0 GENERAL OF EXAS 

## AUSTIN

11. TEXAS
August 24, 1962
Honorable Burney Walker Criminal District Attorney

. Waco, Texas

Dear Mr. Walker: Oplnlbn No. WW-1424 Re: Whether the Stllwell Memorial Residence 1s exempt from ad valorem taxes under the stated facts Youhave requested an opinion from this office as to whether or not Stllwell Memorial Residence, which Is to be operated by the Texas Retired Teachers Residence Corporation, Is exempt from ad valorem taxes.

In connection with,your letter you have attached Exhibit A, which 1s copied as follows:

“STATEMENTOFPOLICIESFORSTILWELL MEMORIAL

RESIDENC,E OFLAKE

AIR CENTER,

WACO,TEXAS

“Stllwell Memorial Is a residence designed Tor retirement living andproviding sheltered care for retrred member8of the teaching profession of the State of Texas. It 1s lncorporated under the Non-profit Corporation Act of the State of Texas for charitable and educational purposes.

“The Stllwell Memoilal Resldenoe for retired teachers, hereinafter referred to as the Realdenoe, is aproject of the Texas Retired Teachers Association whoformed aResidence Corporatlon for the purpose of creating this Residence for the sheltered care of Its senior citizens. The Corporation Is entitled the Texas Retired Teachers Residence Corporation, the President of which is HenryL. Poster, Sr., Box 767, Longview, Texas. "The very foundation of the Residence has been based upon oonizlbutlons from teachers andothers throughbut the State of 'Pexas.Honorable Burney Walker, Page 2 ...‘ Opinion No. Ww-1424

Moreover, the site 1s being donated for the Residence through the Chamberof Commerceof the City of Waco. TheFederal Housing Administration has given an Indication that they will approve a 100 $er cent loan In the amountof approximately 914,000.00 under Section 231 of the Federal Housing Act which provides for housing for the elderly on a nonprofit basis. The 144,640square feet of land has been valued at $72,300.00 which is a contribution.

“Various types of accomodatlons are provided In an effort to meet the retirement needs of a cross-section of our senior teachers.

“The Bylaws provide for an admlsslon.Sce of $250.oo
. However, the Bylaws also provide that the Trustees shall~ admit eligible appllcahts to the Residence on such terms as the circumstances of anyparticular applicant mayin their judgment warrant. Each case Is handled on-an individual basis and charity cases will be accepted. Noone wlll be denied admlsslon because OSfinancial inability to pay the cost.

“The Bylaws provide for a deposit of $250.00 to be held In a separate account for health purposes for the lndlv1dual with the residue to apply on the funeral expenses of said resident. Thebalance 

## 18the property of the estate of the reeident.

“Last illnesses and death8 OSthe members will be paid for by the Residence. Should the lnltl6il $250.00 health deposit be available, this will be applied. However, from a practical standpoint, the Residence will have to absorb muchof this expense. This Js particularly true of those residents whohave minimumor no lncomes andthe charitable cases where the 4250.00 deposit waswaived.

“Those whoare financially able to pay all,thelr cost are expected to do so on 

### a basis to be determined by the type of. .

Honorable Burney Walker, Page 3 Opinion No. W-1424

accomodatlons they desire and the Admissions Committee of the Board of Directors. Bach case will be a matter of lndlvldual~evaluatlon, negotiation, andmutual agreement*and will be considered.on the basis of Its own merit. "The Dlrector&%ave proJected a budget which establlshe~ rates for aminimumof $140.00 for slngllFg to a few select accomodations for doubti! at $260.00amonth. "Provision8 will be madefor those teachers whohave the minimumretirement Income of $100.00 amonthof which there are a substantial number in the upper age brackets where the need Is the greatest. These flgurea Include mea&s, administrative staff, medical and interim nursing care as lndlcated, and a rout&e sustaining health service. Asmall Infirmary area is provided for those whowill require interim bed caree Whlle~thls type of community living for senior citizens Is not appropriate for every individual, there are large numbers of teachers who, because of low salary payments and Inadequate retirement programs of the past, desperately need this type of environment. It wi.$l provide friends, companionship, and sheltered care for many.)df those whohave lived alone all their adult lives. "The Incomes of thls.'group are such that in a non-proflt situation a numbercan afford to pay &i! all their care. Ofpartlcular importance to th&sproject are those whocannot afford;,to pay. Because of the mlnlmumsfor teadkier retirement or old age assistance, ~'ltIs not anticipated that there will be any requlrements:Lfor full charity; I.e.,, 100per cent. However, substantial dlffCnnces will have to be made up from the other residents, from the aubsldy of the Home,andfrom continuing campaigns amongteachers for supplementation of the Residence -:'not an individual. "Thetieachers+f the State of Texas have madecontrlbutibha to help underMete the. ,

Honorable Burney Walker, Page 4 Opinion No. WW-1424

cost of thle facility andwill continue to contribute to Its support.. Without this lnltlal subsidy and continuing assistance, the Residence cannot afford to operate as a numberwill be unable to pay the full cost for their care.

“The entire three acres will be devoted to this cause of retirement living at a minimumof cost. ” Youhave given us further Information that the WacoChamber of Commercedonated @pproxlmately three acres of land to this corporation onwhich abuilding, or buildings, will be constructed for the operation of this ,corporatlon. Thetract of land atthls time Is vacant property. Thedeed was signed and delivered by the Chamberof Commerceto the Texas Retired Teachers Residence Corporation onMay3, 1962.

Weare In agreement with your conclusions as set forth In your letter that Stllwell, according to Exhibit A, Is to be operated In muchthe samemanneras Morningside Manor, Inc. of San Antonio, which was the subject matter of Opinion No. WW-1277 heretofore rendered by this department. Youare advised that In compliance with Opinion No. WW-1277,this corporation, whenIt becomes operative, will meet the requirements of apurely public charity, andwill be exempt from ad valorem taxes. As atated by you, the only question remaining is whether or not Stllwell Is, at this Instant, exempt from ad valorem taxAt the present time this property Is not being used as a iklc charity or for charitable purposes and Is subject to ad valorem taxes, so long a8 It Is just a vacant piece of land not being put to anyuse.

In compliance with the rule laid downIn Hedgecroft v. City of Houstbn, 150Tex. 654, 244 S.W.2d 632, this property would become exempt for taxes as of January lot next after it Is put to use by the Texas Retired Teachers Residence Corporation. It Isour opinion that the property Is taxable as of January 1st. of each year, and since It wasnot ownedbythe corporation on January 1, 1962, then It Is subject to taxes for this year. If It Is still a vacant piece of property on January 1, 1963 andnot being used, then It will be taxable for the year 1963, andso long thereafter, as It Is not ptit to a beneficial use. Aesoon as the exempt corporation start8 construction on the land, then It will become exempt from taxes beginning on the following January 1st.

Quoting from the opinion of the Heduecroft case, supra, at page 636, the court had the following to say:I’ s

Honorable Burney Walker, Page 

### 5 Opininn No. 

### VW-1424

“Petitloner~s acts on andbefore January 1, 1949, analleged in the petition, the substance of which has been set out at the beginning of this opinion, were part of the necessary preparation andremodeling of the building for operation a8a hospital and clinic. Thework proceeded until it was completed onMay

### 13, 1949, and since that time the hospital and cllnEc have been oper%.. ated as apublic charity. Thefacts alleged show, In our opinion, an actual and direct use of the property on andprior to January 1, 1949, for the charitable puppose.”

SUMMARY Under the stated facts, Stllwell Memorial Resldence, to be operated by Texas Retired Teachers Resldence‘Corporation, will qualify as a purely public charity, and the property In question will be exempt from advalorem taxes beginning on the January 1st after construction Is started, andthe property la being used by the.corparatlon. Youra very t&y, WILLWILSON

Assistant 

### J=/@ APPROVED

: OPINIONCOMMITTEE: MorganNesbltt, Chairman L. P. Lollar Fred D. Ward Robert Rowland RNVIEWFD

FORTHEATTORNEY

OENh’RAL By: Leonard Pasamore