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

Executive Director 

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 Department has 

authority to exchange it6 negotiable coupon "State 

of Texas Park Development Bonds" 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 "State of Texas Park Development Bonds" 

for hYs la&; 

may receive such bonds in exchange 

3. The State Parks and Wildlife Department may 

purchase land suitable for a park site from the 

owner of such land who is also the successful 

bidder for "State of Texas Park Development Bonds". 

The relevant statute Is Article 607Qh, Vernon's Civil 

statutes D I'ta Section 4 prescribes the requirements for the 

sale and issuance of,,State of Texas Park Development Bonds, 

and states In part, . The proceeds from,the sale of any 

bond, or bonds, shall'ba used for the purpose of creating the 

Texas Park Development Fund . D .'I* Section 7 of the Statute 

requlr$s that bidders ~for the bonds must accompany their bids 

with, exchange or bank cashlerls check for such sum aa 

fihe De&tk%dz~ may consider adequate to be a forfeit guaranEeielng the accgptance and payment for all bonds covered by 

such bids and accepted by the department." Section 9 provides 

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. . 

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

for the creation of 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 investment of moneys in the Texas Park 

Development Fund. 

The quoted portions of Article 6070h clearly contemplate 

that "State of Texas Park Development Bonds" ape to be sold 

competitively for cash, and cannot therefore be exchanged for 

land? 

In reply to your third question, we know of no prohibition 

against the purchase of land by-the department from a person 

or a corporation who might be the successful bidder in the 

sale of "State of Texas Park Development Bonds" provided there 

has been compliance with all the statutory requirements for the 

competitive sale of the bonds for cash, at par value with 

accrued interest from their date. 

An analogous situation 1s described In the case of 0 

Dies, 176 S,W. 638, (Tex.Civ.App. 1915, no writ), where dF 

successful bidder on a contract to construct county roads was 

also the successful bidder 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 prohibit a county from 

s;liiAg bond's to contractors for 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 transaction Is valid only 

where there has been strict compliance with all‘statutory 

requirementa for the sale of the bonds and conversely is 

invalid where the transaction is used ia a shield ,for the 

sale of the bonds for lea&than their par value and accrued 

interest. 

This case in prinqiple supports our holding that the 

Parks and Wildlife Department may 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 purchase of bonds at an 

unfavorable interest rate in the current market. 

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Honorable J. R. Singleton, Page 3 (M-668) 

SUMMARY 

The Texas Parks and Wildlife Department Is 

authorized to sell its State of Texas Park 

Development Bonds at par and accrued interest 

for cash only, and Is not authorized to exchange bonds for land to be'developed as a 

park site. 

The department is authorized to buy land from 

the successful bidder for its bonds where 

there has been atriot compliance with all the 

statutorr orovi,sions governing~the sale of 

such bon&: 

Prepared by Joseph 

Assistant Attorney 

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 

Executive Aesistant 

NOLA WHITE 

First Assistant 

C. MARTIN 

General of Texas 

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