Untitled Texas Attorney General Opinion ( 2003 )

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
November 18,2003
Mr. Antonio R. Sandoval Opinion No. GA-0122
Hidalgo County Auditor
P.O. Box 689 Re: District attorney’s obligations as administrator
Edinburg, Texas 78540-0689 of forfeited real property (RQ-0059-GA)
Dear Mr. Sandoval:
You ask several questions about a district attorney’s responsibilities to administer real
property that the district court forfeited to the state as contraband under chapter 59 of the Code
of Criminal Procedure.’
An investigation by the Texas Department of Public Safety (“DPS”) Narcotics Service
led to the arrest of Javier Barr-era and the seizure of approximately 15,000 pounds of marijuana.2
In 1996, the Hidalgo County criminal district attorney sought forfeiture of a residence and
approximately 34 acres of land owned by Barr-era and others, simultaneously filing a notice of Zis
pendens with the Hidalgo County clerk’s office.3 In April 1997, the district court rendered a
judgment (1) forfeiting the property to the criminal district attorney and DPS according to the
terms of their local agreement, and (2) transferring title to the criminal district attorney as agent
for the state.4 The criminal district attorney obtained quitclaim deeds from other nominal owners
‘See Brief from Antonio R. Sandoval, Hidalgo County Auditor, to Nancy Fuller, Chair, Opinion
Committee, Office of Attorney General (May 23, 2003) ( on file with Opinion Committee) [hereinafter Request
Briefj.
2See Brief from Honorable Rene Guerra, Hidalgo County Criminal Distric# Attorney, to Nancy Fuller,
Chair, Opinion Committee, Office of Attorney General, at 1 (July 7, 2003) (on file with Opinion Committee)
[hereinafter DA Briefj.
3See id. ; see also Request Brief, supra note 1, at 1.
4See DA Brief, supra note 2, at 2. In 1994, as contemplated by article 59.06, the Hidalgo County criminal
district attorney and DPS entered into a local agreement governing the disposition of forfeited property. See Request
Brief, supra note 1, at 1; see genera& TEX. CODE GRIM. PROC. ANN. 0 59.06(a)-(c) (Vernon Supp. 2004) (providing
for the administration and disposition of forfeited property pursuant to an agreement between the attorney
representing the state and law enforcement agencies). A “law enforcement agency,” one of the parties to a local
agreement under article 59.06, is defined as “an agency of the state or an agency of a political subdivision of the
state authorized by law to employ peace officers.” TEX. CODE CRIM. PROC. ANN. 0 59.01(5) (Vernon Supp. 2004).
Mr. Antonio R. Sandoval - Page 2 (GA-0122)
during the year 2000? On January 3, 2001, the criminal district attorney leased the land to an
adjoining landowner for $100 per month to pasture goats, terminable upon 30-days notice?
Under chapter 59 of the Code of Criminal Procedure, property used to commit certain
enumerated offenses, the proceeds of such offenses, or property acquired with such proceeds is
contraband subject to forfeiture. See TEX.CODE CRIM.PROC.ANN. art. 59.01(2) (Vernon Supp.
2004).7 Contraband may be “property of any nature,” including real property. Id. When the
district court determines that property is contraband subject to forfeiture, the court must forfeit
the property to the state. See id. art. 59.05(e). A final judgment of forfeiture vests the property’s
title in the state. See id. art. 59.06(f) (p roviding for the perfection of title to forfeited property in
the state). However, the trial court may not forfeit property directly to the state or the state
treasury. See Twenty-Four Thousand One Hundred and Eighty ($24,180.00) Dollars in United
States Currency v. State, 865 S.W.2d 181, 185 (Tex. App.-Corpus Christi 1993, writ denied).
Rather, the district court must forfeit contraband property to the attorney representing the state as
the state’s agent. See id.; see also TEX.CODE CRIM.PROC.ANN. arts. 59.05(e) (Vernon Supp.
2004) (“the court shall order the property forfeited to the state with the attorney representing the
state acting as the agent of the state”), 59.01(a)* (defining “attorney representing the state” as
“the prosecutor with felony jurisdiction in the county in which a forfeiture proceeding is held,”
certain city attorneys, and the attorney general). The attorney representing the state has the duty,
“[o]n final judgment of forfeiture, . . . [to] dispose of the property in the manner required by
Article 59.06 of this code.” TEX.CODE GRIM.PROC.ANN. art. 59.05(e) (Vernon Supp. 2004).
Article 59.06 sets forth the duties of the attorney representing the state to administer and
dispose of forfeited property. Under article 59.06(a), the attorney must administer “all forfeited
property . . . , acting as the agent of the state, in accordance with accepted accounting practices
and with the provisions of any local agreement entered into between the attorney representing
the state and law enforcement agencies.” Id. art. 59.06(a). Other provisions of article 59.06
direct the attorney to dispose of forfeited property or proceeds in various ways, depending
primarily on whether the attorney has a local agreement with a law enforcement agency
concerning the disposition of forfeited property. Id. art. 59.06(a)-(c).
When the attorney representing the state has not executed a local agreement under article
59.06, generally the forfeited property must be sold by sheriffs sale, certain payments and costs
‘See DA Brief, supra note 2, at 2.
6See id.; Request Brief, supra note 1 (Exhibit C - “Lease Agreement”).
7Amended by Act of May 30,2003,78th Leg., R.S., ch. 1005, $7,2003 Tex. Sess. Law Serv. 2944, 2945-
46 (House Bill 236); Act of May 30, 2003, 78th Leg., R.S., ch. 257, 0 17,2003 Tex. Sess. Law Serv. 1163, 1169-70
(House Bill 1743); Act of May 28, 2003, 78th Leg., R.S., ch. 649, 0 3, 2003 Tex. Sess. Law Serv. 2053, 2055
(House Bill 2138); Act of June 1, 2003, 78th Leg., R.S., ch. 198, 0 2.141, 2003 Tex. Sess. Law Serv. 611, 705-06
(House Bill 2292).
‘As amendedby Act ofMay30,2003,78thLeg., R.S., ch. 257,§ 17,2003 Tex. Sess. Law Serv. 1163,1169-70
(House Bill 1743); Act of June 1,2003,78th Leg., R.S., ch. 198,§ 2.141,2003 Tex. Sess. Law Serv. 611,705-06 (House
Bill 2292).
Mr. Antonio R. Sandoval - Page 3 (GA-0122)
must be deducted from the proceeds, and the balance must be deposited in the general revenue
fund of the state treasury. Id. art. 59.06(a)(1)-(2).9 If the attorney has entered into a local
agreement with a law enforcement agency, however, the attorney has two principal options. The
attorney may convey forfeited property to the law enforcement agency, which may “maintain,
repair, use, and operate the property for official purposes.” Id. art. 59.06(b). Alternatively,
pursuant to the local agreement, the attorney shall, after deducting certain costs, deposit “all
money, securities, negotiable instruments, stocks or bonds, or things of value, or proceeds from
the sale of those items” into special funds to benefit the attorney’s office and the appropriate law
enforcement agency, to be used solely for official purposes. Id. art. 59.06(c)(1)-(4).
Several of your questions concern the authority and duties of an attorney representing the
state to hold and dispose of forfeited real property under chapter 59. Specifically, you ask:
Does [the local agreement between the Hidalgo County criminal
district attorney’s office and DPS] satisfy the provisions of Article
59.06(a) of the Code of Criminal Procedure, in that the District
Attorney does not have to sell the [forfeited] property on the 75th
day after the date of the final judgment of forfeiture of this
property?
Is the District Attorney authorized to lease the aforementioned
[forfeited] property?
Is the District Attorney in compliance with the state statu[t]es by
holding the property for “. . . law enforcement . . .” before selling
the property and distributing the proceeds as agreed to in the Local
Agreement (Exhibit A)? If the answer to this question is yes, is
there a maximum amount of time the property can be held?
Request Brief, supra note 1, at 2. The local agreement between DPS and the criminal district
attorney of Hidalgo County provides generally for the disposition of forfeited property, 30
percent to the criminal district attorney’s office and 70 percent to DPS, for their respective
official purposes. See id. (Exhibit A - “Local Agreement”). The local agreement does not detail
the methods the criminal district attorney may choose, as attorney representing the state, to
administer and dispose of forfeited real property.
‘Income and other property obtained due to media reenactment of a crime or to the sale of property that has
increased in value due to a crime’s notoriety must be transferred to the attorney general for a crime victim’s fund.
See TEX. CODE GRIM. PROC. ANN. 5 59.06(k)(1)-(3) (V emon Supp. 2004), amended by Act of May 28, 2003,78th
Leg., R.S., ch. 428, $ 2,2003 Tex. Sess. Law Serv. 1673, 1673 (House Bill 406). Certain property or proceeds must
be paid to the Health and Human Services Commission “to the extent necessary to protect the commission’s ability
to recover amounts wrongfully obtained by the owner of the property and associated damages and penalties to which
the commission may otherwise be entitled by law.” Added by Act of June 1,2003, 78th Leg., R.S., ch. 198, 6 2.142,
2003 Tex. Sess. Law Serv. 611, 706 (House Bill 2292); Act of May 28, 2003, 78th Leg., R.S., ch. 257, 5 18, 2003
Tex. Sess. Law Serv. 1163, 1170 (House Bill 1743) (to be codified at TEX. CODE GRIM. PROC. ANN. art. 59.06(p)).
Mr. Antonio R. Sandoval - Page 4 (GA-0122)
In your first question, you are concerned that the local agreement does not comport with
article 59.06(a) because it does not require the attorney representing the state to dispose of
forfeited property within 75 days of judgment. Article 59.06(a) provides, in pertinent part:
[A]11 forfeited property shall be administered by the attorney
representing the state, acting as the agent of the state, in
accordance with accepted accounting practices and with the
provisions of any local agreement entered into between the
attorney representing the state and law enforcement agencies. If a
local agreement has not been executed, the property shall be sold
on the 75th day after the date of the final judgment of forfeiture at
public auction under the direction of the county sheriff, after notice
of public auction as provided by law for other sheriffs sales.
TEX.CODE CRIM.PROC.ANN. art. 59.06(a) (Vernon Supp. 2004). By its terms, article 59.06(a)
requires a sheriffs auction within 75 days of judgment only “[i]f a local agreement has not been
executed.” Id. lo
Under article 59.06(a)‘s plain language, the 75-day auction requirement is a default
provision applicable only in the absence of a local agreement. See Tex. Att’y Gen. LO-97-091,
at 2 (describing sheriffs sale in 59.06(a) as the “fallback” method of disposing property not
subject to a local agreement). Chapter 59 does not contain a comparable provision for forfeited
property subject to a local agreement. When such a local agreement exists, the attorney
representing the state has discretion to administer property “in accordance with accepted
accounting practices and with the provisions of any local agreement.” TEX.CODE CRIM.PROC.
ANN. art. 59.06(a) (Vernon Supp. 2004); see Tex. Att’y Gen. Op. No. JC-0075 (1999) at 1
(advising that “so long as you administer the property in accordance with accepted accounting
practices and with the provisions of your local agreement, you have the discretion to decide how
to dispose of it most advantageously”).
While no statute prescribes a deadline for disposing of forfeited property subject to a
local agreement, it does not follow that the attorney representing the state may hold forfeited
property in perpetuity. Unlike law enforcement agencies, the office of an attorney representing
the state is not authorized under chapter 59 “to maintain, repair, use, and operate” forfeited
property for the office’s own uses. TEX.CODE CRIM. PROC. ANN. art. 59.06(b) (Vernon Supp.
2004). Article 59.05(e) mandates that the attorney “dispose of the property in the manner
required by Article 59.06.” Id. art. 59.05(e); see also Tex. Att’y Gen. Op. No. GA-0005 (2002)
at 2 (“The duty of the attorney for the state is to ‘dispose of the property in the manner required
“Despite article 59.06(a)‘s clear terms, language in one court’s opinion suggests that the 75day deadline
applies even when forfeited property is subject to a local agreement. See State v. One Thousand DolIars ($I,OOO.OO)
in United States Currency and One Pistol, Serial No. FC28277, 865 S.W.2d 164, 166 (Tex. App.-Corpus Christi
1993, writ denied). In One Thousand Dollars, the primary issue was whether a local agreement must be executed
prior to the forfeiture judgment to be effective. See id. at 165-66. While discussing that issue, the opinion suggests
that the 75-day requirement applies regardless of the existence of a local agreement. See id. This office has
considered the court’s statements to that effect in One Thousand Dollars, and concluded that they were dicta. See
Tex. Att’y Gen. Op. No. JC-0075 (1999) at 2.
Mr. Antonio R. Sandoval - Page 5 (GA-0122)
by Article 59.06 of this code.“‘). The attorney’s express duties under article 59.06 include only
the duties to (1) administer forfeited property “in accordance with accepted accounting practices
and with the provisions of any local agreement,” and to (2) dispose and distribute such property
or proceeds for various specified purposes. TEX. CODE CRIM.PROC. ANN. art. 59.06(a)-(c)
(Vernon Supp. 2004). While the code does not define the scope of the attorney’s authority to
administer forfeited property, such administration must comport with the attorney’s express
statutory duties to ultimately dispose of property by sale or transfer and appropriately account
for and distribute any proceeds. See id. arts. 59.05(e); 59.06(b), (c), (g). Taken as a whole,
chapter 59 authorizes the attorney representing the state to hold forfeited property only to
administer it for ultimate disposition by sale or transfer.
Thus, the controlling question is whether the authority to lease forfeited property may be
derived from the attorney’s authority to administer it under article 59.06(a). Article 59.06 does
not preclude an attorney administering forfeited property from leasing it. But in light of the
attorney’s duties stated in 59.06, a lease of forfeited property must serve some administrative
purpose, conform to the terms of any applicable local agreement, and comport with the ultimate
goal of disposing of the forfeited property. Whether article 59.06 would authorize a particular
lease depends on the lease’s terms and circumstances. Pertinent considerations would include
whether leasing the property facilitates its administration, whether the terms of the lease comport
with an eventual sale or transfer of the property, and similar considerations. For example, the
criminal district attorney asserts that the property was leased to “clear the property of underbrush
and growth” and “secure the property from potential trespassers.“” From that statement, an
argument might be made that leasing the property serves the administrative purpose of securing
and protecting the property. However, whether article 59.06 authorizes this particular lease
requires investigating and resolving fact questions beyond the scope of the opinion process.
See Tex. Att’y Gen. Op. No. GA-0003 (2002) at 1 (stating that the opinion process does not
determine facts).
You next ask whether the criminal district attorney may lease forfeited property without
first seeking approval from the Hidalgo County commissioners court or the state or without
following competitive bidding procedures such as those in chapter 263 of the Local Government
Code. I2 As noted previously, the attorney representing the state holds forfeited property as an
agent for the state. Property administered by the attorney for the state, prior to any disposition
under article 59.06, is state property. See TEX.CODE CRIM.PROC.ANN. art. 59.06(f) (Vernon
“DA Brief, supra note 2, at 3.
‘2Specifically, you ask:
Was the District Attorney required to seek approval of the Hidalgo County
Commissioner[s] Court (the governing board of Hidalgo County) or the State of Texas,
since he is considered a state employee, prior to entering into the lease agreement . . . ?
Did the District Attorney violate the bidding laws of the [SItate of Texas by not
requesting sealed bids on the leasing of the property . . . , more specifically [Local
Government Code section] 263.00 l-Sale or Lease of Real Property?
Request Brief, supra note 1, at 2.
Mr. Antonio R. Sandoval - Page 6 (GA-0122)
Supp. 2004). Such property would not be county property subject to the commissioners court’s
jurisdiction. See Tex. Att’y Gen. LO-97-091, at 3 (property forfeited to the state is not county
property subject to sale by the commissioners court). Moreover, article 59.06(a) largely leaves
the means of administering forfeited property to the discretion of the attorney representing the
state, subject to the terms of any applicable local agreement. See TEX.CODE CRIM.PROC.ANN.
art. 59.06(a) (Vernon Supp. 2004). If the attorney representing the state has the administrative
authority to lease forfeited property under 59.06(a), as discussed above, then nothing in chapter
59 requires the attorney to first obtain approval from either the county commissioners court or
the state.
Chapter 263 of the Local Government Code provides generally for leasing county
property by competitive procedures. See TEX.Lot. GOV’T CODE ANN. $8 263.001, 263.007
(Vernon 1999 & Supp. 2004). However, property forfeited to the state and administered under
article 59.06(a) of the Code of Criminal Procedure is state, not county property. Consequently,
county bidding requirements in chapter 263 of the Local Government Code would not apply to a
lease of forfeited property while it is administered under article 59.06(a). See Tex. Att’y Gen.
LO-97-091, at 3 (determining that property forfeited to the state is not subject to statutes
concerning county surplus or salvage property under 263.152 of the Local Governrnent Code).
You have not identified a comparable state property bidding requirement that would apply to a
lease of forfeited real property while it is administered under chapter 59, nor have we located
such a requirement. Thus, an attorney administering property under article 59.06(a) of the Code
of Criminal Procedure may lease it without being subject to competitive bidding requirements.
See Tex. Att’y Gen. Op. No. JC-0075 (1999) at l-2 (advising that an attorney representing the
state has discretion to administer the property in accordance with accepted accounting practices
and with the provisions of the applicable local agreement).
Finally, you ask whether the District Attorney was “required to remove the property from
the tax rolls since the property now belonged to the [SItate of Texas?“13 You note that ad
valorem taxes continue to be assessed against the property, currently amounting to $30,000.‘4
Pursuant to article 59.06(f), title to forfeited real property vests in the state upon filing the
Zis pendens notice. Such property is state property, and state property “used for public purposes”
is tax exempt under section 11.11 of the Tax Code. TEX.TAX CODE ANN. 8 11.1 l(a) (Vernon
Supp. 2004) (“property owned by this state or a political subdivision of this state is exempt from
taxation if the property is used for public purposes”). A tax exemption under section 11.11 does
not require an application for exemption to be effective. See id. $ 11.43(a) (“To receive an
exemption, a person claiming the exemption, other than an exemption authorized by Section
11.11 . . . of this code, must apply for the exemption.“). Consequently, assuming that forfeited
property is tax exempt, the attorney representing the state does not have to apply for an
exemption for it to be effective.
Mr. Antonio R. Sandoval - Page 7 (GA-0122)
This office has previously considered whether, as a general principle, forfeited property
held for disposition under article 59.06 is exempt from property taxes. See generaZZy Tex. Att’y
Gen. Op. No. DM-187 (1992). We noted that in an analogous situation courts have determined
that property obtained by tax foreclosures or tax sales and held for resale constitutes a public
purpose, and therefore such property is tax exempt. See id. at 4 (citing State v. City of San
Antonio, 209 S.W.2d 756 (Tex. 1948); State v. Moak, 207 S.W.2d 894 (Tex. 1948); City of
Austin v. Sheppard, 190 S.W.2d 486 (Tex. 1945); Eason v. David, 232 S.W.2d 427 (Tex. Civ.
App.-Beaumont 1950, writ ref d n.r.e.); Lubbock Indep. Sch. Dist. v. Owens, 217 S.W.2d 186
(Tex. Civ. App.-Amarillo 1948, writ ref d)). We concluded that “property forfeited to the state
pursuant to chapter 59 of the Code of Criminal Procedure is exempt from ad valorem taxation so
long as the property is used for public, as opposed to private, purposes.” Tex. Att’y Gen. Op.
No. DM-187 (1992) at 5; accord Tex. Att’y Gen. Op. No. GA-0026 (2003) at 3 (foreclosed
properties held by the Veterans Land Board pending resale are exempt from ad valorem property
taxes).
Whether forfeited property that has been leased during its administration under article
59.06(a) is used for public, as opposed to private, purposes depends on resolving fact issues such
as whether leasing the property facilitates administering the property in anticipation of
disposition, as discussed previously. See TEX.TAX CODE ANN. 5 11.1 l(d) (Vernon Supp. 2004);
see also Tex. Att’y Gen. Op. No. JC-0571 (2002) at 1 (stating that whether the use of land leased
from a hospital authority satisfies the exclusive public use requirement would necessarily
involve investigation and resolution of facts). Such a factual determination is beyond the
purview of the opinion process. See Tex. Att’y Gen. Op. No. GA-0003 (2002) at 1 (stating that
the opinion process does not determine facts).
Mr. Antonio R. Sandoval - Page 8 (GA-0122)
SUMMARY
An attorney representing the state must administer
property forfeited under chapter 59 of the Code of Criminal
Procedure consistent with accepted accounting practices and
with the terms of any local agreement with a law enforcement
agency. Forfeited property subject to a local agreement must
ultimately be disposed of by sale or transfer of the property to a
law enforcement agency, but there is no statutory deadline for
the disposition. There is no statutory deadline for disposing of
forfeited property subject to a local agreement.
An attorney representing the state may lease forfeited
property only if the lease is consistent with the local agreement
and with the attorney’s statutory duties to ultimately dispose of
property by transfer or sale and to distribute any proceeds
under article 59.06 of the code. Forfeited property subject to
administration under article 59.06(a) of the code is state
property. The attorney representing the state need not obtain
approval from the county commissioners court or the state to
execute a lease within the attorney’s authority to administer
forfeited property under article 59.06(a). Statutory bidding
requirements do not apply to such an attorney’s authority to
administer forfeited property. To the extent forfeited property
is exempt from ad valorem taxation, the attorney representing
the state need not apply for an exemption for it to be effective.
BARRY R. MCBEE
First Assistant Attorney General
DON R. WILLETT
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
Williarn A. Hill
Assistant Attorney General, Opinion Committee