Untitled Texas Attorney General Opinion ( 1990 )

TEE ATTORNEY GENERAL
OF TEXAS
July 30, 1990
Honorable Sam W. Dick Opinion No. JM-1197
Criminal District Attorney
Fort Bend County Re: Authority of an appraisal
Fort Bend County Courthouse district to purchase or lease
Richmond, Texas 77469 real property, and related
questions (RQ-1850)
Dear Wr. Dick:
Subchapter A of chapter 6 of the Tax Code governs the
local administration of appraisal districts. YOU ask a
series of six questions regarding specific provisions of
subchapter A and the authority of an appraisal district to
purchase or lease real property. We will address each of
your questions in turn.
Your first question asks:
Section 6.051(a), Texas Property Tax Code,
provides that the board of directors of an
appraisal district may purchase or lease real
property for an appraisal office. Subsection
(b) of Section 6.051 provides that in the
'acquisition' of real property by
appraisal district, three-fourths of 2
taxing units must approve the transaction.
Pertaining to Section 6.951(b), does the
word 'acquisition' apply only to the purchase
of real estate and/or construction of im-
provements upon real estate or does it also
include lease of real estate by the appraisal
district, i.e., must the board of directors
get three-fourths of the taxing units
approval to lease an appraisal office?
We conclude that the three-fourths approval requirement of
subsection (b) of section 6.051 of the Tax Code does not
govern the lease of real property: it governs only the
purchase of or construction of improvements to real
property.
p. 6323
Honorable Sam W. Dick - Page 2 (JM-1197)
When the Property Tax Code was enacted in 1979 as title
1 of the Tax Code, subsection 6.05(a) provided merely that
Q'[e]xcept as authorized by Subsection (b) of this section,
each appraisal district shall establish an appraisal
office." Subsection (b) authorized the board of directors
of an appraisal district to enter into a contract, either
with the board of directors of another appraisal district or
with the governing body of a taxing. unit in the district,
"to perform the duties of the appraisal office for the
district." No statutory provision, either in the code or
elsewhere, explicitly authorized appraisal districts to
purchase or lease real property or to construct or renovate
any improvements thereon.
The legislature, after having been apprised of the fact
that several appraisal districts had purchased buildings or
entered into contracts for the construction or renovation of
buildings without the specific statutory authority to do so,
enacted section 6.051 of the code in 1987. Acts 1987, 70th
Leg., ch. 55, 5 2, at 147. The section not only confers
such authority on appraisal districts, but also permits the
ratification of an acquisition of real property by an
appraisal district that occurred prior to the section's
--.
enactment. Bill Analysis, S.B. 312, 70th beg. (1987).
Section 6.051 of the Tax Code governs the ownership or
lease of real property by an appraisal district and
provides:
(a) The board of directors of an appraisal
district mav DUrChaSe or lease real DroDertv
1
and ma co ru
to establish and operate the appraisal office
or a branch appraisal office.
(b) The aco-uisition or convevance of real
gor Der t v 0 r t he coilstruction or renovation of
a buildins or other imDrovement bv
aDDraisa1 district must be aDDroved bv tz:
aovernina bodies of three-fourths of the
Ins
fax' *ts
aDDointment f board member S. The board of
directors b; resolution may propose a
property transaction or other action for
which this subsection requires approval of
the taxing units. The chief appraiser shall
notify the presiding officer of each
governing body entitled to vote on the
approval of the proposal by delivering a copy
of the board's resolution, together with
information showing the costs of other
P. 6324
Honorable Sam W. Dick - Page 3 (JM-1197)
available alternatives to the proposal. On
or before the 30th day after the date the
presiding officer receives notice of the
proposal, the governing body of a taxing unit
by resolution may approve or disapprove the
proposal. If a governing body fails to act
on or before that 30th day or fails to file
its resolution with the chief appraiser on or
before the 10th day after that 30th day, the
proposal is treated as if it were disapproved
by the governing body.
(c) The board f directors mav convev real
prooertv wned bov the district; and the
proceeds sEal1 be credited to e:ch taxing
unit that participates in the district in
proportion to the unit's allocation of the
appraisal district budget in the year in
which the transaction occurs. A convevance
must be aooroved as nrovided bv Subsection
(b) of this section, and anv DrOCeedS shall
be aooortioned bv an amendment to the annual
budaet.made as orovided bv Subsection (c) of
Section 6.06 of this code.
(d) An 'acouisition of real oronertv bv an
annraisal district before Januarv 1, 1988.
mav be validated before March 1. 1988, in the
manner nrovided bv Subsection (b) of this
section for the acouisition of real oronerty.
(Emphasis added.)
We understand you to ask whether the phrase "acguisi-
tion or conveyance of real property" comprises only the
purchase of real property or whether the phrase includes a
lease of real property as well. While we admit that the
issue is a close one, we think that the phrase does not
include a lease of real property. We conclude that if the
legislature had intended that leases be included within the
ambit of subsection (b), it would have employed the term
"lease" explicitly or the phrase *Vpossessory interest" or a
phrase such as *Vacguisition or conveyance of a interest Jo
real property."
On the one hand, the phrase Veal property" has been
defined for some purposes by the courts to include leases or
leasehold estates. See, e.a., Iron Countv State Tax
Comm'n, 437 S.W.2d 665 (MO. 1968); State Sazinas & Loan
Ass'n v. Brvant, 81 P.2d 116 (Or. 1938). On the other hand,
the phrase also has been defined for some purposes not to
include leases or leasehold estates. See, e.a., D. P. C.
P. 6325
Honorable Sam W. Dick - Page 4 (JM-1197)
peconstruction Fin-e Cork. V. Assessor of Town of
Johnsburg, 525.N.Y.S.2d 404 (N.Y. App. 1988); l.hIiversitv of
Hartford . Citv of Hartford, 477 A.2d 1023 (Conn. App.
1984); se: also Jack v. State, 694 S.W.2d 391 (Tex. App. -
San Antonio 1985, writ ref'd n.r.e.) (lease is a grant or
devise of realty, usually for a term of years).
In construing a statute, we may consider, inter alia,
the legislative history of the provision. Gov't Code 5
311.023. An examination of the legislative history of
section 6.051 suDDorts our construction that subsection (b)
was intended by -the legislature to govern the purchase or
sale of real property or the construction or renovation of
improvements thereon. The "Section by Section Analysis" set
forth in the Bill Analysis prepared by the Subcommittee on
Property Tax of the House Ways and Means Committee declares
that section 2 of the bill, which contained section 6.051 of
the code:
Adds a new Section 6.051 to permit appraisal
_.
alsrricts to buy, sell, and lease real
property and construct improvements as needed
to provide appraisal district offices. &&I
purchase. sale. construction Droiect or
renovation Droiect must be aDDrOVed bv 314 of
the taxina entities entitled to vote in
elections of aDDraisa1 district directou.
(Emphasis added.)
No mention is made in the underscored sentence to leases of
real property. Additionally, tapes of committee hearings
indicate that the focus of the legislature's concern was on
the purchase or sale of buildings and land, not on the lease
of office space:
Senator Jones: A number of appraisal dis-
tricts across the state have acquired pro-
perty; there is no provision in the statutes
authorizing that. S.B. 312 authorizes [ap-
praisal districts] to buy property on the
vote of 4/5 of the taxing entities who
comprise the appraisal district. They can
sell property on the same basis -- if they
sell it -- then the proceeds are distributed
to the taxing agencies on the same basis as
they contributed for the years in which the
property was sold. It clarifies the existing
situation.
P. 6326
Honorable Sam W. Dick - Page 5 (JM-1197)
Hearings on S.B. 312 before the Senate Committee on Finance,
70th Leg. (Feb. 17, 1987) (tape available from Senate Staff
Services).
Though a plausible argument certainly can be made in
support of the proposition that subsection (b) of section
6.051 of the Tax Code embraces leases, we think that a
better reading of the subsection restricts its scope to the
purchase and sale of real property and the construction or
renovation of improvements thereon. Therefore, we answer
your first question in the negative: the board of directors
of an appraisal district need not seek the approval of the
governing bodies of three-fourths of the taxing units that
comprise the appraisal district in order to enter into a
lease for office space.
Your second question asks:
In the event the answer to Inquiry No. 1
is in the affirmative that the leasing of
real estate is included in the statutory
intent of acquisition (and assuming that the
appraisal district can not get three-fourths
of the taxing units approval to lease office
space), how can the appraisal district ,meet
its statutory mandate to establish an
appraisal office, as required by Section
6.05(a)?
Because we answered your first question in the negative, we
need not address your second question.
Your third question asks:
Is a county prohibited from giving or
leasing office space to the appraisal
district pursuant to Section 263.001, Texas
Local Government Code, i.e. before the county
could allow the appraisal district to use its
property must the county follow the proce-
dures set out in Section 263.001?
Chapter 263 of the Local Government Code governs the
sale or lease of property by the county. Section 263.001
provides the following:
(a) The commissioners court of a county,
by an order entered in its minutes, may
appoint a commissioner to sell or lease real
property owned by the county. The sale or
lease must be made at a public auction held
P. 6327
Honorable Sam W. Dick - Page 6 (JM-1197)
in accordance with this section unless this
chapter provides otherwise.
(b) The appointed commissioner must
publish notice of the auction before the 20th
day before the date the auction is held. The
notice must be published in English in a
newspaper in the county in which the real
property is located and in the county that
owns the real property if not the same
county. The notice must be published once a
week for three consecutive weeks before the
date the auction is held.
(c) If the real property is sold, a deed
that is made on behalf of the county by the
appointed commissioner in conformance with
the order entered under Subsection (a) and
that is properly acknowledged, proved, and
recorded is sufficient to convey the county's
interest in the property.
In Attorney General Opinion JM-335 (1985), we were
asked whether a county must follow article 1577, V.T.C.S.,
the predecessor statute to section 2~63.001 of the Local
Government Code, when it sells its county hospital.
Specifically, we were asked whether the county had to comply
with the provisions of article 1577 in an instance in which
two different statutes, which were enacted subsequent to the
passage of article 1577, authorized the contemplated sale
and set forth procedures with which the county had to
comply. We concluded that in such a situation, a county
need not comply with article 1577:
The source of your concern is the
statement in several Texas cases that a
county u comply with article 1577 in order
to sell real estate. See. e a Ferauson v.
Halsell, 47 Tex. 421, 422' ii877); Hardin
m, 112 S.W. 822 (Tex.
Civ. App. 1908, no writ). Such statements
must be read in their historical context.
The legal basis for any action by a county
must be found in the Texas Constitution or
statutes. Canales
v., 214 S.W.2d
451, 453 (Tex. 1948). A conveyance of land
by a county is void if it is not done in a
manner prescribed by statute. Wilson v. Citv
of CalhouD, 489 S.W.2d 393, 397 (Tex. Civ.
APP. - Corpus Christi 1972, writ ref'd
n.r.e.). Article 1577 states that counties
P. 6328
Honorable Sam W. Dick - Page 7 (JM-1197)
~13y sell real estate in accordance with its
provisions. Absent other authority for
selling real estate, however, a county &
sell real estate in accordance with article
1577 or not at all. 15 Tex. Jur. 2d Counties
§ 88. Clearly, when counties sell real
estate by other means authorized by the
constitution or statutes, compliance with
article 1577 is not mandatory. &S Ferouson
y. Ii-, 47 Tex. at 422 (1877).
Attorney General Opinion JM-335 at l-2.
Section 292.001 of the Local Government Code provides
the following in pertinent part:
(a) The commissioners court of a county
may purchase, construct, or provide by other
means, or may reconstruct, improve, or equip
a building or rooms, other than the court-
house, for the housing of county or district
offices, county or district courts, justice
of the peace courts, county records or
equipment (including voting machines), or
county jail facilities, or for the conducting
of other public business, if the commis-
sioners court determines that the additional
building or rooms are necessary. The
commissioners court may purchase and improve
the necessary site for the building or rooms.
. . . .
(c) The commissioners court mav lease or
rent to anv nerson anv Dart of the buildinq
or rooms that are not necessarv for the
Pm described bv Subsection a.
(imp::% added.)
We construe section 292.001 to constitute the "other
means" by which a county is authorized to enter into a lease
agreement with an appraisal district, thereby rendering
compliance with section 263.001 of the Local Government Code
unnecessary. Therefore, we answer your third question in
the negative.
Your fourth question asks:
Can the county lease office space to the
appraisal district through an interlocal
agreement, pursuant to Article 4413(32c),
P. 6329
Honorable Sam W. Dick - Page 8 (JM-1197)
V.T.C.S., Texas Interlocal Cooperation Act,
disregarding Section 263.0017
We answer your question in the negative.
Subsection 4(a) of the Interlocal Cooperation Act
provides:
Any local government may contract or agree
with one or more local governments to perform
aovernmental functions and servicee under
terms of this Act. (Emphasis added.)
Subsection 3(2) defines "governmental functions and
servicesn in the following way:
'Governmental functions and services'
means all or part of any function or
service included within the following
general areas: police protection and
detention services: fire protection;
streets, roads, and drainage; public
health and welfare; parks; recreation;
library services; museum services: records
center services: waste disposal; planning;
engineering; administrative functions;
public funds investment: and such other
governmental functions which are of mutual
concern to the contracting parties.
Subsection 4(b) provides in pertinent part:
The agreements or contracts may be for the
purpose of studying the feasibility of
contractual performance of any governmental
functions or services or may be for the
performance of any governmental functions or
services which all narties to the contact are
leaallv authorized to oerform, provided such
contracts or agreements shall be duly
authorized by the governing body of each
party to the contract or agreement.
(Emphasis added.)
The act has been construed not to confer on any governmental
entity the substantive authority to perform any governmental
function or service, but rather it confers on a governmental
entity the authority to perform a governmental function for
another governmental entity that it already was authorized
to perform. See, e a Attorney General Opinions JM-891
(1988): H-392 (1974); ;I128 (1973).
p. 6330
Honorable Sam W. Dick - Page 9 (JM-1197)
We need not determine whether the leasing of office
space by one political subdivision to another in order that
the other political subdivision may perform its governmental
functions falls within the definition of OOgovernmental
functions or services." The Interlocal Cooperation Act does
not authorize expressly a county to lease its excess office
space to another political subdivision: however, section
292.001 of the Local Government Code does. Therefore,
because of our answer to your third question, we conclude
that a county may lease office space to an appraisal
district pursuant to section 292.001 of the Local Government
Code.
Your fifth question is in two parts and asks:
5. Section 6.05, Texas Property [Tax] Code
provides that the board of directors can
contract with taxing units to perform duties.
(a) Can the board of directors contract
for office space or is this provision
limited to 'duties' only?
(b) Is a contract entered into pursuant
to subsection (b) of Section 6.05 also
limited to the approval of three-fourths
of the taxing units?
Section 6.05 of the Tax Code provides in pertinent
part:
(a) Except as authorized by subsection
(b) of this section, each appraisal district
shall establish an appraisal office. The
appraisal office must be located in the
county for which the district is established.
An appraisal district may establish branch
appraisal offices outside the county for
which the district is established.
(b) The board of directors of an
annraisal' district mav contract with an
aooraisal office in another district or with
a taxina unit in the district to Derform the
duties of the annraisal office for the
district.. (Emphasis added.)
In the context of political subdivisions, the word
"duties" refers to those responsibilities imposed by the
constitution and laws of this state. See, e.s Citv of
Galveston v. Galveston County, 159 S.W.2d 976 ;Tex. Civ.
P- 6331
Honorable Sam W. Dick - Page 10 (JM-1197)
APP. - Galveston 1942, writ ref'd): Welch, 148
S.W.2d 876 (Tex. Civ. App. - Dallas 1941, writ ref'd). The
"duties of the appraisal office" are those responsibilities
set forth in the Tax Code; nowhere do we find the leasing of
office space to be such a duty. We have found no authority
to support the contention that the phrase "to perform the
duties of the appraisal officeO' includes any duty to lease
office space. Subsection (a) of section 6.051 of the Tax
Code sets forth the authority of an appraisal district board
of directors to lease office space: section 6.05 confers no
such authority. Therefore, we answer the first part of your
fifth question in the negative: section 6.05 of the Tax Code
does not authorize an appraisal district to lease office
space.
The second part of your fifth question is answered by
an examination of the plain words of section 6.05 itself.
No mention is made in section 6.05 of making the exercise of
any power conferred by that section contingent upon the
approval of any of the governing bodies of any of the taxing
units comprising the appraisal district. Therefore, we
answer the second part of your fifth question in the
negative; a contract entered into pursuant to subsection (b)
of section 6.05 does not require the approval of any of the
~governing bodies of the taxing units comprising the
appraisal district.
Your last question asks:
In the event the county could lease office
space to the appraisal district under Section
263.001 or Article 4413(32c), would Section
6.051 reguire~ three-fourths approval (assum-
ing your answer to question 1 suora. is in
the affirmative), of the various taxing
units?
Because of our answer to your first question, we answer your
last question in the negative. We conclude that the
three-fourths approval requirement set forth in subsection
(b) of section 6.051 of the Tax Code does not govern leases
of real property.
SUMMARY
The three-fourths approval requirement of
subsection (b) of section 6.051 of the Tax
Code does not govern leases of real property;
it governs the purchase or sale of real
property and the construction or renovation
of improvements thereon. Section 291.001 of
P. 6332
.
Honorable Sam W. Dick - Page 11 (JM-1197)
the Local Government Code authorizes a county
to lease its excess office space to an
appraisal district: therefore, section
263.001 of the Local Government Code is
inapplicable in the situation that YOU
describe. Section 6.05 of the Tax Code
permits the board of directors of an
appraisal district to contract with another
appraisal district or another taxing unit in
its county to perform appraisal functions, as
defined in the Tax Code; it does not confer
authority on an appraisal district to lease
office space from another taxing unit.
Contracts properly entered into by the board
of directors of fan appraisal district
pursuant to section 6.05 of the Tax Code need
not be approved by the governing bodies of
three-fourths of the taxing units that
comprise the appraisal district. -
L/ /b
Very truly yo
A
JIM MATTOX
Attorney General of Texas
MARY KELLER
First Assistant Attorney General
LOU MCCREARY
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
RKNEA HICKS
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Jim Moellinger
Assistant Attorney General
P. 6333