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