Untitled Texas Attorney General Opinion

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The Attorney General ‘of Texas
July 29, 1981
MARK WHITE
Attorney General
Honorable Mike Driscoll Opinion No. Mw-357
Barr16 County Attorney
Harris County Courthouse He: Lease agreement be-
1001 Preston, Suite 634 tween Harris County and
Houston, Texas 77002 South Texas College of
Law
Dear Judge Driscoll:
Article 1817, V.T.C.S.. provides that the Courts of Civil Appeals
(to be redesignated "Courts of Appeals" on September 1, 1981) in the
First and Fourteenth Supreme Judicial Districts shall be located in
Houston. The statute further provides that:
[T]he County of Harris shall furnish and equip
suitable rooms in Houston for [said courts], and
for the justices thereof, all without cost or
expense to the state....
V.T.C.S. art. 1817.
The Harris County Conmissioners Court and the South Texas College
of Law are considering a lease agreement that would facilitate the
county's efforts to fulfill this mandate. You ask:
1. Can Harris County enter into an agreement
with South Texas College of Law whereby South
Texas College of Law agrees to construct a
multistory building with completion of only
the shell of the 5th and 6th stories, with
Harris County completing the construction of
the said 5th and 6th stories and leasing said
stories for use by the Courts of Civil
Appeals for the 1st and 14th Supreme Judicial
Districts?
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2. Can Harris County expend the proceeds of the
sale of the Harris County Office and Courts
Building Bonds-1979, Series A, to construct
said 5th and 6th stories with the exception
of the shell which will be constructed by the
South Texas College of Law?
3. Will the said building be subject to ad
valorem taxes so long as South Texas College
of Law uses the reminder of the building for
its school purposes?
You have not submitted any particular agreement to us. We
therefore consider only the question of whether the commissioners
court is authorized to enter into the kind of lease agreement you
describe. We imply nothing regarding the validity or desirability of
any agreement, or any element thereof, that may eventually be
concluded.
Commissioners courts may only exercise those express and implied
powers conferred by the constitution and statutes. Canales v-.-
Laughlin, 214 S.W.2d 451 (Tex. 1948); Anderson v. Wood, 152 S.IJ.2d
1084 (Tex. 1941). We must therl
efore determine whether a
constitutional or statutory basis for this kind of lease agreement
exists.
A threshold question, however, is whether, the commissioners
court is prohibited from entering into such an agreement because the
article 1817 requirement that Harris County furnish 'suitable rooms"
for the courts of appeals at no cost to the state is
unconstitutional. You suggest that this requirement violates article
VIII, section 1 of the Texas Constitution, which requires that taxes
be equal and uniform, as well as article III, section 56, which
prohibits local or special laws.
Article 1817 does not purport to levy a tax. Nevertheless, you
contend that by requiring courts of appeals to be in certain taxing
units at their expense. the statute causes a higher rate of assessment
in those units and therefore its effect is to create unequal taxation.
However, while the statute may increase the tax burden on certain
taxing units. it does not .createunequal taxation within any unit. It
therefore does not violate article VIII, section 1. -See Norris v.
City of Waco, 57 T. 635 (1882).
Article III, section 56 provides that:
The Legislature shall not. except as
otherwise provided in this Constitution, pass any
local or special law, authorizing:
. . . .
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Regulating the affairs of counties. . .
In Attorney General Opinion H-196 (1974), this office held a law
establishing the office of jail administrator in Bexar County to be
unconstitutional. However, the opinion also mentioned an exception to
article III, section 56 which was discussed in Smith v. Davis, 426
S.W.2d 827 (Tex. 1968). viz., that legislation of interest to the
people at large is not "local" legislation. This exception was deemed
inapplicable in H-196, but we believe it applies here. Legislation
providing for the maintenance of courts of appeals is certainly of
general interest to the people of Texas.
Courts have also held that legislation enacted pursuant to
article V, section 1 of the constitution, which authorizes the
legislature to establish a courts system, is not proscribed by article
III, section 56, but is expressly permitted by the first sentence
thereof: "The Legislature shall not, except as otherwise provided in
this Constitution, pass any local or special law. . ." (Emphasis
added.) See Harris County v. Croaker, 248 S.W. 652 (Tex. 1923); Jones
v. Anderson, 189 S.W.2d 65' (Tex. Civ. App. - San Antonio 1945, writ
ref'd). While the constitutional basis for article 1817 is article V,
section 6, we believe our courts would also regard it as authorized by
article III, section 56. Like article V, section 1 legislation, laws
enacted under article V, section 6, are passed pursuant to the
legislature's authority to establish a courts system. We therefore
conclude that article 1817, V.T.C.S., does not violate article III.
section 56 of the Texas Constitution.
We now turn to the question of whether the co&issioners court
has express or implied authority to enter into the kind of lease
agreement you describe. Article 2370b. V.T,C.S., provides that:
Section 1. Whenever the Commissioners Court of
any county determines that the county courthouse
is not adequate in size or facilities to properly
house all county and district offices and all
county and district courts and all justice of the
peace courts...and to adequately store all county
records and equipment...and/or that the county
jail is not adequate...the Commissioners Court may
purchase, construct, reconstruct, remodel, improve
and equip, or otherwise acquire an office building
or buildings, or courts building or buildings, or
jail building or buildings...br an additional
building or buildings in which any one or more of
the county or district offices or county, district
or justice of the peace courts, or the county jail
or any other county facilities or functions may be
housed, conducted and maintained; and may purchase
and improve the necessary site or sites
therefor...
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Sec. 2 Such building or buildings...may also be
used for the purpose of carrying, on such other
public business as may be authorized by the
Commissioners Court, and/or the Commissioners
Court may also lease or rent any part or parts of
any such building or buildings (which may not be
presently needed for any of the above purposes) to
the State of Texas and any of its political
subdivisions, and the Federal Government.
Sec. 3. To pay for the purchase, construction,
reconstruction, remodeling, improvement and
equipment of any such building or buildings...the
Commissioners Court is authorized to issue
negotiable bonds...(Emphasis added.)
Whether article 2370b authorizes such an agreement depends upon
whether, in the context thereof, (1) the right to "purchase" includes
the right to "lease" or purchase a leasehold interest; (2) two stories
of a proposed multistory structure constitute a "building"; and (3)
providing housing for the courts of appeals in Houston constitutes a
"county function" of Harris County.
With respect to the third issue, that in light of article 1817,
providing housing for the courts of appeals in Houston is clearly a
"county function" of Harris County. In any event, section 2 of
article 23701, authorizes a commissioners court to use buildings to
carry on "such other public business" as it may authorize.
The second issue is more complicated. Cases involving the term
"building" indicate that its definition varies with the statute or
legal instrument being construed. Compare Day v. State, 534 S.W.2d
681 (Tex. Grim. App. 1976) (structure with no doors or locks not a
"building" for burglary statute); Aluminum Company of America V.
Kohutek, 455 S.W.2d 789 (Tex. Civ. App. - Corpus Christ1 1970, no
writ) (trailer a "building" within restrictive covenant); Ambrose 6
Co. v. Hutchison, 356 S.W.2d 215 (Tex. Civ. App. - Ft. Worth 1962. no
writ) (pier a "building" for purposes of mechanics liens); Peterson v.
sto12, 269 S.W. 113 (Tex. Civ. App. - Beaumont 1925, writ ref'd)
("building" ~a "structure having capacity to contain and which is
designed for the habitation of man...."). See also Roberts v.
Commercial Casualty Ins. Co., 168 F.2d 23 (6th Cir. 1948) (suite in
hotel room a !'buildins" for purposes of life policy clause).
Ultimately, as the court-stated in Mutual Lumber Co. v. Sheppard, 173
S.W.2d 494 at 497 (Tex. Civ. App. - Austin 1943, no writ): [Tlhe
meanine of the noun buildine deoends...unon the oarticular facts and
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circumstances of each case, controlled largely by the intention of the
Parties, or by the aim or purpose of a particular statute. (Emphasis
added.) Thus, we must determine how flexibly the legislature intended
"building" to be construed in the context of article 2370b.
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When one considers article 2370b in its entirety, keeping in mind
that the purpose of statutory construction is to ascertain legislative
intent and that courts will not place undue emphasis upon isolated
words or construe statutes so as to lead to an impractical result, see
Citizens Bank of Bryan v. First State Bank of Hearne, 580 S.W.2d 344
(Tex. 1979); McKinney v. Blankenship. 282 S.W.2d 691 (Tex. 1955). the
conclusion is inescapable that "building" was intended to be a
flexible term which would include two stories in a multistory
structure.
To say that "building" only embraces entire structures is to
conclude that the legislature consciously selected that particular
word with the intent of restricting counties in their ability to
acquire needed facilities. However, you have suggested no reason why
it would have done so, and we can perceive none. The legislature
enacted article 2370b to enable counties to obtain necessary space to
alleviate overcrowding,.and there is no indication that it mattered
whether they do so by obtaining an entire structure or part of one.
An inflexible construction of "building" would also mean that if
a county needed space and two facilities were available--a
twenty-story structure and two stories of a four-story
structure--article 2370b would preclude it from obtaining the latter
even though it suited the county's needs perfectly. The legislature
certainly could not have intended such an impractical and wasteful
result, at least where it had no perceptible goal in mind.
Furthermore, to say that two stories are not a "building" is to raise
the question of what does constitute a building. Some fine
line-drawing would be required to determine whether certain
structures, i.e., self-contained units under a common roof, as in a
shopping mall, or enclosed wings of a large structure, constitute
"buildings."
Finally, when used in connection with certain verbs in article
2370b. "building" makes sense only when construed as including parts
of a structure. For example, counties may "remodel," "improve." and
"equip" buildings. It can hardly be, argued that the legislature
intended that counties must do these things to the entire of building
if it is to do them at all.
In short, we believe, the legislature intended "building" to be
construed flexibly, along the lines discussed in Peterson v. Stolr and
Roberts v. Commercial Casualty Ins. Co.. supra. We therefore conclude
that two stories of a proposed multistory structure constitute a
"building" within article 2370b.
We next consider whether the authority to "purchase" conferred in
article 2370b includes the authority to "lease." Prior opinions of
this office reach conflicting conclusions as to the meaning of the
term "purchase." Attorney General Opinion M-1158 (1972). for example.
concluded that "purchase." within section 55.11 of the Texas Education
Code, included "all lawful acquisitions of real estate by any means
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whatever, except by descent." See also Attorney General Opinion H-23
(1973). On the other hand, Attorney General Opinion M-950 (1971)
concluded that "purchase" does not include a "lease" within section
21.901 of the Education Code.
Section 1 of article 2370b authorizes commissioners courts to
'purchase...or otherwise acquire" buildings. In Attorney General
Opinion MW-290 (1981). we held that "or otherwise acquire" included
authority to lease. Section 3, however, only authorizes commissioners
courts to issue negotiable bonds to "purchase" buildings; it omits any
reference to "or otherwise acquire." Since a commissioners court is
authorized to lease a building, however, it can hardly be argued that
the legislature intended to preclude it from issuing bonds to pay for
such lease. Thus, the legislature must have intended for "purchase"
to have the meaning ascribed to the term in Opinions M-1158 and H-23,
supra, viz., all lawful acquisitions of real estate by any means
whatever, except by descent. The term certainly includes the purchase
of a leasehold estate.
This construction reconciles the provisions of section 1 and 3,
and it accounts for the omission of "or otherwise acquire" in section
3. When the legislature authorized commissioners courts to issue
bonds to "purchase" buildings, it thereby authorized bonds to be
issued for all forms of acquisition of buildings for which payment
would be required. including leases. The reference to "or otherwise
acquire" in section 1, therefore, is to acquisitions by means of gift
or descent. The phrase was omitted in section 3 because no payment is
required for property acquired by descent--thus no bonds are needed--
and therefore there was no reason for including it in that section.
For the foregoing reasons, we conclude that article 2370b
authorizes the commissioners court to enter into the type of lease
agreement you describe. In view of our conclusion, we need not decide
whether another other statute also provides such authority.
You next ask whether the commissioners court may use the Office
and Courts Building Bonds-1979, Series A, to construct the stories in
question. Article 2370b authorizes the commissioners court to issue
negotiable bonds for this purpose. Thus, we need only consider
whether these particular bonds may be used for the purpose sought.
The bond proposition submitted to the voters in Harris County in
1979 provided as follows:
Shall the Comissioners Court of Harris County,
Texas be authorized to issue the bonds of said
county in the amount of...for the purpose of
paying for the purchase, construction,
reconstruction, remodeling, improvement and
equipment of an office building or buildings, or
courts building or buildings (in addition to the
existing courthouse). or any additional building
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or buildings in which any one or more of the
county or district offices or county, district or
justice of the peace courts, or any other county
facilities or functions may be housed, conducted
and maintained...(emphasis added).
Bond Droceeds mav be exoended onlv for the ournoses for which the
bonds were voted. Lewis v.'City of Port Worth; 89 S.W.2d 975 (Tex.
1936); Black v. Strength, 246 S.W. 79 (Tex. 1922); Gordon v.
Commissioners' Court of Jefferson County, 310 S.W.2d 761 (Tex. Civ.
APP. - Beaumont 1958, writ ref'd n.r.e.). Moreover, the purposes of a
proposed bond election must be set out in enough detail that voters
will be familiar with the proposal when they cast their ballots. See
V.T.C.S. art. 703; Tax Payers Association of Lubbock v. Cityof
Lubbock, 565 S.W.2d 578 (Tex. Civ. App. - Amarillo 1978. no writ);
Moore v. City of Corpus Christi, 542 S.W.2d 720 (Tex. Civ. App. -
Corpus Christie 1976. writ ref'd n.r.e.); 15 Tex. Jur. 2d Counties
99124 et seq. Inasmuch as the bond proposition tracked section 3 of
article 2370b, the only question is whether its terms were too general
to sufficiently apprise Harris County voters of the purposes for which
the bonds might be used.
In Moore v. City of Corpus Christi, B, at 723, the court
stated that:
The character, features and purposes of the
proposed bond election are to be set out in
sufficient detail in the proposition, so that the
voters will be familiar with the proposal when
they cast their ballots. [citations omitted]. It
is presumed that all persons eligible to vote in a
bond election will familiariae themselves with the
contents of and the statements made in the
proposition before casting their ballots....
In light of the foregoing authorities, we do not believe the bond
proposition could be successfully challenged on the ground that its
terms were too general and therefore misleading. As noted, the
proposition tracked section 3 of article 2370b. It authorized the
commissioners court to purchase "any" building to house "any county
function." Voters with doubts about the meaning of the provisions
could have inquired as to their meaning before the election. We
therefore conclude that the bonds may be used for their intended
purpose, assuming, that any other applicable requirements are met.
-See Attorney General Opinions MW-290 (1981); H-403. H-445 (1974).
Your final question is whether the proposed multistory building
will be subject to ad valorem taxes. Article VIII, section 2 of the
Texas Constitution authorizes the legislature to exempt fromtaxation
"buildings used exclusively and owned by persons or associations of
persons for school purposes." Section 11.21 of the Property Tax Code
provides that:
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(a) A person is entitled to an exemption from
taxation of the buildings and tangible
personal property that he owns and that are
used for a school that, is qualified as
provided by Subsection (d) of this section
if:
(1) the school is operated exclusively by
the person owning the property;
(2) except as permitted by Subsection (b) of
this section, the buildings and tangible
personal property are used exclusively
for educational functions; and
(3) the buildings and tangible personal
property are reasonably necessary for
the operation of the school.
(b) Use of exempt tangible property for functions
other than educational functions does not
result in loss of an exemption authorized by
this section if those other functions are
incidental to use of the property for
educational functions and benefit the
students or faculty of the school.
. . . .
Claims for tax exemptions are strictly construed. Davies v.
Meyer, 541 S.W.2d 827 (Tex. 1976). Moreover, the right to enjoy an
exemption can only be established by strict proof of all facts
necessary to create the exemption. Radio Bible Hour, Inc. v.
Hurst-Euless Ind. School District, 341 S.W.2d 467 (Tex. Civ. App. -
Ft. Worth 1960, writ ~ref'd n.r.e.). The determination as to whether
or not the building in question would be subject to ad valorem taxes
is a fact question which cannot be answered by an attorney general's
opinion.
SUMMARY
Harris County and the South Texas College of
Law may enter into an agreement calling for the
latter to construct a multistory building but
complete only the shell of the fifth and sixth
stories, and the former to complete construction
of those stories and lease them for use by .the
Courts of Civil Appeals for the First and
Fourteenth Supreme Judicial Districts. Harris
County may expend the proceeds of the sale of the
Harris County Office and Courts Building
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Bonds-1979, Series A, to construct said stories.
We express no opinion regarding whether or not the
proposed building will be subject to ad valorem
tax.
Attorney General of Texas
JOHN W. FAINTER, JR.
First Assistant Attorney General
RICHARD E. GRAY III
Executive Assistant Attorney General
Prepared by Jon Bible
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Susan L. Garrison, Chairman
Jon Bible
Rick Gilpin
Richard E. Gray III
Jim Moellinger
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