Could the Texas Aircraft Pooling Board own and operate an airport for state aircraft, and who could condemn land for it?

TX AG Opinion DM-0436: Could Texas own an airport for state aircraft and condemn land for it?

Plain-English summary

Senator Gonzalo Barrientos asked whether Texas could acquire and operate Austin's Robert Mueller Municipal Airport for state aircraft. The Attorney General found no law prohibiting state ownership and concluded that the Aircraft Pooling Board's authority to acquire “appropriate facilities” for state-owned or leased aircraft implied authority to acquire and operate an airport used only by state aircraft. The General Services Commission's building authority did not include owning or operating an airport.

Neither agency could initiate condemnation on its own. Eminent-domain authority had to come from the Legislature expressly or by necessary implication, and neither the Aircraft Pooling Board nor the General Services Commission had that power for this purpose. Government Code section 2204.001 separately allowed the governor to purchase land required for public use and, if a price could not be agreed on, direct the Attorney General or a local prosecutor to condemn it in the state's name.

Legislative action still had to come first. An appropriation was necessary to pay for the land, and the Legislature could appropriate money only to an agency that already had legal authority to carry out the purpose. Because the opinion found implied authority in the Aircraft Pooling Board, an appropriation to that board would let it purchase or lease the airport or ask the governor to acquire the land through section 2204.001. The General Services Commission could not receive an appropriation to own or operate the airport because it lacked that underlying authority.

The opinion also addressed several consequences. The condemnor generally had absolute discretion to choose the site, subject to court review for bad faith, arbitrary or capricious conduct, or fraud. A restrictive covenant with a future reversion to the former owner probably could not be attached to condemned fee-simple property because it resembled an unenforceable promise about future conduct rather than a reserved property interest. Liability for damage from airport operations depended on the facts and could arise under the Texas Constitution's takings provision or, in narrow vehicle or equipment cases, the Tort Claims Act. State-owned airport property leased to a private operator could remain tax exempt only when its use directly supported the state's airport operation, a fact question that could not be resolved in the opinion process.

Currency note

This opinion was issued in 1997. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Who this opinion affected (as of 1997)

The Aircraft Pooling Board: The opinion found implied authority to own and operate an airport for state aircraft, subject to legislative appropriations, but no authority to initiate condemnation.

The General Services Commission: The opinion concluded that its building-construction powers did not authorize it to own or operate an airport or independently condemn land for one.

The governor and Legislature: The Legislature first had to fund an authorized agency. The governor could then use Government Code section 2204.001 to purchase land or direct condemnation when the state and owner could not agree on a price.

Affected property owners: The opinion described the constitutional right to adequate compensation and the narrow grounds for challenging site selection, while treating operational damage and inverse-condemnation claims as fact-specific.

Appraisal districts and airport lessees: A private facility on a state-owned airport could be exempt only if its use directly supported the public airport operation rather than the lessee's separate commercial interests.

Common questions

Did the Aircraft Pooling Board have express authority to own an airport?
No. The opinion found implied authority in its power to acquire appropriate facilities for the accommodation of all state-owned or leased aircraft. It recommended express legislation to remove doubt.

Could the board or General Services Commission condemn airport land?
No. Neither agency had express or necessarily implied condemnation authority. The governor could direct condemnation under Government Code section 2204.001 after the Legislature appropriated funds to an agency legally authorized to acquire and operate the airport.

Could a court overturn the state's choice of airport site?
Only on narrow grounds under the opinion's cited law. Site selection was within the condemnor's discretion unless the condemnor acted in bad faith, arbitrarily, capriciously, or fraudulently.

Could condemned airport land revert to the former owner if a restriction was violated?
The opinion expressed considerable doubt. It treated an indefinite future reversion as a promise about future conduct, not a limited property interest retained by the owner, and noted that state land could later be disposed of only for adequate consideration and with legislative authority.

Would privately operated facilities on the state airport be tax exempt?
Possibly. The opinion said the property could qualify when the private use directly supported the state's airport operation and served a public purpose. Whether a particular hangar, fuel facility, or other lease met that standard was a fact question.

Background and statutory framework

Transportation Code section 21.101 contemplated grants or loans to a state agency whose governing board was authorized to operate an airport. Government Code section 2205.032(a) required the Aircraft Pooling Board to operate a pool for custody, control, operation, and maintenance of state aircraft, and section 2205.034(a) allowed it to acquire appropriate facilities, including hangars, passenger waiting and flight-planning areas, communications facilities, and other related facilities. The opinion read those provisions together as implied authority to acquire an airport for state aircraft.

The power of eminent domain, by contrast, had to be conferred expressly or by necessary implication. The board's purchase and lease authority under section 2205.035 did not include condemnation. The General Services Commission could condemn a building site only for a particular legislatively authorized building project. Section 2204.001 gave the governor a separate route: purchase land required for state public use, then direct condemnation in the state's name if the owner and state could not agree on price.

Article I, section 17 of the Texas Constitution required adequate compensation when property was taken, damaged, or destroyed for public use. The opinion distinguished physical takings, inverse-condemnation claims for uncompensated takings or damage, nuisance-based constitutional claims, and negligence. Tort liability for property damage existed only in the narrow circumstances stated in Civil Practice and Remedies Code section 101.021(1)(A), involving operation or use of motor-driven vehicles or equipment.

For taxation, article VIII generally required taxation of real property but permitted the Legislature to exempt public property used for public purposes. Tax Code section 11.11 exempted state property used for public purposes while taxing state property leased to a private business for an unrelated private purpose. Relying on earlier airport opinions, the Attorney General used a direct-support test: a private lease could remain exempt when it directly supported safe and efficient airport operation, but not when it served a separate commercial or agricultural purpose.

Citations

Constitution and statutes:

• Tex. Const. art. I, § 17
• Tex. Const. art. III, §§ 44, 51
• Tex. Const. art. VIII, §§ 1, 2(a)
• Tex. Transp. Code §§ 21.101, 21.112, 21.114, 22.020(b)(1)
• Tex. Gov't Code §§ 2204.001, 2205.032(a), 2205.034(a), 2205.035, 2166.001(4)(A), 2166.002, 2166.055, 2166.251
• Tex. Civ. Prac. & Rem. Code § 101.021(1)(A)
• Tex. Tax Code § 11.11

Cases:

• Texas Highway Dep't v. Weber, 219 S.W.2d 70 (Tex. 1949)
• Coastal States Gas Producing Co. v. Pate, 309 S.W.2d 828 (Tex. 1958)
• Valero Eastex Pipeline Co. v. Jarvis, 926 S.W.2d 789 (Tex. App.-Tyler 1996, writ requested)
• Hubler v. Corpus Christi, 564 S.W.2d 816 (Tex. Civ. App.-Corpus Christi 1978, writ ref'd n.r.e.)
• Felts v. Harris County, 915 S.W.2d 482 (Tex. 1996)
• State v. Biggar, 873 S.W.2d 11 (Tex. 1994)
• Coastal Indus. Water v. Celanese Corp., 592 S.W.2d 597 (Tex. 1979)
• White v. Natural Gas Pipeline Co. of America, 444 S.W.2d 298 (Tex. 1969)
• Shade v. City of Dallas, 819 S.W.2d 578 (Tex. App.-Dallas 1991, no writ)
• Ivey v. City of Temple, 415 S.W.2d 542 (Tex. Civ. App.-Austin 1967, writ ref'd n.r.e.)
• A&M Consol. Ind. Sch. Dist. v. City of Bryan, 184 S.W.2d 914 (Tex. 1945)
• Satterlee v. Gulf Coast Waste Disposal Auth., 576 S.W.2d 773 (Tex. 1978)
• Grand Prairie Hosp. Auth. v. Dallas County Appraisal Dist., 730 S.W.2d 849 (Tex. App.-Dallas 1987, writ ref'd n.r.e.)
• Lower Colorado River Auth. v. Chemical Bank & Trust Co., 190 S.W.2d 48 (Tex. 1945)

Related opinions:

• Tex. Att'y Gen. Op. H-1239 (1978); O-3307 (1941); WW-633 (1959); WW-526 (1958); WW-119 (1957); H-944 (1977); JM-675 (1987); JM-242 (1984); H-472 (1974); JM-391 (1985); MW-62 (1979); DM-188 (1992); JM-464 (1986)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0436
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1997/dm0436.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

March 13, 1997

The Honorable Gonzalo Barrientos
Chair, Committee on Legislative and Congressional Redistricting
Texas State Senate
P.O. Box 12068
Austin, Texas 78711

Opinion No. DM-436

Re: Whether state may operate an airport for the use of state aircraft and condemn land for that purpose (RQ-927)

Dear Senator Barrientos:

You ask a number of questions directed at learning whether the state may acquire and operate
Robert Mueller Municipal Airport in Austin." We understand that you are interested in the operation
of the airport for the use of state aircraft only and are not asking whether the state may operate an
airport for non-state aircraft. We note at the threshold that any applicable federal laws must be
considered in connection with the proposed acquisition. You first ask whether there is any
constitutional or statutory authority that allows or prohibits state ownership and operation of an

airport.
We find no constitutional or statutory authority that prohibits state ownership and operation

of an airport, and section 21.101 of the Transportation Code in fact contemplates that a state agency
might have authority to establish an airport. This provision states as follows:

(a) The department [of Transportation] may loan or grant money to a
state agency with a governing board authorized to operate an airport or to a
governmental entity in this state to establish, construct, reconstruct, enlarge,
or repair an airport, airstrip, or air navigational facility if:

‘The City of Austin plans to relocate its airport from Robert Mueller Municipal Airport to the former site of
Bergstrom Air Force Base.

"if the state does acquire Robert Mueller Airport, you also wish to know how the state might be legally bound to
prohibit the use of that airport by commercial passenger and freight airlines. Since you do not give any additional
information about this general topic, we are unable to address it, except to note the possible relevancy of federal law. See
generally City of Dallas v. Southwest Airlines Co., 371 F. Supp. 1015, 1026 (N.D. Tex. 1973), aff'd 494 F.2d 773 (5th
Cir. 1974) (Love Field, as recipient of federal funds, is subject to certain federal provisions). This question, as well as any
other issue of federal law that may be relevant, is beyond the scope of this opinion.

(1) the money has been appropriated to the department for that
purpose; and

(2) providing the money will:
(A) best serve the public interest; and

(B) _ best discharge the governmental aeronautics function of the
state or its political subdivisions.’

You next ask whether specific statutory authority is necessary for either the General Services
Commission or the Aircraft Pooling Board to own and operate an airport, and whether such authority
currently exists. Chapter 22 of the Transportation Code gives cities and counties specific and detailed
authority to establish and operate public airports,‘ but we do not believe such comprehensive

statutory authority is necessary for a state agency to own and operate an airport for the use of state
aircraft. A prior opinion of this office concluded that the Parks and Wildlife Department was

responsible for maintaining airports built in state parks.’ The Aircraft Pooling Board is required to
“operate a pool for the custody, control, operation, and maintenance of all aircraft owned or leased
by the state.”* Moreover,

The board may acquire appropriate facilities for the accommodation of all
aircraft owned or leased by the state. The facilities may be purchased or
leased as determined by the board to be most economical for the state and as
provided by legislative appropriations. The facilities may include adequate
hangar space, an indoor passenger waiting area, a flight-planning area,
communications facilities, and other related and necessary facilities.”

This is a close question, but we believe that the Aircraft Pooling Board’s authority to acquire
“appropriate facilities” for the accommodation of state aircraft includes authority to acquire an airport

Transp. Code § 21.101; see id. §§ 21.112 (expenditure of money granted by department in accord with its rules),
.114 (department is agent of state and each political subdivision of state for purpose of applying for, receiving, and disbursing
federal funds for benefit of general aviation airport under federal law).

‘See id. § 22.020(b)(1).

‘Attorney General Opinion H-1239 (1978). This opinion did not address the Parks and Wildlife Department’s
authority to operate an airport.

⁶Gov't Code § 2205.032(a).

"Id. § 2205.034(a) (emphasis added).

for the use of aircraft owned or leased by the state.* The adoption of legislation expressly authorizing
the board to own and operate an airport for the use of state aircraft would remove any doubt about

the board’s authority.

You ask several questions about the condemnation of land for an airport. The state has the
right to appropriate property for a public use, subject to the property owner’s right to adequate
compensation.’ Article I, section 17 of the Texas Constitution provides that “No person’s property
shall be taken, damaged or destroyed for or applied to public use without adequate compensation
being made, unless by the consent of such person... .”

You ask whether either the Aircraft Pooling Board or the General Services Commission may
initiate condemnation proceedings on its own authority. The power of eminent domain must be
conferred by the legislature, either expressly or by necessary implication, and will not be gathered
from doubtful inferences.!° The Aircraft Pooling Board may purchase or lease facilities," but it has
no express or necessarily implied authority to initiate condemnation proceedings. The General
Services Commission may exercise the power of eminent domain to obtain a building site if the
legislature has authorized the particular building project.'? Accordingly, neither agency may initiate
condemnation proceedings on its own authority.

Your next questions concern section 2204.001 of the Government Code, which authorizes
the governor to purchase land required by the state for public use. If the governor fails to agree with
the land owner on a price, the land may be condemned for public use in the name of the state. “On
the direction of the governor, condemnation proceedings shall be instituted against the owner of the
land by the attorney general or the district or county attorney acting under the direction of the
attorney general.”"? You inquire about the legal standard for deciding that a given piece of land is
required by the state for a specific public use. The decision as to the particular land to be condemned
is within the condemnor’s absolute discretion, and the courts will not review the condemnor’s

*The General Services Commission has authority as to building construction, id. § 2166.002, defined to include
the construction of “a building, structure, or appurtenant facility or utility, including the acquisition and installation of original
equipment and original furnishings,” id. § 2166.001(4)(A). We do not believe that the commission has authority to own
or operate an airport.

*Texas Highway Dep't v. Weber, 219 S.W.2d 70 (Tex. 1949); Attorney General Opinion O-3307}(1941).
"Coastal States Gas Producing Co. v. Pate, 309 S.W.2d 828, 831 (Tex. 1958).
“Gov't Code § 2205.035.

"Id. §§ 2166.055, .251; see also id. § 2166.002.

Id. § 2204.001(b); see generally Attorney General Opinions WW-633 (1959), WW-526 (1958), WW-119

(1957), O-3307 (1941) at 5 (construing former V.T.C.S. art. 5240, now Gov’t Code § 2204.001).

discretion in this respect, except where the condemnor has acted in bad faith or arbitrarily,
capriciously, or fraudulently."

You inquire whether inverse condemnation case law indicates that alternative sites for the
proposed public purpose need to be evaluated. Inverse condemnation case law does not address your
question,’ but to prevent questions concerning the selection of a site, it would be advisable for the
Aircraft Pooling Board to give appropriate notices of a site selection, that all alternatives be
discussed, and that the request for condemnation to the governor recite the basis of the request.

You ask two questions that we will address together: whether legislative authorization is
required prior to action by the governor under section 2204.001, and whether a legislative
appropriation to the Aircraft Pooling Board or the General Services Commission would provide
sufficient authority for either agency to own and operate an airport or for the governor to initiate
condemnation proceedings under section 2204.001 of the Government Code.

Legislative action is required prior to action by the governor pursuant to section 2204.001
of the Government Code. A legislative appropriation must be available to pay for the land, but the
legislature may not appropriate money from the treasury unless preexisting law authorizes the
expenditure.'* Thus, an appropriation for the purpose of acquiring and/or operating an airport may
be made only to an agency that has express or implied statutory authority to own and/or operate an
airport. We have already decided that the Aircraft Pooling Board has implied authority to own and
operate an airport for the use of state aircraft. Accordingly, if the legislature appropriated funds to
the board to acquire an airport, the board could either purchase or lease the airport itself or request
the governor to purchase the land or to initiate condemnation proceedings under section 2204.001
of the Government Code. Since the General Services Commission lacks authority to own or operate
an airport, the legislature may not appropriate funds to the commission for that purpose.

You ask whether the legislature may authorize the owner of land proposed for state
acquisition to impose a restrictive covenant” on the use of the property with a reversionary clause
to the owner, even if the owner contests the property acquisition through the courts. Assuming that

“Valero Eastex Pipeline Co. v. Jarvis, 926 S.W.2d 789 (Tex. App.--Tyler 1996, writ requested).

When property has been taken for public use without proper condemnation proceedings, the property owner may
bring an inverse condemnation suit in attempt to recover compensation for the taking. Hubler v. Corpus Christi, 564 S.W.2d
816, 820 (Tex. Civ. App.--Corpus Christi 1978, writ ref'd n.r.e.); see generally Felts v. Harris County, 915 S.W.2d 482,

484 (Tex. 1996); State v. Biggar, 873 S.W.2d 11, 13 (Tex. 1994),

Tex. Const. art. IIL, § 44; Austin Nat’l Bank v. Sheppard, 71 S.W.2d 242 (Tex. 1934); Attorney General Opinion

H-944|(1977).

• You do not describe the restrictive covenant, but we will assume for purposes of this opinion that it is consistent
  with applicable law.

such conditions may be applied to land taken under the eminent domain power,"® you also ask
whether the legislature may do so by statute or by rider language attached to an appropriation.

Under some circumstances, the state may condemn less than the full fee simple title to land,
for example, a limited easement’? or a temporary construction easement.” It appears, however, that
you refer to the acquisition of the fee, subject to the possibility that it will revert to the landowner at
an undetermined time in the future if the restrictive covenant is violated. Although reservations of
property rights in the landowner are valid as limited easements, “[m]ere promissory statements or
declarations of future intentions by a condemnor are invalid.”?! The courts hold that the effect of a
condemnor’s promissory statements regarding its future intentions is to prevent a landowner from
recovering all his damages in a single proceeding.” The landowner is entitled to compensation in
money at the time of taking, and is not required to accept the condemnor’s promise to pay or act in
the future.” Otherwise, he or she might be burdened with the delay and expense of future lawsuits
to compel the condemnor’s performance.” A reversionary right that may become effective at some
indeterminate time appears to be a promise to act in the future, not a limitation on the property
interest acquired by the state. Such a promise would not prevent the landowner from receiving the
full value of the land as compensation or the state from acquiring the full fee simple title to the land.
Once the state held fee simple title to the land, it could not transfer it to the former owner without

“Reversionary clauses are typically found in deeds of conveyance, not in the description of the lands taken under
the power of eminent domain. See Attorney General Opinions] JM-675) (1987) (discussing restrictions on use on land
conveyed to state), JM-242 (1984) (university conveyance of land to hospital district for hospital purposes).

Coastal Indus. Water v. Celanese Corp., 592 S.W.2d 597, 601 (Tex. 1979) (condemnor may not wish to use
easement to its full legal extent or may intend to create specific proprietary right in landowner).

™See Valero, 926 S.W.2d at 789; Perdue v. City of Azle, 586 S.W.2d 179 (Tex. Civ. App.--Fort Worth 1979, writ
ref'd n.r.e.).

"White v. Natural Gas Pipeline Co. of America, 444 S.W.2d 298, 300 (Tex. 1969). A provision giving the
landowner the exclusive right to mine for gravel up to a certain date constituted a reservation of a proprietary right in the
landowner. Id. at 301.

2Valero, 926 S.W.2d at 793; Coastal Indus. Water., 592 S.W.2d at 601; White, 444 S.W.2d at 300.

BWhite, 444 S.W.2d at 301.

*Valero, 926 S.W.2d at 793; White, 444 S.W.2d at 300.

consideration but could only dispose of it for adequate consideration” pursuant to legislative
authorization.”

Since we have considerable doubt that such a condition may be validly attached to condemned
property, we need not consider whether it may be imposed by statute or appropriation, except to
reiterate that a state agency may dispose of state-owned land only pursuant to legislative authority.

You ask whether current law allows the state to be held liable for damages that result to
private property owners as a result of operations at a state-owned facility. We answer your question
in general terms. Specific instances of property damage must be addressed on a case-by-case basis,
in light of all the relevant facts and circumstances, and for these reasons, cannot be resolved in an

attomey general opinion.

Because article I, section 17 of the Texas Constitution provides that property shall not be
damaged or destroyed for public use without adequate compensation, an actual taking or physical
appropriation of property is not required for a property owner to receive compensation.”” Issues of
damage to property have been raised in inverse condemnation suits. Where property is damaged
rather than taken, article I, section 17 of the Texas Constitution allows recovery only if the injury is
not one suffered by the community in general.”

A litigant may recover under article I, section 17 of the Texas Constitution by establishing a
nuisance.” Recovery under this provision is not allowed where the damage in connection with a
public structure was based on some act of negligence such as the negligent acts of an employee.”
The Texas Supreme Court has stated that the test is whether “the State intentionally perform[ed]
certain acts in the exercise of its lawful authority . . . for public use which resulted in the taking or

Tex. Const. art. III, § 51; Attorney General Opinion H-472 (1974); see also Pasadena Police Officers Ass'n v.
City of Pasadena, 497 S.W.2d 388 (Tex. Civ. App.-Houston [1st Dist] 1973, writ ref'd n.r.e.).

See Lorino v. Crawford Packing Co., 175 S.W.2d 410, 414 (Tex. 1943); Conley v. Daughters of the Republic,
156 S.W. 197, 200 (Tex. 1913); Attorney General Opinions JM-391](1985)] MW-62|(1979); Letter Opinion No|96-106|
(1996).

Felts, 915 S.W.2d at 484; Biggar, 873 S.W.2d at 13.
Felts, 915 S.W.2d at 484 (inverse condemnation action based on increased highway noise).

29 Shade v. City of Dallas, 819 S.W.2d 578, 583 (Tex. App.--Dallas 1991, no writ) (quoting City of Abilene v.
Downs, 367 S.W.2d 153, 159 (Tex. 1963)).

“Shade, 819 S.W.2d at 583 (quoting Ivey v. City of Temple, 415 S.W.2d 542, 543 (Tex. Civ. App.—Austin 1967,
writ ref'd n.r.e.)).

damaging of plaintiffs’ property, and which acts were the proximate cause of the taking or damaging
of such property.”?!

Liability in tort for property damage exists only in extremely limited circumstances pursuant
to the Texas Tort Claims Act, that is, if “the property damage . . . arises from the operation or use
of a motor-driven vehicle or motor-driven equipment” and the employee would be personally liable
to the claimant under Texas law.”

You next state that current law exempts property at municipal airports from taxation,
including leased facilities,*? but allows property taxation of facilities privately owned which, though
leased, operate on state property. You ask whether private facilities built on a state airport would
be exempt from local property taxes.

Article VIII, section 1 of the Texas Constitution provides that all real property in the state,
“unless exempt as required or permitted by this Constitution,” shall be taxed in proportion to its
value. Article VIII, section 2(a) of the Texas Constitution provides that the “legislature may, by
general laws, exempt from taxation public property used for public purposes.” Section 11.11 of the
Tax Code provides the following tax exemption for state property used for public purposes:

(a) Except as provided by Subsections (b) and (c) of this section, property
owned by this state or a political subdivision of this state is exempt from
taxation if the property is used for public purposes.

(b) [Land owned by the Permanent University Fund]. . . .

(c) {Agricultural or grazing land owned by a county for the benefit of
public schools under Article VII, section 6, of the Texas Constitution] . . . .

(d) Property owned by the state that is not used for public purposes is
taxable. Property owned by a state agency or institution is not used for public
purposes if the property is rented or leased for compensation to a private
business enterprise to be used by it for a purpose not related to the
performance of the duties and functions of the state agency or institution.

"Shade, 819 S.W.2d at 583 (quoting State v. Hale, 146 S.W.2d 731, 736 (Tex. 1941)).

Civ. Prac. & Rem. Code § 101.021(1)(A).

®Not all leased facilities at municipal airports are exempt from ad valorem taxation. Attorney General Opinions
DM-188 and JM-464 address the taxation of real property located at a municipal airport and leased to a private entity,
discussing the circumstances under which such property may be exempt from ad valorem tax. Attorney General Opinions

DM-188 (1992), JM-464 (1986).

The test for public purpose is whether the public property is used primarily for the health,
comfort, and welfare of the public. In addition, it must be shown that the property is held only for
public purposes and is devoted exclusively to the use and benefit of the public. The lease of
publicly-owned property to private individuals for their own commercial purposes generally means
that the property is not used for a public purpose and is therefore not entitled to the tax exemption.
However, the fact that public property produces revenues does not prevent it from receiving the tax
exemption, if the property is used for a public purpose, so that some portion of the public has a right
to use it under proper regulations and the revenue inures to the public benefit of the governmental
entity.*”

Two prior opinions of this office considered whether a city was exempt from ad valorem tax
on airport property leased to private entities.** These opinions address municipal airports used by
commercial airlines, but the standards they establish are relevant to your question. Attorney General
Opinion JM-464 concluded that a portion of the airport leased to an individual who operated an
aircraft fueling facility was exempt from ad valorem taxation, while land surrounding the airport that
was leased for private commercial and agricultural purposes was not tax exempt. Attorney General
Opinion DM-188 construed Attorney General Opinion JM-464 “to require a showing that the use of
municipal airport property is in direct support of the city’s operation of the airport.” Thus, a leased
city-owned aircraft maintenance hangar would be tax exempt if it was intended for use in the safe and
efficient operation of a municipal airport. However, if most of the aircraft stored and serviced there
were brought in solely for the purposes of maintenance and storage and not used to transport
passengers and cargo to and from the airport, the facility would not be used exclusively in support
of the city’s operation of the airport, but instead to serve the private commercial interests of the
lessee. We cannot determine in an attorney general opinion whether particular airport facilities
operated under lease by a private entity are used in direct support of the operation of the airport and
are therefore tax exempt, because the answer to such questions requires the resolution of fact

questions.

“A&M Consol. Ind. Sch. Dist. v. City of Bryan, 184 S.W.2d 914 (Tex. 1945); Attorney General OpinionDM-188
(1992) at 3.

“Satterlee v. Gulf Coast Waste Disposal Auth., 576 S.W.2d 773, 778-79 (Tex. 1978); Attorney General Opinion

DM-188)(1992) at 3.

‘Grand Prairie Hosp. Auth. v. Dallas County Appraisal Dist., 730 S.W.2d 849, 851 (Tex. App.--Dallas 1987,
writ ref'd n.r.e.); see Attorney General Opinions DM-188|(1992) at 3) DM-78/(1992) at 3.

37 Lower Colorado River Auth. v. Chemical Bank & Trust Co., 190 S.W.2d 48 (Tex. 1945); State v. Houston
Lighting & Power Co., 609 S.W.2d 263, 268-69 (Tex. Civ. App.-Corpus Christi 1980, writ ref'd n.r.e.).

Attorney General Opinions DM-188 (1992), JM-464 (1986).
Attorney General Opinion DM-188 (1992) at 5.

“ld.

SUMMARY

The Aircraft Pooling Board is authorized to own and operate an airport
for the use of state aircraft. Neither the Aircraft Pooling Board nor the
General Services Commission may initiate condemnation proceedings on its
own authority. An appropriation for the purpose of acquiring and/or
operating an airport may be made only to an agency with express or implied
statutory authority to own and/or operate an airport. If the legislature
appropriates funds to the Aircraft Pooling Board to acquire an airport for the
use of state aircraft, the board could purchase or lease the airport itself or
request the governor to purchase the land or initiate condemnation
proceedings under section 2204.001 of the Government Code. The decision
as to the particular land to be condemned is within the condemnor’s absolute
discretion, reviewable by the courts only when the condemnor has acted in
bad faith or arbitrarily, capriciously, or fraudulently. The legislature probably
could not authorize the owner of land proposed for state acquisition to impose
a restrictive covenant on the use of the property with a reversionary clause to
the owner.

Whether the state may be held liable under article I, section 17 of the
Texas Constitution or under the Tort Claims Act for damages that result to
private property owners as a result of operations at a state-owned facility
must be determined on a case-by-case basis.

Airport property leased by the state to a private entity may be exempt
from ad valorem tax if its use is in direct support of the state’s operation of

the airport. Whether a particular leased facility is exempt from tax depends
upon the resolution of fact questions.

Yours very truly,

DAN MORALES
Attorney General of Texas

JORGE VEGA
First Assistant Attorney General

SARAH J. SHIRLEY
Chair, Opinion Committee

Prepared by Susan L. Garrison
Assistant Attorney General