Untitled Texas Attorney General Opinion ( 1958 )

Mr. E. N. Jones, President Opinion No. WW-531
Texas Techno&oglcal-College
Lubbock. Texas Re: Whether certain property
owned by Texas Techno-
logical College In Carson
County isexempt from
taxation under,~thelaws
Dear Mr. Jones: .' ~of the.State of Texas. :.j ~
We quote .fromyour ,opinion re2qu&t -as f++vs:- .,I
:.
"Yin&``oplkLo~
"Yin&oplkLo~ Is respectfully requested as to
.’ whether cer,talti
property owned by Texas Technological
College In
in Cakon ~County is exempt from,taxatlon
from,taxation under
the laws ofO$he State cf'Texas.
._,..
"The property was originally the PanTex Ordnance ``
Plant and was .deed@dby:the Federal Government tom.
Texas Techi.onApril'l, 1949 by deed without warranty
for t&purpose df.edtlcatlonalutil+zation. The deed .
contained~a recapture clause in event of a national
emergency.
"During t:?eKonean emergency In 1951 and l%Z!, the
Government,exercl,sedthe recapture clause and recaptured
approximatWy lO;OCO,acres of the 16,000~,with improve-
ments, originally .deededto the College. A period of
negotlatlops.began'and culminated In the instruments
dated August 19, 1955 whioh have been sent to your office.
"For the.sake.of clarity, the prop&y till be
divided Into two-clas~lflcatlons, with a description
of each:
"PROPERTY HELD PURSUANT TO THE
EDNATIONAL USE PLAN
"This propeky was.conve$ed to T&as Tech'by the
United States Government forka period of twenty years
..
on April 1, 1949 on tte contentlon (sic) that such l
property be used In compliance with an Education Use
Plan which was established by the General Services
Administration, has been revised, land Is now under
: ”
Mr. E. N. Jones, page .2, Opinion No. WW-531
the jurisdiction.of the Department of Health, Education
and Welfare. If the property Is not operated strictly in
accordance to such plan, the United~States Government may
re-take it for non-compliance any time within the remaining
years of the twenty-year period in keeping with the reversion-
ary clause in the Amended:Deed. 'At the end of the twenty-
year period, Texas Tech will own the property outright.
"The majority of this property is either under
cultivation or being used for the grazing of experi-
mental herds owned by Texas Tech. Texas Tech keeps a
full-time crew~on the property for the purpose of
maintenance and to aid in research. One particularly
outstanding research project presently being conducted
is the bull progeny tests..;Faculty and students are
brought-up from~Texas Tech's main campus to study and
observe the work being conducted.
"Four buildings,located'on the aforesaid property
are temporarily excess to the needs of Texas Tech in
its operation pursuant to the Education Use Plan.
Three of these buildings are being leased to Phillips
.- Chemical Company and the other to one of their employees
by Texas Tech for and with the.permission of the Depart-
ment of Health, Education and Welfare. It is contem-
plated that as ~the educational program expands, this .
property will be used.in connection therewith and is '.
being held for the purpbse.
. . "PROPERTY OWNED OUTRIGHT BY TEXAS TECH
"This property 1s~owned outright by Texas Tech,
having been purchased from the United States Government
by use of accumulated amortized credits. TL:emajcrit3
of this property is rented to&e Phillips Chemical
Company for storage purposes. Phillips rents three
warehouses on a five-year basis and it rents one hundred
and two (102) igloos on an 'as-needed basis,' paying
only for the'igloos actually.used. Certain staff
residences located on'this property are rented to indivi-
duals on a month-to4month tenancy. Certain buildings,
located on sald ~prop,erty,
and.known as PanTex Village, are
owned by Carson County.' Texas Tech leases the land
under such buildings to the'county
: on a year-to-year
basis for $1.00. .~
"The income from'all of the aforesaid rentals is
credited to the.PanTech Farms'Account and Is used solely
for the promotion,of the educational program at PanTech
47
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Mr. E. N. Jones, page 3, Opinion No. WW-531
Farms in Carson.County. It is contemplated that this
property will be eventually needed as part of the PanTech
Farms operation pursuant to the Education Use Program
and is being held for such future use."
It is the opinion of the Attorney General that all of the
above-described property is exempt from taxation under the
laws of the State of Texas.
PERTINENT STATUTORY AND CONSTITUTIONAL PROVISIONS
Article 8, Section 2 of the Texas Constitution contains
the foll,owinglanguage:
II . . the legislature may, by general'laws, exempt
from taxation public property used for public purposes;
. . bng all buildings used exclusively and owned
by persons or associations of persons for.school pur-
poses. . . .'
The provisions of the aforesaid Article are permissive
and not mandatory. #Pursuant thereto, the legislature enacted
Article 7150, Texas.kevised Civil.Statutes, the. salient pro-
visions of which read as follows:
"The following property shall be exempt from taxation,~
to-wit:
"1. Schools and.Churches. -- Public school houses, . . .
~A11 public colleges,~public academies, and all endow-
ment funds of institutions of learning and religion
not used with a view to profit, and when the same are ..
Invested ,in bonds or mortgages, and all such buildings
used exclusively and owned by persons or associations
of persons for school purposes; ~ . .‘I~
II
. . .
" 4. All property, whether real or personal, belknging
exclusively to~thls State, or any political subdivision
thereof. . .I'
GENERAL DISCUSSION
The exemption of property used for school purposesapplies
to private schools as well as public schools. Cassi'anov.
Ursuline Academy 64 Tex. 673 j1823). However, 5he exempfion
accorded nrsivate schools ismze restrictive than the exemp-
tion given to public school houses 9 public colleges and public
Mr. E. N. Jones, page 4, ' Opinion No. WW-531
academies. Chief Justice Stayton pointed out this distinction
inthe case of St. Edward"s College v. Morris, Tax Collector,
17 S.W. 512 (Tex.Sup.Ct. 1851):
"In reference to the exemption from taxation of
property, when used exclusively and owned by persons
or associations of personsfor school purposes, the
statute simply repeats,the~language of the Constitution
which permits th,eexemption to be made; thus indicating
an intention to make the exemption in such cases more
restrictive than is the exemption when given to public
school-houses, public college6 and public academies.
The Constitution, aswell as the statutes, make the-
distinction between public property and private property
owned and used for school purposes. . .'
Texas Technological College.was created and is governed
by the laws of the State of Texas. It is a public college.
Its property is public property of the State of Texas, and
is held bv Texas Technological College as an agency of the
State of Texas. See State v. University of Houston 264 S.W.
2d 153 (Tex.Clv.App. 1954, N.R.E.)
The test for determining whether public property is tax
exempt because used for a "public purpose" is whether it is
used primarily for the health, comfort and welfare of the
public. A. & M. Consolidated Independent School District v.
City of Bryan> lo4 S.W.'2d 914 (Tex.Sup.Ct. 1945). Fublic
education is recognized as a function of State government.
Cassiano v. Ursuline Academy, supra. There can be no doubt
that the maintenance of a public school is a public purpose
as envisioned by Article 8, Section 2, Texas Constitution. 5
Therefore, this opinion is concerned with the exemption ac-
corded to "public property used for public purposes" by
Sectiornl and 4 of Article 7150, Texas Revised Civil Statutes.
From >, supra, we quote:
"Public schools, colleges, .and academies may,,,under
authority of law, be established for the purpose'of
giving Instruction In . . : agriculture, or other
pursuit, which can be done practically only by having
lands which may be used for the purpose of giving
practical instruction, and in such a case all the
buildings and land used for such a purpose would evi-
dently be exempt."
On the authority of this case it is apparent that all the
property described as "Property Held Pursuant to the Educa-
tional Use Plan," (with thenexception of the four buildings
‘.
“I
., .
Mr. E. N. Jones, page 5, Opinion No. WW-531
which are temporarily excess to the needs cf said plan and
which are being rented) is exempt from taxation.
The exemption accorded to "public pr+operfyused for public
purposes" is not lost~even though such property may be temporarily
leased or rented, so long.as the public purpose of the property
has not-been abandoned, and so long as the revenue from
such renting or leasing enures'to the.publlc benefit. State v.
City of Beaumont 161 S.W.,2d 344 (Tex.Civ.App. 1942, no writ
history); City of Abi1ene.v. State 113 S.W.2d 631 (Tex.Clv.App.
1938 Error Dismissed.)
In your letter you state that it Is contemplated that the
property~described as "Property Owned Cktright by Texas Tech,"
and the four buildings listed under "Property Held Pursuant to
the Educational Use Plan" which are temporarily excess to the
needs of such plan, will eventually be used in connection with'
the educational use plan .and are being held for that purpose.
You further state that the Income from all rentals Is credited
to the PanTech Farms Account and is used solely for the pro-
motion of the educational program. It Is therefore apparent
that the property described as "Property Owned Outright by Texas
Tech" and the four rented buildings listed under "Property Held
Pursuant to the Educational Use Plan" are also exempt from
taxation.
The properly held by Texas Technological
College pursuant to the Educational Use Program
Is exempt from taxation under the laws of the
State of Texas on thengrounds that such property'
Is the property of a public college used in con-
nection with'the college's educational program.
The remainder of~the.property is also exempt
from taxation under the 1aws::ofthe State of
Texas though temporarily leased or rented by
reason of its being public property "held" for
public purposes, since the public purpose of
such.property has not been abandoned and all
revenues therefrom enure to the benefit of Texas
Tech and are used solely for the provotion of
the educational program at PanTech Farms.
Mr. E. N. Jones, page 6, Opinion No. WW-531
Very truly yours,
WILL WILSON
Attorney General of Texas
,~
zii15iIr P&-L--u
Assistant Attorney General
JNP:db
APPROVED:
OPINION COMMITTEE:
Geo. P. Blackburn, Chairman
C. Dean Davis
B. H. Timmins, Jr.
L. P. Lollar
Henry G. Braswell
REVIEWED FOR THE ATTORNEY GENES&
m: W. V. Geppert .'