HonorableThos. Bartlett, Jr.

County Attorney Falls County Marlin, Texas Opinion~.No. 

### ~2~203.
FE: Whether Acts 

### 1961,57th Leg., Ch. 

### 487,exempting personal property of charltable~ Institutions from ad valorem taxes is constitutional Dear Mr. Bartlett:

In your letter of December 9, 

### 1963,you have requestedan opinion from this department as to whether or not that part of Section 

### 7 of Article 

### 7150,Vernon's Civil Statutes,as amended by Acts 

### 1961,57th Legislature,Chapter 

### 487,exempting certainpersonal property is constitutional. This amendment reads as follows:

"Allbuildings and personal property belonging to institutionsof purely public charity, together with the lands belonging to and occupied by such institutionsnot leased or otherwise used with a view to profit, unless such rents and profits and all moneys and creditsare appropriatedby such institutions solely to sustain such institutions and for the benefit of the sick and disabled members and their families and the burial of the same, or for the maintenance of personswhen unable to provide for themselves,whether suchpersons are members of such institutionsor not. An lnstitution of 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 proverty or riches of the recipient,also when the funds,property and assets of such institutionsare placed and bound by its law to relieve, aid and administer In any way to the relief of Its memberswhen Inwant, sicknessand distress, and provide homes for its helpless and dependentmembers and to educate and maintain the orphans of its deceased members or other persons."



### -981-Honorable Thos. Bartlett, Jr., Page Two (OpinionNo.'C-203)

Article 

### 8; Section 2 of the Texas Constitutionprovides in part as follows:

II

. . .the Legislaturemay, by general laws exempt from taxation

. . .all buildings used exclusively and owned by persons or associations of persons for schoolpurposes and the necessary furniture of all schoolsand property used exclusivelyand reasonablynecessary in conducting any association engaged in promoting the religious, educational and physical development of boys, girls, young men or youngwomen operatingunder a State or National organization of like character;also the endowment funds of such institutionsof learningand religion not used with a view to profit; and when the same are invested in bonds or mortgages, or in land or other propertywhich has been and shallhereafter be bought in by such institutionsunder foreclosure salesmade to satisfy or protect such bonds or mortgages, that suchexemption of such land and property shall continue only for two years after the purchase of the sameat such sale by such Institutionsand no longer+, and institutions of purely public charity;

. . ." This Section 2, as adopted in 

### 1876,reads in part as follows: II

. . .the Legislaturemay, byegeneral laws, exempt from taxation

. . . all buildingsused exclusively and owned by persons or associations of persons for schoolpurposes, (andthe necessary furniture of all schools),and instltutions of purely public charity; , . ." An amendment adopted November 

### 6, 1906,making the pertinent part of Section 2 read as follows:

M

. . . the Legislaturemay, by general laws, exempt from taxation

. . .all buildingsused exclusively and owned by persons or associations of persons for schoolpurposes and the necessary furniture of all schools,also the endowment funds of such institutions of learning and religionnot used with a view to profit; and when the same are Invested in bonds or mortgages, or in land or other propertywhich has been and shallhereafter be bought in by such institutions under foreclosure salesmade to satisfy or protect

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Honorable Thos. Bartlett, Jr., Page Three (OpinionNo.C-203)

suchbonds or mortgages; that such exemption of such land and property shall continue only for two years after the purchase of the same at such saleby such institutionsand no longer,and institutionsof purely public charity;

. . ." The amendment adopted November 

### 6, 1928,added the provision concerningproperty owned by a church or strictly religious society for use as a dwelling place for the ministry, and the provision beginningwith the words "andproperty used exclusively and reasonably necessary," to and includingthe words, "operatingunder a State or National organization of like character." (Emphasisadded).

The courts in Texas have uniformly held that the Legislature may exempt real property belonging to and used exclusivelyby institutions of purely public charity.

In the case of Morris v. Lone Star Chapter No. 

### 6, Royal~ Arch Masons, 

### 68 Tex. 

### 698, 5 S.W. 

### 516 (1887)the Supreme Court of Texas, in talking about institutionsof~purely public charity, as used in Section 2 of Article 

### 8 of the Texas Constitution said:

"The grammatical construction of this provision Is not clear. The word 'institution' properly means an association organized or established for some specificpurpose, . . ." The court said that that part of the sectionunder considerationwhich contains the word institutionmay have been intended to read either:

"I

.. . .all buildings used exclusively and owned by persons or associations of persons for schoolpurposes, . . .and all instltutions (meanin

‘i establishmentswith houses, grounds, etc. of purely public charity,' or 'allbuildings used exclusively and owned by persons or associations of persons for school purposes, . . .and all buildings used exclusively and owned by institutions of purely public charity.'" The Texas Supreme Court said, '.
. .we are of the opinion that the latter reading gives the more reasonable construction of the language as used in the constitution of our State. This gives to the word its proper meaning, and Is in accord with the spirit of the other provisions contained In the section."

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At the time this opinionwas written by the Supreme Court the pertinent part of Section 2 of Article 

### 8 of the Texas Constitutionread as follows:

11

. . .the Legislature may, by general laws, exempt from taxation; all buildingsused exclusivelyand owned by persons or associations of persons for schoolpurposes, (andthe necessary furniture of all schools),and instltutions of purely public charity;

. . ." In the case of Barbee vs. City of Dallas, 

### 64 S.W. 1018 (civ. App. 1901, error ref.) the court stated:

"Thisappeal Involves the construction of Article 

### 8 $!2, of the state constitution,exempting from taxation 'allinstitutionsof purely public charity.' This clause has been consideredby the supreme court, and in an able and exhaustive opinion the clausewas construed by that court as authorizing the exemption only of real estate,with the buildings thereon owned and used exclusivelyby institutionsof purely public charity. Morris v. Royal Arch Masons, 

### 68Tex. 

### 698, 5 S.W. 519. In other words, the effect of the holding is that this clause of the constitutionauthorizes the legislature to exempt only real estate owned and used exclusivelyby institutions of purely public charity. The property sought to be exempted in the case at bar consists of publications principally of books, tracts, and periodicals published by the Methodist PublishingHouse at Nashville,Tenn., of which Plaintiff is a branch. The petition does show,however, that Plaintiff 'doescarry other of such articles making up the stock in trade of a regular book store.' The property described in the petition consists of personal property only. None of it can be designated as real estate or building. This being true, under the decision above referred to we conclude that it is not included in the exemptionsprovided for in Article 

### 8, g 2, Const.
. . . As the property set out in the petition is not embraced in the clause of the constitutionauthorizing the exemption of 'allinstitutions of purely public charity,' it is unnecessary to decide whether the language of the statute (Sayles'Ann. Civ.

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Honorable Thos. Bartlett, Jr., Page Five (OpinionNo. C-203)

St. art. 5065, subd. 6) is broad enough to exempt it, or whether the language of the ordinance of the city exempting property from taxation would include It. It is conceded that, if the constitutiondoes not authorize the exemption of this property, it could not be exempted by the statute or ordinarne.

. . .’ These caseswere decided under the constitutionas it was originallywritten in 

### 1876. The pertinent part of Section 2, as It now reads, is as follows:

11

. . . the Legislature may, by general laws, exempt from taxation

. . .property used exclusivelyand reasonably necessary In conducting any association engaged inpromoting the religious, educational and physical development of boys, girls, young men or young women operatingunder a State or National organization of like character;
. . .and institutions of purely public charity;

. . .” The cases above discussedwere decided in 

### 1877and 1901, and before Section 2 of Article 

### 8 of the Constitutionwas amended. We believe that the meaning of section 2 above is entirely different now from that as originallywritten and In effect at the time the above court opinionswere written. These cases are therefore not in point as to the present reading of this section of the constitution.

By the amendments of Section 2 of Article 

### 8 of the Constitution it a pears that the people of Texas intended to authorize the

2: Legislatu e to exempt from taxation,property used exclusively and reasonably necessary In conductingany association engaged in promoting the religious, education and physical development of boys, girls, young men or young women operatingunder a State or National organization of like character;and property used exclusively and reasonably necessary In conducting institutions of purely public charity. The word “property”not being in any manner qualified, includes person& aswell as real property.

The Legislature, in putting into effect the permission granted by Section 2 of Article 

### 8 of the Constitutionto exempt property used exclusively and reasonably necessary in conducting institutions of purely public charitywent beyond the authority granted, In that the Legislature did not limit the exemption to property used exclusively and reasonablynecessary In conducting such institutions. The statute to that extent is void. city of
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San Antonio v. Santa Rosa Infirmary 249 S.W. 

### 498 (Tex.Civ.App.1923, reversed on other grounds 259 S.W. 

### 426).

We are, therefore, of the opinion that Acts 1961, 57th Legislature, Chapter 

### 487which amended Article 7150, Vernon's civil Statutes, is constitutionalinsofaras it exempts from taxation, both real and personal,property that is used exclusively and Is reasonablynecessary in conducting Institutionsof purely public charity. SUMMARY -------
Acts 1961, 57th Legislature, Chapter 

### 487,which amended Article 7150,Vernon's Civil Statutes Is constitutional, Insofar as It exempts from taxation, both real and personal property, that is used exclusivelyand is reasonablynecessary In conducting institutionsof purely public charity.
Very truly yours, WAGGONER CARR Attorney General

BY: Assistant Attorney General APPROVED: OPINION COMMITTEE W. V. Geppert, Chairman Cecil Rotsch Arthur Sandlin Marietta Payne Jack Norwood Approved for the Attorney General by: Stanton Stone

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