Dr. J. W. Edgar OpinionNo. (Ci379)

Commissioner of Education Texas EducationAgency Re: Whether The Classroom Austin, Texas Teachers of Dallas, a non-profit corporation, is exempt frompayment of franchise taxes under Dear Dr. Edgar: stated facts. We quote In Its entirety your letter requesting the opinion of this office on the above captioned question.

"The Classroom Teachers of Dallas is incorporated as a non-profit membership organizationunder the laws of Texas for the following purpose as stated in its charter: 'Thepurpose for which The Classroom Teachers of Dallas is formed is strictly educational, to-wit: The advancement of public school education in Texas.' It I am informed that the organization, in pursuit of the statedpurpose, engage8 in the following activities: "1
. It publishes and distributes The Dallas Teacher, a periodical including columns designed to provide beneficial information and significantnews to the teachingprofession.

“2

. It distributes to the teachers educational pamphlets and materials printed by the National Education Association and the Texas State Teachers Association. "3. It organizes and assists in organizing Future Teachers of America Clubs in eachhigh school and junior high school and participates extensively in the programs which are designed to provide information to future teachers.

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organize Student Education Associ- -. . . . . . “4

. It helps ations in colleges, supplies tnem witn eaucatlon materials and works with them in their programs which look toward teachingas a profession.

“5

. It supplies speakersat local, district and statemeetings of both Future Teachers of America and StudentEducationAssociations.

“6. It provides speakers,programs and pamphlets encouragingall teachers to better qualify themselves professionallythrough indtvidual studyalong with recommendingprograms of indtvidual study.

“7. It cooperates in the programs of Texas State TeachersAssociation (TSTA),Texas Classroom Teachers Association (TCTA),National EducationAssociation
t REA) and Teacher Education and Professional Standards TEPS),which are designed to educate, inform and improve teachersand the teachingprofession.

“8. It sends representatives to meetings of Texas StateTeachersAssociation (TSTA),Texas Classroom TeachersAssociation (TCTA),National EducationAssociation (NEA)and Teacher Education and Professional Standards (TEPS). "9. It sends representatives to the local Chamber of Commercemeetings upon request to exchange information. "10. It conducts an annual banquet for teachersand thepublic fingeneral, which is designed to impart information to the public and to provide closer cooperation between teachers and the public. At this year's banquet, the President of the National EducationAssociation spoke on "Educationfor World Responsibility". "11. It encourages teachers to becomemembers in professional teacher organizations. "12. It provides public informationabout the teachingprofession.

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### "13. It polls members regarding their feeling as to the current status of professional competence, standardsand ethics. 

### "14. It provides a forum for discussion of problems involved in teaching. 

### 1115.It reports on all currentprograms at each meeting. "16. It works toward a program whereby teachers teach only in their fields of training or qualifications. "17. It interprets teacher education and professional standards to the teachers. "18. It encourages compliancewith the Professional Code of Ethics. "lg. It provides business and professional leaders with information regarding the current status of education. "20. It provides speakersat meetings in each school on each part of the Professional Code of Ethics. "21. It provides an atmosphere conducive to the improvement of professional standards and mutual cooperation in the working **out** of teachingproblems. "22. It works closely with local (Dallas) school officialsandadministrators in determiningprograms, policies and discipline. 

### "23. It cooperates extensivelywith theAssistant Superintendent of Schools in charge of In-Service Training in devising beneficial in-service training programs.for teachers. "24. It cooperateswith local administration in the recruitment of prospective teachers. 

### "25. It cooperateswith local administration in the orientation of new teachers.

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### 379)

“26. It maintains a small scholarship fund, from which it grants small scholarshipsto worthy, but needy, students in and from the Dallas School System. “27. It maintains a smallbenevolent fund, from which it occasionally makes grants to any teacher in the Dallas systemwho is in need. 

### “28. As a local branch of each organization, it receivesdues for (andremits such collections to ) its parent organizati,on, the Texas Classroom Teachers Association; the Texas State TeachersAssociation; and the National EducationAssociation. "Theactivities above listed are those in which the organizationcustomarilyparticipates. It has on occasion sponsoreda social activity formembers; and it may on some occasionshave paid expenses of somemember or officer to attend some meeting not listed above, for discussionof matters of concern to the schools of Texas. For your Information, there is attached hereto copy of an audit of all receipts, ization for the year 

### 1961, and expenditures of the organwhich further illustrates its activities. "youare requested to advise whether a corporationwhich is organized for the purpose above stated and engages in the activities above enumerated is required to pay a franchisetax under the laws of Texas, and particularly Arts. 12.01 and 12.03 'Taxation-General',Vernon's Civil Statutesas amended. "In connectionwith this request, I would add that in my opinion the activities enumerated above are designed to further and do further the program of public education in this State. So far as I can see, it has no other purpose. If any individual or class of individuals benefits from the activities of the organization, other than as the generalpublic benefits, it is in an indirect way. That is, the encouragement of teachers to improve themselves in their teaching abilities and citizenship responsibilities,and assisting with local schoolprograms of in-service trainingmay result ultimately inhigher salariesfor the teachers who are improvedby suchprograms. But that is an incidental result (assuming it occurs) of acitivitiesdesigned to give better teaching in the public schools.

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'At all events, the cooperative endeavors of teacher-organizations such as The Classroom Teachers of Dallas have been an integral, if not indispensible, part of the progress made in furnishingbetter training of our youth in the schools of Texas. "Ina sense, the question is whether such organizationsare to be charged for the,privilege of making this important contribution to the public good. Article 12.03, Taxation-General,Vernon's Civil Statutes, enumerates the allowable exemptions from franchise taxes. Among those exempt are corporations organized for 'strictly educational purposes. . . ." InAttorney General Opinion No. WW-1517 (1962), this office held that under the submitted facts a corporation charteredby an association of teacherswas required to pay franchise taxes. The purpose clause of the charter of the corporation contained detailedauthorizations or statedpurposes which in most respects, would embrace the activities carried on by The ClassroomTeachers of Dallas. However, one of the charter purposes was ". . .to improve the social and economic status of teachers; and to form a representativebody able to speak with authority for them." We agree with the holding of Opinion No. WW-1517 that this part of the purpose,,clause is inconsistentwith being a coqoration organized for
. . it for this reason..strictlyeducationalpurposes. . . , and affirm

We are not'in accord with that portion of the Opinion which concludes that the followingpurposes are not "strictly educational": (1) cooperationwith the Texas State TeachersAssociation and the National EducationAssociation in the promotion within the teaching group of the highest type of professional practices; (2) the encouragementof active participation of all teachers in the solution of schoolproblems 

### (3)the encoura ement of members to be progressive students of education; 

### (47the arousing of allegiance to a genuine code of professional ethics; (5) the encouragement of higher qualificationsfor entrance into the teachingprofession; 

### (6)the guidance of well endowed young people to select teachingas a life work; (7) the promotion, encouragement and assistance of other local teacher organizations;and 

### (8)the promotion of cooperation among such organizationsand their members. The charter of The Classxoom Teachers of Dallas states that It is formed for a strictly educational purpose, to wit: "The advancement of public school education in Texas." We agree with your ,vlew

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Dr. J. W. Edgar, Page 

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### (C-379)

that the activities in which the corporation engages are consistentwith its statedpurpose and are designed for the furtherance thereof. Any salarybenefitswhich may accrue to teachers as a result of the conduct of these activities is purely incidental thereto and in no way affects or negates the strictly educationalpurpose forwhich the corporationwas organized. You are, therefore,advised that under the submitted facts The ClassroomTeachers of Dallas is exempt from franchise taxes. SUMMARY ------- Under submitted facts,The Classroom Teachers of Dallas, a non-profit corporation organized for a strictly educationalpurpose and limitedby its charter to the advancement of public school education in Texas, is exempt frompayment of franchise taxes. Yours very truly, WAGGONER CARR Attorney General of Texas

MMcGP:sjl APPROVED: OPINION COMMITTEE W. V. Geppert, Chairman Gordon C. Cass Cecil C. Rotsch Arthur Sandlin W. 0. Shultz APPROVED FOR THEATTORNEY GENERAL BY: Stanton Stone

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