Recent Texas Attorney General Cases of Interest to Cities

Note:  Included opinions are from January 11, 2017 through February 10, 2017. 

Opinion No. KP-0131 (Hotel Occupancy Tax):  Under Section 351.101 of the Tax Code, a city may expend its municipal hotel occupancy tax revenue in the direct promotion of tourism and the convention and hotel industry, provided that the expenditure is for one of the specified uses listed in the statute. It is for the governing body to determine in the first instance whether an expenditure of hotel occupancy tax revenue is proper under Section 351.101.

Opinion No. KP-0128 (Public Funds Investment Act):  Consistent with Texas Attorney General Opinion GA-0834 (2011), a court could conclude that a time deposit account fully insured by the Federal Deposit Insurance Corporation is within the scope of an “other obligation” under Government Code Subsection 2256.009(a)(4).

Given the varied state of the relevant jurisprudence, we cannot predict whether a Texas court would determine as a matter of law that a federal home loan bank is an agency or instrumentality of the United States within the scope of Government Code Subsection 2256.009(a)(1).

To the extent a depository institution is an agency or instrumentality of the United States and is not otherwise limited by any governing statute in guaranteeing its obligations in a manner similar to Section 1435, Title 12, United States Code, a court would likely determine that a certificate of deposit investment secured by a letter of credit from such entity comports with Subsection 2256.009(a)(1) of the Government Code.

Under Government Code Subsection 2256.010(a)(1)-(3), a deposit of funds in a certificate of deposit must be to a depository institution that has its main office or a branch office in the State of Texas.  A court would likely conclude that a money market deposit, in an amount exceeding the amount of FDIC insurance could be secured by another obligation in Government Code Subsection 2256.009(a)(4).

Opinion No. KP-0127 (Crime Labs):  In addressing the admissibility of forensic analysis of physical evidence, Article 38.35(d)(1) of the Code of Criminal Procedure prevails over Rule 702 of the Texas Rules of Evidence to the extent of a conflict, pursuant to Rule 101(d) of the Texas Rules of Evidence.

A court would likely conclude that: (1) “forensic analysis” as defined in Article 38.35 of the Code of Criminal Procedure from a crime laboratory that is neither accredited by the Forensic Science Commission (commission) nor exempt from accreditation by statute or administrative rule is inadmissible in a criminal action in a Texas court under Article 38.35(d)(1); and (2) the commission may refrain from granting an exemption from accreditation under Article 38.01, Subpart (4-d)( c) of the Code of Criminal Procedure in its reasonable discretion.

A court would likely conclude that, pursuant to Article 38.01, Subpart 4(a)(2) of the Code of Criminal Procedure, a crime laboratory must report professional negligence or professional misconduct pertaining to forensic analyses in all disciplines-not just those that are accredited-to the commission.

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