Can a Texas city use assessment money to build a seawall on private property?

TX AG Opinion GA-0528: Can a city fund a seawall on private land with assessments?

Plain-English summary

The City of Port Isabel, a home-rule city, was considering a public improvement district under Local Government Code chapter 372 to pay for street paving, sidewalks, storm drainage, water and sewer lines, street lights, dredging and backfill, and a seawall. Most of the work would be on public property, but the seawall would be built on private land along a body of water. The city saw the seawall as a public necessity to protect its territory and prevent erosion. A state senator asked whether improvements paid for with chapter 372 assessments must be located on public property, meaning either land the city owns in fee or an easement the city holds in private land.

The Attorney General started with basic property rights. A landowner can exclude others from the property, and a city cannot use private property for a public purpose unless the owner consents or the city otherwise secures an appropriate interest in the land. Without such an interest, a city building on private land is in the position of a trespasser. So Port Isabel had no right to put a seawall on private real property; it would first have to acquire an appropriate interest.

The opinion then turned to article III, section 52(a) of the Texas Constitution, which bars using public funds for private purposes and gratuitous grants to private parties. A public expenditure that incidentally benefits a private person is still lawful if it meets three tests: its predominant purpose must be public, the city must keep enough control over the project to ensure the public purpose is achieved and to protect the public's investment, and the public must get a return benefit. To keep that required control over a seawall on private land, the city has to acquire a sufficient interest in the property so owners cannot alter or remove the seawall, and so the city can inspect, maintain, and repair it over time. The opinion noted several ways to get that interest: chapter 372 itself authorizes acquiring real property for a project, chapter 421 lets Gulf Coast cities and counties acquire property (including by eminent domain) to build and maintain a seawall, and a landowner may donate the land or an interest in it. The bottom line: the city may not fund a seawall on private land under chapter 372 without first obtaining an interest in the property sufficient to protect the public's stake in it.

Currency note

This opinion was issued in 2007. 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.

Local Government Code chapters 372 and 421 and the constitutional gift-clause case law may have changed since 2007. A city planning to fund a public improvement on private land today should confirm the current statutes and the current requirements for protecting the public interest before relying on this analysis.

Who this opinion affected (as of 2007)

Cities using public improvement districts: The opinion told them that a chapter 372 improvement on private land was permissible only if the city first acquired a sufficient property interest to protect the public's investment, not merely an assumption that the work served a public purpose.

Gulf Coast cities and counties building seawalls: The opinion pointed them to chapter 421, which authorizes acquiring property (including by eminent domain) to establish, construct, and maintain a seawall, breakwater, levee, floodway, or drainway.

Private landowners along a project: The opinion meant a city could not build on their land without consent or another valid interest, and that they could, if they chose, donate land or an interest in land to the city for the public use.

Common questions

Can a Texas city build a seawall on private property using assessment money?
Only if it first acquires a sufficient interest in the land. The opinion concluded a city may not fund a chapter 372 seawall on private property without an interest adequate to protect the public's stake in it.

Why does the city need an interest in the land?
The opinion explained that article III, section 52(a) requires the city to keep enough control over a publicly funded project to ensure the public purpose is met and to protect the public's investment. The city also needs access to inspect, maintain, and repair the seawall.

What kinds of interest would work?
The opinion listed acquiring real property under chapter 372, acquiring property (including by eminent domain) under chapter 421 for Gulf Coast seawalls, or accepting a donation of land or an interest in land from the owner.

Does an incidental benefit to a private owner make the spending illegal?
No. The opinion said a municipal expenditure for an authorized public purpose is not unlawful just because it incidentally benefits a private person, provided the predominant purpose is public, the city retains control, and the public receives a return benefit.

Background and statutory framework

Chapter 372, subchapters A (the Public Improvement District Assessment Act) and B (improvement districts in home-rule municipalities) provide for funding certain public improvements by special assessment, an imposition on property specially benefited by the improvement and measured by that benefit, distinct from a general property tax (Tex. Loc. Gov't Code Ann. §§ 372.001-.030, 372.041 (Vernon 2005); City of Wichita Falls v. Williams, 26 S.W.2d 910, 911-12 (Tex. 1930); Henry v. Kaufman County Dev. Dist., 150 S.W.3d 498, 504-05 (Tex. App.-Austin 2004, pet. dism'd by agr.); City of Houston v. Blackbird, 394 S.W.2d 159, 162 (Tex. 1965)). The opinion assumed the seawall could be an authorized improvement under those subchapters (Tex. Loc. Gov't Code Ann. §§ 372.003(b), 372.041(a) (Vernon 2005)).

A landowner may exclude others, and a city using private property for a public purpose without consent or a valid interest stands in the position of a trespasser (Marcus Cable Assocs., L.P. v. Krohn, 90 S.W.3d 697, 700 (Tex. 2002); Bickler v. Bickler, 403 S.W.2d 354, 359 (Tex. 1966); MGJ Corp. v. City of Houston, 544 S.W.2d 171, 173-74 (Tex. Civ. App.-Houston [1st Dist.] 1976, writ ref'd n.r.e.)). Article III, section 52(a) prevents using public funds for private purposes, but an expenditure that incidentally benefits a private party is lawful if its predominant purpose is public, the city retains sufficient control to ensure the public purpose and protect its investment, and the public receives a return benefit (Tex. Const. art. III, § 52(a); Byrd v. City of Dallas, 6 S.W.2d 738, 740 (Tex. 1928); Brazos River Auth. v. Carr, 405 S.W.2d 689, 693-94 (Tex. 1966); Tex. Mun. League Intergovernmental Risk Pool v. Tex. Workers' Comp. Comm'n, 74 S.W.3d 377, 384 (Tex. 2002)). To retain that control, the city must acquire a sufficient interest in the seawall site, which it may do under chapter 372, under chapter 421's authority for Gulf Coast cities and counties to acquire property (including by eminent domain) for a seawall, or by accepting a donation (Tex. Loc. Gov't Code Ann. §§ 372.003(b)(12), 421.004(a), (c) (Vernon 2005); Copeland v. City of Dallas, 454 S.W.2d 279, 282-83 (Tex. Civ. App.-Dallas 1970, writ ref'd n.r.e.)).

Citations

Constitution and statutes:

• Tex. Const. art. III, § 52(a)
• Tex. Loc. Gov't Code Ann. §§ 372.001-.030, 372.003(b), 372.003(b)(12), 372.041, 372.041(a) (Vernon 2005)
• Tex. Loc. Gov't Code Ann. § 421.004(a), (c) (Vernon 2005)

Cases:

• Marcus Cable Assocs., L.P. v. Krohn, 90 S.W.3d 697, 700 (Tex. 2002)
• Bickler v. Bickler, 403 S.W.2d 354, 359 (Tex. 1966)
• City of Wichita Falls v. Williams, 26 S.W.2d 910, 911-12 (Tex. 1930)
• Henry v. Kaufman County Dev. Dist., 150 S.W.3d 498, 504-05 (Tex. App.-Austin 2004, pet. dism'd by agr.)
• City of Houston v. Blackbird, 394 S.W.2d 159, 162 (Tex. 1965)
• MGJ Corp. v. City of Houston, 544 S.W.2d 171, 173-74 (Tex. Civ. App.-Houston [1st Dist.] 1976, writ ref'd n.r.e.)
• Byrd v. City of Dallas, 6 S.W.2d 738, 740 (Tex. 1928)
• Brazos River Auth. v. Carr, 405 S.W.2d 689, 693-94 (Tex. 1966)
• Tex. Mun. League Intergovernmental Risk Pool v. Tex. Workers' Comp. Comm'n, 74 S.W.3d 377, 384 (Tex. 2002)
• Copeland v. City of Dallas, 454 S.W.2d 279, 282-83 (Tex. Civ. App.-Dallas 1970, writ ref'd n.r.e.)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0528
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2007/ga0528.pdf

Original opinion text

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

GREG ABBOTT

March 8, 2007

The Honorable Eddie Lucio, Jr.
Chair, Committee on International Relations and Trade
Texas State Senate
Post Office Box 12068
Austin, Texas 78711

Opinion No. GA-0528

Re: Whether a seawall funded from assessments levied pursuant to Local Government Code, chapter 372, subchapter A or B, may be built on privately-owned land (RQ-0528-GA)

Dear Senator Lucio:

You ask whether a seawall located on privately-owned property may be funded from assessments levied under Local Government Code chapter 372, subchapter A or B. See TEX. LOC. GOV'T CODE ANN. §§ 372.001-.030 (Vernon 2005) (subchapter A, entitled the Public Improvement District Assessment Act), 372.041 (subchapter B, concerning the authority of improvement districts in home-rule municipalities). A "seawall" is "a wall or embankment to protect the shore from erosion or to act as a breakwater." MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY 1054 (10th ed. 1993).

The City of Port Isabel ("the City"), a home-rule municipality, is considering the creation of a public improvement district pursuant to Local Government Code chapter 372 to finance various improvements. See Request Letter, supra note 1, at 2. The contemplated improvements include street paving, sidewalks, storm drainage, water and sewer lines, street lights, a seawall, and dredging and backfill, and most of these will be located on public property. See id. "The City believes the seawall is a public necessity that will both protect the City's territory and prevent soil erosion from harming the body of water." Id. The proposed seawall, however, "would be built on private property along a body of water." Id. You wish to know whether improvements authorized by chapter 372 must be located on public property, either real property owned in fee or an easement in privately-owned real property. See id.

Subchapters A and B provide for funding certain public improvements by assessment. An assessment, or special assessment, is a special imposition on property in the vicinity of municipal improvements to provide funding for the improvements. See City of Wichita Falls v. Williams, 26 S.W.2d 910, 911-12 (Tex. 1930); see also BRYAN A. GARNER, A DICTIONARY OF MODERN LEGAL USAGE 868 (2d ed. 1995). Although special assessments are levied under the taxing power, they differ from a general property tax that is imposed throughout the taxing jurisdiction for the general support of its government. See City of Wichita Falls, 26 S.W.2d at 912; Henry v. Kaufman County Dev. Dist., 150 S.W.3d 498, 504-05 (Tex. App.-Austin 2004, pet. dism'd by agr.). An assessment is imposed only upon the property that is specially benefitted by the improvement, and its amount is based on the special benefits accruing to the property. See City of Wichita Falls, 26 S.W.2d at 911; Henry, 150 S.W.3d at 505; see also City of Houston v. Blackbird, 394 S.W.2d 159, 162 (Tex. 1965) (assessment for paving improvements).

It appears, and for purposes of this opinion we assume, that the proposed seawall can be an authorized public improvement under chapter 372, subchapters A and B. See TEX. LOC. GOV'T CODE ANN. §§ 372.003(b) (Vernon 2005) (authorized improvements under subchapter A), 372.041(a) (authorized improvements under subchapter B).

To determine whether improvements authorized by chapter 372 must be located on public property, either real property owned in fee or an easement in privately-owned real property, we first consider a private owner's rights in his real property. A property owner may exclude others from his property, although he may choose to relinquish a portion of the right to exclude by granting an easement. See Marcus Cable Assocs., L.P. v. Krohn, 90 S.W.3d 697, 700 (Tex. 2002). A city may not use private property for public purposes unless the landowner consents to the use or the city otherwise secures an appropriate interest in the land. In MGJ Corp. v. City of Houston, for example, the plaintiff who held an easement in a private parking lot sued the City of Houston to prevent city police officers from parking in the lot. See MGJ Corp. v. City of Houston, 544 S.W.2d 171, 173-74 (Tex. Civ. App.-Houston [1st Dist.] 1976, writ ref'd n.r.e.). Because the City of Houston had "no valid claim of right to use the parking area jointly with the plaintiff, it [was] in the position of a trespasser," and an injunction against Houston was a proper remedy to restrain the trespasses. Id. at 175. Accordingly, the City of Port Isabel has no right to build a seawall on private real property. The City must first acquire an appropriate interest in the real property.

Next, we consider a constitutional provision governing the expenditure of public funds. Texas Constitution, article III, section 52(a) provides in part:

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, or to become a stockholder in such corporation, association or company.

TEX. CONST. art. III, § 52(a).

The purpose of article III, section 52(a) is to prevent the use of public funds for private purposes and to prevent the gratuitous grant of such funds or other public assets to individuals or corporations. See Byrd v. City of Dallas, 6 S.W.2d 738, 740 (Tex. 1928). A municipal expenditure to accomplish an authorized municipal purpose is not, however, rendered unlawful because it incidentally benefits a private person. See Brazos River Auth. v. Carr, 405 S.W.2d 689, 693-94 (Tex. 1966). For a municipal expenditure to comply with article III, section 52(a), it must meet three requirements: its predominant purpose must be to accomplish a public purpose and not to benefit private parties; the city must retain sufficient control over the transaction to ensure that the public purpose is accomplished and to protect the public's investment in it; and the public must receive a return benefit. See Tex. Mun. League Intergovernmental Risk Pool v. Tex. Workers' Comp. Comm'n, 74 S.W.3d 377, 384 (Tex. 2002). The City may spend public funds and allocate other resources to building a seawall that incidentally benefits private parties if the project complies with these requirements.

Because the City must retain enough control over the project to ensure that the public purpose is accomplished and the public interest protected, the City must acquire a sufficient interest in the real property where the seawall will be built to prevent land owners from altering or removing it. In addition, the City would likely need to acquire an interest in the land in order to inspect, maintain, and repair the seawall at various times in the future.

We conclude that the City may not build and fund a seawall under Local Government Code chapter 372, subchapter A or B, on privately-owned property without obtaining an interest in the property sufficient to enable the city to protect the public interest in the seawall.

SUMMARY

Texas Constitution article III, section 52(a) requires a city that builds a seawall on privately-owned land to maintain sufficient control over it to ensure that the public purpose is accomplished and to protect the public's interest in it. To carry out this duty, a city must have an appropriate interest in the land on which a seawall funded from assessments levied pursuant to Local Government Code, chapter 372, subchapter A or B will be located.

Very truly yours,

GREG ABBOTT
Attorney General of Texas

KENT C. SULLIVAN
First Assistant Attorney General

ELLEN L. WITT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Susan L. Garrison
Assistant Attorney General, Opinion Committee

Footnotes

[1] See Letter from Honorable Eddie Lucio, Jr., Chair, Committee on International Relations and Trade, Texas State Senate, to Honorable Greg Abbott, Attorney General of Texas, at 1 (Sept. 6, 2006) (on file with the Opinion Committee, also available at http://www.oag.state.tx.us) [hereinafter Request Letter].

[2] An easement is a nonpossessory interest in land that authorizes the holder to use the property for particular purposes. See Marcus Cable Assocs., L.P. v. Krohn, 90 S.W.3d 697, 700 (Tex. 2002). It confers upon the dominant estate holder the right to use the land of the servient estate holder for a specific purpose. See Bickler v. Bickler, 403 S.W.2d 354, 359 (Tex. 1966).

[3] Several provisions of the Local Government Code could enable the City to acquire an interest in the seawall to protect the public interest and ensure that the public purpose is accomplished. Chapter 372, subchapter A authorizes a city to acquire real property in connection with a public improvement project under that subchapter. See TEX. LOC. GOV'T CODE ANN. § 372.003(b)(12) (Vernon 2005). Furthermore, Local Government Code chapter 421, which authorizes cities and counties on the Gulf Coast to build seawalls and impose a tax to pay for them, provides that the city or county "may acquire property that is necessary for the establishment, construction, and maintenance of a seawall, breakwater, levee, floodway, or drainway." Id. § 421.004(a). Gulf Coast cities and counties may exercise the power of eminent domain to acquire an easement or fee simple interest in real property. See id. § 421.004(c). Finally, landowners may donate real property or an interest in real property to a city for a public use. See Copeland v. City of Dallas, 454 S.W.2d 279, 282-83 (Tex. Civ. App.-Dallas 1970, writ ref'd n.r.e.).