Untitled Texas Attorney General Opinion ( 1970 )

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~ti- able coupon bonds with the low bidder POP such bonds, for land owned Dear Mr. Singleton: by the low bidder. Weare 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 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 "State of Texas Park Develop- ment Bonds" may receive such bonds in exchange for hYs la&; 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 statutesD I'taSection 4 prescribes the requirementsfor the sale and issuance of,,Stateof Texas Park DevelopmentBonds, 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 DevelopmentFund . D .'I* Section 7 of the Statute requlr$s that bidders~forthe 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 guaran- Eeielngthe accgptance and 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 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 DevelopinentPutidinto 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 DevelopmentFund. The quoted portions of Article 6070h clearly contemplate that "State of Texas Park DevelopmentBonds" ape to be sold competitivelyfor 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 corporationwho might be the successfulbidder in the sale of "State of Texas Park DevelopmentBonds" provided there has been compliancewith all the statutory requirementsfor the competitivesale 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 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 prohibit a county from s;liiAg bond'sto contractorsfor public works for the constructionof 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 ,forthe 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. -3192- Honorable J. R. Singleton, Page 3 (M-668) SUMMARY The Texas Parks and Wildlife Department Is authorized to sell its State of Texas Park DevelopmentBonds at par and accrued interest for cash only, and Is not authorized to ex- change bonds for land to be'developedas a park site. The department is authorized to buy land from the successful bidder for its bonds where there has been atriot compliancewith all the statutorr orovi,sionsgoverning~thesale of such bon&: C. MARTIN General of Texas Prepared by Joseph Assistant Attorney APPROYED: OPINION COMMITTEE Kerqs Taylor, Chairman W. E. Allen;~Co-chairman Roger Tyler John Reeves Arthur Sandlin James Quick MFiADEF. GRIFFIN Staff Legal Assistant ALFRED WALKER Executive Aesistant NOLA WHITE First Assistant -3193-