Untitled Texas Attorney General Opinion ( 1979 )

The Attorney General ,of Texas
August 17, 1979
MARKWHITE
Attorney General
Honorable Tim Von Dohlen Opinion No. MI+ 4 5
Chairman, Committee on Regions,
Compacts & Districts Re: Whether a city may dispose
House of Representatives of public land at fair market value
Austin, Texas under article 54211``12,section 2(e),
V.T.C.S., to a private, nonprofit,
neighborhood-oriented corporation
so that low cost housing may be
constructed for resale to ‘low
income citizens.
Dear Representative Von Dohlen:
723Main.suae 610 You have, requested our opinion as to the circumstances under which a
Hannn.TX.no02 city may dispose of land pursuant to section 2(e) of article 5421~12, V.T.C.S.
713228.0701 Article 5421-12 establishes certain bidding and publication procedures with
which a political subdivision must comply before it may sell or exchange
so6emdway.suit*312 land, unless the transaction falls tqithin one .of the exceptions set forth in
Lumoch.
TX.7wo1 section 2. Section 2(e) excepts:
WW-l.7~CO238
Illand owned by a political subdivision which it
desires to have developed by contract with an
independent foundation.
You state that a city wkhes to seU land at fair market value “to a
private, nonprofit, neighborhood-oriented corporation so that low cost
housing may be constructed thereon’through this corporation for resale, at
cosf, to low income citixens.n No actual development of the land for a
particular purposes would be required by the contract of sale. You ask
whether, in such circumstances., the sale is within the exception of section
2(e).
Neither article 5421c-12 nor any other Texas statute or judicial
decision defines the term “independent foundation.” A “foundation” in thii
context k
2b. an organization or institution established by
endowment . . . or otherwise established with a
provision for future maintenance.. . .
.
Honorable Tim Von Dohlen - Page Two (Ml+46)
Webster’s New International Dictionary (3d ed.), at 898. One court has said that a
“foundation” is a “corporation with funds for contributing to the endowment of institutions
as for educational or-charitable work.” In re National Foundation for Diarrheal Diseases,
164 N.Y.S.2d 177. 178 (SUD. Ct. 1957). Althoueh it is not clearlv embraced within the
traditional concept of “foundation,” we cannot Say as a matter of law that the legislature
intended to exclude from the section 2(e) exception the kind of nonprofit corporation you
have described. -See 26 U.S.C. 5509 (definition of “private foundation”).
Section 2(e) Is operative, however, only in those instances ln which the political
subdivision %ie&es to have [the landI developed by contract ,with an independent
foundation.” An exception to the bidding statutes should be strictly construed. See ci_ty
of Corpus Christi v. McClaugherty, 284 S.W.2d 927, 929 (Tex. Civ. App. - San%tonio
1955, writ refkl); Town of Port Acres v. City of Port Arthur, 340 S.W.2d 325, 331 (Tex. Civ.
- Beaumont 1960 writ ref’d n.r.e.1. See also Attorney General Opinion Ii-1188
In our opinion tI& terms of the exception require that, as part of the contract of
sale, the foundation &ree to develop the land ln accordance with the city% specifications.
We conclude therefore that, although a particular nonprofit corporation may qualify as a
foundation under the section 2(e) exception to article 5421el2, the exception operates
only so long as the foundation agrees, under the contract of sale, to develop the land as
the city may determine.
SUMMARY
A particular nonprofit corporation may qualify as a nfoundationn
under the section 2(e) exception to article 5421&2, V.T.C.S., but
the exception operates only if the foundation agrees, as part of the
contract of sale, to develop the land according to the city’s
specifications.
MARK WHITE
Attorney General of Texas
JOHN W. FAINTER, JR.
First Assistant Attorney General
TED L. HARTLEY
Executive Assistant Attorney General
.
Prepared by Rick Gilpin
Assistant Attorney General
P- 139
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Honorable Tim Von Dohlen - Page Three (m-46)
APPROVED:
OPINION COMMITTEE
C. Robert Heath, Chairman
Jim Allison
David B. Brooks
Walter Davis
Susan Garrison
Rick Giiin
Willlam G Reid
Bruce Youngblood
.
P. 140