Untitled Texas Attorney General Opinion

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 '. _~, . : . . / 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 .'