JIM MATTOX 

Attorney General 

Supreme Court Building 

P. 0. BOX 12549 

Austin, TX. 7871% 2549 

51214752501 

Telex 910/874-1387 

Telecopier 512/4750288 

714 Jackson, Suits 700 

Dallas, TX. 752024506 

21U7428944 

4S24 Alberta Ave., Suite 180 

El Paso. TX. 79905-2793 

915/53344B4 

91 Texas, Suite 700 

JUS~O”, TX. 77W2.3111 

71~2235886 

808 Broadway, Suite 312 

Lubbock, TX. 79401.3479 

905,747.5239 

4309 N. Tenth, Suits S 

McAllen, TX. 7850%1685 

51216824547 

200 Main Plaza, suite 400 

San Antonio, TX. 782052797 

5121225.4191 

An Equal OpportunItyI 

Aftlrmatlvs Action Employer 

The Attorney General of Texas 

:&arch 31. 1986 

Honorable Am Postma Musgrove opinion No. m-464 

Cbildrcss County A,ttomey 

Courthouse Ret Whether the city of Cbildress 

Childress, Texas 79201 is exempt from taxes under section 

11.11 of the Tax Code, on city-owned 

airport land leased to individuals 

Dear Ms. Musgrove: 

You ask whet,ber real property med by a city but leased to 

private indlviduale is exempt from ad valorem taxation which the 

county and a hospi,tal district seek to impose. You inform us that the 

property includes an airport operated by the city in which some of the 

airport facilities are leased to an individual who sells fuel to 

airplane operatom. The lessee operates the facility as a commercial 

enterprise but sub,ject to the direction and control of the city as 

specified in the lease agreement. Also, the federal government 

operates a weather station and directs flight cdntrol at the airport. 

The land surround,ing the airport is leased by the city to private 

individuals and corporations that use the land for commercial 

purposes, includ,lng farming and ranching. The city receives 

remuneration from the individuals in the form of rental payments which 

are devoted exclusively, you assert, to the use and benefit of the 

public, specifically including the upkeep of the airport. 

We understand you to .ask whether the city is exempt from ad 

valorem taxes on ,the airport operation, oo the airport facilities 

which are leasei. to an individual who sells fuel to airplane 

operators, and on the land surrounding the airport which is leased for 

private commercial. purposes. We do not understand you to ask whether 

the lessees willl~c: subject to taxation oo their leaseholds. We first 

address the airport facilities question and will then address taxation 

of the surroundins; land. 

Article VIII, section 1, of the Texas Constitution provides the 

following in pertLumt part: 

Taxal:l.oa shall be equal and uniform. All real 

property and tangible personal property in this 

tsltate, whether owned by natural persons or corporations, other than municipal, shall be taxed in 

p. 2126 
. Honorable Ann Postma Musgrcve - Page 2 (JM-464) 

proportion to it,s value, which shall be ascertained as way be provided by law. 

Article VIII, section 2, of the Texas Constitution. provides the 

following in pertinent part: 

[Tlhe legislature my, by general laws, exempt 

from taxation public property used for public 

purposes. . . . (Emphasis added). 

Article XI, section !):, of the Texas Constitution provides the 

following in pertinent part: 

The property of s:ounties, cities and towns, owned 

and held only folrpublic purposes, such as public 

buildings and tl;! sites therefor . . . and all 

other property debvoted exclusively to the use and 

benefit of the-$blic shall be exempt from . . . 

taxation. . . . emphasis added). 

Section 11.11 of the lax Code sets forth the following: 

511.11. Public Froperty 

(a) Except 811 provided by Subsections (b) and 

(c) of this sectjon [which are not here apposite], 

property owned b:~ this state or a political subdivision of this- state is exempt from taxation 

if the property -is used for public purposes. 

(Emphasis added).- 

Property of a political subdivision which would otherwise qualify 

for exemption from ad valorem taxation under one of the foregoing 

constitutional provisions will not lose its tax-exempt status merely 

because a charge is made :Eor use of the property or a profit is 

generated thereby, providei that charges are incident to its use by 

the public and the proceeds inure to the benefit of the political 

subdivision. Lower Colomdo River Authoritv v. Chemical Bank and 

915 (Tex. 1967)( 

, 190 S.W.2d-48, ~50 CT&. 1945); A b M Consolidated 

:hool Distrlcllv. City of Bryan, 184 S.W.2d 914, 915-16 

See also City , 415 S.W.2d 902, 

,Walker, J.. dissenting); Galveston Wharf Company v. 

23 (1884): Cf. City of Dallas v. 

1937); SantaRosa Infirmary v. Cite 

931 (Tex. Ccmn'n App. 1924, judgmt 

City of Galveston, 63 Tex.. 14, 

Smith, 107 S.W.2d 872, 878 (Tex. 

ofn Antonio. 259 S.W. 926, 

adopted); City of Palestfne v. Hissourl-Pacific Lines Hospital 

Association, 99 S.W.2d 311,-314 (Tex. Civ. App. - Amarillo 1936, writ 

ref'd) (cases involved not political subdivisions, but rather 

institutions of purely prblic charity). The fact that the city 

receives compensation for +le lease of its property will not deprive 

p. 2127 
. 

Honorable Ann Postma Musgrove - Page 3 (JM-464) 

-. 

the city of its tax-exanpt status on the property if it would 

otherwise be tax-exempt. 

But this discussion, of course, does not end our inquiry. The 

Texas Supreme Court has consistently raafflrmed the principle that, in 

order for public property to be exaupt from ad valorem taxation, it 

rrmst be held onlv for oub1.j.c Dumoses and devoted exclusivelv to the 

use and benefit df the bub:.ic.' Satterlee v. Gulf Coast Waste Disposal 

Authority, 576 S.W.2d 773, 778 (Tex. 1978); Leander Independent School 

District v. Cedar Park Watsr Supply Corporation, 479 S.W.2d 908, 912 

(Tex. 1972); Daugherty v. Thompson, 9 S.W. 99, 102 (Tex. 1888). The 

test for determining whethP:c uublic orooertv is tax exemDt is whether 

it is used for the health, &fort. 'andweifare of the niblic. It is 

not essmtial that it be used for "governmental" purposes. Lower 

Colorado River Authority 12 Chemical Bank and Trust Company, supra; 

Corporation of San Felipe I$ Austin v. State, 229 S.W. 845, 847 (Tex. 

1921). It is sufficient t,hat it be used for "proprietary" purposes. 

A 6 M Consolidated Independent School District -v. Cit; df Bryan, 

supra. It is imaterial whether only residents of the district are 

benefitted or whether others benefit as well; the fact that property 

is owned by the public ctnd is used for the health, comfort, and 

welfare of the public of gnome portion of the state is sufficient to 

entitle such property to tre:-exempt status. 

& Power Co., 

State v. Houston Lightins 

609 8.W.2d :!63, 270 (Tex. Civ. App. - Corpus Christi 

1980, writ ref'd n.r.e.). 

(1982); IN-391 (1981). 

See also Attorney General Opinions MW-430 

We have no difficulty in statlng as a matter of law that the 

city's airport and airpor,t facilities, Including those leased to a 

private individual, are impressed with a public purpose sufficient to 

meet Texas constitutional .and statutory tests regarding ad valorem 

taxes. The Texas Legislature has specifically authorized all cities 

and towns. including home rule cities, to build and purchase airports 

and to mortgage or otherwills encumber airports, as well as the land on 

which they are situated. See V.T.C.S. art. 1015~; see also V.T.C.S. 

arts. 126921; 1269j; 46d-1 t!t:scq. ("Municipal AirpOrtB Act"). Article 

46d-16, V.T.C.S., specificcilly provides %n relevant part: 

Any property in this [sltate acquired by a municipaltry for airport purposes pursuant to the provisions of this [slct [articles 46d-1 to 46d-221, 

and any income derived by such municipality from 

the ownership, operation or control thereof, shall 

be exempt from taxation to the sane extent as 

other property uc;ed for public purposes. 

In fact, municipal airports constructed with public funds have been 

said to differ In no water:lal element from other public facilities, 

such as a public auditorium or a municipal hospital. Hayden V. City 

p. 2128 
Honorable Ann Postma Musgroyre - Page 4 (a-464) 

of Houston, 305 S.W.2d 798, 802 (Tex. Civ. App. - Fort Worth 1957, 

writ ref'd n.r.e.). 

We mw turn to the iswle of taxation of the surrounding land. In 

City of Abilene v. State, 113 S.W.2d 631 (Tax. Civ. App. - Eastland 

1937, writ dism'd), real <lroperty was acquired by the city for the 

purpose of constructing a reservior. After the purchase of the 

property but before the consitructlon of the reservoir, the city leased 

the laud to private persons who used the land for agricultural 

purposes. The court framed the question to be answered in the 

following way: 

when a city becomes the owner of land acquired for 

a public purpose and there Is delay in the actual 

use of it for such purpose, will the temporary 

renting of the land and the use thereof by tenants 

for agricultural purposes, in the absence of an 

abandonment of such public purpose, place such 

property beyond the power of the Legislature to 

provfde for its l mmp tifrom o n taxation until such 

time as the prollerty be actually used for such 

public purpose? TEmphasis added). 

113 S.W.2d at 633. The court assumed that the leasing of such lands 

for a purpose unrelated to ithe operation of the municipality did not 

constitute a public purpose?., It relied upon the fact that there had 

been no abandonment of the public purpose for which the property was 

purchased by the city in the first place and concluded that, in spite 

of the fact that there was 'uo actual public use of the property then 

involved, "public use" did not require continuous, uninterrupted, or 

unranittent use. 

It is, therefore, our view that when the facts of 

a giveu case establish the ownership of property 

by a municipal corporation, which has been 

acquired for an authorized public purpose, and the 

purpose for which it is owned and held has not 

been abandoned, such property is to be regarded as 

used for public purposes, and the Legislature has 

the power to p,covide by general law for its 

exemption from taxation. 

113 S.W.2d at 635. 

In City of Beaumont v. Fertitta. 415 S.W.2d 902, 912 (Tex. 1967), 

however, the court expre&ly disapproved the holding in City of 

Abilene. The continuing v;%:lidity of Fertitta is itself doubtful, due 

in no small measure to 1:hLe novel legal analysis employed in the 

majority opinion. See Lellrtder Independent School District v. Cedar 

Park Water Supply CGoG?on --' 479 S.W.2d 908, 911-912 (Tex. 1972); 

,-. 

p. 2129 
Honorable Ann Postma Musgrme - Page 5 ,(X+464) 

I 

,- 

Attorney General Opinion MW-430 (1982). That notwithstanding, it is 

clear that the court in both Fertitta and Leander construed the Texas 

Constitution to require acwal , exclusive use for a public purpose in 

order to qualify for exenlption from ad valorem taxes. 

State v. Bouston Lighting k Power Compan& 609 S.W.2d 263, =F 266 Tex. 

Civ. App. - Corpus Christi 1980, writ ref'd n.r.e.1. 

In order for property to be exempt from ad valorem taxation, such 

property must be exempt under both the applicable Texas statutory 

provisions and the Texas Constitution as well. Normally, such a 

determination involves reso:lutions of factual matters upon which this 

office is not empowered t'3 rule. However, in light of the express 

disapproval of the City of Abilene case by the supreme court and the 

requirement of actual, exclusive use for a public purpose in order for 

public property to be held ‘tax-exempt ,we conclude as a matter of law 

that, in the instance you #describe, the city is not exempt from ad 

valorem taxation on the city-owned land surrounding the airport which 

is leased for commerctal and agricultural purposes. 

SUMMARY 

In the fact s,ituation herein described, the 

city is not exempt: from ad valorem taxation on the 

city-owned land surrounding the airport which is 

leased for commercial and agricultural purposes. 

Very ruly your, 

. 

d-b 

JIM MATTOX 

Attorney General of Texas 

JACK HIGETOWKR 

First Assistant Attorney Gtxvral 

MARY KELLER 

Executive Assistant Attonwy General 

ROBERT GRAY 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Comnittec: 

Prepared by Jim Moellinger 

Assistant Attorney General 

p. 2130