OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Eonorable Jaok .VJetdh
County Attormy
CaJneron count
~rotkn6~1118, g ema8
Dear sir:
fqa teQuest our
ty ‘owned br the
8ubjeot to State and
on therewith submit an
able en& appreoiat
d being Article 1269k
cited Act creates or purports
one from taxation:
an authority 18 deolared to be
6 for essential pub110 an6 govern-
such property end en authority
from all tares and epeoial assesemente
e oounty, the State or any politioal eub-
dlvleion thereofi provided, however, that in lieu of
au h taxes or speoial aseeaementa, an authority may
ag li ee to make payments to the city or the county or
any such polltloal subdivielon for Improvementa, eer-
vluea, and raollltlee furnished by suoh olty, oounty,
or political eubdivlaion for the benefit of e housing
project, but in no event shall such payment6 erceell
honorable Jack ?!elch, page 2
the estimated cost to such city, county, or polltIoel
subdlvlelon of the improvements, services, or faclll-
ties to be 80 rurnlehed.~
The foregoing exemption is so plain and. unambiguous
_ as
to remove the Instant question from tne recognized rule of
statutory construction that tax exemptlon statutes are oon-
strued most strongly against exemptions. The Intention of the
Legleleture to create euch exemption Is too plain for argument,
and the sole issue Involved in your lnqulry la whether or not
tax-exemption statute is oonstltotIonnl under that portion of
,,Artlcle VIII, Section 2, Constitution of Texas, empowering the
-Legislature, by general laws, to exempt from taxation “public
property used for public purposes . . .v and property held by
“lnstltutlons of purely public oherlty,” and further providing
that “all laws exempting property from taxation other than the
property above mentioned shall be null and vold*I also to be
,.consIdered in thle connection 1s Article XI, Section 9, Constl-
tutlon 0r Texas, providing as follows:
“The property of oountles, cities and towns, owned
end held only for pub110 purposes, such as public
buildings and the sites therefor. Fire engines and the
furniture thereof, and all property used, or intended
for extinguishing fires, public grounds and all other
property devoted exclusively to the use and benefit
of the public shall be exempt from forced sel3-and irom
taxation, provided, nothing herein shell prevent the
enforcement oP the vendors lien, the meohanlos or
builders lien, or other liens now exlrt1ng.e
In determining the constitutionality of, Section 22 of
the above cited “Housing Authorltlee Law,” it first becomes
necessary to aetemne the nature end scope of thIe measure
with referenoe to whether the property owned by the Brownavllle
Eoualng Authority, oreeted thereunder, comes within the Intend-
ment and purview of the foregoing oonstltutlonel provisions
fixing limits upon then power of the Legislature to oreete eremp-
tlone on property for taxation. To thle end, w do not purpose
to outline the administrative details provided by the ‘Eouelng
Authorities Law,’ but. rather to point only to the portlone
thereof as tend to give the Brownsville Housing Authority, created
there der, the statue and oharaoter of an agency or lnstrument-
allty 3 f the State of Texas, oreated for a public purpose, and
to stamp the property owned thereby es “public property used
Honorable Jack Welch, page 3
for public purposes ,* within the meaning of the above oonstltu-
tlonal provision.
Section 4 of the Housing Authorities lav creates in each
city of the State a “public body corporate and politlcn to be
known as the “Housing Authority” of the city, to be celled into
active existence for traneeotlng business under said law by
proper resolution of the governing body of said cLty, baaed upon
certain tlndlnge of a need for better housing oondltlone. Under
section 6 of the Act the governing body of the Authority con-
sists of flTe oommIseioners appointed by the nayor of such city,
and the appointment, puellrIcatlone end tenure of said oonuale-
slonere are fixed by eeId eeotlon, including a provision that
no COE~SaiOntr shall receive oompen8atlon for his services but
shall only be entitled to necessary traveling expenses, incurred
in the discharge of his duties. Section 6 provides that no
comm.issIontr or smployee of an Authority shall acquire any
interest direct or indlreot In any housing project or in any
contract ior materials or services in ocmectlon therewith,
and isctlon 8, in enumerating the statutory pavers end duties
of the Authority, deolarte that “an Authority shell constitute
a pub110 body corporate end polltlo, exercising pub110 end
essential governmental functlone, and having all the powers nec-
essary or ccnvenient to carry out and effectuate the purposes
end provisions of this Act.” Among the powers granted is the
-right to sue and be sued, to have a seal, and the right of per-
petual sucoes6ion, to investigate into living, dw&llng, and
houalng conditions, end the means and method6 of improving the
same, and to enter into any and all necessary aontracts ror this
purpose, to lease or rent any dwelllnge, houses, eto., embraced
in any housing project, tid to own, hold or improve real end
personal property, to eoqulro real property by the sxerolee of
the power of eminent domain. to invest the Sunde of the Auth-
ority, and to conduct exemlnetions and lnrestlgatlone, hear tes-
timony and take proof on any matter material to the work of
the Authority. Section 9 of the Act declares It to be the
Wpolloy of this State that each housing authority shall menage
and operate it8 housing projeote In en tffloient smmbr 80 8s
to enable it to fix the rentals for dntllIng aooommodatlons St
the lowest possible rates coneiettnt wlth Its providing decent,
safe, and sanitary dwelling aoco5S@ations, and that no EoUSiX@
Authority shall construct’ or operate eny szch projeot for pro-
fit, 05 the source of rcvenae tB the city.
Se&Ion8 14, 16 end 16 of the.Aot provide reeptotively
for the Iasuence of bonde’by .en authority for eny of it6 corpot-
ate purposes, the form end condition8 of sale of such bonds,
and the provisions of the truet indentures and mortgages securing
same. Section 20 provides that all reel property of an authority
honorable Jack Vieich, pegs 4
shell be exempt from ls~y turd sale by virtue of en exscutlon,
or judgment lien, sxsspt as otherwise provided ln the act, end
Section 21 empowers an authority “to borrow money or aoospt
grants or other finenrlel assistance from tpe Sadera Govern-
ment .a
Aa further lndloetlrs of the public purpxe to be served
by the nBonslng Authorities Lawn and the public charaoter of
the property o*lned or held by an authority oreatsd thereunder,
the Legloleture, in SeOtlon 2 of the Act, mskss the following
declaration or fact-finding:
wSeC.’‘2. St’ls hereby dealared: (a) that there
exist in the State insanitary or unsafe dwelling
accommodations and that persons of low lnoome are
forced to reside in such Insanitary or unsare eccommo-
detione; that viithln the State there is e shortage
of safe or sanitary dwelling eooommodatione avall-
able et rents which person6 of low Income oan arrord
and that suoh persons are forced to ,ocoupy ovsrorowd-
sd and oongested dwelling acoommodations; that the
aforeseld oondltionr ow%e an lnorease ln end epread
of disease end orbs end constitute a nenaoe to the
health, safety, morals, and welrare of the residents
of the 3tete and lupalr eoonomlc values; that these
ocndltlons neoessitate excessive and disproportionate
expenditures of public funds for crine prevention
and punishment, public heelth end sarsty’, rlrT‘s.nd
aooident proteotlon, end other public srrvlcee end
racllltiea; (b) that these slum arees sennot be
olearrd, nor oan’the shortago or safe an& renitary
dwellings ror perrons of low lnoome be rrllsrsd,
through the opention of private anterprlrr, end
thet the construotion 0r housing projeatr ror per-
aons or lor income (as herein dqrlned) would there-
fore not bs oompetltirs with private enterprise;
(0) that the clearanae, rsplannlng, apd rsoonrtruo-
tlon 0r the ersas Inwhich insanitary or.unsai*
housing oondltions~exlst end thr providing 0r sare
and sanitary dwalllng aeeomaodatlons for perrons ot
low fnoome are pub110 uses end purposes ior which
pub110 money my be spent and prlvato pro rty ac-
quired end ere governmental funetlons of r tate oon-
that it 18 in the public Interest that work
z?%eh projectsbe commenaed es soon 88 pooslbls
ln order to relieve ~unemploymcnt which now oonstitutsr
an emergencyi and the nooesslty in the pu,blio interest
for the provisions hereinafter enaottd; la hereby
declared 8s~ a metter of legislative detewlnatlon.”
Eenoreble Jack ‘hi&, pegs 5
It 18 trueth8t logl818tlte flndlngs and detotination
of pub118 ama are not oonoln8lro on the eourte, but they ar8
corteinly entitled at les@t to gr88t lwrpmlat, 8inoe they relate
to pub110 oonditione ocncrrnln~ which the Legislature, both br
n%Oerelty end duty, must hare knom. Blook vs. Hipah, 256 P. S.
135, 41 sup. Ct. 458, 68 L. !&d.565; People VS. char108
Gchw8iulor Orors, 214 bi. P. SQS, 108 b;.i. 639; Kow York City
iiou8ingAuthority ~8. bullor, 290 8. Y. SW, 1 N. 2. (2d) 15s.
In doteroinlng what constitutea a publlo pulp088 or u8e,
ior which publlo ruadn MY be applied, 88 oontrcl-dl8tingui8hed
fro% a prlrato purpoee, the Court of Clrll Ap ala
et 4 1 ~8. City o r la y & r ,lt al, 39 >. w. (2dfii91, *hitd%%l-
lowe:
'tie detemin&tion of whet aon8titut88 6 pub118
purpose ir prlmrllr a leglrl8tl~ fumtloo, rubject
to rerier by the court8 when abuood, and their deter-
uinaticn of that mettor 8hould not be rerareod, *er-
eopt In inrtanoes where the legl8latlre dsteruinatlon
of the qw8floa I8 palpably end aunlteet4 8rbltrar
end lnoorr8at.' Keal V. Boog-y:oott (Tax. Clr. App. T
a49 5. h. 689, 691; walker V. City of Cinolnoatl, 21
ohlo St. 14, 8 kc. ?.ep. i!r: Brcdhoad v. City ot rib
waakee , 19 Ha. 624, @5 Am. Dec. Yll; Stete V. Coruell,
53 S4‘qb. 556, 94 H. d. 89, SO L. 2. A. 515, 6&iur~.
at. hp. 629. Jmd it there be any doubt e8 'towhether
the purpo8e questioned be a pub118 u8e, the leglrla-
tire 6ekrmination tboroof 8houl.6aontrol. Brtnm
.v. Gaftestor,,supra; Amarillo V. Tutor, suprs~ Stet8
t. Cornell, 8upra; tiormn v. Ky. Board of z&II., OS
iiy.5s9, 20 s. k. 901, 18 L. 8. A. Mb."
Tbhrrean co aames in thl8 juri84lotion deter8Anfng the
eonrtitutionallty er the Vourfng hthoritias Law,* QP the tax
exemption fwtare thereof, bsosuaa gOv8~8Btal bowing project8
OOn6titUti a compar~tlt*lp B8W M8B8 of re8MYlng lrlauoimt
evil. But irm! the t8rlou8 roetare of the Z‘WSB ‘HoUSI~C: buth?
orltlar Lar,* herelnabovo adterted to, including the oreatlon oi
8 body polltlr and oorporete to sdmini8ter the Ad, govomod by
ocnmirrloner8 who 8mve rithout pay, who am authorlsbedto
8oqulre, hold end 8ell real and perronal property, to plan,
aonstrwt, rent or 18ero hooriug projeotr for the clearance of
rluu 8r8a8 and the providing or rare end sanitary housing aooom-
modatfcjn8 for parsons or low lneoke, weelrlng the pow6r of
OEiBOBt domain to that and and authorized to i8sue bond8 in fur-
therance or it8 oorporets purpoae8, and to hold it8 properti88
‘Honorable Jack Welch, page 6
free from liens, execution, and taxation, certainly leaves no
room to doubt that the ieglelatura of Texas has deolared ana
committed lteelr to the propoaition that the purpose8 to be
6e~ed by thl8 riot aro pub110 and governmental, and the property
acquired, owned, held and used by the housing authorities
created under the Act is public property used ror public pur-
poses. Not only did the Legielature expressly 80 deolare, but
theae enumerated attributes or features ot the Act are all, to
our mind, lndiola 6t thlr pub110 and governmental purpose.
Therefore, we would not ‘feel cowtralned, even ln the absenoe
of authoritlea from other jurisdlotlona, to disturb this legle-
latire dsolaratlon and fact-finding. ae take this poaltion
bsoanse MI do not think it oan be controverted that legislation,
suoh aa under oonslderatlon here, designed to alleviate the
conditions of diseaee, inmorality and crime incident to orovided,
unsafe and msanltary houeing conditIona, ie a proper and valid
exercise of the reeerPed police power of the State to proteat
the health, safety and general welfare or the publlo.
Upon this theory, ousing Authorities Lavrs of other states
have been fully sustained aa the exerolae of a proper governmental
run&Ion for a valid public purpose. New York City Housing
Authority vs. Afuller, 270 N. Y. 333, 1 N. z. (26) 163; bioh’ulty
vs. Ovzena, 199 S. h. 425; tie118 VS. IJouslng Authority or City or
‘iiilmington, et al, 197 S. L. 693. These casea turned upon con-
stitutlonal and statutory provisiona, substantially identical to
those involved here, and, although persuasive only,Je aeern
such authorities controlling, in principle, upon the instant
question of whether or not property held by the Brownsvillr
i?ouslng Authority is *publlo property used for publia purposes*
within the meaning of pertinent aonstltutional proriaiona liait-
ing tex exemptions to auoh property. Moreover, the laaet two
case8 oited above are more dlreotly in point, in that the Ques-
tion wae raised and determined regarding the validity and aon-
etitutlonality of the tax-exemption feature of the act6 under
consideration, and the oourt, in aaah ease, held that property
to be used In carrying out’6 alum olearanoe and low-oost housing
projeot was municipal property within the Constltutlon and alEo
was property ured exclwirely for publio purposes wlthfn the
constitution, so as to be exempt from taxation.
in our oplnlon, GeHdon 22 of Article lE6Qk, Vernon*e
Annotated Civil Statute&, commonly known and citdd aa the *&u8lng
.iiuthorit$es I.Rw* is a constitutional exemption rrom taxatlon, and
property oxned by the Housing Authority of Brownsville, Texas,
.
lionorable Jaok ireioh., page 7
duly oreated under eaid act as a pub110 body corporate and
politlo, and an agenoy or lnetrumentallty of the State or yexae,
--under its police Dow@r,.lr) "public property used ior pub110
purpoees, =- entltl&l to exemption from State. and aounty ad
valorem taxes under aafd ?iouainR Authorities Law” and oontrol-
llng constitutional provisions. -
Yours very truly
ATTORNEY 0ENERk.LOF TEXAS
BY
APFROVEDm 28, 1940