TEEX-CS 891228~/FULBRIGHT & JAWORSKI
;~200 ROSS AVENUE
SUITE 2800
DALLAS~TEXAS 75201
HOUSTON
WASHINGTON, D C.
AUSTIN
SAN ANTONIO
DALLAS
LON ~)ON
December 28, 1989
Honorable Mark Wolfe
Mayor, City of Coppell
255 Parkway Boulevard
Coppell, Texas 75019
RE: City of Coppell,
Extension
Texas - Texas A & M University
Dear Mayor Wolfe:
The City of Coppell, Texas (the "City"), has asked us
to review certain legal questions surrounding a proposal to
locate an extension facility of Texas A & M University ("A &
M") in the City. We have been advised that the proposal
relates to a financing plan wherein the City would acquire land
and construct a building which land and building would then be
donated to A & M for use as an extension facility. It is our
understanding that the funds to acquire the land and construct
the building are anticipated to come from bond proceeds to be
received by the City after approval of the qualified voters of
the City is obtained at a bond election. Specifically, we have
been asked to examine the questions of whether the City is
authorized to issue debt to acquire the land and construct the
facility and then donate both the land and the facility to
A & M.
Article III, Section 52-a
was adopted in 1987 and provides:
of the Texas Constitution
Notwithstanding any other provision of this
constitution, the legislature may provide for the
creation of programs and the making of loans and
grants of public money, other than money otherwise
dedicated by this constitution to use for a different
purpose, for the public purposes of development and
diversification of the economy of the state, the
elimination of unemployment or underemployment in the
state, the stimulation of agricultural innovation, the
fostering of the growth of enterprises based on
agriculture, or the development or expansion of
transportation or commerce in the state. Any bonds or
other obligations of a county, municipality, or other
political subdivision of the state that are issued for
the purpose of making loans or grants in connection
with a program authorized by the legislature under
this section and that are payable from ad valorem
taxes must be approved by a vote of the majority of
the registered voters of the county, municipality, or
political subdivision voting on the issue. An
enabling law enacted by the legislature in
anticipation of the adoption of this amendment is not
void because of its anticipatory character.
This constitutional provision requires legislative action in
order to permit grants or loans by a political subdivision such
as the City. Accordingly, the Texas Legislature must provide
specific statutory authority for the implementation of the
provisions of Article III, Section 52-a of the Texas
Constitution.
In 1989, the Texas Legislature did enact Article 835s,
Vernon's Texas Civil Statutes, as amended, which authorizes a
city to acquire, by any lawful means other than eminent domain,
land and to construct or otherwise acquire a building or other
facility for the purpose of leasing the land, building or other
facility to a political subdivision or agency of the state for
public use or to an individual, private corporation or other
private entity for use in manufacturing or another commercial
activity. A & M would qualify as an agency of the state.
The City, under Article 835s, is authorized to issue
and sell bonds to finance the acquisition of land and
construction of the facilities provided that the land and
building are leased to the user. The statutes currently do not
provide for land or facilities to be acquired by the City and
then donated to the user. Accordingly, under current law, we
do not believe that the acquisition of land and the
construction of a facility with the subsequent donation of both
to A & M is permitted in the general structure outlined above.
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It is interesting to note that in 1940, the district
attorney of Comanche County submitted an Attorney General
opinion request asking whether the commissioners court had the
power to call an election for the purpose of voting bonds for
the purchase of land to be donated to A & M College for an
experiment station as provided in the then applicable Article
149(c), Vernon's Texas Civil Statutes, as amended. In
reviewing the law in effect at that time, the Attorney
General's office concluded that Article 149(c) did not confer
upon the county the authority to issue bonds for the purpose of
purchasing such lands and that no other statute granted to the
county that power. Accordingly, the Attorney General's office
concluded that Comanche County was without power to call an
election for the purpose of voting bonds of the nature sought
to be issued.
In response to the aforesaid opinion, in 1941 the
Legislature enacted Article 163a which authorized counties to
acquire and construct an agricultural experiment station and
lease it to the State of Texas or any agency of the Federal
Government. In 1946, another Attorney General opinion was
requested as to whether or not a county could issue bonds for
the acquisition of land to be given, sold or leased to A & M
College for the purpose of establishing an adjunct or division
of the College. The Attorney General concluded that Article
163a did authorize a county to issue bonds for an agricultural
experiment station and thereafter lease the facility to the
State of Texas or the Federal Government. Since the statute
did not authorize the sale or donation of the facilities, the
Attorney General concluded that a county was only permitted to
lease the anticipated facilities and could not sell or donate
the facilities.
Given the current statutory authority provided by
Article 835s, we believe that a lease of the desired facilities
is the only alternative that would be able to be applied to the
facts as set forth above.
Should you have any questions or desire any additional
clarification, please do not hesitate to contact us.
Sincerely,
Robert D. Dransfield
RD:cf
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