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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