Court Opinion

ID: 4132134
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:23:20.685316+00
Date Added: 2024-06-11T13:26:33.197432
License: Public Domain

The Attorney               General of Texas
                                          September      27,   1978
JOHN L. HILL
Attorney General

                   Honorable Kenneth H. Ashworth                   Opinion No. H- 1248
                   Commissioner
                   Coordinating Board, Texas College &             Re: Use of ad valorem tax
                      University System                            funds for the construction  of
                   P. 0. Box 12788, Capitol Station                college  stadiums .and special
                   Austin, Texas 787ll                             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 constitu-
tional 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. See enerally      Attorney General
Opinion V-848 (1949).

       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