July 30, 1975

The Honorable Jack K. Williams President Texas A&M University College Station, **Texas 77843**  Opinion No. H- 655 Re: Whether ,astate university can erect abuilding on land subject toapossibility of reverter. Dear Dr.. Williams:

You have requested our opinion concerning the authority ofthe Texas A&M University System to erect a building onland subject toapossibility of reverter. The land involved inyour request was deeded to the University from the United States ofAmerica onNovember 21, 1974. The deed contains four conditions subsequent which in essence are as follows:

1. The property will be used for educational purposes in accordance with the plan set out in the application. 2. The grantee can sell, lease, encumber and otherwise dispose ofthe property only as authorized in writing bythe grantor. 3. Grantee must file annual reports aa to the operation and maintenance ofthe property. 4. Grantee will comply with all civil rights **statutes** and regulations pertaining to discrimination on grounds ofrace, color or national origin for so long as the property is used for a purpose for which federal financial aasiatance is provided. The breach ofany ofthe above conditions can result in the reversion of the property to the grantor at the grantor’s option. The first three conditions expire after thirty years but no expiration date was set for the fourth condition although the fourth condition is inoperable if the facilities located onthe land involved receive nofederal financial assistance.

p* 2877The Honorable Jack K. Williams - page 2

Abrogation oft,hc:first three primary conditions may br obtained by certain payments to be made by grantee which alrlount to the current lair market **value** ofthe land as ofthe date ofabrogation less a 3l/3% credit for each year the grantee has complied with the conditions.

Section 85.23(a) ofthe Education Code, which is applicable to the Texas A&M University System, provides that the University’s Board of Directors:

**. .**  **.** may contract with persons, firms, or corporations

for the purchase, acquisition, or construction ofpermanent improvements on or conveniently located with reference to the campus ofany institution ofthe system; and may purchasc~, sell, or lease lands and other appurtenances for the construction ofthe permanent improvements. However, noliability shall be incurred bythe State of Texas under this subsection. There are no express restrictions on the form of contract to be utili?.ed in the purchase oflands for the erection ofpermanent improvements.

The Board is expressly authorized to erect buildings on leased land. Thus, in **our** opinion,this section would in this case permit permanent improvements to be erected on land owned subject toapossibility of reverter, for while a lease will usually contain atermination date, the land involved in your request will remain the property ofthe University so long as the conditions subsequent are not breached. Thus, the University may retain title to this property indefinitely. Accordingly, in our opinion, the Texas A&M Universiiy System is statutorily authorized to erect permanent improvements on this land. We do not consider the effect, if any, ofSenate Bill 706, Acts 1975, 64th Leg., which relates to construction ofphysical plants at institutions ofhigher learn@ in the State of Texas.

Inaddition, we are aware ofnoconstitutional inhibitions tothe erection ofsuch permanent improvements. Inthe similar context ofimprovements on leased land, we have hrld that article 3, sec,tion 51oft.heTexas Constitution and its associated provisions would not be violated if the expenditure:

p. 2878is for il propc’r public purpose and ifthe consideration or Ix:lll%titto (.hepublic is adequai.cb. Attorney General Opinion I.(-403 (1974). Having determined this test to be satisfied we have upheld expenditures for improvements on leased land. Attorney General Opinions H-403 (1974), H-257 (1974). Since the pu.blic purpose and beneift are evident in the instant case, and since there is less possibility ofdkestiture in this case than in those involved in our prior opinions, we believe the proposed expenditures wculd be clearly constitutiona\. SUMMARY

The ‘Texas A&M University System may erect permanent improvcmrnts on certain land owned by the System subject toa possibility ofrevcrter. Very truly yours,

DAVID M. KENDALL, First Assistant

C. RO6F;lIT HEATH, Chai~rrnan Opinion Cornn~littee