JIM MAllOX 

Attorney General 

Supreme Cowl BulldIng 

P. 0. 80x 12S48 

Austin. TX. 711711.2S4a 

512l4752501 

Telex 91ws7c13a7 

Telecopier 512/47402+6 

714 Jackson. Suite 700 

Dallas, TX. 75202-4SOS 

2lU742.SSU 

4824 Albwta Ave.. Sulle 160 

El Paso. TX. 799052793 

915/533-3494 

4001 Texas. Suite 700 

Houston, TX. 77W2.3111 

713l223.5886 

505 Broadway. Suite 312 

Lubbock. TX. 7S401-3419 

80817476238 

4302 N. Tenth. Suite B 

McAllm. TX. 78501.1685 

512/SS2-4S47 

200 Main Plaa. Suite 400 

San Antonio. TX. 781052797 

5120254191 

An Equal Opportunity/ 

Affirmative Action Employer 

The Attorney General of Texas 

:)ecember 27, 1984 

Ronorable Mike Driscoll 

Rarris County Attorney 

1001 Preston, Suite 634 

Rouston, Texas 77002 

Opinion No. JM-269 

Re: Whether the real and personal 

property of the Blue Bird Circle 

is exempt from ad valorem taxes 

Dear Mr. Driscoll: 

You have asked this 

. 

office to determine whether section 11.18 of 

tne state Property Tax Code exempts from ad valorem taxation the real 

and personal prope,rty of the Blue Bird Circle. Section 11.18 exempts 

charitable organizations from taxation of their buildings and tangible 

property. provides that the organization can meet certain stated 

requirements. We conclude that the Blue Bird Circle does not meet 

these statutory requirements for exemption under section 11.18. We 

limit our answer to the particular facts which you have given us. 

You inform us that the Blue Bird Circle [hereinafter Circle] is a 

non-profit Texas corporation which owns a tract of land on which it 

maintains an offi’:s building and two resale shops. The Circle uses 

the office bulldir~e; for its various programs and meetings; the resale 

shops sell merchandise which has been donated to the Circle. The 

Circle uses all profits from its various activities to support the 

Blue Bird Clinic for Pediatric Neurology, which is located in the 

Texas Uedical Center, several miles away from the property in 

question. 

Section ll.lIl~:c) of the Texas Tax Code lists the requirements 

which an organir.ation must meet to qualify ‘-6 a charitable 

organization under the statute: 

(c) To qualify as a charitable organixaiion 

for the purposes of this section. an organization 

(whethe:, operated by an lndlvldual. as a 

corporation, or as an association) must: 

(1) be organized exclusively to perform 

relic ious, charitable, scientific, literary, or 

educa,tlonal purposes rind. except as permitted 

by subsection (d) of this section, engage 

p. 1200 
Honorable Mike Driscoll - PaSe 2 (Jhi-269) 

exclusively in performing one or more of the 

folloving charitable functions: 

(A) providing medical care without 

regard to the beneficiaries’ ability to pay; 

. . . . 

As this office noted in Attornev General Ooinion MW-288 (1980). 

the court in Hilltop Villa:Qs, Inc. -v. Kerrvilie Independent School 

District, 426 S.W.2d 943 (Tax. 1968). indicated that the activity of 

providing facilities which m,eet special residential requirements of 

the aged-might qualify as au institution for tax exemption as one of 

purely public charity, but only where it also qualified under the 

statutory definition of such institutions for tax exemption purposes. 

Because the controlling st:a.tute (former article 7150. section 7, 

V.T.C.S.) at that time restricted exemptions to property of 

institutions dispensing aid “vithout regard to [the] poverty or riches 

of the reciuient.” a reauirement which the claimant failed to meet. 

the exemption was denied: 426 S.W.2d at 948. See also City of (Waco 

v. Texas Retired Teacher Re!aidence Corporation, 464 S.W.Zd 346 Tex. 

1971). Accordingly, if the F’roperty of the Circle is to be accorded a 

charitable exemption, the Circle itself must be exempt under section 

11.18. 

We must conclude that the Circle does not qualify for a section 

11.18 tax exemption. We note that the burden of establishing the 

requirements for exemptlox from taxation is on the institurion 

claiminn the exemution. and the exemption must be proved in such a 

manner as to leave no doubt:. Willacy County Appt&d District v. 

North Alamo Water Supply Corporation. No. 13-83-318-0 (Tex. App. - 

Corpus Christi. June 28. lTB4). Further, in such cases, exemptions 

from taxation are never favored. and, in construing laws exempting an 

organization.’ all doubts uust be resolved against the institution 

claiming the exemption. HeQecroft v. City of Housron. 244 S.W.2d 632 

(Tex. 1951). Both statutory and constitutional provisions purporting 

to grant exemption from taxation will be given a narrow and strict 

construction. and all doubts must be resolved against the granting of 

the tax exemption. Hillto) Village v. Kerrvifie Independent School 

District, supra. 

Section 11.18(c)(3)(B) of the Tax Code requires that charter, 

bylaws, or regulations adopted by the organization to govern its 

affairs must 

direct that on d::scontinuance of the organization 

by dissolution or otherwi.se the assets are to be 

transferred to this state or CO an educational, 

religious, charitable, or other similar organiration that is qualified as a charitable 

p. 1201 . 
q 

Honorable Mike Driscoll - Prtge 3 (JM-269) 

organization under Section 501(c)(3). Internal 

Revenue Code of 1!154, as amended. 

Article I, section 3 o:: the Circle's bylaws reads: 

Section 3. No part of the property of this 

Corporation shall ever be utilized for the private 

gain or profit of any officer, director, or 

member, as such, oi1 the Corporation. 

In its brief, the Circle refers to section 3 as ensuring that its 

assets are "perpetually dedicated to use in performing the 

organization's charitable function." The Circle asserts that this 

provision satisfies the staeutory requirements of section 11.18(c)(3). 

We disagree. There is no provision in the documents submitted to us 

that directs the Circle's assets to be transferred in the required 

manner in the event of its Hacontinuance. 

The tax status of the c,orporation for this year is determined by 

its qualifications on January 1. 1984. Prop. Tax Code 511.42. 

Because the Circle does not meet the section 11.18(c) statutory 

requirements of a charitat~le organization, we conclude that its 

property is not exempt from ad valorem taxation. 

SUMMARY 

The Blue Ri::d Circle does not meet the 

statutory requirements to qualify as a charitable 

organization and, therefore, is not exempted from 

ad valorem taxaticn by section 11.18 of the state 

Property Tax Code. 

JIM MATTOX 

Attorney General of Texas 

TOM GREEN 

First Assistant Attorney G+eral 

DAVID R. RlCRARDS 

Executive Assistant Attorncfy General 

RICK GILPIN 

Chairman, Opinion Committee! 

p. 1202 
Honorable Mike Driscoll - Page 4 (JM-269) 

Prepared by Rick Gilpin 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Rick Gilpin. Chairman 

Colin Carl 

Susan Garrison 

Tony Guillory 

Jim Hoellinger 

Jennifer Riggs 

p. 1x3