Untitled Texas Attorney General Opinion

@ffice of tije 2UtornepQheral &date of Qexae DAN MORALES October 25.1993 ATTORNEY GENERAL Honorable Nathan B. Bheinlander Opiion No. DM-268 comal county Attorney 150NorthSeguin,Suite318 Be: Whether House Bii 2087 violates New Braunfels, Texas 78130-5113 article JII, section 52 of the Texas Consti- ,tution (lQ592) Dear Mr. Rheinhder: You ask whether House Bii 2087 violates article Ill, section 52 of the Texas Consthution. House Big 2087, which was recently enacted by the legislature, see Acts 1993, 73d Leg., ch. 237 (eff Aug. 30, 1993), amends section 263.152 of the Local Government Code. Chapte-r263, subchapter D of the Local Government Code governs the disposition of salvage or surplus property by a commissionerscourt of a county. As it did prior to amendment, section 263.152 authorizes a commissioners court to sell such property by competitive bid or auction, Local Gov’t Code 8 263.152(a)(l), or to o&r the property as a trade-in for new property, id.5 263.152(a)(Z). Section 263.152(a)(3) spedicfdly authorizes a court to order any of the property to be destroyed or otherwise disposed of as worthless ifthe commissionerscourt undertakes to sell that property under Subdivision (1) and is unable to do so because no bids are made. Id.5 263.152(a)(3). Section 263.155 of the Local Government Code requires a conunissioners court to keep records of property disposed of pursuant to this provision for one year. House Bii 2087 amended section 263.152 by adding subsection (c) which provides as follows: The commissioners court may dispose of property under Subsection (a)(3) by donating the property to a civic or charitable organimtion located in the county. You are concerned that this provision runs afoul of article III, section 52 of the Texas Constitution which provides in pertinent part: jT]he Legislature shall have no power to authorize any county. . . of the State to lend its credit or to grant public money or p. 1402 Honorable Nathan B. Rheinlander - Page 2 (DM-268) thing of value in aid of, or to‘ any hrdividt& association or corporation whatsoever. Tex. Const. art. III, 5 52(a). As explained below, we believe that House Bii 2087 on its face does not run afoul of this provision. First, article III, section 52 prohibits the legislature from autborising a county to “grant . . a thing of value.” House Bii 2087 authorizes county commissioners to donate “salvage” or “surplus” property only. Under the relevant subchapter of the Local Government Code, “salvageproperty” means: personal property, other than items routinely discarded as waste, that because of use, time, accident, or any other cause is so worn, damaged, or obsolete that it has no value for the purpose for which it was oliginally intended. Local Goti Code 8 263.i51(1). “Surplus property” means property that is not Currently needed by its owner, is not required for the owtiet’sforeseeable needs, and possesses some usehlness for the purpose for which it was intended. Id.8 263.151(2). Obkusly, “salvage”or “surplus”property is generally property which is of little or no use to the county. Furthermore, House Bii 2087 authorizes a county commissionerscourt to donate such property only if it has tried and been unable to sell the property because no bids have been made. For this reason, the property is also of no value to the county for resale purposes. Assumingthat an item of property is of no use or resale value to the county, we do not believe that article III, section 52 prohibits a county from donating it to a civic or charitable organization. Of course, the determination whether a particular item of property is truly of no use or resale value to the county would involve the resolution of factual issues and therefore is not amenableto the opinion process. Even if an item of salvage or surplus property is of some nominal use or value to the county, we do not believe that disposing of it by donating it in accordance with House Bii2087will run afbul of article III, section 52. if certain conditions are met. In Attorney General Opiion MW-373 (1981). this ofllce considered whether the University of Texas could provide office space, utilities, and telephone service to the University of Texas Law School Foundation, a nonprofit corporation. This office concluded that the university had the statutory authority to provide the foundation with these items as “terms and conditions”attached to the foundation’sdonations under section 65.31(e) of the Education Code, and themconsidered whether this arrangement would violate article III, section 51, the legislative counterpart of section 52(a). Attorney General Opiion MW-373 at 8-l 1. The opinion stated that the constitutional prohibition requires that a grant by the university to the foundation must serve a public purpose, appropriate to the kction of a university, and that adequate consideration must flow to the public. . In addition, the p. 1403 Honorable Nathan B. Rheiniander - Page 3 (DM-268) university must maintain some wntrols over the foundation’s activities, to ensure that the public purpose. is actually achieved. . If these wnditions are met, the grant by the public entity is not unwnstitutional. Id.at9. We believe that it is possible that the donation of salvage or surplus property pursuant to House Bill 2087 wuld serve a public purpose and be acwmpanied by adequate consideration. For example, the donation of a large piece of surplus county equipment to an organktion which agreed to haul it could serve the public purpose of disposing of the property. In addition, by relieving the county of the expemes it would incur in disposing of the item, such as transportation costs and disposal fses, the agreement to haul it could constitute adequate consideration. Again, whether the donation of a particular item of salvage or surplus property pursuant to House Bill 2087 meets these constitutional requirements is a question of fact. Given the potential wnstitutional pitfalls, county wmmissioners should take special care to ensure that the donation of property pursuant to the new law does not run afoul of article III, section 52 of the Texas Constitution. Fii, the wunty commissioners should ensure that the property meets the definition of “salvage”or “surplus”property set forth in section 263.151 of the Local Government Code. Second, the county wmmissioners should make a good faith effort to se4 the property by competitive bid or auction pursuant to subsection (a)(l) of section 263.152. Finally, if the property has even some very nominal value to the wunty, the county wmmissioners should ensure that the donation serves a public purpose and is accompaniedby adequate consideration. SUMMARY House Bill 2087, which amends Local Govemment Code section 263.152 to authorize a county wmmissioners wurt to donate to civic or charitable organizations salvage and surplus property that it has been unable to sell by competitive bid or auction, does not on its he. violate article III, section 52 of the Texas Constitution. The donation of a particular item may run afoul of this wnstitutional prohibition if the property is of value to the county and it is not donated for a public purpose for adequate consideration. DAN MORALES Attorney General of Texas p. 1404 Honorable Nathan B. Rheinhder - Page 4 (DM-268) WILL PRYOR Fii Assistant Attorney General MARYKELLER Deputy Attorney Oemeralfor Lit&ion RENEAHICKS State Solicitor MADELEINE B. JOHNSON Chair, Opiion Committee Pmpared by Mary R Grouter AssistrntAttO~OUKMl p. 1405