Can a Texas county spend subdivision bond money on private roads without taking them over?

Plain-English summary

When a developer plats a new subdivision in an unincorporated part of a Texas county, the county can require the developer to post a bond guaranteeing that the subdivision's roads and drainage will be built to county standards. If the developer does not finish the work, the county collects on that security (often a letter of credit, a lawsuit settlement, or a judgment) and uses the money to complete or repair the roads and drainage. The Montgomery County Attorney asked the AG two things about that money. Can the county spend it on roads it has not accepted into the official county road system, including roads in private, gated subdivisions? And if the county spends the money on those roads, has it effectively adopted them, so that it is now stuck maintaining them?

On the first question, the AG started from a basic rule: a commissioners court has only the powers the Constitution or statutes give it, expressly or by necessary implication. Chapter 232 does not spell out how bond proceeds may be spent, but the bond's stated purpose is to ensure the roads and drainage are built to the county's adopted specifications, and a county's express powers carry implied powers to carry them out. Because section 232.003 lets a county set construction standards for subdivision roads generally (not just county roads), and section 232.0031 recognizes standards for noncounty subdivision roads like private roads or public roads the county has not accepted, the AG concluded the county may use the bond proceeds to build subdivision roads of any kind to county specifications.

On the second question, the AG explained that a county has discretion over which roads it accepts into its system, and that a county road is established only by a commissioners court order, by dedication and acceptance, or by prescription. County maintenance can sometimes be evidence of acceptance, but the AG concluded that merely spending bond proceeds to ensure proper construction, without more, does not constitute acceptance and does not by itself obligate the county to maintain the roads. The AG added the important limits on private roads: counties generally cannot construct or maintain a private road unless the Constitution or a statute authorizes it (for example, article III, section 52f for counties of 7,500 or fewer people), and cannot use public funds to improve a private road when the prominent purpose is to benefit private interests, though they may spend funds that only incidentally benefit private interests when the predominant purpose is a county public purpose.

Finally, on drainage, the AG distinguished two statutory provisions. Subsection 232.003(5) covers drainage for each street or road, while subsection 232.003(8) separately covers subdivision drainage that manages stormwater runoff and coordinates with the area's general storm drainage. The AG concluded that the county may spend bond proceeds on subdivision drainage facilities that are not part of a road right-of-way, such as detention ponds, as long as the facilities serve the stormwater and coordination purposes in subsection 232.003(8).

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 commissioners and county attorneys: At the time of the opinion, the AG read chapter 232 to let the county use subdivision bond proceeds to build public or private subdivision roads to county standards, and concluded that doing so, without more, neither accepted the roads into the county system nor created a maintenance obligation. The opinion meant the county could act on the bonds without automatically taking on long-term upkeep.

Subdivision developers: The opinion described why the bond exists, to secure construction of roads and drainage to county specifications, and clarified that the county's use of the proceeds was tied to that construction purpose.

Property owners in private or gated subdivisions: The opinion explained that the county spending bond money to complete roads did not, by itself, convert private roads into county-maintained roads, and it noted the constitutional limits on counties improving private roads for private benefit.

Common questions

Can a county use subdivision bond money on roads it never accepted into the county system?
Yes. The AG concluded sections 232.003, 232.0031, and 232.004 impliedly authorize the county to use bond proceeds to build subdivision roads, public or private, to county standards.

Does spending the money mean the county now owns and must maintain the road?
No. The AG concluded that a county's expenditure of bond proceeds to ensure proper construction, without more, does not constitute acceptance into the county road system or obligate the county to maintain the road.

Can the county fix up a purely private road?
Only within limits. The AG noted counties generally lack authority to construct or maintain private roads except as the Constitution or a statute allows, and cannot spend public funds to improve a private road when the prominent purpose is private benefit.

Can bond proceeds pay for a detention pond that is not next to a road?
Yes, if it qualifies. The AG concluded the county may spend bond proceeds on subdivision drainage facilities outside a road right-of-way when they serve stormwater-runoff management or storm-drainage coordination under subsection 232.003(8).

Background and statutory framework

Chapter 232 of the Local Government Code governs county regulation of subdivisions (sections 232.001-.109). Section 232.003 authorizes a county to adopt requirements for streets, roads, and rights-of-way and drainage specifications, and subsection 232.003(7) lets the county require the subdivider to post a good and sufficient bond under section 232.004. Section 232.004 requires the bond to be payable to the county judge, set in an amount adequate to ensure proper construction (not exceeding estimated cost), and conditioned on construction to the county's adopted specifications.

The AG applied the rule that a commissioners court has only expressly conferred or necessarily implied powers (City of San Antonio v. City of Boerne; Guynes v. Galveston County), and that an express power carries broad implied powers to accomplish it (Guynes). Reading sections 232.003, 232.0031, and 232.004 together, with section 232.0031 recognizing standards for noncounty subdivision roads, the AG found implied authority to spend bond proceeds on subdivision roads of any kind built to county specifications. On road acceptance, the AG cited KP-0240 (2019) for county discretion over which roads to accept; Stein v. Killough and JC-0503 (2002) on how a county road is established; Transportation Code sections 253.003, 253.011, and 258.002(a)(2) and Coryell County v. Harrell, GA-0128 (2003), and JC-0503 on maintenance as evidence of acceptance; and KP-0075 (2016), GA-0659 (2008), and GA-0594 (2008) on the duty to maintain an accepted road. On private roads, the AG cited Louisiana-Pacific Corp. v. Newton County and JC-0172 (2000) for the lack of general authority, article III, section 52f and JM-334 (1985) for the narrow authorizations, and article III, section 52(a) with GA-0359 (2005), JC-0288 (2000), and KP-0116 (2016) for the public-purpose limits. On drainage, the AG relied on subsections 232.003(5) and 232.003(8) and section 232.004(2) and (5), noting section 232.0034 as an example of a distinct subdivision purpose.

Citations

Constitutional and statutory provisions:

• Tex. Loc. Gov't Code §§ 232.001-.109; §§ 232.001-.011; § 232.003; § 232.003(1)-(4); § 232.003(5); § 232.003(7); § 232.003(8); § 232.0031; § 232.0034; § 232.004; § 232.004(2), (5)
• Tex. Const. art. III, § 52f; § 52(a)
• Tex. Transp. Code §§ 253.003, .011; § 258.002(a)(2)

Cases:

• City of San Antonio v. City of Boerne, 111 S.W.3d 22, 28 (Tex. 2003)
• Guynes v. Galveston Cty., 861 S.W.2d 861, 863 (Tex. 1993)
• Stein v. Killough, 53 S.W.3d 36, 43 (Tex. App.-San Antonio 2001, no pet.)
• Coryell Cty. v. Harrell, 379 S.W.3d 345, 351 (Tex. App.-Waco 2011, no pet.)
• La.-Pac. Corp. v. Newton Cty., 149 S.W.3d 262, 264 (Tex. App.-Eastland 2004, no pet.)

Attorney General opinions:

• Tex. Att'y Gen. Op. No. KP-0240 (2019)
• Tex. Att'y Gen. Op. No. JC-0503 (2002)
• Tex. Att'y Gen. Op. No. GA-0128 (2003)
• Tex. Att'y Gen. Op. No. KP-0075 (2016)
• Tex. Att'y Gen. Op. No. GA-0659 (2008)
• Tex. Att'y Gen. Op. No. GA-0594 (2008)
• Tex. Att'y Gen. Op. No. JC-0172 (2000)
• Tex. Att'y Gen. Op. No. JM-334 (1985)
• Tex. Att'y Gen. Op. No. GA-0359 (2005)
• Tex. Att'y Gen. Op. No. JC-0288 (2000)
• Tex. Att'y Gen. Op. No. KP-0116 (2016)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0256
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2019/kp0256.pdf

Original opinion text

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

June 10, 2019

The Honorable B. D. Griffin Opinion No. KP-0256
Montgomery County Attorney
501 North Thompson, Suite 300 Re: Use of funds collected from claims on
Conroe, Texas 77301 subdivision road and drainage bonds required
under Local Government Code subsection
232.003(7) (RQ-0260-KP)

Dear Mr. Griffin:

    Your predecessor asked about a county's use of funds from subdivision road and drainage bonds that a county may require under Local Government Code subsection 232.003(7).1 Chapter 232 governs a county's regulation of subdivisions. See TEX. LOC. GOV'T CODE §§ 232.001-.109. Subchapter A of that chapter generally authorizes counties to adopt subdivision platting requirements. Id. §§ 232.001-.011. Section 232.003 expressly authorizes a county to adopt requirements for streets, roads, and rights-of-way, and specifications for construction of streets and roads. Id. § 232.003(1)-(4). The statute also authorizes a county to adopt certain drainage specifications. Id. § 232.003(5), (8). Relevant to the questions asked, subsection 232.003(7) authorizes a county to "require that the owner of the tract to be subdivided execute a good and sufficient bond in the manner provided by Section 232.004." Id. § 232.003(7). When a county requires a bond,

            [t]he bond must:

            (1) be payable to the county judge of the county in which the subdivision will be located or to the judge's successors in office;

            (2) be in an amount determined by the commissioners court to be adequate to ensure proper construction of the roads and streets in and drainage requirements for the subdivision, but not to exceed the estimated cost of construction of the roads, streets, and drainage requirements;

            (5) be conditioned that the roads and streets and the drainage requirements for the subdivision will be constructed:

                (A) in accordance with the specifications adopted by the court ....

Id. § 232.004. Your predecessor stated that Montgomery County (the "County") adopted this bond requirement, which he said "provides security for the subdivision developer's obligations to comply with the Subdivision Rules and compensation/damages to the County to facilitate completion or repair of the roads and drainage shown on the plat and in the plans," in the event the developer fails to properly complete the roads or drainage. Request Letter at 1, 3. Failure of the developer to complete the roads or drainage "typically results in the County collecting funds by recourse against the letter of credit, by a lawsuit settlement, or by judgment," which funds are designated for use by the appropriate commissioner. Id. at 3.

    The County requires the bond for all subdivision plats providing new roads, whether dedicated public roads or private roads. Id. Your predecessor explained that in some cases the County accepts the previously publicly dedicated subdivision roads into the county road system and expends the bond proceeds to complete or make repairs to the roads in the subdivision. Id. However, in other instances the County does not accept the roads into the county road system to avoid any obligation for continuing maintenance. Id. at 3-4. Your predecessor also informed us that some roads are located in a private, gated subdivision. Id. at 4. Given the latter two scenarios, your predecessor first asked whether the County may expend the bond proceeds on a public road that has not been accepted into the county's system of roads or on a private road. Id. at 2-4.

     A commissioners court has only those powers expressly conferred or those powers necessarily implied from express grants of power. City of San Antonio v. City of Boerne, 111 S.W.3d 22, 28 (Tex. 2003); see also Guynes v. Galveston Cty., 861 S.W.2d 861, 863 (Tex. 1993) (stating that a county commissioners court's powers must be ultimately grounded in the Constitution or statutes). While the statute requires the bond be payable to the county judge, no statute in chapter 232 directly addresses how bond proceeds may be used thereafter. However, a commissioners court's express statutory power or duty carries with it "broad implied powers to accomplish its legitimate directives." Guynes, 861 S.W.2d at 863. By expressly stating the purpose of the bond, section 232.004 necessarily authorizes the use of bond proceeds to accomplish the statute's purposes. See TEX. LOC. GOV'T CODE § 232.004. Section 232.003 authorizes counties to adopt reasonable standards for roads, streets, and specified drainage in a subdivision, without limiting the standards to county roads. Id. § 232.003(4), (5), (8). Section 232.0031 recognizes that the county may adopt standards for noncounty subdivision roads, such as private roads or public roads not accepted as a county road. See id. § 232.0031 (prohibiting a higher standard for subdivision streets and roads "than [what] the county imposes on itself"). Thus, sections 232.003, 232.0031, and 232.004 impliedly authorize the use of subdivision bond proceeds received by the county judge to construct subdivision roads in accordance with county specifications, whether the roads are county roads, private roads, or public roads that the county has not accepted as county roads. Id. §§ 232.003, .0031, .004.

    Your predecessor was concerned, however, that by expending the bond proceeds on a noncounty public road or a private road, the county may obligate itself to accept the road into the county road system for ongoing maintenance purposes. Request Letter at 3-4. A county has discretion about which roads it will accept into the county road system. See Tex. Att'y Gen. Op. No. KP-0240 (2019) at 2. Generally, a county road may be established by commissioners court order, dedication and acceptance, or prescription. See Stein v. Killough, 53 S.W.3d 36, 43 (Tex. App.-San Antonio 2001, no pet.); Tex. Att'y Gen. Op. No. JC-0503 (2002) at 1-3. In some circumstances, county maintenance may be relevant to show whether the county has accepted a particular road into its system. For example, a subdivision road constructed or maintained pursuant to a county order and election under chapter 253 of the Transportation Code is a county road. See TEX. TRANSP. CODE §§ 253.003, .011. Continuous maintenance using public funds may establish a county road in a contest under chapter 258. Id. § 258.002(a)(2). And as an evidentiary matter, county maintenance may establish implied dedication and acceptance. See Coryell Cty. v. Harrell, 379 S.W.3d 345, 351 (Tex. App.-Waco 2011, no pet.); Tex. Att'y Gen. Op. Nos. GA-0128 (2003) at 1-2; JC-0503 (2002) at 4. If a county has accepted a road into the county system, the county has a general duty to maintain the road. See Tex. Att'y Gen. Op. Nos. KP-0075 (2016) at 2, GA-0659 (2008) at 3, GA-0594 (2008) at 3.

      Counties do not possess general authority to construct or maintain private roads. See La.-Pac. Corp. v. Newton Cty., 149 S.W.3d 262, 264 (Tex. App.-Eastland 2004, no pet.); Tex. Att'y Gen. Op. No. JC-0172 (2000) at 2. Thus, a county may construct or maintain a private road only as the Constitution or a statute authorizes. See TEX. CONST. art. III, § 52f (authorizing a county with a population of 7,500 or less to construct and maintain private roads if it imposes a reasonable charge for the work); Tex. Att'y Gen. Op. No. JM-334 (1985) at 2 (stating that county authority to maintain a private road must "be found in a [constitutional or statutory] provision authorizing county maintenance of a private road under specified circumstances"). Moreover, the Constitution prohibits a county from using public funds to improve a private road when the prominent purpose is to benefit private interests. Tex. Att'y Gen. Op. Nos. GA-0359 (2005) at 4 (citing TEX. CONST. art. III, § 52(a)); JC-0288 (2000) at 3 (determining that use of county resources for the benefit of a private property owners' association did not serve a county purpose). But a county may expend public funds that incidentally benefit private interests when the predominant purpose of the expenditure is to directly accomplish a county public purpose. See Tex. Att'y Gen. Op. No. KP-0116 (2016) at 4-5.

    Chapter 232 impliedly authorizes the expenditure of bond proceeds in support of the county's authority to adopt construction requirements and specifications for subdivision roads of any kind. See TEX. LOC. GOV'T CODE §§ 232.003, .0031, .004. These construction requirements and specifications may serve a county public purpose distinct from the county's general duty to provide for a county road system. See, e.g., id. § 232.0034 (authorizing additional requirements for access by emergency vehicles). Chapter 232 does not expressly or impliedly require a county to accept the subdivision roads into the county's system of roads or otherwise obligate the county to assume ongoing maintenance. Thus, a court would likely conclude that a county's expenditure of subdivision bond proceeds to ensure proper construction of roads in accordance with the county's subdivision requirements, without more, does not constitute acceptance of the roads into the county's system of roads or otherwise obligate the county to maintain the roads.2

    Your predecessor also asked whether the County may expend subdivision bond proceeds "on drainage facilities (such as detention ponds) located on private property within subdivisions when the drainage facilities are not part of a road right-of-way." Request Letter at 3. Subsection 232.003(5) addresses subdivision road drainage, authorizing a county to "adopt reasonable specifications to provide adequate drainage for each street or road in a subdivision in accordance with standard engineering practices." TEX. LOC. GOV'T CODE § 232.003(5). But subsection 232.003(8) separately authorizes a county to "adopt reasonable specifications that provide for drainage in the subdivision to:

            (A) efficiently manage the flow of stormwater runoff in the subdivision; and

            (B) coordinate subdivision drainage with the general storm drainage pattern for the area[.]

Id. § 232.003(8); see also id. § 232.004(2), (5) (addressing bond aspects relating to "drainage requirements for the subdivision"). Thus, a county may expend the bond proceeds on subdivision drainage facilities that are not part of a road right-of-way, provided that the facilities are for stormwater runoff management or storm drainage coordination as authorized under subsection 232.003(8).

                                       SUMMARY

                      Sections 232.003, 232.0031, and 232.004 of the Local Government Code authorize a county to use proceeds from a subdivision bond required by section 232.003 to ensure a public or private road is constructed to standards adopted by the county for subdivision roads. A court would likely conclude that a county's expenditure of such bond proceeds, without more, does not constitute acceptance of the roads into the county's system of roads or otherwise obligate the county to maintain the roads.

                     A county may expend construction bond proceeds on subdivision drainage facilities that are not part of a road right-of-way, provided that the facilities are for stormwater runoff management or storm drainage coordination as authorized under Local Government Code subsection 232.003(8).

                                            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

WILLIAM A. HILL
Assistant Attorney General, Opinion Committee

1See Letter from Honorable J. D. Lambright, Montgomery Cty. Att'y, to Honorable Ken Paxton, Tex. Att'y Gen. at 1, 3 (Dec. 14, 2018), https://www2.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").
2Your predecessor characterized the bonds as "road maintenance bonds" but while the statute requires a bond conditioned on the completion of construction to county standards, it is silent about maintenance. Request Letter at 1; TEX. LOC. GOV'T CODE § 232.004.