C 

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THEN ATTORNEY GENERAL 

OF TEXAS 

December 21, 1988 

Honorable Ii. Tati Santiesteban 

Chairman 

Natural Resources Committee 

Texas State Senate 

P. 0. Box 12068 

Austin, Texas 78711 

Dear Senator Santiesteban: 

Opinion No. JM-997 

Re: Authority of a home rule 

citv to convev land to the 

state for us;? as a park, 

where the transfer is made 

at a price below market 

value (RQ-1572) 

You ask a question about the state's acquisition of a 

specific parcel of land owned by the city of El Paso and 

administered by the city's Public Service Board. This land, 

consisting of approximately 6,833.g acres, is within the 

boundaries of the Franklin Mountains State Park which were 

delineated by the legislature in 1979 and redrawn to exclude 

five sections of land in 1987. See Acts 1979, 66th Leg., 

ch. 736, at 1804; Acts 1987, 70th Leg. ch. 304, at 1676. 

The Parks and Wildlife Code establishes the park under the 

jurisdiction of the Parks and Wildlife Department and 

provides that the department 

gift, lease, 

"shall acquire by purchase, 

or condemnation all of the land described" in 

the 1979 legislation, except for the tracts deleted in 1987. 

Parks & Wild. Code 55 22.221; 22.222(a). A proposed agreement between El Paso and the state provides for transferring 

the land to the state at a nmodest price" that is considerably less than market value. 

The Public Service Board of the city of El Paso 

is appointed by the city and has responsibility for 

administering the water system for the city and the bond 

issues supporting the water system. The lands in question 

have been designated Public Service Board lands, and the 

board holds them as agent for the city, &g V.T.C.S. art. 

1109a; San Antonio Inden . S chool Dist. v. Water Works Bd f 

Trustees 120 S.W.Zd. 861 (Tex. Civ. 

writ ref:d). 

APP. - Beaumont 193: 

Concern has been expressed as to the city#L 

authority to transfer these lands to the state at a time 

when the Public Service Board of the city of El Paso still 

has outstanding bonds. 

p. 5105 
Honorable H. Tati Santiesteban - Page 2 (JM-997) 

Your question is as follows: 

Does the City of El Paso, through its duly 

elected governing body, have the power and 

authority to make the transfer of land to the 

State for inclusion in the state park system 

at a price which may be less than market 

value? 

Your question raises the following three issues: the 

effect of the outstanding bonds on the city's transfer of 

these lands: the statutory authority for selling the land at 

less than market value: and the constitutionality of this 

transaction under article III, section 52, of the Texas 

Constitution. 

We will first address your concern that provisions of 

prior bond issues might prevent the city of El Paso from 

selling this property at less than market value. The Public 

Finance Section of this office has reviewed the relevant 

bond documents and has found that the management and control 

of the city waterworks system (hereinafter the tnsystemvn) is 

vested in the Trustees of the Public Service Board by city 

ordinance of Way 22, 1952. Included as subsections D and E 

of section 12 of this ordinance are covenants on the 

disposition of the system's property which have been carried 

forward by all subsequent bond ordinances. 

Subsection D is a general covenant by which the board 

agrees not to take any action whereby the lien of the bonds 

on the revenues of the system might be lost or impaired. 

Subsection E specifically addresses the board's authority to 

dispose of the property of the system. This covenant reads 

in part as follows: 

E. That the city will not sell, encumber 

or in any manner dispose of the system or any 

substantial part thereof, including any and 

all extensions and additions that may be made 

thereto, until the bonds herein authorized to 

be issued shall have been paid in full as to 

both principal and interest (provided that 

this covenant shall not be construed to 

prevent the disposal by the city of property 

which in the Board's judgment has become 

inexpedient to use in connection with the 

system . . .). 

We are informed that the property to be sold does not 

generate any revenues from which the debt service on the 

bonds is paid, nor is it used for water or wastewater system 

p. 5106 
Honorable H. Tati Santiesteban - Page 3 (JM-997) 

P 

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functions. If this 

makes the required ._ _ _ 

information is 

determination, 

prevent tne sale of this property. 

the bondholders protects them from 

impair their source of repayment and permits sales of 

property not needed for the system. Sale of the land in 

accordance with these provisions, even if at less than 

market value, will not impair the bondholder's interests. 

See aenerallv Citv of Aransas Pass v. Keeling, 247 S.W. 818 

(Tex. 1923). 

correct and if the board 

these covenants do not 

The city's contract with 

property sales which will 

We next consider whether the city. of El Paso has 

statutory authority to transfer this land to the Parks and 

Wildlife Department at less than market value. 

Sections 22.221 through 22.223 of the Parks and Wildlife Code authorize the Parks and Wildlife Department to 

acquire the specific acreage you inquire about. Acts 1979, 

66th Leg., ch. 736, at 1804. The bill analysis of the 1979 

bill which established the Franklin Mountains State Park 

states as follows: 

Backcrround: 

The only state park near El Paso, Hueco Tanks 

State Historical Park, is located twenty-six 

miles east of the city and is a limited 

access, historical preservation park. The 

city and county parks are small and for 

'playground# recreation. 

The proposed park in the Franklin Mountains 

includes the majority of the high mountains 

in the Franklin Range and some of the 

remaining wild desert mountains in El Paso 

County. The area contains many unique 

features, such as prehistoric and historic 

archaelogical sites . . . . 

The closeness of the proposed area to El Paso 

would enable residents and visitors to hike 

mountain trails and study a unique natural 

environment. 

The bill would require the Texas Parks and 

Wildlife Department to acquire the portion of 

the Franklin Mountains of El Paso County 

north of Trans-Mountain Road (Loop 375) to 

create a state recreational park. The 

p. 5107 
Honorable H. Tati Santiesteban - Page 4 (JM-997) 

department would acquire the land by purchase, gift, or condemnation with funds from 

the Texas Park Development Fund. 

Bill Analysis, Tex. H.B. 867, 66th Beg. (1979). 

Thus, the Parks and Wildlife Code provisions were 

adopted to govern the acquisition of identified land which 

included the specific land in question. The legislature 

amended these provisions in 1987 to facilitate the proposed 

transfer agreement which is the subject of your request. 

The Bill Analysis to the 1987 legislation stated in part: 

Backaroa : 

In 1979 the 66th Legislature created the 

Franklin Wountains State Park. The park 

is . . . the largest urban park in the United 

States. The Public Service Board of El Paso 

owns land that is within the boundary of the 

Park (approximately 8,100 acres) which is 

presently valued at $40,000,000. The State 

is currently in litigation involving the 

purchase of this parcel of land from the 

City of El Paso. The Public Service Board 

has offered to sell to the State 4,780 

acres . . . at a substantially lower price 

($250,000) if the 5 sections (3,320 acres) on 

the eastern border of the park may be 

exempted as proposed park lands. The 

property described as Sections 24, 17, 16, 9, 

and 4 are considered to be prime developable 

lands and should not be a part of a wilderness park. 

Provides that 5 sections of land within the 

Franklin Mountains State Park be deleted from 

the land described for acquisition in Section 

2 of the Act. 

Bill Analysis Tex. H.B. No. 1839, 70th Leg. (1987). 

The legislature thus contemplated that sections 22.221 

through 22.223 of the Parks and Wildlife Code would provide 

comprehensive statutory authority for the department to 

acquire land designated for Franklin Mountains State Park, 

including the authority to acquire land from the city of El 

Paso at less than market value. These provisions constitute 

a specific law authorizing the sale of the El Paso property 

-.. 

p. 5108 
Honorable H. Tati Santiesteban - Page 5 (JM-997) 

to the department on these terms and they remove this transaction from general statutes that ordinarily govern the sale 

of land by a city, in particular from chapter 272 of the 

Local Government Code. See, e.a., Gov't Code 55 311.003; 

311.023; 311.025. See also Flowers v. Pecos River R. co., 

156 S.W.Zd 260, 263 (Tex. 1941, writ granted): Townsend v. 

TerrelJ 16 S.W.2d 1063, 1064 (Tex. 1929) (specific 

control; over general statute). 

statute 

Chapter 272 of the Local Government Code requires 

political subdivisions to comply with notice and bidding 

requirements before selling or exchanging land. Local Gov't 

Code 5 272.001. These notice and bidding requirements do 

not apply to land conveyed to a governmental entity that 

has the power of eminent domain, but such land may not be 

conveyed for less than its fair market value. Id. Sections 

22.221 through 22.223 of the Parks and Wildlife Code 

impliedly excepts the transfer of the Franklin Mountains 

land from the requirements of chapter 272 of the Local 

Government Code. Thus, the requirement that land be 

conveyed at not less than market value does not apply to the 

transfer of the designated land from El Paso to the Parks 

and Wildlife Department. 

We finally consider whether article III, section 52, of 

the Texas Constitution prohibits the city of El Paso from 

selling the land to the department at less than market 

value. Article III, section 52 provides in part: 

(a) Except as otherwise provided by this 

section, the Legislature shall have no power 

to authorize any county, city, town or other 

political corporation or subdivision of the 

State to lend its credit or to grant public 

money or thing of value in aid of, or to any 

individual, association or corporation 

whatsoever . . . . 

Tex . Const. art. III, § 52. The proposed sale at less than 

market value involves an element of donation. 

In Texas Nat'1 Guard Armorv Bd . v . McGraw, 126 S.W.2d 

627 (Tex. 1939), the Supreme Court determined that the 

attorney general was within his right in refusing to approve 

revenue bonds to finance the construction of armories for 

the Texas National Guard. The attorney general argued that 

part of the security for the bonds would be invalid because 

it would consist of rentals from armory sites donated to the 

Armory Board by incorporated cities in violation of article 

III, section 52, of the Texas Constitution. 126 S.W.2d at 

p. 5109 
Honorable H. Tati Santiesteban - Page 6 (JM-997) 

630. The Supreme Court stated as follows in response to 

this argument: 

This Act [the National Guard Armory Board 

Act] does not undertake to authorize municipal 

corporations to donate sites for armories: nor 

has the Legislature enacted any law which 

undertakes to confer on such cities that 

power. Since the Legislature has not by law 

authorized municipal corporations to donate 

sites for armories, it becomes unnecessary to 

decide the power of the Legislature to 

authorize municipal corporations to lend 

their aid to the Board by donating sites for 

armories under the provisions of Section 52 of 

Article 3 of the Constitution. 

126 S.W.2d at 638. Thus, the Supreme Court did not determine whether a city could constitutionally donate land to 

the National Guard Armory Board. 

In Attorney General Opinion H-108 (1973), this office 

considered a question very similar to the one not reached in 

Texas Nat91 Guard Armorv Bd. v. McGraw and decided that the 

city of Beaumont could give the Department of Mental Health 

and Mental Retardation ten acres of land in fee simple as a 

site for constructing a ward.building at the Beaumont State 

Center for Human Development. 

The opinion stated as follows: 

The fact that the transaction is denominated *a gift# does not invalidate it unless 

the Beaumont City charter contains restrictive provisions unknown to us. The proposed 

use is clearly for a public purpose and thus 

does not violate Article 3 88 50, et. seq., 

of the Texas Constitution. Similar donations 

were involved and approved by the courts in 

El Paso COW&Y v. Citv of El PasQ . . . [357 

S.W.2d 783 (Tex. Civ. App. - El P&o 1962, no 

writ)], and- g 

tion of Sisters of Q&,&y 360 S.W.2d 580 

(Tex. Civ. App. - [Waco] 1662, [writ ref'd, 

n.r.e.1). 

Actually, the transfer is not a gift. The 

improvement of the property and the consequent benefit to the city of Beaumont 

supply consideration for the transaction. 

In the Bl Paso case, suora, the county order 

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p. 5110 
Honorable H. Tati Santiesteban -' Page 7 (JM-997) 

approving the transaction recited as consideration for its transfer that 'it will 

reduce the fire insurance rate in El Paso.R 

Attorney General Opinion H-108 at 4 (1973). 

The city of El Paso similarly benefits from transferring its land to the Parks and Wildlife Department 

because it will be maintained at state expense as part of a 

state recreational park easily accessible to residents of 

the city. Consideration for the transfer of land to the 

state is provided by these benefits to the city, and not 

merely by the cash sum it receives. 

Opinion H-1256 (1978). 

&S Attorney General 

The judicial opinion in &Ha v. Sha 157 

682 (Tax. Civ. App. - Austin 1941, writ ref'd &.o.m.) 

S.W.Zd 

addresses a question analogous to the question before us, The 

legislature appropriated funds to purchase land for the Big 

Bend National Park which would be deeded to the federal 

government to use for national park purposes only. A taxpayer challenged the appropriation as violating sections 50, 

51, and 52 of article III, which "inhibit the lending or 

giving of the credit of the State, 

individual, 

or the granting of public 

money . . . to any association, corporation, 

etc." 157 S.W.2d at 686. 

The court quoted at some length from Malone . Peqy 

17 S.W.2d 901 (Tenn. 1929), a Tennessee case dealXng with 

the transfer of state land to the federal government for a 

national park. The Tennessee court cited authorities to 

the effect that the United States was not an individual, 

association, or corporation within state constitutional 

provisions forbidding the gift or grant of public funds. 

The court also stated that a transfer of the lands from the 

state to the United States for park purposes would not 

impair the beneficial rights of the people of Tennessee, who 

are also citizens of the United States. The transfer 

relieved the state from the continuing expense of maintaining the park, while its residents still had the benefits 

of the park system. 

The Kina Sheovard court concluded that the Tennessee 

decision was s%nd and should be followed as the law of the 

case. 157 S.W.2d at 686. Much of the reasoning followed in 

Kina v. Shevnard applies to the transfer of the Franklin 

Mountains property from El Paso to the Parks and Wildlife 

Department. The benefits of the Franklin Mountains State 

Park will accrue to El Paso, its residents and visitors. 

Moreover, authorities from other jurisdictions have held 

that the state is not an individual, association, company or 

P. 5111 
Honorable H. Tati Santiesteban - Page 8 (JR-997) 

corporation within constitutional provisions comparable to 

article III, sections 50, 51, and 52. See. e.a., Citv of 

Sacramento v. Adams, 153 P. 908 (Cal. 1915) (city donated 

land to state for site for state buildings): &n%cnv v. Kinq 

w, 45 P. 645 (Wash. 1896) (use of county land for public 

improvements undertaken by state and United States): Ransom 

V. Rutherford County, 130 S.W. 1057 (Tenn. 1910) (city and 

county bonds finance purchase of sites and construction of 

buildings for state teacher's college). 

On the basis of the reasoning and authorities cited 

above, we believe that the city of El Paso may transfer the 

land in question to the Department of Parks and Wildlife at 

less than market value without violating article III, 

section 52 of the Texas Constitution. 

Our opinion is limited to the questions discussed. We 

do not consider any contract provisions, home rule charter 

provisions, or other provisions not expressly addressed. 

SUMMARY 

Under sections 22.;21 through 22.223 of 

the Parks and Wildlife Code, the city of El 

Paso may sell land at less than market value 

to the Parks and Wildlife Department for 

inclusion in the Franklin Mountains State 

Park. The transfer at less than market 

value does not violate article III, section 

52, of the Texas Constitution. Based on the 

information submitted to us, the fact that 

the land has been designated land of the El 

Paso Public Service Board and that the board 

has outstanding bonds does not bar sale of 

this land at less than market value. 

JIM MATTOX 

Attorney General of Texas 

MARYKELLER 

First Assistant Attorney General 

MU MCCREARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

p. 5112 
Honorable H. Tati Santiesteban - Page 9 (JM-997) 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Susan L. Garrison 

Assistant Attorney General 

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p. 5113