Untitled Texas Attorney General Opinion

The Attorney General of Texas November 19, 1981 MARK WHITE Attorney General Supreme Court Building Honorable Roy Blake, Chairman Opinion No. Mu-391 P. 0. Box 12548 Senate Committee on Administration Austin. TX. 78711 State Capitol Building, G-27-J Re: Whether residences owned 512/475-2501 Austin, Texas 78711 by the Texas Department of Telex 9101874-1367 Corrections and used by its Telecopier 512/4754266 employees are taxable 1807 Main St.. Suite 1400 Dear Senator Blake: Dallas. TX. 75201 21417428944 You have inquired about the tax status of certain property held by the Texas Department of Corrections. You state that the department 4924 Alberta Ave.. Suite 160 owns a number of housing facilities which are serving as private El Paso, TX. 7QQu5 residences of the department's employees. You ask whether such use is 9156933494 a "private use- such that this property is taxable under the Texas Constitution and the Property Tax Code. 1220 Dallas Ave.. Suite 202 Houston. TX. 77002 Article VIII, section Z(a) of the Texas Constitution provides 713165oo666 that "the legislature may, by general laws, exempt from taxation public property used for public purposes." Article XI, section 9 of the constitution provides that "all other property devoted exclusively 808 Broadway, Suite 312 Lubbock. TX. 79401 to the' use and benefit of the public shall be exempt... from 90617476239 taxation." Section 11.11(a) of the Property Tax' Code, effective on January 1, 1980, provides that "property owned by this state or a political subdivision of this state is exempt from taxation if the 4309 N. Tenth. Suite 8 property is used for public purposes." Section 11.11(d) of the McAllen. TX. 79501 512t952-4547 Property Tax Code, also effective January 1, 1982, provides in part: (d) Property owned by the state that is not 200 MaIn Plea. suite 400 used for public purposes is taxable. Property San Antonio, TX. 79205 owned by a state agency or institution is not used 512a25-4191 for public purposes if the property is... used to provide private residential housing for An Equal Opportunityl compensation to members of the public other than Affirmative Action Employer students and employees of the state agency or institution owning the proPert .... (Emphasis added). Acts 1981, 67th Leg., 1st C.S., ch. 13, 130, at 127. Section 11.11(d) of the Property Tax Code does not expressly make the housing facilities taxable. It in fact suggests, although it does not state. that use of housing by state employees constitutes a public purpose. p. 1330 Honorable Roy Blake - Page 2 (MN-391) In order to answer your question, we must determine whether the use of residences by employees of the department constitutes a public or private purpose within the meaninn of the constitution. See David -- Graham Hill-Foundation v. Highland-Park Independent School District, 371 S.W.2d 762 (Tex. Civ. App. - Dallas 1963, writ ref'd n.r.e.). Briefs submitted to this office raise the question of whether the employee's use of state-owned housing primarily benefits the prison system or the employee as a private individual. In our opinion, the relevant legislation defines the provision of housing to an employee as compensation or an emolument. Article 616629, V.T.C.S., provides that certain prison employees shall receive lodging in addition to their salaries. The General Appropriations Act gives certain prison employees an entitlement to emoluments, which include "housing belonging to the Department of Corrections." Acts 1981. 67th Leg., ch. 875, at 3309. The Board of Corrections may also authorize emoluments to other employees. Id. The housing used by Department of Corrections employees has thus been characterized by the legislature as an emolument. "Emolument" is the urofit arisine from office or employment and it is more comprehensive than salary. Thomas v. _ Abernathy County Line Independent School-~District,278 S.W. 312 (Te z- Civ. App. - Amarillo 1925), r*!v'd on other grounds, 290 S.W. 152 (Tex. Comm'n App. 1927); Taxpayers7 League of Carbon County v. McPherson, 54 P.Zd 897 (Wyo. 1936); At torney General Opinion WW-719 (1959). Thus. we believe the legislature intended the use of housing ‘to be part of the employee's compensation. In our opinion, the department's use of housing to compensate its employees constitutes a public use. State funds appropriated to compensate public employees are not taxable to the state merely because.they will eventually be spent by the employees for private purposes. Nor, in our opinion, is the housing in question taxable. See generally City of Sherman v. Williams, 19 S.W. 606 (Tex. 1892). SUMMARY The use of residential property owned by the Department of Corrections to provide housing as compensation to its employees constitutes a public use of the property. The property is not subject to ad valorem taxation. MARK WHITE Attorney General of Texas JOHN W. FAINTER, JR. First Assistant Attorney General p. 1331 Honorable Roy Blake - Page 3 (Mw-391) RICHARD E. GRAY III Executive Assistant Attorney General Prepared by Susan L. Garrison Assistant Attorney General APPROVED: OPINION COMMITTEE Susan L. Garrison, Chairman Jon Bible Rick Gilpin W. Reed Lockhoof Jim Moellinger p. 1332