Alabama Constitution Section 94 - Municipalities not to grant public money or lend credit to private persons or corporations.
Alabama Constitution – Section 94: Municipalities Not to Grant Public Money or Lend Credit to Private Persons or Corporations
📜 Summary:
Section 94 of the Alabama Constitution prohibits the state and local governments, including municipalities and counties, from using public resources to benefit private individuals or corporations.
🔑 Key Provisions:
No Public Gifts to Private Entities:
The legislature, any county, or municipality cannot grant public money or things of value to:
Any individual
Private or foreign corporation
Association
Other private entity
No Lending of Public Credit:
Governmental entities cannot lend or pledge the credit of the state or local government to support private interests.
🏛️ Purpose of Section 94:
To protect taxpayer funds from being used for private gain.
To ensure that government resources are used strictly for public purposes.
To prevent favoritism, corruption, or misuse of public assets.
⚠️ Exceptions & Evolving Interpretations:
Although Section 94 is strict, over the years, amendments and legal interpretations have carved out exceptions, such as:
Industrial development programs under certain constitutional amendments.
Public-private partnerships if they serve a clear public interest (like economic development).
Use of tax incentives for attracting businesses, but often done under constitutional amendments specific to certain counties or projects.
✅ Example (What’s Not Allowed):
A city cannot give a cash grant directly to a private business just because it's opening a store — unless there’s a specific constitutional amendment or legal justification showing a public benefit and compliance with related laws.
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