Texas high court hears challenge to Corsicana, Navarro County economic development grant

May it please the court: advocates for and against the City of Corsicana and Navarro County''s economic-development agreement told the Texas Supreme Court on Wednesday that the key question is how to read Article 3, Section 52(a) of the Texas Constitution against preexisting gift-clause jurisprudence. Petitioner counsel argued the constitutional amendment authorizing economic-development grants authoritatively allows the legislature and local governments to structure conditional grants, while the city and county''s lawyers and the State amicus urged the court to preserve the court''s established three-part gift-clause test (TML/Borgelt) that looks to public purpose and "controls."

Why it matters: the case challenges whether cities and counties may continue to make sales-tax or other incentive payments to private developers years after projects are completed, and whether local taxpayers retain a judicially enforceable protection against grants that function as private gifts.

Petitioner counsel told the court that "the constitutionality of economic development grants is governed by the 1987 enactment of Article 3, Section 52(a) of the Texas Constitution" and urged that the amendment authorized the legislature to permit public loans and grants for economic-development purposes without reopening older gift-clause restrictions. He added that the…