                               ATTORNEY GENERAL OF TEXAS
                                            GREG       ABBOTT




                                                June 26,2006



The Honorable Kip Averitt                               Opinion No. GA-044 1
Chair, Committee on Natural Resources
Texas State Senate                                      Re: Authority of a municipality to lease its oil,
Post Office Box 12068                                   gas and mineral property and the terms under
Austin, Texas 787 1 l-2068                              which it may do so (RQ-0432,GA)

Dear Senator Aver&t:

         Your predecessor as Chair of the Senate Committee on Natural Resources asked us to
consider the authority of a municipality to lease its oil, gas, and mineral properties, and the terms
under which it may do so? At issue are two statutes, subchapter A of chapter 71 of the Natural
Resources Code, and section 253.005 of the Local Government Code. See Request Letter, supra
note 1, at l-2. Your predecessor asked whether these two statutes are in conflict and, if so, which
prevails. See id. at 1. The concern expressed in the request letter arises from the interrelationship
between these two statutes and a 1952 attorney general opinion. See id. at 1-2; see also Tex. Att’y
Gen. Op. No. V-l 569 (1952). In addition, there is one case that resulted in two court decisions that
reach potentially different conclusions about that interrelationship.  See City of Corpus Christi v.
Gregg, 275 S.W.2d 547,553-54 (Tex. Civ. App. -San Antonio 1954), rev ‘don other grounds, 289
S.W.2d 746 (Tex. 1956).

I0      Historical background

         In 1952, this office issued Attorney General Opinion V-l 569, which discussed the conflict
between the predecessors of the two statutes at issue here. See Tex. Att’y Gen. Op. No. V-l 569
(1952). The prior version of subchapter A of chapter 7 1 of the Natural Resources Code was former
article 5400a of the Texas Revised Civil Statutes, which had first been enacted in 1937. See Act of
Apr. 30,1937,45th Leg., R.S., ch. 279, $5 l-3,1937 Tex. Gen. Laws 568, 568-69.2 That statute was
applicable to political subdivisions and authorized those entities to “lease for mineral development



         ‘See Letter from Honorable Ken Armbrister, Chair, Committee on Natural Resources, Texas State Senate, to
Honorable Greg Abbott, Attorney General of Texas, at l-2 (Jan. 19,2006) (on file with the Opinion Committee, also
available at http://www.oag.state.tx.us) [hereinafter Request Letter].

         2Repealed andrecodijied by Act of May 24, 1977,65th Leg., R.S., ch 871, §Ej 71.001-,010, 1977 Tex. Gen.
Laws 2345, 2504-05 (current version at TEX. NAT. RES. CODE ANN. 55 71.001-.OIO (Vernon 2001) (subchapter A,
chapter 7 1).
The Honorable Kip Averitt         - Page 2           (GA-0441)




purposes any and all lands” which they may own. Id. $ 1, at 568. The right to lease those lands,
however, was contingent upon restrictions imposed upon the governing body of the political
subdivision, such as notice, hearing, and competitive bidding. See id. 5 2, at 568. By contrast,
former article 1267 of the Texas Revised Civil Statutes, which was a prior version of section 253.005
of the Local Government Code, first enacted in 1919, was limited in its application to cities and
towns. See Act of March 18, 1919,36th Leg., R.S., ch. 117, 5 1, 1919 Tex. Gen. Laws 183, 183.3
Such entities were granted “the power and right to lease such oil or mineral lands for the benefit of
such town or city,” subject to certain minor restrictions but not to any of the restrictions imposed on
political subdivisions by article 5400a. See id.

         Attorney General Opinion V-1569 found that because “cities and towns are political
subdivisions of the State, Articles 1267 and 54OOa”relate to the same subject matter as to cities and
towns and that article 1267, applicable only to cities and towns, was an exception to article 5400a.
Tex. Att’y Gen. Op. No. V-l 569 (1952) at 4-6. The opinion reasoned that because article 1267
was the more specific statute, it prevailed over article 5400a with regard to cities and towns. See id.
at 6. As a consequence, cities and towns were not bound by the restrictions imposed on political
subdivisions by article 5400a.

         In 1954, the San Antonio Court of Civil Appeals, without referring to Attorney General
Opinion No. V- 1569, held that there was no conflict between article 1267 and article 5400a, that the
statutes could be harmonized, and that as a result, cities and towns were subject to the restrictions
imposed by article 5400a. See Gregg, 275 S.W.2d at 553-54. Two years later, the Supreme Court
of Texas reversed the decision of the court of appeals, but on the procedural ground that the City
of Corpus Christi was estopped to deny the validity of the leases granted. See Gregg, 289 S.W.2d
at 753. The supreme court neither upheld nor overruled the San Antonio court’s decision that
articles 1267 and 5400a were not in conflict and could be harmonized. Rather, it merely granted,
“for the sake of argument, that article 5400a applies to cities and towns.” Id. at 751 (citation
omitted).

         Here the issue of the conflict between the two statutes rested until 1975. The state of the law
would have been difficult to determine during those nearly two decades because of the uncertainty
regarding the authority of both the San Antonio court’s decision in Gregg, which had been reversed
on other grounds, and Attorney General Opinion V-1569, which had not been cited in the San
Antonio court’s decision in Gregg. Then in 1975 the legislature amended former article 1267 to add
the following italicized language:

                         Cities and towns chartered and organized under the general
                 laws of Texas, or by special Act or charter, which may own oil, gas
                 or mineral lands, shall have the power and right to lease such oil, gas



        3Amended by Act of May 17, 1975,64th Leg., R.S., ch. 3 12, (j 1, 1975 Tex. Gen. Laws 806, 806, and Act of
May 26, 1985,69th Leg., R.S., ch. 893, tj 1, 1985 Tex. Gen. Laws 30 17, 30 17-l 8; repealed and recodljied by Act of
May 1, 1987, 70th Leg., R.S., ch. 149, $5 1,49, 1987 Tex. Gen. Laws 707, 1028, 1307 (current version at TEX. LOC.
GOV’T CODE ANN. 5 253.005 (Vernon 2005).
The Honorable Kip Averitt          - Page 3             (GA-0441)




                 or mineral lands for the benefit of such town or city in such manner
                 and upon such terms and conditions as the governing body of such
                 town or city may determine . . . .

See Act of May 17, 1975,64th          Leg., R.S., ch. 3 12, 5 1, 1975 Tex. Gen. Laws 806, 806 (emphasis
added).4

II 0    Relevant statutes

         Chapter 7 1 of the Natural Resources Code provides that “[a] political subdivision may lease
land owned by it for mineral development, including development of coal and lignite,” TEX. NAT.
RES.CODEANN. 5 71.002 (Vernon 2001), and it sets out specific requirements for such a lease. See
id. $5 7 1.OOl-7 1.057. Subchapter A of chapter 7 1 describes the leasing procedures, which include
notice and hearing requirements, that a political subdivision must follow in order to lease its land for
mineral development.       Id. $5 71 .OOl-.Ol 0.5 Other portions of the subchapter relate to bidding
procedures. Id. $5 71.006-.008.        Section 71.009 prescribes that the lessor shall retain a royalty
interest, based on whether the lease is for “coal and lignite” or for other kinds of mineral. Id.
5 7 1.009. Finally, section 7 1.O10 prescribes maximum terms for a lease: thirty-five years in the case
of coal and lignite, ten years for other kinds of mineral. See id. $ 71 .OlO.

          Section 253.005 of the Local Government                Code, on the other hand, provides very few
restrictions on such mineral leases:

                         (a) Except as provided by Subsection (b), a municipality may
                 lease oil, gas, or mineral land that it owns, in the manner and on the
                 terms that the governing body of the municipality determines, for the
                 benefit of the municipality.   A lease under this section is not a sale
                 under the law governing the sale of municipal land.

                          (b) A municipality may not lease under this section a street,
                 alley, or public square in the municipality.

                         (c) A well may not be drilled in the thickly settled part of the
                 municipality or within 200 feet of a private residence.

TEX. LOC. GOV’T CODEANN. 5 253,005 (Vernon 2005) (emphasis added).




         4Amended by Act of May 26, 1985, 69th Leg., R.S., ch. 893, $ 1, 1985 Tex. Gen. Laws 3017, 3017-18;
repealed andrecodzjied by Act of May 1,1987,7Oth Leg., R.S.;ch. 149,§ 5 1,49,1987 Tex. Gen. ,Laws 707,1028,1307
(current version at TEX. Lot. GOV’T CODE ANN. $253.005 (Vernon 2005).

        ‘Chapter 7 1 defmes a political subdivision   as “any body corporate with a recognized   and defined area.” TEX.
NAT. RES. CODE ANN. 5 7 1.OO1 (Vernon 200 1).
    The Honorable Kip Averitt     - Page 4            (GA-0441)




              The issue before us , is whether there is a conflict between subchapter A of the Natural
                                                  1               1 *.*                                      .   1
                                  1       .                                   1   ,.   .   .   9   1   0’.

    Resources Code, which attacnes various restrictions to a political subdivisions lease or its mineral
                                                      l   a *             1




    land, and section 253.005 of the Local Government Code, which imposes relatively few and minor
    restrictions on a municipality’s lease of its land for purposes of mineral development and none of
    the notice, hearing and bidding requirements required under subchapter A of chapter 71 of the
    Natural Resources Code.

    III   l   Analysis
i
             Subchapter A of chapter 71 of the Natural Resources Code applies to all political
    subdivisions, of which a municipality is merely one example. See TEX. NAT. RES. CODEANN.
    $5 71.001-.OlO (Vernon 2001) (subchapter A, chapter 71). Section 253.005 of the Local
    Government Code, on the other hand, applies only to a municipality. See TEX. LOC. GOV’T CODE
    ANN. $ 253.005 (Vernon 2005). Although the relevant provisions of chapter 71 of the Natural
    Resources Code are more detailed, section 253.005 is the narrower and thus more specific provision.
    Section 3 11.026(a) of the Government Code provides that, “[i]f a general provision conflicts with
    a special or local provision, the provisions shall be construed, if possible, so that effect is given to
    both.” TEX. GOV’T CODEANN. 5 3 11.026(a) (Vernon 2005). In our view, however, the statutes
    cannot be harmonized because section 253.005 applies very limited restrictions to a narrow subset
    of the category of “political subdivision,” while subchapter A of chapter 71 imposes different and
    much more stringent restrictions to the entire category of “political subdivision.” Furthermore, as
    we have noted, section 253.005 contains the provision that “a municipality may lease oil, gas, or
    mineral land that it owns, in the manner and on the terms that the governing body of the municipality
    determines.” TEX. LOC.GOV’T CODEANN. 5 253.005 (Vernon 2005). This last clause indicates that
    a municipality is at liberty to negotiate and set its own lease terms without regard to the notice,
    hearing, length of term, and bidding restrictions attached to subchapter A of chapter 7 1 of the Natural
    Resources Code.

            Section 3 11.026(b) of the Government Code declares that “[i]f the conflict between the
    general provision and the special or local provision is irreconcilable, the special or local prevails as
    an exception to the general provision, unless the general provision is the later enactment and the
    manifest intent is that the general provision prevail.” TEX. GOV’T CODEANN. $3 11.026(b) (Vernon
    2005). Texas courts, including the Supreme Court, have construed the term “special or local” to
    mean “specific.” InMitchell v. CityofDallas, 855 S.W.2d741 (Tex. App.-Dallas           1993), aff’d, 870
    S. W.2d 2 1 (Tex. 1994), the appellate court considered what statute was applicable to a negligence
    claim against the city of Dallas. The general statute, section 75.002 of the Civil Practice and
    Remedies Code, declared that an owner, lessee or occupant of real property does not owe an invitee
    any greater degree of care than is owed to a trespasser. iMitchell, 855 S.W.2d at 746 (citing section
    75.002 of the Civil Practice and Remedies Code). The other statute, a part of the Texas Tort Claims
    Act, provided that a political subdivision, with regard to a premises defect, owes to a claimant the
    duty that a private person owes to a licensee on private property. See id. (citing section 10 1.022(a)
    of the Civil Practice and Remedies Code). The court found that the more general statutes “were
    intended to be laws of general application,” id. at 746-47, while the Tort Claims Act was a specific
    law “applicable to governmental owners and occupiers of real property,” and that, as a result, “the
The Honorable Kip Averitt     - Page 5          (GA-0441)




specific controls over the general.” Id. at 747. Significantly for our purposes here, the court cited
section 3 11.026(b) of the Government Code for this proposition. See id. When the Supreme Court
affirmed Mitchell, it similarly cited section 3 11.026(b) for the principle that “the specific controls
over the general.” City ofDallas v. Mitchell, 870 S.W.2d 21,23 (Tex. 1994).

         The standard set forth in section 3 11.026(b) thus means that the specific controls over the
general’, but it adds the following qualifying language: “unless the general provision is the later
enactment and the manifest intent is that the general provision prevail.” TEX. GOV'T CODEANN.
5 3 11.026(b) (V emon 2005). The relevant portion of the Natural Resources Code was enacted in
1937 in essentially the same language as that of today’s law. Compare Act of Apr. 30, 1937,45th
Leg., R.S., ch. 279, $5 l-3,1937 Tex. Gen. Laws 568,568-69, with Act of May 24,1977,65thLeg.,
R.S., ch. 871, @ 71.001-.OlO, 1977 Tex. Gen. Laws 2345,2504-05.             The predecessor statute to
section 253.005 containing the language “in such manner and upon such terms and conditions as the
governing body of such town or city may determine” was enacted in 1975. Compare Act of May 17,
1975,64th Leg., R.S., ch. 3 12, 5 1, 1975 Tex. Gen. Laws 806,806, with Act of May 1, 1987,7Oth
Leg., R.S., ch. 149,s 1, sec. 253.005,1987 Tex. Gen. Laws 707,1028. Thus, the Local Government
provision is not only more specific; it is also the later-enacted statute. As a result, we conclude that
with regard to a municipality’s lease of its mineral property, subchapter A of chapter 71 of the
Natural Resources Code irreconcilably conflicts with section 253.005 of the Local Government
Code, and section 253.005, being the more specific enactment, prevails.
The Honorable Kip Averitt    - Page 6         (GA-0441)




                                        SUMMARY

                        With regard to a municipality’s lease of its mineral property,
               subchapter A of chapter 71 of the Natural Resources Code
               irreconcilably conflicts with section 253.005 of the Local Government
               Code, and as a result, section 253.005, being the more specific
               enactment, prevails.




KENT C. SULLIVAN
First Assistant Attorney General

ELLEN L. WITT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Rick Gilpin
Assistant Attorney General, Opinion Committee             ’
