June 4, 1968

The Honorable Joe Resweber OpinionNo. M-240 County Attorney Harris County Houston, Texas Re: Constitutionalityof Senate Bill 105, 60th '.,',: Legislature, 1967, cod%- Pied as Section,

22 of Article 7150. Vernon's Dear Mr. Reswebers Civil Statutes.

Your request for an opinion reads, in part, follows; as

"Carl Smith, Tax Assessor-Collector of Harris County has recently requested this 'officeto obtain an Attorney Ckneral's Opinion as to whether or not S.B. 105, 60th Legislature, 1967, which is codified as Section 22 of Article 7150,V.T.C.S., is constitutional."
You also expressed the opfnlon that said Section 22 is unconstitutional,but you have not presented us wtth any factual situatfon for application of‘the statute,

Thfs opinionwill deal only with said Senate Bill 105 (60thLegfslature,p0 319, Che 1>2), and it does not relate, to House Bill N0. 2, both Legislature.p* 623, Ch 3b3 1 which3fnvolvesnon-profft corporatfons (asdeffned In thi Texas Non-Profit CorporationAct), and which is also codfmed as Sectfon 22 of Vernon's Civil Statutes.

Senate Bill 105, 60th Legislature, 1967, codffiedas Section 22 of Artfcle 7150,~ Vernon,Js

Civil Statutes, provides fn parts "22. The property of all fraternal

organizationi shallbe exempt from taxation so long as the property is owned and used for charitable,benevolent, re3fgIous,,aPld educationalpurposesp and is not fn whole

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or in part leased out to others, or otherwiseused with a view to profit.
"The term 'FraternalOrganization' as used in thisAct shallmean, 'A lodger or lodges, engaged in charitable,benevolent, religious,and educationalwork.' "However,this Act shall not apply to any fraternal organization or lodge which pays to its members, either directly or indirectly,any type of insurancebenefit, be It life, health, accident or death benefit,, or any other type of insurance;neither shall any organizationwhich shall directly or indirectlyparticipate or engage in any political activity, either in support of or in opposition to any candidate seeking anyQub1j.coffice,have or be entitl$d to benefits as provided under thisAct. c The constitutionalityof the statute In exempting property from ad valorem taxation Is controlledby Article VIII, Section 2 of the Texas Constitution,reading as follows:

“Set, 2. All occupation taxes shall b+ equal and uniform upon the same class, of subjects within the limits of the authority levying the tax; but the legislaturemay, by general laws, exempt from taxationpublic property tisedfor public purposes; actual places or [of] religious worship, also any property armedby a church or by 'astrictly religious society for the exclusive uae.as a dwellingplace for the ministry of sticlf church or religious. society, and which.yleldsno revenue whatever to such ' church or religious society;provided that such exemption shallnot extend to more property than is reasonablynecessary for a dwelling place, and in no event more than one acre of land; places of burial not held for private or corporateprofit; all buildings,used - exclusively and owned by persons or associations of persons for schoolpurposes and the necessary furniture of all schools and property used exclusivelyand reasonablynecessary

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The Hon. Joe Resweber, Page 3 ‘(M-240)

fn conductingany association. engaged In pro- " :' motfng the religious, educationaland physical development of boys, girls, young men or young women operatingunder a State or National - organization of like character; also the endawment funds of such institutionsof learning and religionnot used with a view to profit; and when the same are invested in bonds or mortgages, or in land or otherproperty which has been and shall hereafterbe bought in by such institutionsunder foreclosure sales made to satisfy or protect such,bonds ormortgages, that such exemption of such land and property shall continue only for two years after the purchase of the same at such sale by such institutionsand no longer, and institutions - of purely public charity;and all laws exempting property from taxation other than the propertyabove mentioned shall be null and void."
The controlling question is whether' the exempt pnrposes set forth in Section 22 of Article 7150 are broader than the exempt purposes provided by the~Constitution. If the statute is subject to a broader construction than Section 2 of Article, VIII of the Constitution of Texas, that constructionmust be rejected as an unconstitutionalconstruction. Dicklson, v* Woodmen of the World Insurance Society 280 S.W.2d 315 (Tex. i71 A l$T::: 1932, error ref.), I

156, 155:

S,W.2d 631, Clt 0: Waco v* Landingham,

6"33f3[941) th Supreme Court,. recog ized that 0 a o lu it is a’settled~rkleEf statutory const ctfon that where the language of a,statute is broad enough to cover matters without, as well as within, t.he power of the.

Legislature to enact, courts should construe the statute’ in a restrictedmanner, as aptlying only to the’:matte3+ lying within the legislativepower.

Statutes wfll be presumed to be constitutfonal,and if theymay be upheld by a construction in harmony with the Constitution it is the duty of the courts to do so, 54 Tex, Jur.2d 140-142, Sec. 23, Taxation.

The exempt purposes In the statute are defined by the :. y,,.;, ., ;.~,y ,~~. ~'.?. .' words :;.~:.-< ,,,!. "ct+arftable, benevo,lent,

religious and educational." z;, :&g; 'i.~ ,, We will compare each~.ofsuch words separatelywith the language y$$:':':

,,: of Section 22 of Article VIII of the Constitution.

._ ..&;$ ;"'.,:L .:: ,: $.T~ 2.:

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Charitable. In construing the word charitable in, the statute, it will be construed to mean "purelypublic charity" for ad valorem tax purposes. See City of Houston v. Scottish Rite BenevolentAss'n., 111 Tex. 1 1 2 0 S W m (1921) River Oaks Garden Club v. City of ~o&st~n~,~O S,W.2d 85l’(lgb3) Th f th d "charitable" be limited tomean "pu~~*'pr~~lIcecr$O~ity."

Benevolent. The word benevolent Is generallyheld to mean "charitable." Black's Law Dictionary, 4th Rd., Q. 201. "Purelypublic charity" is the onlyphrase in Section 2 of Article VIII of the Constitution thatmight be considered as synonymouswith "benevolent." However, the Supreme Court of Texas In the River Oaks Garden Club case, supra, held that the accomplishmentof "endswholly benevolent" was only one-thirdpart of the definition of an "institutionof purely public charity." Therefore, the word ".benevolent" will be construedand limited tomean the same as "purelypublic charity." the:flrstportion of ArticleVIII Section%%%*co%%red reads: "actualplaces OP reliilous worship, also any property ownedby a church or by a strictly religious society for the exclusive use as a dwellingplace for the ministry of such church or religious society,and which yields no revenue whatever to such church'orreligious society; provided that .suchexemption shallnot extend to~' more property than is reasonablynecessary for a dwellil;tg place and in no event more than one acre of land,

. e D

In construing this exemption, it has many times been held that the exemption goes only to the explicitproperty defined In the Constitution. City of San Antonio v. Young

The secondpart of Article VIII; Section 2 to be .- examined fn regard to "religion"is as follows: "andQroperty used exclusively and reasonablynecessary In conducting any association engaged in promoting the religious, educational and physical development of boys, girls, young men or young,women operating under a State or National organization of like character."

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Thus* 7150 wfll be Constitution then"religiouspurpose" of Section 22 ofArticle

limited wfth respect to this clause of the to those fraternal organizationswhich are of ^_^

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the cnaracter speclrled In such Clause. -8 conclusion 1s also applicable to the only other constitutionalexemption relating to "religious,"f,e., "also the endowment funds of such fnstftutfons of learning and religionnot used with a view to profit," This provision relates to endowment funds and not to property generally, Harris v. City of Ft. Worth, 142 Tex. 600, 180 S,W.2d 131 (192F4).

We thus conclude that the phrase "religiouspurpose" wfll be construed to encompass only the religious activities which are within the confines of the last three quotedportions of the Constitution.

: Educational. With respect to "educational,"the only

applicable clauses"ofSection 2 ofArticle VIII are those dealing wfth buildings and furniture of institutionswhich are used exclusively for schoolpurposes, and endowment funds of such fnstftutions.

In order to fit th#se"'educational"exemptions, the ~- property must be of the exact nature described in the Constl- .' tutlon, and no statutewill be construed so as to afford a broader exemption. 17 S.W, 512 Bn891); 82 Tex. 1, ~ o-871~(193g).
WRfle the statute in questiondoes not specifically require that the property be owned and used exclusively for the named purposes, we are required to construe the statute to have been passed with a constitutional intent and thus such property must be owned and used wholly and completelyfor one or more of the constitutionallyexempt v, Feather, 149 Tex. 402, 234 S,W.2d 411urposes. See Smith (1950);Morris v~. Lone Star ChapterNo. 6, 68 Tex. 698, 5 S.W, 519 flBgl)* David Graham Hall Foundation v. Highland Park Independ& e e s 02 0 0 762 I-X.Cl v.App. 19b3, writ yef., n.r.C.).
It is our opinfon thatArticle 7150, Section 22,.is valid, as constftutfonallylimited as herein construed, .ln '- conferringan ad valoremproperty tax exemption on that QI'CPerty of those fraternal organizationswhich is wholly, cozy', pletely and exclusively owned and used by them for,purely public charitable, religious and educationalpurposes. Therefore, the applfcation of the statute to the particular facts presented will determine in caeh case whether the property Is exempt, Insofar as this statute is subject to a broader

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construction, such wouldbe ,.I.: < that constructionwill not be adopted because unconstitutional.

SUMMARY
Senate BSll 105, Acts 60th Legislature, 1967, codified as Section 22 of Article 7150, Vernon's Civil Statutes, is constitutional; however, Its effect is limitedby the restrlctlveprovisions of ArticleVIII, Section 2 of the Constitution of Texas. (Thisopinion does ,_ not deal with House Bill No. 372, Acts 60th Legislature,p. 855, Ch. 363, which was also codified as Section 22 of Article 7150, Vernon's Civil Statutes:)

Preparedby Alfred Walker Assistant Attorney General
APPROVED: s very truly,

Tzm= C. MARTIN General of Texas

OPINION COMMITTEEi Hawthorne Phillips, Chairman Kerns ,Taylor,Co-chairman Jack Goodman Bill C aig Ralph+iash Mariettia

McGregor Payne
A. J. CARUBBI, Jr. ExecutiveAsslstant "

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