                                                 KEN PAXTON
                                            ATTORNEY GENERAL OF TEXAS




                                                   June 20, 2016



Mr. Mike Morath                                                Opinion No.' KP-0097
Commissioner of Education
Texas Education Agency                                         Re: The legal status of real property
1701 North Congress Avenue                                     described by section 12.128 of the Education
Austin, Texas 78701-1494                                       Code that is returned ·to the State from a
                                                               charter school (RQ-0086-KP)

Dear Commissioner Morath:

        Your predecessor asked "whether real property that is returned to the state pursuant to
section 12.128 of the Education Code is 'unappropriated public domain' that must be returned to
the School Land Board (SLB) as part of the Permanent School Fund (PSF) under section
43.001(a)(2) of the Texas Education Code[.]" 1

        As an initial matter, section 12.128 is expressly limited to "[p]roperty purchased or leased
with funds received by a charter holder under Section 12.106" of the Educadon Code after
September 1, 2001. TEX. EDUC. CODE§ 12.128(a). Your predecessor did not tell us whether the
property at issue was purchased or leased with state-provided funds after the specified date. See
generally Request Letter at 1-3.2 Moreover, the question whether any given interest in real
property falls within the scope of section 12.128 would involve the resolution of fact questions, a
task inapposite to the opinion process. See Tex. Att'y Gen. Op. No. KP-0046 (2015) at 4 (stating
that this office does not answer fact questions). Thus, we limit this opinion to the legal issues
presented by sections 12.128 and 43.001 of the Education Code and do not address issues regarding
the ownership of any particular property.

       Subsection 43.001(a)(2) of the Education Code provides that "the permanent school fund,
which is a perpetual endowment for the public schools of this state, consists of . . . all of the
unappropriated public domain remaining in this state, including all land recovered by the state by

         1
           See Letter from Michael Williams, Comm'r of Educ., to Honorable Ken Paxton, Tex. Att'y Gen. at I
(Dec. 21, 2015), https://www.texasattomeygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter"); Letter
from Mike Morath, Comm'r of Educ., to Virginia K. Hoelscher, Chair, Op. Comm., Office of the Tex. Att'y Gen. at I
(Jan. 8, 2016) (confirming the continued need for answers to the questions posed by predecessor) (on file with the Op.
Comm.).

        2
          See also Brief from Thomas Sage, on behalf of the Tex. Charter Sch. Ass'n, to Honorable Ken Paxton, Tex.
Att'y Gen. at 1-4 (Feb. 2, 2016) (arguing such property is private property of the charter school) (on file with the Op.
Comm.).
Commissioner Mike Morath - Page 2              (KP-0097)



suit or otherwise .... " TEX. EDUC. CODE§ 43.00l(a)(2); see also TEX. CONST. art. VII, § 2
(providing that all "funds, lands and other property heretofore set apart and appropriated for the
support of public schools . . . shall constitute a permanent school fund"). The term
"unappropriated" is undefined in chapter 43 or elsewhere in Texas statutes. Courts "often look to
dictionary definitions for the ordinary meaning" of a statute's undefined term. See Beeman v.
Livingston, 468 S.W.3d 534, 539 (Tex. 2015). The common meaning of the term "unappropriated"
is "not allocated, assigned, or taken into possession." NEW OXFORD AM. DICTIONARY 1878 (3rd
ed. 2010). Though no judicial opinion or attorney general opinion has defined "unappropriated"
as used in subsection 43.001(a)(2), an opinion from this office, considering the predecessor to
subsection 43.001(a)(2), said the statute was "evidence of a consistent State policy that lands not
designated to a specific agency should be deemed to belong to the Permanent School Fund." Tex.
Att'y Gen. Op. No. MW-18 (1979) at 2; see also Tex. Att'y Gen. Op. No. JM-347 (1985) at 2
(discussing various avenues by which the State may recover land). Given the term's ordinary
meaning and its lack of express treatment elsewhere in Texas jurisprudence, a court would likely
conclude that subsection 43.001(a)(2) refers to land not allocated, assigned, or taken into
possession, or otherwise set aside, by the Legislature for another purpose.

       Section 12.128 of the Education Code provides that:

               (a) Property purchased or leased with funds received by a charter
                   holder under Section 12.106 after September 1, 2001:

                   (1) is considered to be public property for all purposes under
                       state law;

                   (2) is property of this state held in trust by the charter holder for
                       the benefit of the students of the open-enrollment charter
                       school; and

                   (3) may be used only for a purpose for which a school district
                       may use school district property.



               (c) The commissioner shall:

                   ( 1) take possession and assume control of the property described
                        by Subsection (a) of an open-enrollment charter school that
                        ceases to operate; and

                   (2) supervise the disposition of the property in accordance with
                       law.

TEX. EDUC. CODE § 12.128(a), (c). Subsection 12.128(c)'s plain language directs the
Commissioner of Education ("Commissioner") to take possession and assume control of specified
property of an open-enrollment charter school that has ceased to operate. See id. § 12.128(c); Ross
v. St. Lukes Episcopal Hosp., 462 S. W.3d 496, 501 (Tex. 2015) ("In determining [legislative] intent
 Commissioner Mike Morath - Page 3                       (KP-0097)



 we look first and foremost to the language of the statute."). Subsection 12.128(c)(2) also expressly
 authorizes the Commissioner to "supervise the disposition" of the returned property. TEX. EDUC.
 CODE§ 12.128(c)(2). In section 12.128, the Legislature expressly set aside this returned property
 as public property subject to the control and disposition of the Commissioner. See id. Accordingly,
 property returned to the State under section 12.128 is likely not unappropriated public domain for
 the Permanent School Fund under Education Code subsection 43.001(a)(2). 3

        Your predecessor asked five additional questions, four of which are premised on a
 conclusion that the property is part of the Permanent School Fund. See Request Letter at 3. Given
 our conclusion, we need not address these questions.

           In his final question, your predecessor asked

                    [i]f the real property ... is appropriated to TEA under current law,
                    does Chapter 31 of the Natural Resources Code, or any part thereof,
                    govern the disposition of the property? If not, are Art. 3, sec. 51 of
                    the Texas Constitution and Art. IX,§ 8.02 of the Appropriations Act
                    the only law governing disposition of the property?

 Id. Chapter 31 of the Natural Resources Code governs the General Land Office ("GLO"). See
 TEX. NAT. RES. CODE §§ 31.001-.455. Subsection 31.051(2) requires the commissioner of the
 GLO to "execute and perform all acts and other things relating to public real property of the state
 ... which is required by law." Id. § 31.051(2). The GLO is required to maintain an inventory of
 all real property owned by the State. Id. § 31.154; see also id. § 31.153(b) (requiring each State
 agency to maintain records of its real property and to furnish such records to the GLO's division
 of asset management). The GLO is also required to periodically review and report on State real
 property that is not being used or is being substantially underused. Id. § § 31.156 (providing for
 review), .157, .1571 (providing for an evaluation report to the Governor and other officials).
 Chapter 31 provides a process through which the GLO may recommend and otherwise be involved
 in transactions involving property owned by the State in specific instances. 4 While chapter 31
 does not authorize the GLO to unilaterally direct the disposition of public property that is returned
 to the State pursuant to section 12.128, the chapter certainly provides for the involvement of the
 GLO in the Commissioner's disposition of such property. Moreover, the Legislature evidenced an


          3
            This conclusion is bolstered by the argument, proffered by the General Land Office, that a conclusion that
 any property returned to the State under section 12.128 of the Education Code is part of the Permanent School Fund
 would render section 12.128 superfluous or meaningless, a result courts avoid if at all possible. See Letter from Mark
 Havens, Gen. Counsel, Gen. Land Office, to Honorable Ken Paxton, Tex. Att'y Gen. at 3-4 (Jan. 22, 2016) (noting
 that chapter 51 of the Natural Resources Code gives the State Land Board exclusive authority to control and dispose
 of Permanent School Fund property) (on file with the Op. Comm.).

          4
            See, e.g., TEX. NAT. RES. CODE §§ 3 l. l 573(a) (authorizing the GLO to "take charge and control of the real
  property as necessary to conduct and close a real estate transaction authorized by the governor"), 3 l. l 58(a)
  (authorizing the division of asset management to "take possession and control of the real property" and to negotiate
  and close a real estate transaction involving same "[i]fthe legislature authorizes" the transaction); 31.067 (authorizing
  the asset management division to sell real property acquired on behalf of the State pursuant to section 402.025 of the
, Government Code).
Commissioner Mike Morath - Page 4             (KP-0097)



intent that the GLO assist the Commissioner in the disposition of the property. See General
Appropriations Act, 84th Leg., R.S., ch. 1281, art. IX, § 8.02(h)(2), 2015 Tex. Gen. Laws 4343,
5206 ("The General Land Office, upon request of the commissioner of education, may enter into
an interagency agreement to assist with the marketing and sale of the state real property in an
expedient manner and that allows the recovery of costs.").

        The last question also inquires whether Texas Constitution article III, section 51 and article
IX, section 8.02 of the Appropriations Act are the only other laws that may govern the disposition
of the returned property. See Request Letter at 3. Under Texas Constitution article III, sections 51
and 52(a), the Commissioner is prohibited from making an outright grant of the public property.
TEX. CONST. art. III, §§ 51, 52(a); see Tex. Att'y Gen. Op. No. JC-0146 (1999) at 2-3
(acknowledging that application of public funds to private interests is prohibited if gratuitous);
Tex. Mun. Leaguelntergov'tlRiskPoolv. Tex. Workers'Comp. Comm'n., 74S.W.3d377,384(Tex.
2002) (establishing three-part test to determine constitutionality of an expenditure of public funds
or property). Article IX, subsection 8.02(h) of the Appropriations Act of the Eighty-fourth
Legislature provides that

               [p ]roceeds from the sale of real property returned to the state due to
               revocation or other cessation of operation of an entity under Chapter
               12, Texas Education Code, are appropriated to the Texas Education
               Agency for the management and closure of entities and disposition
               of state property under Chapter 12, Texas Education Code.

General Appropriations Act, 84th Leg., R.S., ch. 1281, art. IX, § 8.02(h), 2015 Tex. Gen. Laws
4343, 5206. By its plain language, proceeds from the disposition of public property returned to
the State pursuant to section 12.128, Education Code, are appropriated to the Texas Education
Agency for the "management and closure of entities and disposition of state property." Id. As
your predecessor acknowledged, Texas Constitution article III, section 51 and article IX, section
8.02 of the Appropriations Act apply to property returned to the State under section 12.128. See
Request Letter at 3. While we do not find additional law that expressly provides for the disposition
of property returned to the State pursuant to section 12.128, we cannot foreclose the possibility
that other law may apply to the Commissioner's disposition of the property.
Commissioner Mike Morath - Page 5             (KP-0097)



                                      SUMMARY

                      Subsection 12.128(c) of the Education Code provides that
              the Commissioner of Education shall take possession and assume
              control of, and supervise the disposition of, public property of an
              open-enrollment charter school that ceases to operate. In this
              provision, the Legislature has set aside this returned public property
              such that it is not unappropriated property for the Permanent School
              Fund under subsection 43.001(a)(2) of the Education Code.

                      Chapter 31 of the Natural Resources Code does not authorize
              the General Land Office ("GLO") to unilaterally direct the
              disposition of public property returned to the State pursuant to
              section 12.128, but it provides for GLO involvement in the
              Commissioner of Education's disposition of such property.

                      Texas Constitution article III, sections 51 and 52(a) prohibit
              the Commissioner of Education from gratuitously granting such
              property to private interests, and article IV, subsection 8.02(h) of the
              2015 General Appropriations Act appropriates the proceeds from the
              disposition of such property. Aside from these provisions, we
              cannot foreclose the possibility that other law may apply to the
              Commissioner's disposition of the property.

                                             Very truly yours,



                                             ~?~
                                             KEN PAXTON
                                             Attorney General of Texas



JEFFREY C. MATEER
First Assistant Attorney General

BRANTLEY STARR
Deputy First Assistant Attorney General

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

CHARLOTTE M. HARPER
Assistant Attorney General, Opinion Committee
