# The Attorney General of Texas

September 27, 1978

JOHN L. HILL Attorney General

Honorable Kenneth H.Ashworth Commissioner Coordinating Board, Texas College & University System P. 0. Box12788,Capitol Station Austin, Texas 787ll Opinion No. H- 1248

Re: Use of ad valorem tax funds for the construction of college stadiums .and special events centers.

Dear Dr.Ashworth:

Youhave asked several questions about the use ofadvalorem tax funds levied under article 7, section 17 of the Texas Constitution for the construction of certain facilities. Article 7, section 17creates aspecial fund in the State treasury ‘for the purpose of constructing buildings and other permanent improvements at designated institutions of higher education. It expressly provides that “none of the proceeds of this tax shall be used for auxiliary enterprises.” You first ask whether stadia and special events centers in which intercollegiate athletic events take place are “auxiliary enterprises” within this constitutional provision.

The language forbidding the use of article 7, section 17proceeds for auxiliary enterprises was added to the Constitution in 1965. See Senate Joint Resolution No.24,Acts 1965,59th Leg., at 2197. The same lslative session which proposed the constitutional amendment included the following provision inthe Higher Education Coordinating Act of1965:

‘Educational and general buildings and facilities’ means buildings and facilities essential to or commonly associated with teaching, research, orthe preservation of knowledge. Excluded are auxiliary enterprise buildings and facilities, including but not limited to dormitories, cafeterias, student union buildings, stadiums and alumni centers.

Acts 1965,59th Leg., ch. 12,S2(m),at 29(codified at Educ. Code S61003(13)). Webelieve this contemporaneous usage of the term “auxiliary enterprises” indicates the meaning of that language as it appears in article 7, section 1’7.

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Honorable Kenneth H.Ashworth - Page 2 (H-1248)

See Code Construction Act, V.T.C.S. art. 5429b-2, S2.01;Michael v. Michael, 79
m. 74 (Tex. Civ. App. 1904, no writ) (language should be given meaning with which it wasused by legislature). Consequently, stadia and special events centers for intercollegiate athletics are used for auxiliary enterprises within the constitutional provision.

You next ask whether advalorem tax funds may be used to pay for aportion of a stadium or special events center designated for educational purposes, such as classrooms. Prior opinions of this office have said that article 7, section 17funds may be used to construct a wing on a building. Attorney General Opinions V-1427 at 8(1952);V-848 at 5(19491. Webelieve that these funds may be used to fund a part of a building, if there is actually a separation of auxiliary and educational
uses. Howthis actually will be accomplished inagiven case will depend’on facts as to the design and operation of the building. Since wedonot resolve fact questions in the opinion process, we cannot give a comprehensive answer to your question. Nor do we address any problems raised by an attempt to finance the different portions of one building from different sources. Opinion V-848(1949). See enerally Attorney General

You finally ask who is responsible for approving the determination that part ofthe facility isactually designed and used for educational purposes and therefore eligible for funding from the ad valorem tax. Prior opinions of this office have stated that the governing boards of the various institutions have discretion to determine in the first instance that an imorovement mav be financed oursuant to article 7, section 17. Attorney General Opinions V-1427*(1952);V-848 (1949). See generally Foley v. Benedict, 55 S.W.2d 805 (Tex. 1932);Cornette v. Aldridge, 408 S.W.2d 935 (Tex. Civ. App. - Amarillo 1966. mand. overr.1. The Coordinating Board has authority tooapprove or disapprove new construction under some circumstances. See Kduc.Code S61058(8). Ifthe total cost ofthe project exceeds $500,000 the boardmay consider its financial implications to the state. Kduc.Code S61.058(8)(A). We believe the availability of ad valorem tax funds bears on the project’s financial implications to the state, and the board may consider whether such funds are in fact available for that project. The board’s approval is,however, not required where a project is specifically approved by the legislature. muc. Code S61.058(8)(D).

If the institution finances the project through issuing bonds, the Attorney General must examine and approve them. Tex. Const. art. 7, S17. They can be disapproved if not in compliance with the constitutional provision. See Texas National Guard Armory Board v. MeCraw, 126 S.W.2d 627 (Tex. 19m The Comptroller isdirected to draw “all necessary and proper warrants upon the State Treasury” to carry out the purposes of article 7, section 17. Wedo not believe the Comptroller may refuse to issue a warrant in payment of bond obligations, since approved bond Issues are incontestable. See generally Walling v. Malone Independent School Dist., 195S.W. 671(Tex. Civ. App. - Dallas 1917,no writ);

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Simpson v. City of Nacogdoches, 152S.W. 858 (Tex. Civ. App. - Galveston 1912, wrtt dtsm’d). Whenan institution reouests the Comotroller to issue awarrant on its share ofthe special fund for payment ofbuilding costs other than bond retirement, for example, apayment to acontractor, the Comptroller may refuse the warrant if the expenditure is not an authorized use of ad valorem tax funds. See Bullock v. Calvert, 480 S.W.2d 367 (Tex. 1972); Attorney General Opinion7972 (1949) (Comptroller’s authority to issue warrant on College Building fund for certain administrative costs ofbond retirement).

SUMMARY

Stadia and special events centers in which intercollegiate athletic events take place are used for auxiliary enterprises and cannot be funded by ad valorem taxes raised under article 7, section 17of the Texas Constitution. Ad valorem tax funds may be used to construct a wingorother separate portion of an intercollegiate athletics facility designated and used for educational purposes. The decision that part of the facility isto be used for educational purposes lies in the first instance with the governing board ofthe institution.

KENDALL, First Assistant

Opinion Committee

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