The Attorney General of .Texas
tbvmbcr 20, 1985
JIM MATTOX
Attorney General
Suprem. Court Building Mr. Lias B. “Bubbl? Steen opieioo no. Jn-361
P. 0. Box 12S4B Executive Director:
Aultin.lx. 79711.2549 ‘. State Purchasing md 80: Conetructioe of Eousc Bill PO.
512M75-2901 General Serviccro Camd.a~loe 1426, Actr 1985, 69th Leg., ch. i22.
T.lPx 9101B74.1~7
P. 0. Box 13047, Capitol Station which authorizes the state to cm-
Telecopier SlU475-0299
Austin, Texu 7lK’ll vey certain rul property in Bexar
Countyby e closed bid procrGure
714 Jackron. Suite 700
Oail~s. TX. 752924509
Dear Mr. Steen:
2tUI42-9944
4924 AItwIa Ave.. Suite 160
El Paso. TX. 799052793 You have arked thir agency to coastme chapter 722. Acts of the
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
l99lTaxas.Suilr 700
in Bexar Couety. You ask the following specific questions:
~ou,ton, TX. 77002~3111
7lY2255999 1. Khat is intended and meant by the require-
ment of I ‘closed bid procedure?’
W5 Broadway.SUN9312
Lubbock.TX. 79401.3479
2. II there a conflict between the provisions
M&747-3239 of rec,::loo 1 of chapter 722 end section 3 of
chapter 7221
4399 N. tenth, Suite B
Mc*ll*n. lx. 7BSol-19BS
3. What procedure lhould be folloved in
512m924947
rolling the property?
It is well mttled that the disposition of ltate-ovned land is a
200 Main Plaza. Suit0 400 matter over which the leglmlature has uclusive control and the paver
San Antonio. TX. 78205.2797 of an agency of the #rate to 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
An Equal OpPOrtUnitYl the Republic, 1% S.W. 197. 200 (Tex. 1913); Attorney General Opieioea
~fflrmativ~ Aclion Employw J&l49 (1984); MK-,62(1979); C-207 (1964); V-878 (1949). The terms of
legirlative euthwisation for the conveyance of land mua.tbe strictly
complied with. See State v. gasley, 404 S.U.Zd 296 (Tex. 1966);
Wilson v. County ~~Calhoun, 489 S.W.Zd 393 (Tex. Clo. App. - Corpus
Chrleti 1972, n5.t ref’d 0.r.e.); Attorney General Opinions m-242
(1984) ; MU-62 (15’7.9).
IO 1981, tlw leglalature authorized the State Purchasing and
General Services Co~s6100 to lease certain atace-oweed land in San
p, 1741
.
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” for the lessee to purchase the 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
the legislature. Acts 1981, 67th Leg., ch. 464. 12(c), at 2073.
Later that year, the comn~.s~slou leased the property for a priuarp tern
of 25 years with the rlghc of the lessee to renew the lease for se
additional 25 yearr. The lease includes permission to. the lessee co
cancel the lease after giving notice and coetelns se “option” to the
lessee to purchase the property at the property’s fair mrket value et
the rime the lessee ccrtlf ies its intent to purchase, if the
legislature approves the purchase. Prior to the 1985 session of the
legislature, the lessee c:ertified its intent to purchase, and House
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 aNaIt 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
deterabed by the feir mrket velue of the property 011 January 1.
1985. vhich would be lstr~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 the commiasioe to convey the
’ property to the named lesrme. gouse Bill No. 1426 gives the cocmissloe
the right to 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 the sale of the 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
of a lease that wa s luthcwired 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 lccordeece with the terms of
nuch l 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 fair market value In paragraph III (3)
of the lease. We, belimre the optiou in the lease can be uo~c
Mr. Llaa B. “Bubba” Steen a. Page 3 (m-381)
lccurately &scribed as an optiou to seek the legislature’o epprovel
to purchase oa there terms. The legislature vas not obligeted to
approve the lessee’s offer to purchase at fair 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
the property ou different terns. uhich include a bid procedure and
fair market value as a mirdmuxprice. Since the 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 the lease. Under gouaa
Bill No. 1426, the co~nlaaiou is l uthorlxed to convey all of the
interest of the 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. It 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
available for purchase. Competitive bidding la the method frequently
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
political subdivirioo of ,thastate, the legislature specifies that
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 the State Purchasing and General
Semites Act authorizes the comlosioe to lease stata-ovned land under
the comiasioe’s control for agricultural lud 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 the comisslon to adopt
rule6 sod regulations the!: will. in its judgment, protect the ieterest
of the state and luthorfrtru the coudaaloe to reject soy and all bids.
Id. Section 4.15 of 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
Gte coupetitioe sod Imrotect the ietereata of the state. -m See id.
594.15(b), (f). Sectfoe 9.05 of the aaxie act directs the ccmanlsaioo
to sell certain surplus or salvage personal property owned by the
state by competitive bid o:r euction sod after publication of notice of
the sale If the lstl.ma velue tetlexceeds $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.
p. 1743
Mr. Liar B. “Bubba” Stun - Page 4 (JM-381)
Rouse Bill No. 1426 c~ontains no guidslfnss for bid procsdutss and
publicscion rsquiremnts w be smP1oy.d in the sale of this l pscific
property. It 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 of atats property under itr control
and in a sale of the 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 for the Bexar
County property owned by the orate. -See V.T.C.S. art. 5421c-12, 551
and 3.
SUMMARY
House Bill NED.1426 of the Sixty-ninth Legis-
lature dose not g.rant legislative approval to sell
certain Bexar County property owned by the atate
to the -d losses who offered to purchase the
property at felt market value. ,Legislative
authority to sell the propekty by e bid procses
does not confl,Lct with a lsaee provlrion that
permita the 1emlBeeto purchase at fair market
value if the 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 the 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
JIM
A
MATTOX
Attorney General of Tsxas
MARYKELLER
Executive Assistant Attorney General
ROBRRTGRAY
Spscfal Assistant Attorney General
RICK GILPIN
Chairman, Opinion Comitttii!
p. 1744
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
p. 1745