April 1, 1960

Mr. Weldon Holcomb OpinionNo. WW- E23 Criminal District Attorney Tyler, Texas Re: Exemption from ad valorem taxation of properties of Caldwell Schools, Inc., under Article 7150, Vernon's Civil StatDear Mr. Holcomb: utes.
We are in receipt of your letter in which you request an opinion of this Department as to whether or not the followingproperties ownedby Caldwell Schools, Inc. are exempt from ad valorem taxationunder the laws of the State of Texas.

"No. l-being: West part of Lot 4, Block 80, and Lot 10,Block 184, City of Tyler, located at 419 South Bonner Street. This tract is used as the principal site of Caldwell Play School for pre-school children. It is in the nature of a kindergarten and is not officially connectedwith the Tyler Public Schools. Each child pays a fee, the principal expensesare paid by the City of Tyler and Caldwell Schools, Inc. There are no profits, It is operated as a benevolent public service. The property is used for no other purpose.
"No. 2-being: The block of land located at 727 South Chilton known as the Old Chilton Home. On this property are two principal buildings, residenceswhich have been converted to schoolpurposes. The property is used exclusively for the Caldwell Play School for certain activitieswhich can not be carried on on the first tract referred to above.

"No. 3-being: 78 acres of land in the A. G. Barrett and Harris Fenton Surveys, Smith County. This property is used exclusively asMr. Weldon Holcomb, page 2 (WW-823)

a children's zoo, and for F,uture Farmers Association activities in the raising of their cattle and pigs. The F,ut,ure FarmersAssociation projectsare under public school supervision; the Zoo, charitable in purpose. There is no admission fee, no profit. The entire expense is paid by Caldwell Schools, Inc. Any personmay be admitted to the Zoo, but It is designed principally for children."

Your request also informs us that the Caldwell School, Inc. is a charitable corporation,organized under the laws of the State of Texas and that the three above described propertiesbelong to this corporation. Subsequent to your request, the attorneys for Caldwell Schools, Inc., advised us of the following facts concerningthe school:

"Althoughit is for pre-schoolage childrenin the nature of a kindergarten, (a) it does teach the childrena limitedamount of writing, such as reading and writing their names, (b) it teaches art, (c) it teaches them how to study, (d) it teaches them things that educators agree may be taught to children in this age group, so that they will be better prepared for the first gradework. "H~i.gh school students,as part of their high schoolwork, take practice teaching courses in the school, that is, they practicewith the instruction of the childrenas a accreditedhigh school courses. I? art of their

Section 2 of ArticleVIII of the State Constitution provides in part:

II

. . .theLegislaturemay, by general laws, exempt from taxation.

. .a11buildingsused exclusively and owned by persons or associations of persons for school purposes . . . institutions of purelypublic charity;

. . .'
The Legislature, pursuantto Section 2, Article VIII, enactedArticle 7150,Vernon's Civil Statutes, which provides in part:Mr. Weldon Holcomb, page 3 (WW-&3)

"The followingproperty shallbe exempt from taxation, to-wit:
"1

. Schools and Churches

. . .all such buildings used exclusivelyand ownedby persons or associationsof persons for school purposes;
. . .II
"7

. Public charities. - All buildings belonging to institutionsof purely public charity, togetherwith the landsbelonging to and occupiedby such institutionsnot leased or otherwise used with a view to profit, unless such rents and profits and all moneys and credits are appropriatedby such institutions solely to sustain such institutions and for the benefit of the sick and disabled members and their familiesand 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 institutionof 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 poverty or riches of the recipient,also when the funds,property, and assets of such institutions are placed and bound by its laws to relieve, aid and administer in any way to the relief of its memberswhen in want, sicknessand distress, and providehomes for its helpless and dependentmembers and to educate and maintain the orphans of its deceasedmembers or other persons."
The Constitutionalprovisions quoted above are permissive and not mandatory or self-enacting,and consequently a charity to be exempt must fall within the terms of Article 7150,Vernon's Civil Statutes. Section 7 of Article 7150, quoted above, specificallydefines the kinds' of public charities that are to be exempted and Caldwell Schools, Inc., although eleemosynary in nature is not a "charitablecorporation"as definedby this section.
The properties in question, therefore,must come within the requirementsof Section 1 of Article 7150, Vernon's Civil Statutes, in order to be exempt from ad valorem taxation.Kr. Weldon Holsomb, page 4 (~~-823)

JudgeRobertson, in the case of Cassianov. UrsulineAcademy, 64 Tex. 673, expressed the policy of the State regarding this exemption as'follows:

"Ithas been the policy of the state since 1849 to encourage educational enterprisesby exempting them from any share of the burdens of government.

. . . "The education of the masses is now recognized as a function of state government. Those who from charitable considerations,to forward sectarianviews, or for privateprofit, have organized or conducted schools,have assisted the state in the performance of a duty it owes to its citizens,which cannotbe too thoroughlyperformed, and which the statehas never assumed that it had either themeans or the machinery of doing sufficientlywell without private assistance. The Ursuline Academy is performing its part in thisbranch of the public service,and it should ratherbe encouragedby aids, than impaired in its usefulnessby a tax upon its pitiful revenues."
The Cassiano case further established that the exemption was to include the land on which the schoolbuildings stand and that private educational institutionswere not to be discriminatedagainst in granting such an exemption.
Chief JusticeHickman in Smith v. Feather, 234 S.W. 2d 418, cites Cassianov. UrsulineAcademy, supra, and comments on the policybehind the exemptionas follows:

"Private schoolswere in greaterproportion then than they are today, and the theory back of their exemptionwas that theywere rendering a distinctpublic servicewhich under our theory of governmentwas recognized as a function of the state."
The buildings involved in Smith v. Feather, supra,were used exclusively for operation for profit of a schmffering courses in interior architectureand decoration and commercial art. It was argued that this was not a schoolwithin the purview of the Constitutionand statute. The Court writes on this point as follows:

"Weknow of no rule or decisionwhich requires or even would authorizea holdingMr. Weldon Holcomb, page 5 (w-823)

that this institutionwas not the terms of the statute." a schoolwithin

In Harris v. City of Fort Worth, 180 S.W. 2d 131, the Court says:
"The Constitutionand the Statutes of this State evince a liberality in the exemption from taxation of property for educational or religiouspurposes. ~ . . In view of the constitutionaland statutoryprovisions and the authorities referred to above, it is our opinion that tractsNos. 1 and 2 are exempt from taxationbut that tract No. 3 is not exempt as it does not comewithin the purview of Article 7150.
SUMMARY

Tracts Nos. 1 and 2 of Caldwell Schools, Inc. are entitled to exemption from ad valorem taxationunder Article 7150,Vernon's Civil Statute, as propertiesused for "schoolpurposes;" tract No. 3 is not entitled to exemption under Article 7150,Vernon's Civil Statutes.

Yours very truly,

WILL WILSON Attorney General of Texas

RAR:ms
APPROVED: OPINION COMMITTEE W. V. Geppert, Chairman Robert A. Rowland AssistantAttorney General

JackN. ,Price John L. Estes J. Arthur Sandlin Bob Eric Shannon REVIEWED FOR THE ATTORNEY GENERAL BY: Leonard Passmore