Can a Texas county treasurer sell abandoned property through an online auction?

Plain-English summary

Texas counties sometimes end up holding small items of property that nobody claims, like unclaimed belongings turned in to a sheriff's office. Chapter 76 of the Property Code is the rulebook for disposing of certain abandoned property worth $100 or less. The Tom Green County Attorney asked the AG a modern, practical question: can the county treasurer just put that property up on an online auction site?

The AG answered by separating Chapter 76 into the two different sales it sets up. The first is the required public sale. The treasurer has to publish notice in a newspaper "in the county where the sale is to be held," and the statute says the treasurer "shall conduct the sale in the [county's] jurisdiction." The AG read that mandatory "shall" language to mean the sale has to physically happen in the county. An online-only auction, the AG noted (quoting an Indiana case), "has no physical location and is not a situs in the traditional sense," so it cannot satisfy a requirement that the sale be held in the county. The Legislature knows how to authorize online auctions when it wants to: the AG pointed to Local Government Code section 263.153(c) and Tax Code section 34.01(a-1), which expressly let counties use online bidding for other kinds of property. Chapter 76 contains no such authorization for the initial public sale. So the treasurer has no express or implied power to run that first sale solely online. The AG added one important caveat in a footnote: a public sale that is properly noticed and held in the county, but that also allows online bidding at the same time as in-person bidding, does not violate Chapter 76.

The second sale is where the answer flips. If the treasurer looks at the highest bid from the public sale and decides it is insufficient, the statute lets the treasurer "decline that bid and offer the property for public or private sale." For that follow-on sale, the only requirement is that it be a public or private sale, with no geographic restriction and no notice rule. Because the Legislature granted express authority to use a public or private sale there, the AG concluded the treasurer has implied authority to run it as an online auction, which depending on its terms qualifies as a public or private sale.

Currency note

This opinion was issued in 2019. 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.

What the opinion meant for those who asked

County treasurers and county officials: The opinion drew a line between the two Chapter 76 sales. At the time of the opinion, the required first public sale had to be noticed and conducted in the county and could not be run solely as an online auction, though simultaneous online-and-in-person bidding at a properly located county sale was acceptable. The follow-on sale, available when the treasurer found the highest public-sale bid insufficient, could be a public or private sale and the AG read that to include an online auction.

County attorneys advising on property disposition: The opinion rested on the rule that a county officer has only the powers expressly granted or necessarily implied (citing City of San Antonio v. City of Boerne). It also pointed to other statutes (Local Government Code section 263.153(c) and Tax Code section 34.01(a-1)) where the Legislature spelled out online-auction authority for counties, contrasting their silence in the Chapter 76 public-sale provisions.

Common questions

What property does Chapter 76 of the Texas Property Code cover?
The opinion described it as the procedures certain public entities, including counties, must follow to dispose of certain abandoned property valued at $100 or less.

Why can't the first sale be held entirely online?
Because Chapter 76 says the treasurer "shall conduct the sale in the [county's] jurisdiction" and requires newspaper notice "in the county where the sale is to be held." The AG read "shall" as imposing a duty, and reasoned an online-only auction has no physical location to satisfy that requirement.

Can a county still use online bidding at all for the first sale?
Yes, in part. The AG's footnote said a public sale that is properly noticed and held in the county but that allows online bidding at the same time as in-person bidding is not inconsistent with Chapter 76.

When does an online auction become allowed under this opinion?
When the treasurer determines the highest bid at the public sale is insufficient and moves to the second sale. The statute allows a public or private sale there with no location limit, and the AG concluded an online auction can qualify.

Background and statutory framework

Chapter 76 of the Property Code (sections 76.001-.704) governs how counties and certain other public entities dispose of abandoned property worth $100 or less. The opinion identified a three-step process for property still abandoned after public notice: the treasurer posts notice in a newspaper of general circulation in the county where the sale is held (section 76.402); the treasurer holds a public sale conducted in the county's jurisdiction (section 76.401(a)); and the treasurer then decides whether to accept the highest bid or decline it and offer the property for public or private sale (section 76.401(b)). Section 76.401(c) and (d) excuse the treasurer from selling when the sale would cost more than the property's value or when the owner has an out-of-state address.

The AG applied the settled rule that a county officer has only the powers expressly granted by the Constitution or Legislature or necessarily implied from them, citing City of San Antonio v. City of Boerne and a prior opinion, KP-0076. It contrasted Chapter 76's silence with Local Government Code section 263.153(c) and Tax Code section 34.01(a-1), which expressly authorize online auctions for other county property, and invoked Government Code section 311.016(2) for the meaning of "shall." For the proposition that an online auction lacks a fixed location, the AG cited an Indiana decision, Moore v. Wells Fargo Construction. On the implied-authority question for the second sale, it cited a prior opinion, GA-0705, and an Alabama AG opinion discussing how to tell whether an online auction is a public or private sale.

Citations

Statutes and codes:

• Tex. Prop. Code §§ 76.001-.704; §§ 76.201, .401-.02; § 76.401(a), (b), (c), (d); § 76.402
• Tex. Loc. Gov't Code § 263.153(c)
• Tex. Tax Code § 34.01(a-1)
• Tex. Gov't Code § 311.016(2)

Cases:

• City of San Antonio v. City of Boerne, 111 S.W.3d 22, 29 (Tex. 2003)
• Moore v. Wells Fargo Constr., 903 N.E.2d 525, 533 (Ind. Ct. App. 2009)

Attorney General opinions:

• Tex. Att'y Gen. Op. No. KP-0076 (2016)
• Tex. Att'y Gen. Op. No. GA-0705 (Tex. 2009)
• Ala. Op. Att'y Gen. No. 2011-095 (Aug. 30, 2011)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0269
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2019/kp-02690.pdf

Original opinion text

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

September 24, 2019

The Honorable Chris Taylor Opinion No. KP-0269
Tom Green County Attorney
122 West Harris Re: Whether a county treasurer is authorized
San Angelo, Texas 76903-5835 to use an online auction site to sell unclaimed
property pursuant to chapter 76 of the Property
Code (RQ-0282-KP)

Dear Mr. Taylor:

    You ask whether a county treasurer can utilize an online auction site to sell unclaimed

property pursuant to chapter 76.1 Chapter 76 of the Property Code mandates the procedures that
certain public entities, including counties, must follow to dispose of certain abandoned property
valued at $100 or less. See TEX. PROP. CODE §§ 76.001-.704. The chapter sets forth a three-step
process for selling property that remains abandoned after the county provides public notice. See
id. §§ 76.201, .401-.02. First, the county treasurer must post notice of the sale in a newspaper of
general circulation "in the county where the sale is to be held." Id. § 76.402. Then, the county
treasurer must hold a "public sale" for the property and "shall conduct the sale in the [county's]
jurisdiction." Id. § 76.401(a).2 Lastly, the treasurer must determine whether to sell the property
to the highest bidder at the public sale or "decline that bid and offer the property for public or
private sale." Id. § 76.401(b).

    You ask whether chapter 76 permits the county treasurer to sell property through an online

auction. Request Letter at 1. A public officer of a county possesses only those powers expressly
granted by the Texas Constitution or Legislature or necessarily implied from express powers. City
of San Antonio v. City of Boerne, 111 S.W.3d 22, 29 (Tex. 2003); Tex. Att'y Gen. Op. No. KP-
0076 (2016) at 2. Chapter 76 mandates two potential means of selling property, each with different
requirements. With respect to the initial public sale required by chapter 76, the statute does not
expressly authorize the county treasurer to conduct an online sale. Compare TEX. PROP. CODE
§§ 76.401-.02 (containing no reference to an online sale), with TEX. LOC. GOV'T CODE
§ 263.153(c) (providing specific notice procedures for county to sell certain salvage property
through an online auction), and TEX. TAX CODE § 34.01(a-1) (providing that the "commissioners
court of a county by official action may authorize the officer charged with selling property under
this section to conduct a public auction using online bidding and sale" and "adopt rules governing
online auctions authorized under this subsection"). Rather, the statute mandates that the county
treasurer notice, hold, and conduct this sale in the county's jurisdiction. See TEX. PROP. CODE
§§ 76.401(a) (providing that the treasurer "shall conduct the sale in the [county's] jurisdiction"),
76.402 (providing that notice "shall" be published "in the county where the sale is to be held").
Given the statute's mandatory language, the treasurer therefore must conduct the sale in the county
and has no express nor implied authority to conduct the sale solely through an online auction that
has no geographical location.3 See TEX. GOV'T CODE § 311.016(2) (providing that, unless context
requires otherwise, the word "shall" in a statute "imposes a duty"); see also Moore v. Wells Fargo
Constr., 903 N.E.2d 525, 533 (Ind. Ct. App. 2009) ("An internet auction has no physical location
and is not a situs in the traditional sense.").

    Turning to the second sale permitted by chapter 76 upon the treasurer's determination that

the highest bid from the public sale is insufficient, the statute broadly authorizes the treasurer to
conduct this transaction through either a "public or private sale." TEX. PROP. CODE § 76.401(b).
The Legislature's sole requirement for this transaction is that it be a public or private sale, and the
statute does not restrict the geographical location of this sale nor require notice. See id. Given
that the Legislature granted the county treasurer express authority to conduct the sale through a
public or private sale, the officer therefore has implied authority to conduct the transaction through
an online auction, which depending on its terms, is a public or private sale. See Tex. Att'y Gen.
Op. No. GA-0705 (Tex. 2009) at 3; see also Ala. Op. Att'y Gen. No. 2011-095 (Aug. 30, 2011)
(discussing criteria for determining whether an online auction is a private or public sale).

                                 SUMMARY

                  Chapter 76 of the Property Code requires the county
          treasurer to sell abandoned property subject to its provisions at a
          public sale conducted in the county's jurisdiction. If the county
          treasurer determines the highest bid from the public sale is
          insufficient, then the property may be sold through a public or
          private sale, including an online auction.

                                        Very truly yours,

                                        KEN PAXTON
                                        Attorney General of Texas

JEFFREY C. MATEER
First Assistant Attorney General

RYAN L. BANGERT
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

ASHLEY FRANKLIN
Assistant Attorney General, Opinion Committee

1See Letter from Honorable Chris Taylor, Tom Green Cty. Att'y, to Honorable Ken Paxton, Tex. Att'y Gen. at 1 (Apr. 2, 2019), https://www2.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").
2Chapter 76 does not require the treasurer to sell the property if the cost of the sale exceeds the property's value or if the property belongs to a person with an address outside the State. TEX. PROP. CODE § 76.401(c), (d).
3A public sale that is properly noticed and held in the county but that allows online bidding simultaneous with in-person bidding is not inconsistent with chapter 76's requirement that the sale be held in the county.