Case Information

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THEA~TORNEYGENERAL OlF~EX:AS : June 18, 1948 Honorable Lon Alsup

Executive Secretary-Director

State Commission for the Blind'~ "

Land Office Building Austin, Texas

Opinion NO.

Re: 'Authority of State Commission for the Blind to accept land as a donation; to pay taxes thereon: to sell; and dlsposi- tion of proceeds of such sale.

Dear Sir: requesting anopinion reads in

Your letter part:

"The laws . . . in behalf of the State Commission for the Blind permit the said ConmIssIon to accept donations. Mr. Ben M. Beaver '; . . desires to donate to the State Commission for the Blind ap- proximately 17 acres of land, . .

"Mr. Beaver proposes to give a deed to this land to said Commlss$.on with the specific agreement that all mineral rlghts~ are to be reserved to him and his wife un- tll their death. Then, such mineral rights would become the property of the commission. "In view of the statement made above, please advise this department If it would be advisable for this agency to accept this donation. Also advise if this land was ac- cepted by this agency, if it would be ex- em ted from county and,state taxes. If it we t e not exempted, would this agency be re- sponsible for the taxes or would such taxes be paid by the Legislature of the State of Texas.

Hon. Lon Alsup - Page 2-V-609

"It is also to be taken into considera- tion the fact that if the Commission for Blind were to accept this donation of land that It is to be used for the development of a rural project for blind persons. If it Is found over a reasonable period of time that such a project is not feasible, then in that event, the Commission for the Blind or the the State of Texas would be permitted to sell such land and the proceeds, of the sale of such property would go to the State Com- mission for the Blind to be used in develop- ing the business enterprises program for the blind."

Sec. of Ii. B. 347, Ch. 241, p. 374, Acts of 1945, 49th Legislature is codlfled as Art. 3207c, Sec.7, v. c. s., and reads as follows:

"Gifts. The Director is hereby au- thorized and empowered, with the approval of the Commission, to accept and use gifts made unconditionally by will or otherwise for carrying out the purpose of this Act.

Gifts made under such conditions as in the judgment of the Commission are proper and consistent with the provisions of this Act may be so,accepted and shall be held, in- vested, reinvested, and used in accordance with the condttlons of the gift." It is OUT opinion that "gifts" as used in Article

3207c, Sec. 7, V.C.S., is broad enough to include land. Your letter states that this land, if accepted, would be used for the development of a rural project for blind persons. It Is further noted that the deed re- serves a life estate in the mineral rights to the grantor and his wife.

In our opinion, a reservation of a life estate in the minerals to the grantor and his wife is "proper and consistent" with, the provisions of Art. 3207c,V.C.S. The reservation of the minerals In the land to the gran- tor and his wife for life may conceivably interfere with the future use of the land for the development of a rural project for the blind, if there is any substantial oil and gasdevelopment. In such event, however, the land could be sold without affecting the mineral rights of *3 Honorable Lon Alsup - Page 3-v-609

the grantor and his wife." -'

If the Commlsslon accepted the donation of this land, would It be tax exempt?~ The State Com- mission for the Blind isan Instrumentality of State government and possesses only such powers as has been conferred on it by the Constitution and Legls- lature. We do not find any statute or article of the Constitution that permits the,payment of 'taxes by the State Colmnission for'the Blind; therefore, It is our opinion that such property interest conveyed to the said Commission would be exemptfrom Stite~~ and County taxes.

The question of whether or not such property could be sold was answered in Attorney General's Opinion Ho. O-2355 as follows:

"Your question is answered,' then, by determining the character of the'grant. It is clear that 3.P it is public money it may not be expended except upon a ape- , clfic appropriation made therefor by the Legislature. Sectia.6, Article VIII, Constitution of Texas; &Combs v. Dallas County (CCA; 1940) 136 S. W. (2) 975. On the other hand, if the gift constitutes a trust fund, and we hold under the specific facts given, that It does, It may be ex- pended by your Commlsslon as trustee under any lawful condltlons Imposed by the donor of the grant consistent with the Com- mlsslonts duties under Art; 3207a, V.C.S. Such funds have no place in the State Treasury and Section of Article VIII of the Constitution has no application. Under such circumstances, moreover, rea- aonble prudence would dictate that all such moneys received be placed in a pri- vate bank account."

It is to be noted that Section 7 of Article 3207c, V. C. S., authorizes the Director "to accept and use gifts," but the Commission must first approve the gift. The conveyance should be made to the Di- rector of the State Commission for the Blind and his successors In office as trustee. Itis also to be *4 - Page -- Hon. Lon Alsup

noted that the gifts "shall be held, invested, reinvested and used in accordance with the con- ditions of the gift."

SUrnY The Director of the State Commission for the Blind, with the ap- proval of the Commission, may act In the capacity of a trustee and accept gifts of land with mineral rights reserved in ~the grantor and his wife for life, and

the interest in the land that is accepted will then be exempt from State and County taxes. Such land may be sold and the proceeds of the sale held, Invested, re- invested and used for vocational rehabil- itation of the blind as authorized in Arti- ,cle 3207c, V. C. S.

Yours very truly ATTORNEYGENEML OF TEXAS Robert W. Spence BY Assistant RWS:bt

APPROVED