Honorable Thos. Bartlett, Jr. Opinion~.No.~2~203.
County Attorney
Falls County FE: Whether Acts 1961, 57th Leg.,
Marlin, Texas Ch. 487, exempting personal
property of charltable~
Institutions from ad valorem
taxes is constitutional
Dear Mr. Bartlett:
In your letter of December 9, 1963, you have requested an
opinion from this department as to whether or not that part of
Section 7 of Article 7150, Vernon's Civil Statutes, as amended by
Acts 1961, 57th Legislature, Chapter 487, exempting certain personal
property is constitutional. This amendment reads as follows:
"All buildings and personal property belonging
to institutions of purely public charity, together
with the lands belonging to and occupied by such
institutions not leased or otherwise used with a
view to profit, unless such rents and profits and
all moneys and credits are appropriated by such
institutions solely to sustain such institutions
and for the benefit of the sick and disabled mem-
bers and their families and the burial of the same,
or for the maintenance of persons when unable to
provide for themselves, whether such persons are
members of such institutions or not. An lnstitu-
tion of purely public charity under this article
is one which dispenses Its aid to Its members
and others in sickness or distress, or at death,
without regard to proverty or riches of the
recipient, also when the funds, property and
assets of such institutions are placed and bound
by its law to relieve, aid and administer In any
way to the relief of Its members when In want,
sickness and distress, and provide homes for its
helpless and dependent members and to educate and
maintain the orphans of its deceased members or
other persons."
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Honorable Thos. Bartlett, Jr., Page Two (Opinion No.'C-203)
Article 8; Section 2 of the Texas Constitution provides in
part as follows:
II
. . . the Legislature may, by general laws
exempt from taxation . . . all buildings used
exclusively and owned by persons or associations
of persons for school purposes and the necessary
furniture of all schools and property used ex-
clusively and reasonably necessary in conducting
any association engaged in promoting the religious,
educational and physical development of boys,
girls, young men or young women operating under
a State or National organization of like
character; also the endowment funds of such
institutions of learning and religion not used
with a view to profit; and when the same are
invested in bonds or mortgages, or in land or
other property which has been and shall here-
after be bought in by such institutions under
foreclosure sales made to satisfy or protect such
bonds or mortgages, that such exemption of such
land and property shall continue only for two
years after the purchase of the same at such sale
by such Institutions and no longer+,and institu-
tions of purely public charity; . . ."
This Section 2, as adopted in 1876, reads in part as follows:
II
. . . the Legislature may, byegeneral laws,
exempt from taxation . . . all buildings used
exclusively and owned by persons or associations
of persons for school purposes, (and the
necessary furniture of all schools), and instltu-
tions of purely public charity; , . ."
An amendment adopted November 6, 1906, making the pertinent
part of Section 2 read as follows:
M
. . . the Legislature may, by general laws,
exempt from taxation . . . all buildings used
exclusively and owned by persons or associations
of persons for school purposes and the necessary
furniture of all schools, also the endowment
funds of such institutions of learning and re-
ligion not used with a view to profit; and when
the same are Invested in bonds or mortgages, or
in land or other property which has been and
shall hereafter be bought in by such institutions
under foreclosure sales made to satisfy or protect
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. .
Honorable Thos. Bartlett, Jr., Page Three (Opinion No. C-203)
such bonds or mortgages; that such exemption
of such land and property shall continue
only for two years after the purchase of the
same at such sale by such institutions and
no longer, and institutions of purely public
charity; . . ."
The amendment adopted November 6, 1928, added the provision
concerning property owned by a church or strictly religious society
for use as a dwelling place for the ministry, and the provision
beginning with the words "and property used exclusively and reason-
ably necessary," to and including the words, "operating under a
State or National organization of like character." (Emphasis added).
The courts in Texas have uniformly held that the Legislature
may exempt real property belonging to and used exclusively by
institutions of purely public charity.
In the case of Morris v. Lone Star Chapter No. 6, Royal~Arch
Masons, 68 Tex. 698, 5 S.W. 516 (1887) the Supreme Court of Texas,
in talking about institutions of~purely public charity, as used in
Section 2 of Article 8 of the Texas Constitution said:
"The grammatical construction of this
provision Is not clear. The word 'institution'
properly means an association organized or
established for some specific purpose, . . ."
The court said that that part of the section under con-
sideration which contains the word institution may have been in-
tended to read either:
" I... . all buildings used exclusively and
owned by persons or associations of persons
for school purposes, . . . and all instltu-
tions (meanin establishments with houses,
grounds, etc.‘i of purely public charity,' or
'all buildings used exclusively and owned by
persons or associations of persons for school
purposes, . . . and all buildings used ex-
clusively and owned by institutions of purely
public charity.'"
The Texas Supreme Court said, '. . . we are of the opinion
that the latter reading gives the more reasonable construction of
the language as used in the constitution of our State. This gives
to the word its proper meaning, and Is in accord with the spirit
of the other provisions contained In the section."
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Honorable Thos. Bartlett, Jr., Page Four (Opinion No. C-203)
At the time this opinion was written by the Supreme Court
the pertinent part of Section 2 of Article 8 of the Texas
Constitution read as follows:
11
. . . the Legislature may, by general laws,
exempt from taxation; all buildings used ex-
clusively and owned by persons or associations
of persons for school purposes, (and the
necessary furniture of all schools), and instl-
tutions of purely public charity; . . ."
In the case of Barbee vs. City of Dallas, 64 S.W. 1018 (civ.
App. 1901, error ref.) the court stated:
"This appeal Involves the construction of
Article 8 $!2, of the state constitution, ex-
empting from taxation 'all institutionsof
purely public charity.' This clause has been
considered by the supreme court, and in an able
and exhaustive opinion the clause was construed
by that court as authorizing the exemption only
of real estate, with the buildings thereon owned
and used exclusively by institutions of purely
public charity. Morris v. Royal Arch Masons,
68 Tex. 698, 5 S.W. 519. In other words, the
effect of the holding is that this clause of
the constitution authorizes the legislature to
exempt only real estate owned and used ex-
clusively by institutions of purely public
charity. The property sought to be exempted
in the case at bar consists of publications
principally of books, tracts, and periodicals
published by the Methodist Publishing House
at Nashville, Tenn., of which Plaintiff is a
branch. The petition does show, however, that
Plaintiff 'does carry other of such articles
making up the stock in trade of a regular
book store.' The property described in the
petition consists of personal property only.
None of it can be designated as real estate or
building. This being true, under the decision
above referred to we conclude that it is not
included in the exemptions provided for in
Article 8, g 2, Const. . . . As the property
set out in the petition is not embraced in the
clause of the constitution authorizing the
exemption of 'all institutions of purely public
charity,' it is unnecessary to decide whether
the language of the statute (Sayles' Ann. Civ.
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.
Honorable Thos. Bartlett, Jr., Page Five (Opinion No. C-203)
St. art. 5065, subd. 6) is broad enough to
exempt it, or whether the language of the
ordinance of the city exempting property
from taxation would include It. It is con-
ceded that, if the constitution does not
authorize the exemption of this property, it
could not be exempted by the statute or
ordinarne. . . .’
These cases were decided under the constitution as it was
originally written in 1876. The pertinent part of Section 2, as
It now reads, is as follows:
11
. . . the Legislature may, by general laws,
exempt from taxation . . . property used ex-
clusively and reasonably necessary In con-
ducting any association engaged in promoting
the religious, educational and physical develop-
ment of boys, girls, young men or young women
operating under a State or National organization
of like character; . . . and institutions of
purely public charity; . . .”
The cases above discussed were decided in 1877 and 1901, and
before Section 2 of Article 8 of the Constitution was amended. We
believe that the meaning of section 2 above is entirely different
now from that as originally written and In effect at the time the
above court opinions were written. These cases are therefore not
in point as to the present reading of this section of the
constitution.
By the amendments of Section 2 of Article 8 of the Constitu-
tion it a pears that the people of Texas intended to authorize the
Legislatu2:
e to exempt from taxation, property used exclusively and
reasonably necessary In conducting any association engaged in
promoting the religious, education and physical development of
boys, girls, young men or young women operating under a State or
National organization of like character; and property used exclusively
and reasonably necessary In conducting institutions of purely public
charity. The word “property” not being in any manner qualified, in-
cludes person& as well as real property.
The Legislature, in putting into effect the permission
granted by Section 2 of Article 8 of the Constitution to exempt
property used exclusively and reasonably necessary in conducting
institutions of purely public charity went beyond the authority
granted, In that the Legislature did not limit the exemption to
property used exclusively and reasonably necessary In conducting
such institutions. The statute to that extent is void. city of
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Honorable Thos. Bartlett, Jr., Page Six (Opinion No. C-203)
San Antonio v. Santa Rosa Infirmary 249 S.W. 498 (Tex.Civ.App. 1923,
reversed on other grounds 259 S.W. 426).
We are, therefore, of the opinion that Acts 1961, 57th
Legislature, Chapter 487 which amended Article 7150, Vernon's civil
Statutes, is constitutional insofar as it exempts from taxation,
both real and personal, property that is used exclusively and Is
reasonably necessary in conducting Institutions of purely public
charity.
SUMMARY
-------
Acts 1961, 57th Legislature, Chapter 487, which
amended Article 7150, Vernon's Civil Statutes Is
constitutional, Insofar as It exempts from taxation,
both real and personal property, that is used ex-
clusively and is reasonably necessary In conducting
institutions of purely public charity.
Very truly yours,
WAGGONER CARR
Attorney General
BY:
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
W. V. Geppert, Chairman
Cecil Rotsch
Arthur Sandlin
Marietta Payne
Jack Norwood
Approved for the Attorney General
by: Stanton Stone
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