Untitled Texas Attorney General Opinion ( 1971 )

September14, 1971
Dr. J..W. Edgar Opinion No. M-950
Commissioner of Education
Texas Education Agency Re: Questions relating to bid-
201 East 11th Street lease procedure under
Austin, Texas Section 2i.901, Texas Edu-
'cation Code.
Dear Dr. Edgar:
You have requested'our opinion as to whether a lease con-
tract by the Dallas IndependentSchool District for a computer
is re uired by the provisions of Sec. 21.901, Texas Education
Code.P'to be awarded on competitivebids or whether such contract
may be entered into on a negotiatedbasis, whereby the best offer
might be obtained from prospective lessors.
Our opinion ia that such a contract may be'entered into on a
negotiated basis and is not required to be awarded on competitive
bids. Our conference with officials of the Dallas Independent
School District convinces us that the proposed contract is in fact
a lease and not a purchase contract.
Section 20.40 of the Texas Education Code' authorizes certain
expendituresfrom the public free school funds. Subdivision (c)
of this Section, in its pertinent portion, reads as follows:
"(c) Local school funds from district taxes,
tuition fees of pupils not.~~en$itled
to free tuifion
and other local sources may be used for the purposes
1. Derived from Art. 2752a, V.C.S.
2. Derived from Art. 2827, V.C.S.
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Dr. J. W. Edgar, page 2 (M-950)
enumeratedfor.stpte,andcounty funds and for
purchasingapplianqes.andsupplies, for the,payment
of insurancepremiums, janitors and other employees,
for buying school sites, buying, building and repair-
ing and rending school houses, and for other DUrDoses
necessarv in the conduct of the public schools to be
determined,bvthe board of trustees . . ." (Emphasis
added.)
Our opinion is that this,subd&&ion; in its underscored
portion,authorizesthe board of trust,ees, in its discretion,to
lease the computer.,Weefind only one case construingthis Sectios
~be&nACity of Garland v. Garland I.S.D., 468 S.W.2d 110 (Dallas ,:~
CiV.A!pP.1971). .An,appeal,ofth$s,,~,decisiqn
is pending in the
Texas Supreme Court under the sarpestyle, their No. B-2858.
The Court,ofCivil Appealsheld that th$s‘Section authorisedthe,
board of trustees of the district to determinewhether'school
funds should be used for paving pub& streets abutting,.its school
properties.
Section 21.901 of,the.TexasEdqation Code is the controlling
statutpryprovision relating to competitivebidding; its relevant
portion,4s subdivision (a) which reads 'asfollows:
"(a), All contractsproposed to be made by any Texas '
public school board for the,Purchaseof.any personal
propertyshal.l,besubmitted to,competitivebidding when
sa%d property is valued at $1,000 or more." (Emphasis
! aaaed.1
The competitivebidding statute is limited to "purchases."A
*purchase,involvesa sale and tran,sm$ssion of the ownershipand
title to.propertyfrom one person or,entity to another. 73 CJS
207, Property,Seq. 15bQ). ,,Itdoes not,necessarilyinclude or
comprehenda mere leasing or renting of property, Contracts for
the rentingqf real property,or the,hire,prrenting of chattels.
or personaltyare not gegerally,qonsidered within the provisions
requiringcontracts for-work.s.upplie.s,or materials to be let.up"
.cojapetitive,bidding. See: 43 Am.Jur..769,.Public.Works and,Con-
tracts, Section 27; Ambrosich v. Eveleth, 200 firm. 473, 274
N.W. 635 (Minn.Supp.1937), 112 A.L.R. 269, wherein it was held
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Dr. J. W. Edgar, page 3 (M-950)
that a lease of real property by a municipality is not comprehended
within the requirement for advertising for competitive bids for
purchases of property, labor, materials, etc.: Scott v. Bloomfield,
N.J. Super.592,229 A.2d 667 (19671, wherein it was held that public
advertisement required of a municipality for the sale of land or any
interest therein did not include a lease. The Court, in the case
last cited, said, 229A.Zd at 673:
11
...There is no reference in this statute to
leasing, nor does the word lease appear.
"A sale of property is fundamentally different
from a lease since a sale transfersownership, which
includes both title and right to possession, while a
lease grants only the use and enjoyment of the thing leased.
51 C.J.S. Landlord and Tenant, Sec. 202."
Our opinion is supported by the further general powers of the
board of trustees set forth in other provisions of the Code,
namely, Subchapter B. entitled, "Powers and Duties of Trustees,"
and the first two sections thereof:
Section 23.25 reads:
"The board of trustees of an independent school
district shall have the powers and duties described
in this subchapter, in addition to any other powers
and duties granted or imposed by this code or by law."
Section 23.26, in its relevant portions. reads as follows:
“(a) The trustees shall constitute a body
corporate and in the name of the school district may
acquire and hold real and personal property, . . .
a,
. . .
"(c) All rights and titles to the school property
of the district, whether real or personal, shall be
vested in the trustees and their successors in office.
I'..." (Emphasis added.)
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Dr. J. W. Edgar, page 4 (M-950)
Subsequent to receiving this opinion request,we asked the
Dallas Independent School District to furnish us certain informa-
tion concerning the term and expiration date of the proposed
leane. In response to our inquiry, Dr. Nolan Estes, General
Superintendentof the Dallas Independent School District, made the
following statement in a letter dated September 8, 1971:
"The DISD would like to lease a computer
system and related support services beginning
as soon as possible and terminatingAugust 31,
1972. We do not intend to commit funds nor
otherwise obligate the District beyond this
current fiscal year. Any contract developed
would expire August 31, 1972, and would require
specific Board of Education action to renew the
lease for each subsequent year." .'
Since this lease terminates'atthe end of the current fiscal
year (August 31, 1972), it is our further opinion that the lease
does not contravene the provisions of Section 52 of Article III
of the Texas Constitution,which prohibit a county, city, town
or other political corporation or subdivisionof the State from
lending its credit.
SUMMARY
The Dallas Independent SchoolsDistrict is
authorized to negotiate a lease contract
for a computer without competitivebids.
Arts. 20.40 and 2B.901. Texas Education
Code.
This lease terminates at the end of the
current fiscal year, August 31, 1972.
Therefore, it does not violate the provisions
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Dr. J. W. Edgar, page 5 (M-950)
of Section 52 of Article III of the Texas
Constitution,which prohibits school
districts and other subdivisionsof the
State from lending their credit.
Yap.
?8 very truly,
.q.?JL#~&<@
Atto ,ey General of Texas
li
Prepared by Malcolm L. Quick
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Kerns Taylor, Chairman
W. E. Allen, Co-Chairman
James McCoy
John Reeves
Jerry Roberts
Marietta Payne
SAM MCDANIEL
Acting Staff Legal Assistant
ALFRED WALKER
Executive Assistant
NOLA WHITE
First Assistant
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