November 26, 1963
Honorable Doug Crouch Opinion No. C-184
Criminal Dietrlct Attorney
Tarrant County RE: Whether the housing for'the
Fort Worth, Texas elderly known as Lake Crest
Efltates owned~ and operated
by Christian Homes, Inc., a
non-profit corporation 18
exempt. from ad valorem taxea.
D&r Mr. Crouch:
.r
You h&e requeeted'our opinion on the above referenced
subject, and In connectlon,therewlth have given us the following
facts:
Lake Crest Estates Is a housing development compoaed.of
343 tw&bedroom.housea, together wlth a community center and a
Chapel. Title to the.entlre project ia vested in 8 Texas non-
proflt.corporat1on known a8 Chrlstlaii Homes, Inc, The ltiltlal
directors of the .corporatlon were pa&ore of five local churches
who agreed:to sponsor the project. The.re are .no timbers of the
corporation and any vacancies on the Board ape filled by vote of
the reinalnlng directors.
. Funde.to construct the proJect riere obtained by a bank
loan backed by a one hundred per cent guarantee from the Federal
,Houalng Administration. The corporation has entered into. a re-
gulatoryagreement with the Federal Houslng.Admlri1atratlon.
Tenancy 18 not limited to persons 62 years of age or over (aged
person a8 defined by 12 USC 14019) but they a% ~to be given prl-
ority of opportunity to rent the units. Basic rental la $107,.50
per month on a lease .@aals and la charged all tenants under 62
yeare of age and those over 62.who are able to pay. Rent under
the&V-law8 of the corporation may be reduced by the Board of
DIrectora for aenlor citizens in need The only services provided
_ by.the corporation other~than the housing unit la free use of the
community center with It8 swimming ~001,~ recreation and meeting
rooms, and chapel. These fadllltles are used free of charge by
those over 62. Those tenants under 62 may use these facilities
by paying a charge of $5.00 per month. The corporation has no
sources of Income other than the rental from the housing units;
Income, If any, from the community center, and possible con-
tributions from sptinsore or others.
-892-
Honorable Doug Crouch, Page 2 (No. C-184 )
AS of August 23, 1963, only twelve of the 343 units are
occupied, as set out below:
(a) Four (4) units are occupied by employees
of the corporation as part of their
. salary.
(b) One (1) unit la occupied by a senior
citizen (over 62) at a reduced rental.
(c) Seven (7) units are occupied by Indl-
viduala under 62 years of age, who. are
not retired, and who pay the full rental
of $107.50 per month.
The Federal H&sing Admlnlstratlon has, for the present,
waived the requirement that priority of opportunity be given to
those 62 years of age or over and the’ project Is leasing without
regard to,age or financial condition. All tenants must enter In-
to a written lease with the corporation for a minimum period of
six (6) months.
You’have asked. the ,followlng questions:
“Is ‘the housing for the elderly ‘project
knotin as Lake. Crest Estates owned and bperated
by Christian Homes, Inc., a non-proflit corpora-
tltin, exempt from ad valorem taxes as ‘an ,lnstl-.
tutlon bf public charity?”
“Can port.loni of a qualifying project thit
are vacantbecause no aged peraon.has applied
to occupy them be rented or leased to others
without the Institution .losIng lts~ exemption;
and, can such an Institution furnish quarters
~to Its employees and their families, on the
premises, 83~ part ~of their compensation or
salary, without losing, Its exempt status?”
Article VIII, Se&Ion. 2 o b the Constitution. of the StaM
of Texas has empowered the Legislature to ekempt f-m taxation
certain enumerated properties a&ng.whlch are’ . . . lnatltutlons
of purely public charity. ” In pursuance to ,th ! a particular con-
stltutlonal grant,~the Legislature enacted Section 7. Article
7150, Vernon’s Civil Statutes, which effectuates exempt1ofi.t.o ths
extent of the exemptive powers conferred by Article VIII, Ssc-
tlon 2.
We are of the o&Ion that under the %tated. facts In
th1.s case, Lake Crest Estates cannot qualify ao as to be exempt
from ad valorem taxes.
-89%
Honorable Doug Crouch, Page 3 (No. C- 184 )
A building la not exempt from taxation unless it is both
owned and used exclusively by an lnstltutlon of purely public
charity. City of Houston-vs: Scottish Rite Ekne%oleni Association,
111 Texas Dl, 230 s.w. 97811921).ve cited
case, held that an Instltutldn wai one of "purely public charity"
where first It made no gain or profit;. second, It accompllshed.ends
wholly benevolent; and, third, It beneflted.persons, Indefinite in
numbers and In personalltIes,by preventing them through absolulie
gratuity, from becoming burdens to society and the State. The
Supreme Court also held that a non-profit organization whose actlvl-
ties were only partly charitable could not qualify as an Institution
of purely public charity.
In the situation before us here, the facts show that
thla property does ,not meet the quallflcatlons set forth In the
above cited case: It la shown that the property Is leased lndls-
crlmlnately to persons of acy age Irrespective of whether they are
in need of financial assistalice.
You are,.therefore, advised that In our opinion the Lake
Crest Estates owned and operated by Chrlstlan Homes, Inc., la not
exempt from ad valorem taxes.
SUMMARY.
-------
Under the stated facts the property
Involved In @la opinion la not at the
present time- be$ng used exolualtrely-.bg an inatl-
tutlon of purely public charity, and Is,
therefore, not exempt from ad valorem taxes.
Yours very truly,
WAGGONER CARR
Attorney General of Texas
Assletant Attorney General
APPROVED:
OPINIONCOMMItiEE
W. V. Geppert Chairman
Arthur Sandlln
Ernest Fortenberry
Paul Phy
APPROVEDFOR THE ATTORNEYGENERAL
By: Stanton Stone
-894