July 30, 1975
The Honorable Jack K. Williams Opinion No. H- 655
President
Texas A&M University Re: Whether ,a state university
College Station, Texas 77843 can erect a building on land
subject to a possibility of reverter.
Dear Dr.. Williams:
You have requested our opinion concerning the authority of the Texas
A&M University System to erect a building on land subject to a possibility of
reverter. The land involved in your request was deeded to the University
from the United States of America on November 21, 1974. The deed contains
four conditions subsequent which in essence are as follows:
1. The property will be used for educational purposes
in accordance with the plan set out in the application.
2. The grantee can sell, lease, encumber and otherwise
dispose of the property only as authorized in writing by the
grantor.
3. Grantee must file annual reports aa to the operation
and maintenance of the property.
4. Grantee will comply with all civil rights statutes and
regulations pertaining to discrimination on grounds of race,
color or national origin for so long as the property is used
for a purpose for which federal financial aasiatance is
provided.
The breach of any of the above conditions can result in the reversion of
the property to the grantor at the grantor’s option. The first three conditions
expire after thirty years but no expiration date was set for the fourth condition
although the fourth condition is inoperable if the facilities located on the land
involved receive no federal financial assistance.
p* 2877
The Honorable Jack K. Williams - page 2
Abrogation of t,hc: first three primary conditions may br obtained by
certain payments to be made by grantee which alrlount to the current lair
market value of the land as of the date of abrogation less a 3 l/3% credit
for each year the grantee has complied with the conditions.
Section 85. 23(a) of the Education Code, which is applicable to the
Texas A&M University System, provides that the University’s Board of
Directors:
. . . may contract with persons, firms, or corporations
for the purchase, acquisition, or construction of permanent
improvements on or conveniently located with reference to
the campus of any institution of the system; and may purchasc~,
sell, or lease lands and other appurtenances for the construction
of the permanent improvements. However, no liability shall
be incurred by the State of Texas under this subsection.
There are no express restrictions on the form of contract to be utili?.ed
in the purchase of lands for the erection of permanent improvements.
The Board is expressly authorized to erect buildings on leased land.
Thus, in our opinion,this section would in this case permit permanent improve-
ments to be erected on land owned subject to a possibility of reverter, for
while a lease will usually contain a termination date, the land involved in your
request will remain the property of the University so long as the conditions
subsequent are not breached. Thus, the University may retain title to this
property indefinitely. Accordingly, in our opinion, the Texas A&M Universiiy
System is statutorily authorized to erect permanent improvements on this land.
We do not consider the effect, if any, of Senate Bill 706, Acts 1975, 64th Leg.,
which relates to construction of physical plants at institutions of higher learn@
in the State of Texas.
In addition, we are aware of no constitutional inhibitions to the erection
of such permanent improvements. In the similar context of improvements on
leased land, we have hrld that article 3, sec,tion 51 of t.he Texas Constitution
and its associated provisions would not be violated if the expenditure:
p. 2878
is for il propc’r public purpose and if the consideration
or Ix:lll%tit to (.he public is adequai.cb. Attorney General
Opinion I.(-403 (1974).
Having determined this test to be satisfied we have upheld expenditures for
improvements on leased land. Attorney General Opinions H-403 (1974), H-257
(1974). Since the pu.blic purpose and beneift are evident in the instant case, and
since there is less possibility of dkestiture in this case than in those involved in
our prior opinions, we believe the proposed expenditures wculd be clearly
constitutiona\.
SUMMARY
The ‘Texas A&M University System may erect permanent
improvcmrnts on certain land owned by the System subject
to a possibility of revcrter.
Very truly yours,
DAVID M. KENDALL, First Assistant
C. RO6F;lIT HEATH, Chai~rrnan
Opinion Cornn~littee