Case Information
*1 The Attorney General of .Texas tbvmbcr 20, 1985 JIM MATTOX
Attorney General Mr. Lias B. “Bubbl? Steen opieioo no. Jn-361
Suprem. Court Building Executive Director: P. 0. Box 12S4B Aultin.lx. 79711.2549 ‘. 80: Conetructioe of Eousc Bill PO. State Purchasing md 1426, Actr 1985, 69th Leg., ch. i22. 512M75-2901 General Serviccro Camd.a~loe T.lPx 9101B74.1~7 P. 0. Box 13047, Capitol Station which authorizes state to cm- Telecopier SlU475-0299 7lK’ll vey certain rul property in Bexar Austin, Texu County by e closed bid procrGure 714 Jackron. Suite 700 Oail~s. TX. 752924509 Dear Mr. Steen: 2tUI42-9944
4924 AItwIa Ave.. Suite 160 You have arked thir chapter 722. Acts of the El Paso. TX. 799052793 agency to coastme SlY53%34&( Sixty-ninth Lig$elature, 1985, which was eeacfed by House Bill No.
1426 to authorize the conveyance of certain etate-owned real property in Bexar Couety. You ask the following specific questions: l99lTaxas.Suilr 700 ~ou,ton, TX. 77002~3111 1. Khat is intended and meant by the require- 7lY2255999 ment of I ‘closed bid procedure?’ W5 Broadway. SUN9 312 II there a conflict between the provisions 2. Lubbock. TX. 79401.3479 of rec,::loo 1 of chapter 722 end section 3 of M&747-3239 chapter 7221 4399 N. tenth, Suite B 3. What procedure hould be folloved in Mc*ll*n. lx. 7BSol-19BS rolling the property? 512m924947
is well mttled that the disposition of tate-ovned land is a 200 Main Plaza. Suit0 400 matter over which leglmlature has uclusive control and the paver San Antonio. TX. 78205.2797 of an agency of #rate convey state property my be exercised 512025-4191 only under the l.eglslature’r authorization. See Lorieo v. Crawford Packing Co. , 175 !i.W.Zd 410, 414 (Tex. 1943); ?&ey v. Daughtars of Republic, 1% S.W. 197. 200 (Tex. 1913); Attorney General Opieioea An Equal OpPOrtUnitYl J&l49 (1984); MK-,62 (1979); C-207 (1964); V-878 (1949). The terms of ~fflrmativ~ Aclion Employw the conveyance land mua.t be strictly legirlative euthwisation See State v. gasley, 404 S.U.Zd 296 (Tex. 1966);
complied with. Wilson v. County ~~Calhoun, 489 S.W.Zd 393 (Tex. Clo. App. - Corpus Chrleti 1972, n5.t ref’d 0.r.e.); General Opinions m-242 Attorney (1984) ; MU-62 (15’7.9). IO 1981, tlw leglalature authorized the State Purchasing and General Services Co~s6100 lease certain atace-oweed land in San p, 1741 *2 .
Ur. Liar B. “Bubba” Steen - PeSe 2 (J?i-381) Aetoeio. Chapter 464, Acts of the Sixty-seventh Legirlature. 1981, specifies certain proviri~asa of such s luse, including the right of the lessee to reoeu the lease for a term not to exceed 25 yurs at the end of the primsty term of the lease. It authorized the comisalou to include au “option” the lessee to purchase property at the property’8 fair aurkac v&he at the time the optioo is exercised but expressly epecifiea that wch a purchase is subject to the approval of legislature. the Acts 1981, 67th Leg., ch. 464. 12(c), at 2073. Later year, the comn~.s~slou leased the property for a priuarp tern of 25 years with rlghc of the lessee to renew lease for se The lease includes permission to. the lessee co additional 25 yearr. cancel the lease after giving notice and coetelns se “option” to the lessee to purchase property at the property’s fair mrket value et the rime the lessee ccrtlf ies its purchase, intent if the legislature approves the purchase. Prior to the 1985 session of the the lessee c:ertified its intent to purchase, and House legislature, Bill No. 1426 vaa introduced in that session for the purpose of obtaining the necessary l.egiolative approval. .We conclude, houever, that the legislature by the enactment of Eousr Bill No. 1426 did not approve the sale of the ‘property in questlou to the named lessee at fair market value. % Acts 1985, 69th Leg., ch. 722. at 5251.
be introduced and aNa It passed the &use, Rouse Bill No. -1426 . vould have directed tht State Purchasing and General Services Ccmaaission to convey tha property to the named lessee at a price by the feir mrket velue of the property 011 January 1. deterabed 1985. vhich would be l str~b~llshed by an M41 appraisal. As it fiually passed the legirlature, ‘Bouse Bill No. 1426 authorized a different kind of sale. Instead of directing commiasioe to convey the ’ property to the named lesrme. gouse Bill No. 1426 gives the cocmissloe
the right convey the property vithout oauieg a specific purchaser. AB passed, the bill doea oot provide that “the sale price” of the property vi11 be its fair ,urket value but provides that “the minimum price of the property” vlLI be its fair aarket value. The firm1 bill further provides that sale of property is subject to a “closed bid procedure.” As fioally passed, gouse Bill No. 1426 provides that a conveyance of the propcwty shall not be lo couflict vith the terms a lease that was l uthcwired by chapter 464. Acts 1981, 67th Leg., ch. 464, at 2073. Aa introduced, the bill provided that a conveyance under Eouse Bill No. 1426 would be in ccordeece with the terms of nuch lees=.
You. ask if there is a conflict betveee sections 1 and 3 of gousa Bill No. 1426. We conclude thet the provisions do not conflict. Section 1 directs that a conveyance shall not coufllct vith the tares of the lease authorized br chapter 464, Acts 1981, 67th Leg., ch. 464. Section 3 authorizea the sale of the property under terms and procedurea that differ faao the terms and procedures in the lessee’s so-called option to purchme at market value In paragraph III (3) lease. We, belimre the optiou in the lease can be uo~c *3 Mr. Llaa B. “Bubba” Steen a. Page 3 (m-381)
l ccurately &scribed as an optiou to seek the legislature’o epprovel purchase oa there terms. The legislature vas not obligeted to approve the lessee’s offer to purchase at market value aud did not grent that approval by the enectuet of Bouae Bill Ilo. 1426. Instead. the lsgislature exercised itr right to authorize the male of terns. uhich include a bid procedure and the property ou different fair market value as a mirdmux price. Since leseee does not have a right under the leasa to purchase without the legislature’s approval, e couveyaece under the terms approved by the legislature it section 3 vould not conflict vlth the terms of lease. Under gouaa Bill No. 1426, the co~nlaaiou is l uthorlxed to convey all of the interest of state 1.3 the property in question. asauuing the property is cold not latw: than Decexber 10, 1985, and a purchaser would take the title of t’wc state but subject to tbe lease contract.
l’he named lessee is not precluded frou submitting a bid as provided by section 3 of Eouse Bill No. 1426.
You also ask the mc:oeiog of “closed bid procedure” sod vhat procedure should be followed in selling the property. is our opinion that the legislatur:e ioteeds “closed bid procedure” to mean a procedure under vhich maled bids to purchase the property are submitted follovieg the publicatiou of uotice that the property is for purchase. Competitive bidding la the method frequently available adopted by the leglslatu~rtr. for the sale or lease of property. in article 5421c-12. V.T.C.S., vhlch la applicable to land wued by a subdivirioo of ,tha state, the legislature political specifies such laud uay be sold by waled bids and at a price not less than fair uarket value after publj.c:ation of uotfce that the land is to be ’ offered for sale. Sectita. 4.02 of State Purchasing and General Semites Act authorizes the comlosioe lease stata-ovned land under the comiasioe’s control agricultural ud c-rcial purposes on the receipt of bide efter advertising a proposed lease. V.T.C.S. art.
601b. Subsectiou (b) of a~cction 4.02 directu comisslon to adopt rule6 sod regulations the!: will. in its judgment, protect the ieterest the state and uthorfrtru the coudaaloe to reject soy and all bids. Id. Section 4.15 that act authorizes the comission to lease ccrtaie office space in a state-ovned building by negotlatleg with a teuant or by selecting a ?euant through a competitive bidding process.
Id. In either case. tta ccmxdaeioo shall follou procedures that coupetitioe sod Imrotect the ietereata of the state. See id. Gte -m 594.15(b), (f). Sectfoe 9.05 of the aaxie act directs ccmanlsaioo to sell certain surplus or salvage personal property owned by state by competitive bid o:r euction sod after publication of notice of the sale If l stl.matetl velue exceeds $1,000. V.T.C.S. art. 601b. As to purchases to be nude by the State Purchasing and General Services Commiasioe. as I~rtieguished from aalesr the legislature has specified that purchases, with certain exceptions, shall be baaed on competitive sealed bids ef.ter publiahieg notice of the purchases to be made. See id. 613.10, 3.11, 3.12. -- *4 - Page 4 (JM-381)
Mr. Liar B. “Bubba” Stun Rouse Bill No. 1426 c~ontains no guidslfnss for bid procsdutss and publicscion rsquiremnts w be smP1oy.d in the sale of this pscific property. la rsaoonable that ths lsgislaturs intands ths corn- miesion to protect the interest of the atata. including rejection of any and all bida. in both ;I luss atats property under itr control and in a sale of property authorizsd by Eourc Bill No. 1426. xn ths absence of specific guldalinsr for this property, we belisvc the gsnsral law guidelines pwvfded by the legiolaturs for the sale of land owned by the ateta% political subdivialons would conetitute reasonable bid procedures and publication requirsmsata the Bexar County property owned by orate. See V.T.C.S. art. 5421c-12, 551 - and 3.
SUMMARY House Bill NED. 1426 the Sixty-ninth Legis- lature dose not g.rant legislative approval to sell certain Bexar County property owned by atate -d losses who offered to purchase the property at felt market value. ,Legislative authority to sell propekty by e bid procses does not confl,Lct with a lsaee provlrion permita 1emlBee to purchase at market value if le~:i~slaturs approves such a purchase.
It is the opiniczl of this egency that the legisla- ture-authorized ,the aale of the proparty~ by coi- petitivs biddint: which vould protect intsruts of the state. such aa the general lav provieiona for sealed bids and publication of notice of the rals enacted by the legislature for the aale of other publicly-mnmsd property. Any aals will be subject to the,!.aasehold intersat In the property.
Very truly your J ~LG
A
JIM MATTOX Attorney General of Tsxas MARYKELLER
Executive Assistant Attorney General
ROBRRT GRAY
Spscfal Assistant Attorney General
RICK GILPIN
Chairman, Opinion Comitttii!
Nr. Lies B. "Bubba" Steen - Pegs 5 (JH-381)
. .
prapared by Nancy Sutton
Aaaiatant Attorney Gansral
APPROVED:
OPINION COtNIlTEE
Rick Gilpln, Chairman
Colln Carl
Swan Garrison
Tony Guillory
Jim Noellinger
Jennifer Riggs
Nancy Sutton
Sarah Woelk