Case Information
*1 The Attorney General ,of Texas
August 17, 1979
MARK WHITE
Attorney General Opinion No. MI+ 4 5
Chairman, Committee on Regions, Re: Whether a city may dispose
Compacts & Districts of public land at fair market value House of Representatives Austin, Texas under article 54211~~12, section 2(e), V.T.C.S., to a private, nonprofit, neighborhood-oriented corporation so that low cost housing may be constructed for resale to ‘low income citizens.
Dear Representative Von Dohlen:
You have, requested our opinion as to the circumstances under which a 723 Main. suae 610 Hannn. TX. no02 city may dispose of land pursuant to section 2(e) of article 5421~12, V.T.C.S. 713228.0701 Article 5421-12 establishes certain bidding and publication procedures with which a political subdivision must comply before it may sell or exchange land, unless the transaction falls tqithin one .of the exceptions set forth in so6 emdway. suit* 312 section 2. Section 2(e) excepts: Lumoch. TX. 7wo1 WW-l.7~CO238
Illand owned by a political subdivision which it desires to have developed by contract with an foundation. You state that a city wkhes to seU land at fair market value “to a private, nonprofit, neighborhood-oriented corporation so that low cost housing may be constructed thereon’through this corporation for resale, at cosf, to low income citixens.n No actual development of the land for a particular purposes would be required by the contract of sale. You ask whether, in such circumstances., the sale is within the exception of section 2(e).
Neither article 5421c-12 nor any other Texas statute or judicial decision defines the term “independent foundation.” A “foundation” in thii context k
2b. an organization or institution established by . . . or otherwise established with a endowment provision for future maintenance.. . .
.
Honorable Tim Von Dohlen - Page Two (Ml+46)
Webster’s New International Dictionary (3d ed.), at 898. One court has said that a “foundation” is a “corporation with funds for contributing to the endowment of institutions as for educational or-charitable work.” In re National Foundation for Diarrheal Diseases, 164 N.Y.S.2d 177. 178 (SUD. Ct. 1957). Althoueh it is not clearlv embraced within the traditional concept of “foundation,” we cannot Say as a matter of law that the legislature intended to exclude from the section 2(e) exception the kind of nonprofit corporation you have described. See 26 U.S.C. 5509 (definition of “private foundation”). -
Section 2(e) Is operative, however, only in those instances ln which the political subdivision %ie&es to have [the landI developed by contract ,with an foundation.” An exception to the bidding statutes should be strictly construed. See ci_ty of Corpus Christi v. McClaugherty, 284 S.W.2d 927, 929 (Tex. Civ. App. - San%tonio 1955, writ refkl); Town of Port Acres v. City of Port Arthur, 340 S.W.2d 325, 331 (Tex. Civ.
- Beaumont 1960 writ ref’d n.r.e.1. See also Attorney General Opinion Ii-1188 In our opinion tI& terms of the exception require that, as part of the contract of sale, the foundation &ree to develop the land ln accordance with the city% specifications. We conclude therefore that, although a particular nonprofit corporation may qualify as a foundation under the section 2(e) exception to article 5421el2, the exception operates only so long as the foundation agrees, under the contract of sale, to develop the land as the city may determine.
SUMMARY A particular nonprofit corporation may qualify as a nfoundationn under the section 2(e) exception to article 5421&2, V.T.C.S., but the exception operates only if the foundation agrees, as part of the contract of sale, to develop the land according to the city’s specifications.
MARK WHITE Attorney General of Texas JOHN W. FAINTER, JR.
First Assistant Attorney General
TED L. HARTLEY Executive Assistant Attorney General
Prepared by Rick Gilpin
Assistant Attorney General
P- 139
- / : (m-46) - Page Three
APPROVED:
OPINION COMMITTEE
C. Robert Heath, Chairman
Jim Allison
David B. Brooks
Walter Davis
Susan Garrison
Rick Giiin
Willlam G Reid
Bruce Youngblood
P. 140