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. Box 12788, 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: 

You have asked several questions about the use of ad valorem tax funds 

levied under article 7, section 17 of the Texas Constitution for the 

construction of certain facilities. Article 7, section 17 creates a special 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 17 proceeds 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 

in the Higher Education Coordinating Act of 1965: 

‘Educational and general buildings and facilities’ means 

buildings and facilities essential to or commonly 

associated with teaching, research, or the 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, S 2(m),at 29 (codified at Educ. Code S 61003(13)). 

We believe this contemporaneous usage of the term “auxiliary enterprises” 

indicates the meaning of that language as it appears in article 7, section 1’7. 

p. 4960 
. - 

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

See Code Construction Act, V.T.C.S. art. 5429b-2, S 2.01; Michael v. Michael, 79 

m. 74 (Tex. Civ. App. 1904, no writ) (language should be given meaning with 

which it was used by legislature). Consequently, stadia and special events centers 

for intercollegiate athletics are used for auxiliary enterprises within the constitutional provision. 

You next ask whether ad valorem tax funds may be used to pay for a portion 

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 17 funds 

may be used to construct a wing on a building. Attorney General Opinions V-1427 

at 8 (1952); V-848 at 5 (19491. We believe that these funds may be used to fund a 

part of a building, if there is actually a separation of auxiliary and educational 

uses. How this actually will be accomplished in a given case will depend’on facts as 

to the design and operation of the building. Since we do not 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 

of the facility is actually 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 S 61058(8). If the total cost of the project exceeds 

$500,000 the boardmay consider its financial implications to the state. Kduc. Code 

S 61.058(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 S 61.058(8)(D). 

If the institution finances the project through issuing bonds, the Attorney 

General must examine and approve them. Tex. Const. art. 7, S 17. 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 is directed to draw “all necessary and proper warrants upon the State 

Treasury” to carry out the purposes of article 7, section 17. We do 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., 195 S.W. 671 (Tex. Civ. App. - Dallas 1917, no writ); 

P. 4961 
Honorable Kenneth H. Ashworth - Page 3 

Simpson v. City of Nacogdoches, 152 S.W. 858 (Tex. Civ. App. - Galveston 1912, 

wrtt dtsm’d). When an institution reouests the Comotroller to issue a warrant on its 

share of the special fund for payment of building costs other than bond retirement, 

for example, a payment to a contractor, 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 of bond 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 17 of the Texas Constitution. Ad valorem 

tax funds may be used to construct a wing or other separate 

portion of an intercollegiate athletics facility designated 

and used for educational purposes. The decision that part of 

the facility is to be used for educational purposes lies in the 

first instance with the governing board of the institution. 

KENDALL, First Assistant 

Opinion Committee 

p. 4962