THEA~TORNEYGENERAL
OF TEXAS
AUSTIN 1% ‘IYExAS
November 3, 1961
Honorable William A, Nobles Opinion No. ~-1184'
County Attorney
Wise County Courthcuse Re: Tax exemption status of
Decatur, Texas a royalty Interest belong-
ing to ‘Decatur Baptist
CcLege, arising from a
pooled lease of lands
Dear Mr. Nobles: belonging to the college.
Pour request for an opinion reads in part as follows:
“Decatur Baptist College is a junior
college operated by and under the auspices
of the Baptist.General Ccnventlon of Texas,
It owns approximst,elyfour blocks of land
in South Decatur A~dditFonto the city of
Decatur3 on which its buildings, athletic
fields and other school facilities are
located.
“Adjoining ;aid chmp:.~s~
it.c,wnsvarious
numbered Lots and blcsks in said addition,
aggregating 91,212.acres of land through
and acrGss whleh th.eplatted streets and
alleys have rever been laid out or used
as such, “TheCollege acquired this prop-
erty under.various deeds dated from the
year 1899 to the year 1947.
“In the year 1948, the College authorities
issued an oil and ga,sleast covering the
91.212 aores &der what is known ‘in the
industry as a “pGoling” lease, thereafter
under the authority granted in the lease,
the lessee pools,dsaid acreage with other
landa tG create a production unit of 352
acres fcr the production of gas; drilled
and discovered a producing gas well on the
acreage with which the College lands had
been pocled,
“So far as I sr ab’leto determine, none
of the Ccllege c,wnedproperty has ever been
cn the tax poll of any taxing agency in Wise
Honorable William A. Nobles, Page 2 Opinion No. ~~1184
'Xounty, Texas, the county and state wherein
said land is situated, until the year 1961,
for which year the royalty ictertst in said
UnitSed production has been assessed at
a value of $1,220.03, the tax value on
which state and'county assessed at $18.56,
an issue is presented between the tax
assessor-cdlector of Wise County, Texas,
and the ad+nistrat:ve authorities of
Decatur Baptist Csllege as to whether or
not the property in queatior,is exempt
from taxation."
In response to further inquiry frotzthis
. office, you
stated in part as follokJs:
"All the property belonging to Decatur
Baptist College and inyolved iv my problem,
ares and have bee:?at all tfmts since, owned
by the College, situated within the city
limits of the City of Decatur, all of which
being platted in Lots, blocks';streets an3
alleys; that part of the acreage in question
Is not a part of the eollege campus and
never has been. According to my informati0n
the 0nPy use the college has ever made of it
has been td;graze dafry cattle thereon, the
numbers varying from time to time untfl in
recelatyears the dafrying operation has been
discoctinued. While maintaining the dairy
cattle on the land, the dairy products
derived from the operation were used 'for
the student tables in the dormitory. The
entire tract in question waa enclosed in
sollda with fecces which have been extended
from time to time as acreage has been asquired
by tht'college until all of it is under one
fence and entire acreage was used for ;dairy
cattlt.grazing :jlatfl
that operation wag dis-
continued. For the last several years no
.ust has been made of this land by the cbllege,
.~.laa
to far as I am informed, and believe:
"I do not find that the,Collegt authorities
have ever filed with the Tax Assessor Collector '
of Wise County, TtWos, the-County and State
wherein said,land fa situated, JA comp$ett
itemized statement of all of said property,
any and every kind whatsoever which Is claimed .'
to be exempt from taxes under the auspices,
.
Honorable William Nobles, Page 3 Opinion No, ~~-1184
of this present law, and all property not so
listed should be assessed and it would be the
duty of the tax assessor to make levy on the
same, and the tax collaotor to collect said
taxes.'
"In so far as I am informed or believe,
the entire income from said land, if any,
has been used by the College authorities
for operational expenses of the college."
In response to a telephone,inquiry from this office, you
have further stated that while Decatur.Baptlst College has
given instruction in the subject of agriculture In the past,
It has not done so in the last five or six years. You further
stated that even when the College gave instruction In agriculture,
this particular tract of land, 91.212 acres, was not used for
instructional purposes.
Section 2 of Article 8, Texas Constitution, reads In part
a6 follows:
11B I D the legislature may, by general
laws, exempt from taxation, m * all
buildings used exclusively and reasonably
necessary in conducting any association
engaged in promoting the religious,
educational and physical development of
boys, girls, young men or young women
operating under a State or National
organization of like character; also the
endowment funds of such institutions of
learning and religion not used with a view
to profit; and when the same are invested
in bonds or mortgages, OP in land or other
property which has been and,shall hereafter
be bought in by such Institutions under
foreclosure sales made to satisfy OP protect
such bonds or mortgages, thatsuch exemption
of such land and property shall continue
for only two years after the purchase of
the same at such sale by such Institutions
and no longerpO D * and all laws exempting
property from taxation other than the prop-
erty above mentioned shall be null and void."
In Dickison v. Woodmen of the World Life Insurance Society,
280 S.W.2d 315 (Civ.App., 1953, error ref.), the Court stated
at page 317:
.
Honorable William A. Nobles, Page 4 Opinion No. W-1184
..;
“There are other provisions of the Con-
,stitutlonrelating to exemption from the
burden of taxation of property, but the only
constitutional provision here involved is
Sec. 2, Art. 8. Two things are apparent
from,.areading of this constitutional pro-
vision: First, that the section itself does
not exempt any property from taxation, but
only authorizes the Legislature to do so
by general laws, and second, while the
Legislature may r+estrlctthe exemption,
it may not broaden it beyond the constitu-
tional confines9 and any attempt to do so
would be null and void.”
.
The Legislature, acting under the authority of the pro-
visions of Section 2 of Article 8, Texas Constitution, enacted
Article 7150, V.C.S. Section 1 of which reads in part as
follows:
“The following property shall be exempt
from taxation, to-wit:
“1 o Schools and Churches.--Public
school houses. s .A11 public colleges,
public academies, and all endowment funds
of institutions of learning. 9 .not used
with a view of profit, and when the same
are invested4n bonds or mortgages, and all
vs used exclusive1 and ownea
u bersons or associ,ationsforYschool
purposes; provided that when the land or
other property has been> or shall hereafter
be, bought In by such institutions under
foreclosure sales made to satisfy or
protect bonds or mortgages in which said
endowment funds are invested, that such
exemption of.,suchland and property shall
continue fo@twos years ofter the purchase
of the same at such sale by suoh institutions
and no longer, This provision shall not
extend to leasehold estate of real property
held under authority of any college or
university of learning.
“Provided, however, that said schools0.6 .
“‘:
desiring t,heright of exemption of the prop-
erties hereinabove mentioned, shall first
prepare and file with the Tax Assessor of
the County In which such property is situated,
. .
. :
Honorable William A. Nobles, Page 5 Opinion No. WW-1184
a complete,itemized statement of all of said
wow-W, any and every kind whatsoever,
which Is claimed to Abe exempt from taxation
under the provisions of this particular law,
and all property not so listed shall be
assessed and it shall be the duty of the
Tax Assessor to make levy on the same, and
for the Tax Collector to collect the said
taxes.
"Said itemized list of exemptions when
made by said schools, 6 *shall be sworn
to by some officer of the said schools, D s
familiar with the facts, and when the same
haa been filed with the Tax Assessor same
shall be by him filed in his office, subject
to inspection at any time by any person
desiring to see the same." Bphasis addeg
'The above proviso to the effect that schools and churches
desiring theright of exemption shall file with the tax assessor
a complete itemized statement of all property claimed to be
exempt was held ineffective because the caption of the amendatory
act failed to mention such purpose in the caption. City of
Fort Worth v. Harris 177 S,W.2d 308 (Civ.App. 1944) revd.
on other grounds, l& Tex, 600, 180 S,W.2d 131 (1944).
In the case of Cassiano v. Ursuline Acadetn 64 Tex. 673
I1885~),the Court held that the term "buildlng"y~ncluded the
land-used with it, The grounds.in..questionwere used for
recreation of the pupils and to supply vegetables for the
school table. The Court said, at page 676:
"All the buildings and all the land
sought to be aold by appellants were
necessary and used for the proper and
economical conduct of the school,"
The Court held that the buildingsand ground were exempt from
taxation.
In St. Edwards' Collene 'v. Morris, 82 Tex, 1, 17 S.W.
512 (1891) the College,owned 499 acre8 of land, which the
trial couri found to consist of 5 acres uaed exolueively for
school purposes9 and 494 acres was used as a farm and pasture.
The pasture was used to pasture the farm stock; the produce
raised on the farm was used to feed the stook. No stock ~w~as
sold; no produce was sold. The hogs slaughtered were used
to supply the table In the school. The trial court held
Honorable Yllliam A; Nobles, Page 6 OplnlonNo, y-1184
that.the 5 acres was exempt, and the 494 acres subject to,
ad valorem taxes. The 'SupremeCourt of Texas said at page'
512:
"It cannot be claimed that the prop-
erty of appellant is public property used
for public purposes, for to give It such
character lt is believed that the ownership
should be In the.state or some of its
municipal subdivisions,0 o ."
At page 513, the Court said:
"The .statutealso exempts from taxa-
tion 'all public colleges; public academies,
.a11 buildings-connected with the same,
and all lands connected with public insti-
tutions of learning.' Under this exemption
which has reference to public colleges and
academies, the connection of buildings and
of lands referred to, may not be one of ,.
mere contiguity, but one of connected use,
for a oommon purpose9 public In its nature,
and not foreign to the leading purposes for
which the public colleges and academies
are established and maintained.. . + .The
constitution, as well'as the statutes, make
the dfstdnction between public property and
nrfvate prooertv owned and used for school
c
i“ purposes; and that the property in huestfon
is not publld within the meaning of these
laws as too clear, Itmay have been con-
venient to have lands. in connection with
those used for school-purposes, and thus
supply much that went to aupply the table
of a boarding school; but we~are of the
opinion that the lands so used by appellan4
Were not used exclusively for school pur-
poses.? ,&phasfs addedJ
The Supreme'Court u&&d the trial court, which had exempted
as much of the land as the conetltutl~onwould permit the
leglelature to exempt, and held the balance of the land
subject to taxation.. .:
<'
The foregoing cases~pertain to privately owned church
schools. 'They are to be distlnauiahed from the case of
State v. University of Houston ;t al.,264 .S.Y.2d 153 (Clv.
PP*, 954, error ref., n.r.e.). In that casep the University
Honorable William A. Nobles, Page 7 Opinion No. ~~-1184
of Houston, which is located in Harrls.County, owned certain
producing mineral Interests In Fort ~Bend County. The State,
Fort Bend County and certain differenttypes of taxing
districts loc'atedIn Fort Bend County, sought to subject the
mineral interest to ad valorem taxes. In the beginning, the
University of,Houston was a municipally owned publlc~junior
.,
,." college, developing eventually Into a large endowed university.
The appellants had sought to place this mineral,lnterest on the
tax rolls on the grounds that the University had lost its
status as a "publicly owned and operzted lnstltutl.onof leam-
ing D" The Court held that the University still retained Its
"publicly owned and operated" ,status,and that the mineral
interest sought to be tax'ed.was exempt.'
Attorney'General's Opinion No. v-1568 (3952), concerned
Jarvis Christian College, which by its purpose clause was
incorporated to "give to the colored youth of Texas practical
.;lgriculturrl# as well as high grade instruction
in'the arts,and sciences;. o ~a *" ,@phasis addedJ Some
of the college lands were used for campus3 other land being
used as demonstration tracts in agricultural pursuits, and
other lands used'ln reforestation courses. The opinion held
that the entire surface of the land was being used exclusively
for school,purposes, and that such exemption extended to the
one-eighth 011 royalty constituting a part of the whole of
the real estate owned by the college.
In Attorney General's Oplnlon No. 0-3083 (19&l) it was
held that ~the land on which the xchool plant of the College
of Marshall ls..loe&ed and tihlchis used'excluslvely for
educational purposes, including the necessary yards and
recreational grounds, was exemptfrom, taxation, but that a
part of the land which was farmed was not exempt;
Attorney General's Oplnlon No. O-6485:(1945) was concerned
with two tracts~of land,acqulred for Trinity University in
San Antonio. The Secretary of the Board of Trustees of the
University In a letter to the Commlsslonerss Court requested
that the,land be exempt from taxation, and stated that "This
property has been the campus of
the Tf;lnlty The opinionheld
that Q e .if the flommlss convinced that
such property lr..reasonablynecessary to the full exercise
and enjoyment of the educational purposes of the University,
it Is exempt from taxation, 'D0 011
From the facts submitted, and the authorities cIteda It
is our opfnlon, and we so hold, that the 91.212.acre tract
la not exempt from taxation. If the aurface'of the land 1s
.
Honorable William A. Nobles, Page 8 Opinion No. W-1184 ’j
‘,jr.1
not exempt, neither is the mineral Interest, It being a part“
The tract in question is no part of the
of the realty.'.:-
campusj the land is not used as a demonstration tract in
agricultural pursuits;,,.the
land Is not ,ownedby a "publicly
owned and operated institution of learning," that is, it
ls':hotowned by the S'tate,county or any municipality.
”
SUMMARY
e’.
P.
.. .The royalty interest of a 91.212'
.acre tract oeland owned by Decatur Baptist
. Colkge, which has been pooled with other
land under an'oil and gas lease, the'surface
'1'
~' of such tract;not being a part of.the campus,
not used as a:demonstratlon tract in agri-
cultural
. pursuits,,and not the property of
a publ:lcly~ow,ned,and operated institution of
learnihg, is ,not exempt from ad valorem taxes.
Yours very truly,
WILL WILSON.
Attorney General of Texas
”
Riley Eugene Fletcher
REF:om Assistant
"7~.
APPROVED:
OPINION COMMITTEE: :
W. V..Geppert, .ehairman
W. E. Allen
W, Ray Sc~uggs
Marvin Sentell
REVIEWED FOR THE ATTORNEY GENERAL
BY:.,Houghton Brownlee, Jr.
1