                                 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
