Honorable J. R. Singleton Opinion No. M-668

ExecutiveDirector Texas Parks and WlldllPe Dept. John Ii.

Reagan Building Rc: Whether the Texas Parks Austin, Texas 78701 pti Wildlife Department may exchange Its nego~tiable coupon bonds with the low bidder POP such Dear Mr. Singleton: bonds, for land owned by the low bidder. 

### We are In receipt of your request for an opinion of this office as to whether: 1. The Texas Parks and Wildlife Departmenthas authority to exchange it6 negotiablecoupon "State of Texas Park DevelopmentBonds" for a tract of land to be developed Into a State Park;
2. The owner of suitable land who Is the success: ful bidder for such "Stateof Texas Park Development Bonds" for hYs la&; may receive such bonds in exchange
3. The State Parks and Wildlife Departmentmay purchase land suitable for a park site from the owner of such land who is also the successful bidder for "State of Texas Park DevelopmentBonds". The relevant statute Is Article 607Qh, Vernon's Civil statutes

D I'ta Section 4 prescribesthe requirementsfor the sale and issuanceof,,State of Texas Park DevelopmentBonds, and states In part,
. The proceedsfrom,the sale of any bond, or bonds, shall'baused for the purpose of creating the Texas Park DevelopmentFund
. D .'I* Section 7 of the Statute requlr$s that bidders~forthe bonds must accompany their bids with, exchange or bank cashlerlscheck for such sum aa fihe De&tk%dz~ may consideradequate to be a forfeit guaranEeielng the accgptanceand payment for all bonds covered by such bids and accepted by the department." Section 9 provides

-3191-. .

Honorable J. R. Singleton,Page 2 (M-668)

for the creationof special funds for administering 'I. the moneys provided for In this Act i

. .'I. One of these f&s Is the Texas Park Developinent Putid into which the proceeds of bond sales are required to be placed by Section 4. Section 9-C provides for the investmentof moneys in the Texas Park DevelopmentFund. The quoted portionsof Article 6070h clearly contemplate that "State of Texas Park DevelopmentBonds" ape to be sold competitively

for cash, and cannot thereforebe exchanged for land? In reply to your third question,we know of no prohibition against the purchase of land by-the departmentfrom a person or a corporationwho might be the successfulbidder in the sale of "State of Texas Park DevelopmentBonds" provided there has been compliancewith all the statutoryrequirementsfor the competitivesale of the bonds for cash, at par value with accrued interest from their date. An analogous situation1s described In the case of 0 Dies, 176 S,W. 638, (Tex.Civ.App. 1915, no writ), where dF successfulbidder on a contract to constructcounty roads was also the successfulbidder for the,,purchase of the county bonds ;e&g sold to finance the same roads. The court said, at page * 11 The law does not prohibita county from s;liiAg bond's

to contractorsfor public works for the construction of which the bonds are issued. The statute forbids the sale of bonds of this character for less than par value and accrued interest;

. . .'I The court further said that such a transactionIs valid only where there has been strict compliancewith all‘statutory requirementafor the sale of the bonds and conversely is invalid where the transactionis used ia a shield ,for the sale of the bonds for lea&than their par value and accrued interest. This case in prinqiple supportsour holding that the Parks and WildlifeDepartmentmay not pay in excess of the fair market value of the land in question so as to let the seller of the land recoup his loss for the purchaseof bonds at an unfavorableinterest rate in the currentmarket.

-3192-HonorableJ. R. Singleton,Page 3 (M-668)

SUMMARY The Texas Parks and Wildlife DepartmentIs authorizedto sell its State of Texas Park DevelopmentBonds at par and accrued interest for cash only, and Is not authorizedto exchange bonds for land to be'developed as a park site. The departmentis authorizedto buy land from the successfulbidder for its bonds where there has been atriot compliancewith all the statutorrorovi,sions governing~the

sale of such bon&:

Preparedby Joseph AssistantAttorney APPROYED: OPINION COMMITTEE Kerqs Taylor, Chairman W. E. Allen;~

Co-chairman Roger Tyler John Reeves Arthur Sandlin James Quick MFiADE F. GRIFFIN Staff Legal Assistant ALFRED WALKER ExecutiveAesistant NOLA WHITE First Assistant C. MARTIN General of Texas

-3193-