Can a Texas county lease its school land and require the tenant to pay for upkeep?

Plain-English summary

Some Texas counties still hold tracts of "county school land," land the state historically set aside to benefit public schools. The proceeds and income from that land flow into the county permanent school fund and the available school fund. The Upshur County Criminal District Attorney asked the Attorney General whether a commissioners court could lease county school land under a lease that obligates the tenant to spend money on managing and maintaining the land.

The opinion began by drawing a line it would not cross. The requestor had attached an actual lease, but the opinion does not construe the terms of particular contracts; that is not a function of the opinion process. What it could do was answer, as a matter of law, whether a county is generally authorized to agree to that kind of term.

On that general question, the answer was yes. Article VII, section 6 of the Texas Constitution governs county school lands and lets a county sell or dispose of them, with the proceeds held in trust in perpetuity in the county permanent school fund and the income going to the available school fund. The Texas Supreme Court has read that provision to also let counties lease their school land. And an early court of appeals decision, McInnes v. Wallace, squarely approved a lease much like the one at issue: it upheld a pasture lease that required the lessee to spend $500 building a fence on the land. That court reasoned that the commissioners court had reasonable discretion to set the rental price, that the funds were not diverted away from school purposes, that the $500 would never become part of the school fund, and that providing a fence was necessary to make the pasture leasable. It held that requiring the lessee to spend the money was not a breach of the trust the county holds over school lands.

Building on that, the opinion said it had found no authority casting doubt on a county's ability to lease county school land under a lease requiring the lessee to spend money on land management and maintenance. So a court would likely recognize the county's general authority to do so, provided the lease term is consistent with school-fund purposes and otherwise complies with the law. The opinion expressly declined to opine on the legality of any specific lease term Upshur County might adopt. It also addressed a concern the requestor seemed to have, an earlier opinion (JM-729) saying a commissioners court could not use lease or rental money to build a house or make improvements. The opinion distinguished that as being about the county's own authority to spend funds, not about a lease term that obligates the lessee to spend.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later Attorney General 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

Upshur County and its commissioners court (as the opinion described it): The opinion recognized a county's general authority to lease county school land under a lease requiring the lessee to spend money on land management and maintenance, so long as the term fits school-fund purposes and complies with law. It did not bless or reject the county's specific lease.

Lessees of county school land (as the opinion described it): The opinion treated a lease obligation to spend on upkeep (like the fence in McInnes v. Wallace) as something a county may generally require, not a breach of the school-land trust.

On the specific lease and on JM-729 (as the opinion described it): The opinion declined to construe the particular lease attached to the request. It distinguished the earlier opinion JM-729 as addressing the county's own spending authority, not a lease term obligating the lessee to spend.

Common questions

Can a Texas county lease its school land at all?
Yes. Article VII, section 6 of the Texas Constitution authorizes a county to sell or dispose of county school lands, and the Texas Supreme Court has read it to also authorize leasing that land.

Can the lease make the tenant pay for upkeep or improvements?
Generally yes, as the opinion read the law. It pointed to McInnes v. Wallace, which upheld a pasture lease requiring the lessee to spend $500 building a fence, and found no authority forbidding a lease term requiring the lessee to spend on land management and maintenance.

Did the Attorney General approve Upshur County's specific lease?
No. The opinion does not construe particular contracts. It answered only the general legal question and expressly declined to opine on any specific lease term the county contemplated.

What about the older opinion saying the county couldn't fund improvements?
The opinion distinguished JM-729 as addressing the county's own authority to spend lease or rental money, which is a different question from whether a lease may obligate the lessee to spend.

Background and statutory framework

Article VII, section 6 of the Texas Constitution governs the ownership and disposition of county school lands, authorizing a county to sell or dispose of them, with the proceeds held in trust in perpetuity in the county permanent school fund. Education Code section 45.113(a)(2) and (c) addresses that trust and provides that income from it is part of the county available school fund and may be distributed as permitted by law. The Texas Supreme Court construed article VII, section 6 to also authorize counties to lease their county school land in Falls County v. Delaney, and the court of appeals in McInnes v. Wallace upheld a pasture lease that required the lessee to fund a fence.

The opinion also relied on its own prior opinions for two procedural points: GA-0252 (2004), that construing particular contracts is not a function of the opinion process, and GA-0176 (2004), that it may advise whether a public entity is generally authorized to agree to a contractual term as a matter of law. It distinguished JM-729 (1987).

Citations

Cases:

• Falls Cnty. v. Delaney, 11 S.W. 492, 492 (Tex. 1889)
• McInnes v. Wallace, 38 S.W. 816, 817-18 (Tex. Civ. App.—San Antonio 1896, writ denied)

Statutes:

• Tex. Const. art. VII, § 6
• Tex. Educ. Code Ann. § 45.113(a)(2), (c) (West Supp. 2011)

Prior Attorney General opinions referenced:

• Tex. Att'y Gen. Op. Nos. JM-729 (1987), GA-0176 (2004), GA-0252 (2004)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0958
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2012/ga0958.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT

July 27, 2012

The Honorable Billy W. Byrd Opinion No. GA-0958
Upshur County Criminal District Attorney
405 North Titus Street Re: Whether a commissioners court may execute a
Gilmer, Texas 75644 surface lease of county school land that contains a
term obligating the lessee to make expenditures for
land management and maintenance (RQ-1044-GA)

Dear Mr. Byrd:

You ask whether a commissioners court may execute a surface lease of county school land that contains a term obligating the lessee to make an expenditure for land management and maintenance. As a preliminary matter, although you have attached a lease to your request letter, this opinion does not purport to construe the terms of the contract.[1] The construction of particular contracts and leases is not a function of the opinion process. Tex. Att'y Gen. Op. No. GA-0252 (2004) at 6. However, we may advise whether a public entity is generally authorized to agree to a particular contractual term if the question may be answered as a matter of law. Tex. Att'y Gen. Op. No. GA-0176 (2004) at 2.

Article VII, section 6 of the Texas Constitution governs the ownership and disposition of county school lands. TEX. CONST. art. VII, § 6. The provision authorizes a county to "sell or dispose" its county school lands, the proceeds of which are to be held in trust in perpetuity in the county permanent school fund. See id.; TEX. EDUC. CODE ANN. § 45.113(a)(2), (c) (West Supp. 2011). Income from the trust "constitutes a portion of the county available school fund and may be distributed as permitted by law." TEX. EDUC. CODE ANN. § 45.113(c) (West Supp. 2011). The Texas Supreme Court has construed article VII, section 6 to also authorize counties to lease their county school land. See Falls Cnty. v. Delaney, 11 S.W. 492, 492 (Tex. 1889).

An early court of appeals opinion determined that article VII, section 6 did not preclude a commissioners court from leasing county school land for pasture pursuant to a lease that required the lessee to spend $500 to construct a fence on the land. McInnes v. Wallace, 38 S.W. 816, 817-18 (Tex. Civ. App.—San Antonio 1896, writ denied). The court noted that the commissioners court had reasonable discretion to set the rental price, that the funds were not diverted to anything other than school purposes, and that the $500 would never become a part of the school fund. Id. at 817. The court also observed that providing for a fence was necessary for the county to be able to lease pasture land. Id. The court finally held that it was not a "breach of the trust reposed in a county to lease its school lands" with a requirement in the lease that the lessee spend $500 to build a fence on the land. Id. at 818.

You do not direct us to, and we have not found, any authority casting doubt on a county's ability to enter into a lease that requires the lessee of county school land to expend funds for land management and maintenance.[2] Accordingly, we conclude that a court would likely recognize a county's general authority to do so, provided the lease term is consistent with school fund purposes and otherwise comports with law. We express no opinion, however, on the legality of any specific lease term that may be contemplated by Upshur County.

SUMMARY

A court would likely conclude that a county is generally authorized to enter into a lease that requires the lessee of county school land to expend funds for land management and maintenance. We express no opinion, however, on the legality of any specific lease term that may be contemplated by Upshur County.

Very truly yours,

DANIEL T. HODGE
First Assistant Attorney General

JAMES D. BLACKLOCK
Deputy Attorney General for Legal Counsel

JASON BOATRIGHT
Chair, Opinion Committee

William A. Hill
Assistant Attorney General, Opinion Committee

[1] See Letter from Honorable Billy W. Byrd, Upshur Cnty. Criminal Dist. Att'y, to Honorable Greg Abbott, Tex. Att'y Gen. at 1-2 (Feb. 28, 2012), http://www.texasattorneygeneral.gov/opin ("Request Letter").

[2] From materials attached to your request, it appears a principal concern was an opinion of this office that determined that a commissioners court could not use funds from the lease or rental of county school land to build a house or make improvements on the land. Request Letter attachment (citing Tex. Att'y Gen. Op. No. JM-729 (1987)). Because that opinion addressed only the general authority of a county to expend funds, it is not relevant to the question presented to this office involving a lease term requiring the lessee to make expenditures. See McInnes, 38 S.W. at 817-18 (distinguishing the question of whether a county commissioners court had the authority "to make out of the collected rental money of school lands improvements that would be needed to render the lands effective in producing a larger and steadier school fund").