Can a Texas county donate its surplus or salvage property to a local charity?

Plain-English summary

The Comal County Attorney asked whether a newly enacted 1993 law, House Bill 2087, was constitutional. The bill let a county commissioners court donate "salvage" or "surplus" property to a local civic or charitable organization, but only property the county had already tried and failed to sell at competitive bid or auction. He was concerned it collided with article III, section 52 of the Texas Constitution, which bars the legislature from authorizing a county to "grant public money or thing of value" to a private individual, association, or corporation.

The Attorney General concluded the bill did not violate the constitution on its face. The reasoning ran in two steps. First, the property the bill covers is, by definition, salvage (so worn, damaged, or obsolete that it has no value for its original purpose) or surplus the county no longer needs, and a donation is allowed only after the county has tried to sell the item and received no bids. Property in that posture generally has no use or resale value to the county, so giving it away is not granting a "thing of value." Second, even if a particular item still carried some nominal value, the donation could still pass muster if it served a public purpose and the county received adequate consideration in return. The office drew that test from a 1981 opinion (MW-373) and offered a concrete example: donating a bulky piece of surplus county equipment to a group that agrees to haul it away serves the public purpose of disposing of the property and spares the county hauling and disposal costs, which can count as adequate consideration. The office was careful to say that whether any specific donation actually clears these lines is a fact question it could not decide in an opinion, and it set out three cautions for commissioners.

Currency note

This opinion was issued in 1993. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The Local Government Code provisions discussed here (chapter 263, subchapter D, including sections 263.151 and 263.152) may have been amended since 1993; confirm the current statutes before relying on anything described here.

What the opinion meant for those who asked

For Comal County and county commissioners courts generally: The opinion treated House Bill 2087 as facially valid, so a commissioners court could donate unsellable salvage or surplus property to a local civic or charitable organization. The office cautioned commissioners to take three steps before donating: confirm the property fits the statutory definitions of salvage or surplus in section 263.151; make a good-faith effort to sell it by competitive bid or auction under section 263.152(a)(1) first; and, if the item retains even nominal value, make sure the donation serves a public purpose and is accompanied by adequate consideration.

For civic and charitable organizations in the county: The opinion described these groups as eligible recipients of donated county salvage or surplus property, but only where the donation stays within the constitutional limits the office laid out, which in practice could mean giving the county something in return, such as agreeing to haul the item away.

Background and statutory framework

Chapter 263, subchapter D of the Local Government Code governs how a county commissioners court disposes of salvage or surplus property. Section 263.152 lets the court sell such property by competitive bid or auction (section 263.152(a)(1)) or offer it as a trade-in (section 263.152(a)(2)), and section 263.152(a)(3) lets the court order property destroyed or otherwise disposed of as worthless if it tried to sell under subdivision (1) and could not because no bids were made. Section 263.155 requires the court to keep records of property disposed of in this way for one year. House Bill 2087 (Acts 1993, 73d Leg., ch. 237, effective August 30, 1993) added a new subsection (c) allowing the court to "dispose of property under Subsection (a)(3) by donating the property to a civic or charitable organization located in the county."

Article III, section 52(a) provides that the legislature "shall have no power to authorize any county . . . 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." The office read the bill against the statutory definitions in section 263.151: "salvage property" is personal property (other than items routinely discarded as waste) so worn, damaged, or obsolete that it has no value for its original purpose, and "surplus property" is property not currently needed and not required for the owner's foreseeable needs, though it retains some usefulness. Because a donation is permitted only after a failed attempt to sell, the office reasoned the property would ordinarily have no use or resale value, so donating it would not grant a thing of value. For the residual case of nominal value, the office applied Attorney General Opinion MW-373 (1981), which addressed the University of Texas providing office space and services to the UT Law School Foundation under section 65.31(e) of the Education Code and analyzed it under article III, section 51 (the legislative counterpart of section 52(a)). MW-373 held that a grant by a public entity is constitutional if it serves a public purpose, adequate consideration flows to the public, and the entity keeps some control to ensure the public purpose is met. Applying that, the office concluded donations under House Bill 2087 could satisfy those requirements, but that whether any given donation does is a question of fact outside the opinion process.

Common questions

Can a Texas county donate surplus or salvage property to a local charity?
On its face, yes, under House Bill 2087 as the office construed it. A county commissioners court could donate salvage or surplus property to a local civic or charitable organization, but only property it had tried and failed to sell by competitive bid or auction.

Why doesn't donating county property violate the constitution's gift ban?
Because the property covered by the law is, by definition, worn-out or no-longer-needed property the county could not sell, so it generally has no use or resale value. Giving away something of no value is not granting a "thing of value" under article III, section 52.

What if the donated item still has some value?
The office said the donation could still be constitutional if it served a public purpose and the county received adequate consideration. Its example was donating bulky equipment to a group that agrees to haul it off, which disposes of the item and saves the county hauling and disposal costs.

What did the opinion tell county commissioners to watch for?
Three things: confirm the property meets the salvage or surplus definitions in section 263.151; try in good faith to sell it by bid or auction first; and, if the item has even nominal value, ensure the donation serves a public purpose for adequate consideration. Whether a specific donation meets these is a fact question.

Citations

Constitutional, statutory, and legislative provisions discussed:

• Tex. Const. art. III, § 52 (and § 52(a)) (county may not grant public money or a thing of value to a private party)
• Tex. Const. art. III, § 51 (legislative counterpart applied in Attorney General Opinion MW-373)
• Local Gov't Code § 263.151 (definitions of "salvage property" and "surplus property")
• Local Gov't Code § 263.152 (disposition of salvage or surplus property; subsections (a)(1), (a)(2), (a)(3), and new (c))
• Local Gov't Code § 263.155 (recordkeeping)
• Education Code § 65.31(e) (terms and conditions on donations, as discussed in MW-373)
• House Bill 2087, Acts 1993, 73d Leg., ch. 237 (effective August 30, 1993)

Prior Attorney General opinion referenced: MW-373 (1981).

No court cases were cited in this opinion.

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0268
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1993/dm0268.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

October 25, 1993

Honorable Nathan B. Rheinlander
Comal County Attorney
150 North Seguin, Suite 318
New Braunfels, Texas 78130-5113

Opinion No. DM-268

Re: Whether House Bill 2087 violates article III, section 52 of the Texas Constitution (RQ-592)

Dear Mr. Rheinlander:

You ask whether House Bill 2087 violates article III, section 52 of the Texas Constitution. House Bill 2087, which was recently enacted by the legislature, see Acts 1993, 73d Leg., ch. 237 (eff. Aug. 30, 1993), amends section 263.152 of the Local Government Code. Chapter 263, subchapter D of the Local Government Code governs the disposition of salvage or surplus property by a commissioners court of a county. As it did prior to amendment, section 263.152 authorizes a commissioners court to sell such property by competitive bid or auction, Local Gov't Code § 263.152(a)(1), or to offer the property as a trade-in for new property, id. § 263.152(a)(2). Section 263.152(a)(3) specifically authorizes a court to

order any of the property to be destroyed or otherwise disposed of as worthless if the commissioners court undertakes to sell that property under Subdivision (1) and is unable to do so because no bids are made.

Id. § 263.152(a)(3). Section 263.155 of the Local Government Code requires a commissioners court to keep records of property disposed of pursuant to this provision for one year.

House Bill 2087 amended section 263.152 by adding subsection (c) which provides as follows:

The commissioners court may dispose of property under Subsection (a)(3) by donating the property to a civic or charitable organization located in the county.

You are concerned that this provision runs afoul of article III, section 52 of the Texas Constitution which provides in pertinent part:

[T]he Legislature shall have no power to authorize any county . . . 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(a). As explained below, we believe that House Bill 2087 on its face does not run afoul of this provision.

First, article III, section 52 prohibits the legislature from authorizing a county to "grant . . . a thing of value." House Bill 2087 authorizes county commissioners to donate "salvage" or "surplus" property only. Under the relevant subchapter of the Local Government Code, "salvage property" means:

personal property, other than items routinely discarded as waste, that because of use, time, accident, or any other cause is so worn, damaged, or obsolete that it has no value for the purpose for which it was originally intended.

Local Gov't Code § 263.151(1). "Surplus property" means property that is not currently needed by its owner, is not required for the owner's foreseeable needs, and possesses some usefulness for the purpose for which it was intended. Id. § 263.151(2). Obviously, "salvage" or "surplus" property is generally property which is of little or no use to the county. Furthermore, House Bill 2087 authorizes a county commissioners court to donate such property only if it has tried and been unable to sell the property because no bids have been made. For this reason, the property is also of no value to the county for resale purposes. Assuming that an item of property is of no use or resale value to the county, we do not believe that article III, section 52 prohibits a county from donating it to a civic or charitable organization. Of course, the determination whether a particular item of property is truly of no use or resale value to the county would involve the resolution of factual issues and therefore is not amenable to the opinion process.

Even if an item of salvage or surplus property is of some nominal use or value to the county, we do not believe that disposing of it by donating it in accordance with House Bill 2087 will run afoul of article III, section 52, if certain conditions are met. In Attorney General Opinion MW-373 (1981), this office considered whether the University of Texas could provide office space, utilities, and telephone service to the University of Texas Law School Foundation, a nonprofit corporation. This office concluded that the university had the statutory authority to provide the foundation with these items as "terms and conditions" attached to the foundation's donations under section 65.31(e) of the Education Code, and then considered whether this arrangement would violate article III, section 51, the legislative counterpart of section 52(a). Attorney General Opinion MW-373 at 8-11. The opinion stated that the constitutional prohibition

requires that a grant by the university to the foundation must serve a public purpose, appropriate to the function of a university, and that adequate consideration must flow to the public. . . . In addition, the university must maintain some controls over the foundation's activities, to ensure that the public purpose is actually achieved. . . . If these conditions are met, the grant by the public entity is not unconstitutional.

Id. at 9.

We believe that it is possible that the donation of salvage or surplus property pursuant to House Bill 2087 could serve a public purpose and be accompanied by adequate consideration. For example, the donation of a large piece of surplus county equipment to an organization which agreed to haul it could serve the public purpose of disposing of the property. In addition, by relieving the county of the expenses it would incur in disposing of the item, such as transportation costs and disposal fees, the agreement to haul it could constitute adequate consideration. Again, whether the donation of a particular item of salvage or surplus property pursuant to House Bill 2087 meets these constitutional requirements is a question of fact.

Given the potential constitutional pitfalls, county commissioners should take special care to ensure that the donation of property pursuant to the new law does not run afoul of article III, section 52 of the Texas Constitution. First, the county commissioners should ensure that the property meets the definition of "salvage" or "surplus" property set forth in section 263.151 of the Local Government Code. Second, the county commissioners should make a good faith effort to sell the property by competitive bid or auction pursuant to subsection (a)(1) of section 263.152. Finally, if the property has even some very nominal value to the county, the county commissioners should ensure that the donation serves a public purpose and is accompanied by adequate consideration.

SUMMARY

House Bill 2087, which amends Local Government Code section 263.152 to authorize a county commissioners court to donate to civic or charitable organizations salvage and surplus property that it has been unable to sell by competitive bid or auction, does not on its face violate article III, section 52 of the Texas Constitution. The donation of a particular item may run afoul of this constitutional prohibition if the property is of value to the county and it is not donated for a public purpose for adequate consideration.

DAN MORALES
Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Attorney General for Litigation

RENEA HICKS
State Solicitor

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by Mary R. Crouter
Assistant Attorney General