                      September14, 1971

Dr. J..W. Edgar                 Opinion No. M-950
Commissioner of Education
Texas Education Agency          Re: Questions relating to bid-
201 East 11th Street                 lease procedure under
Austin, Texas                        Section 2i.901, Texas Edu-
                                    'cation Code.
Dear Dr. Edgar:

     You have requested'our opinion as to whether a lease con-
tract by the Dallas IndependentSchool District for a computer
is re uired by the provisions of Sec. 21.901, Texas Education
Code.P'to be awarded on competitivebids or whether such contract
may be entered into on a negotiatedbasis, whereby the best offer
might be obtained from prospective lessors.

     Our opinion ia that such a contract may be'entered into on a
negotiated basis and is not required to be awarded on competitive
bids. Our conference with officials of the Dallas Independent
School District convinces us that the proposed contract is in fact
a lease and not a purchase contract.

     Section 20.40 of the Texas Education Code' authorizes certain
expendituresfrom the public free school funds. Subdivision (c)
of this Section, in its pertinent portion, reads as follows:

          "(c) Local school funds from district taxes,
     tuition fees of pupils not.~~en$itled
                                         to free tuifion
     and other local sources may be used for the purposes



1. Derived from Art. 2752a, V.C.S.
2. Derived from Art. 2827, V.C.S.




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Dr. J. W. Edgar, page 2      (M-950)

     enumeratedfor.stpte,andcounty funds and for
     purchasingapplianqes.andsupplies, for the,payment
     of insurancepremiums, janitors and other employees,
     for buying school sites, buying, building and repair-
     ing and rending school houses, and for other DUrDoses
     necessarv in the conduct of the public schools to be
     determined,bvthe board of trustees . . ." (Emphasis
     added.)
     Our opinion is that this,subd&&ion; in its underscored
portion,authorizesthe board of trust,ees,  in its discretion,to
lease the computer.,Weefind only one case construingthis Sectios
~be&nACity of Garland v. Garland I.S.D., 468 S.W.2d 110 (Dallas ,:~
CiV.A!pP.1971). .An,appeal,ofth$s,,~,decisiqn
                                            is pending in the
Texas Supreme Court under the sarpestyle, their No. B-2858.
The Court,ofCivil Appealsheld that th$s‘Section authorisedthe,
board of trustees of the district to determinewhether'school
funds should be used for paving pub& streets abutting,.its  school
properties.

    Section 21.901 of,the.TexasEdqation Code is the controlling
statutpryprovision relating to competitivebidding; its relevant
portion,4s subdivision (a) which reads 'asfollows:

           "(a), All contractsproposed to be made by any Texas   '
     public school board for the,Purchaseof.any personal
     propertyshal.l,besubmitted to,competitivebidding when
      sa%d property is valued at $1,000 or more." (Emphasis
    ! aaaed.1
      The competitivebidding statute is limited to "purchases."A
*purchase,involvesa sale and tran,sm$ssion of the ownershipand
 title to.propertyfrom one person or,entity to another. 73 CJS
 207, Property,Seq. 15bQ). ,,Itdoes not,necessarilyinclude or
 comprehenda mere leasing or renting of property, Contracts for
 the rentingqf real property,or the,hire,prrenting of chattels.
 or personaltyare not gegerally,qonsidered  within the provisions
 requiringcontracts for-work.s.upplie.s,or materials to be let.up"
.cojapetitive,bidding. See: 43 Am.Jur..769,.Public.Works and,Con-
 tracts, Section 27; Ambrosich v. Eveleth, 200 firm. 473, 274
N.W. 635 (Minn.Supp.1937), 112 A.L.R. 269, wherein it was held




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Dr. J. W. Edgar, page 3        (M-950)


that a lease of real property by a municipality is not comprehended
within the requirement for advertising for competitive bids for
purchases of property, labor, materials, etc.: Scott v. Bloomfield,
N.J. Super.592,229 A.2d 667 (19671, wherein it was held that public
advertisement required of a municipality for the sale of land or any
interest therein did not include a lease. The Court, in the case
last cited, said, 229A.Zd at 673:

          11
            ...There is no reference in this statute to
     leasing, nor does the word lease appear.

          "A sale of property is fundamentally different
     from a lease since a sale transfersownership,  which
     includes both title and right to possession, while a
     lease grants only the use and enjoyment of the thing leased.
     51 C.J.S. Landlord and Tenant, Sec. 202."

     Our opinion is supported by the further general powers of the
board of trustees set forth in other provisions of the Code,
namely, Subchapter B. entitled, "Powers and Duties of Trustees,"
and the first two sections thereof:

     Section 23.25 reads:

          "The board of trustees of an independent school
     district shall have the powers and duties described
     in this subchapter, in addition to any other powers
     and duties granted or imposed by this code or by law."

     Section 23.26, in its relevant portions. reads as follows:

          “(a) The trustees shall constitute a body
     corporate and in the name of the school district may
     acquire and hold real and personal property, . . .
          a,
           . . .

           "(c) All rights and titles to the school property
     of the district, whether real or personal, shall be
     vested in the trustees and their successors in office.

          I'..." (Emphasis added.)



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Dr. J. W.   Edgar, page 4      (M-950)


     Subsequent to receiving this opinion request,we asked the
Dallas Independent School District to furnish us certain informa-
tion concerning the term and expiration date of the proposed
leane. In response to our inquiry, Dr. Nolan Estes, General
Superintendentof the Dallas Independent School District, made the
following statement in a letter dated September 8, 1971:
           "The DISD would like to lease a computer
     system and related support services beginning
     as soon as possible and terminatingAugust 31,
     1972. We do not intend to commit funds nor
     otherwise obligate the District beyond this
     current fiscal year. Any contract developed
     would expire August 31, 1972, and would require
     specific Board of Education action to renew the
     lease for each subsequent year."     .'

     Since this lease terminates'atthe end of the current fiscal
year (August 31, 1972), it is our further opinion that the lease
does not contravene the provisions of Section 52 of Article III
of the Texas Constitution,which prohibit a county, city, town
or other political corporation or subdivisionof the State from
lending its credit.

                            SUMMARY

             The Dallas Independent SchoolsDistrict is
             authorized to negotiate a lease contract
             for a computer without competitivebids.
             Arts. 20.40 and 2B.901. Texas Education
             Code.

             This lease terminates at the end of the
             current fiscal year, August 31, 1972.
             Therefore, it does not violate the provisions




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Dr. J. W. Edgar, page 5        (M-950)


          of Section 52 of Article III of the Texas
          Constitution,which prohibits school
          districts and other subdivisionsof the
          State from lending their credit.

                               Yap.
                                  ?8 very truly,


                           .q.?JL#~&<@
                               Atto ,ey General of Texas
                                  li
Prepared by Malcolm L. Quick
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Kerns Taylor, Chairman
W. E. Allen, Co-Chairman
James McCoy
John Reeves
Jerry Roberts
Marietta Payne

SAM MCDANIEL
Acting Staff Legal Assistant

ALFRED WALKER
Executive Assistant

NOLA WHITE
First Assistant




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