $5 13.041 (Vernon 2000)
 (authorizing Texas Natural Resource Conservation Commission to adopt rules regulating certain
water and sewer utilities); 13.042 (municipal jurisdiction); 13.250 (establishing certain conditions
 under which retail public utility may discontinue service). In our review of the statutes and cases,
 however, we have found nothing authorizing a city or other political subdivision to deny utility or
 solid waste disposal services to a customer because the customer is delinquent in paying for similar
 services provided by another city or political subdivision. Nor, conversely, have we found anything
 authorizing a city or political subdivision that is owed payments from a former customer to enforce
 collection ofthose payments by arranging for another entity to withhold services from the customer.

         We now turn to your specific question. You ask about the permissibility under the Interlocal
Cooperation Act of an agreement between cities operating water, sewer, gas or electric utility
systems under chapter 402 of the Local Government Code, and cities, counties, and other entities
operating solid waste disposal systems under chapter 364 of the Health and Safety Code. Pursuant
to the agreement, each party would agree to collect unpaid utility and landfill service fees owed to
other participating local governments from a customer requesting service t?om it and to deny service
to the customer until the outstanding balance with other participating local governments had been
remitted. We conclude that the Interlocal Coopcation Act does not authorize such an agreement.

        The Interlocal Cooperation Act, chapter 791 of the Government Code, authorizes local
governments to contract or agree “to perform govemmenta! functions and services.” TEX. GOV’T
CODE ANN. 5 791.01 l(a) (Vernon Supp. 2000). Parties are authorized to contract to “provide a
governmental    function or service that each party to the contract is authorized to perform
individually.” Id. 5 791.01 l(c)(2). The phrase “governmental functions and services” is defined to
include “all or part of a function or service” in a number of areas including, for example, public
The Honorable Chris D. Prentice      - Page 5       (JC-0219)




health and welfare and waste disposal. See id. 9 791.003(3) (Vernon 1994). The main purpose of
the agreement you describe, however, is not for local governments to provide such governmental
functions or services to each other. Rather, it involves an agreement whereby the participating local
governments would agree to withhold services from third parties to force them to pay debts owed
to the other parties to the agreement. We do not believe that an agreement to withhold services from
third parties constitutes an agreement to provide other local governments “a governmental function
or service” for purposes of the Interlocal Cooperation Act.

         In addition, the proposed agreement does not involve a governmental function or service
“that each party to the contract is authorized to perform individually.” Neither chapter 402 of the
Local Government Code nor chapter 364 of the Health and Safety Code authorizes a governmental
entity operating a utility or providing solid waste disposal services to deny services to a customer
because he or she has an outstanding balance for utility or solid waste disposal services provided by
another governmental entity. Nor does either statute authorize a city or political subdivision that is
owed payments from a former customer to enforce collection of those payments by arranging for
another entity to withhold services from the customer. Moreover, we do not believe this authority
is implicit in an entity’s police powers. Municipal police power authorizes a city to protect public
health and safety within its jurisdiction by insisting that those within its statutory jurisdiction use and
pay for garbage collection and other health and sanitation related services. A city’s police power is
limited to protecting the health and safety within its statutory jurisdiction and does not extend to
protecting public health and safety in other parts of the state. The police power delegated to
counties, cities, and other local agencies under chapter 364 of the Health and Safety Code is
similarly limited.

         The Interlocal Cooperation Act, which authorizes local governments               to “provide a
governmental      function or service that each party to the contract is authorized to perform
individually,” does not provide a mechanism for a city or any other local government to extend its
police power beyond its statutory jurisdiction.      Nor does the Act permit a local government to
delegate to another entity apower it does not have. See Tex. Att’y Gen. Op. No. JM-191 (1984) at
1 (“The Interlocal Cooperation Act in itself does not confer upon a governmental body any
additional substantive authority to perform particular acts.“); Tex. Att’y Gen. LO-97-055, at 3 n.3
(“We have found no support for the proposition that the Interlocal Cooperation Act allows a city to
extend its authority [to enforce ordinances outside its territorial limits] solely by agreement.“). We
believe that the authority to enforce collection of delinquent payments owed to an entity by a former
customer by having another entity withhold services from the customer must be expressly provided
by the legislature, as must the authority of an entity to deny utility or solid waste disposal services
to a customer because the customer is delinquent in paying for similar services provided by another
city or political subdivision. Only when local governments are authorized to exercise such powers
individually and these powers are legislatively defined as “governmental functions or services” will
local governments be authorized to contract under the Interlocal Cooperation Act to exercise such
powers on each others’ behalf.
The Honorable   Chris D. Prentice   - Page 6      (JC-0219)




                                        SUMMARY

                         Local governments that operate utilities or sanitary landfills
                may not enter into an interlocal cooperation contract under the
                Interlocal Cooperation Act, TEX.GOV'TCODE ANN. ch. 791 (Vernon
                1994 & Supp. 2000), whereby the parties to the contract would agree
                to collect unpaid fees owed to the other parties and to refuse service
                to customers who owe fees to the other parties, because an agreement
                to withhold services from third parties is not an agreement between
                local governments to provide to each other “a governmental function
                or service that each party to the contract is authorized to perform
                individually,“see   id. 5 791.01 l(c)(2) (Vernon Supp. 2000).




                                                Attorney General of Texas



ANDY TAYLOR
First Assistant Attorney General

CLARK RENT ERVIN
Deputy Attorney General - General Counsel

ELIZABETH ROBINSON
Chair, Gpinion Committee

Mary R. Crouter
Assistant Attorney General - Opinion Committee
