DAN MORALES 

ATTORNEY GENERA,. 

QBffice of the flttocnep 

.&ate of lltexae 

February 28, 1997 

&neral 

The Honorable Warren Chisum 

Chair, Environmental Committee 

Texas House of Representatives 

P.O. Box 2910 

Austin, Texas 78768-2910 

Dear Representative Chisum: 

Opinion No. DM-432 

Re: Whether Tax Code section 11.23(c), 

which provides a tax exemption for the 

tangible property of the Nature Conservancy 

of Texas, Inc., is constitutional (RQ-829) 

Tax Code section 11.23(c) provides a tax exemption for the Nature Conservancy 

of Texas, Inc. (the “‘Nature Conservancy”) in the following terms: “The Nature 

Conservancy of Texas, Incorporated, is entitled to an exemption from taxation of the 

tangible property it owns if the property is not held for gain, as long as the organization is 

a nonprofit corporation as defined by the Texas Non-Profit Corporation Act.” You ask 

whether there is any constitutional basis for this exemption and whether this exemption 

may be claimed or granted ifit has no constitutional basis. 

Au real and tangible personal property in Texas is taxable unless exempt by statute 

as required or permitted by the Texas Constitution. Tex. Const. art. VIII, 5 l(b); Tax 

Code $ 11.01. Article VIII, section 2(a) of the Texas Constitution provides that the 

legislature “may, by general laws, exempt from taxation [property owned by] . 

institutions of purely public charity.” A brief submitted on behalf of the Nature 

Conservancy contends that section 11.23(c) is authorized by article VIII, section 2(a). We 

do not reach the Nature Conservancy’s assertion that it qualifies as an institution of purely 

public charity and that its tax exemption is therefore authorized by article VIII, 2(a) 

because, for the reasons explained below, we believe that section 11.23(c) of the Tax 

Code is not a “general law” authorized by article VIII, section 2(a) and that the statute 

runs afoul of another constitutional provision - article III, section 56, which prohibits the 

legislature from enacting local or special laws. 

We believe a court would conclude that section 11.23(c) of the Tax Code is a 

“special law.” The definition of the term “special law” and the distinction between a 

“special law” and a “local law” are important to our analysis. The Texas Supreme Court 

recently defined these terms and explained the difference between them in a case involving 

a law applicable to a particular municipal utility diict: 

While the terms “local law” and “special law” have at times been 

used interchangeably, a local law is one limited to a specific 

geographic region of the State, while a special law is limited to a 
The Honorable Warren Cbisum - Page 2 (DM-432) 

particular class of persons by some characteristic other than geography. See 1 GEORGE D. BRADEN, ‘THE CONSTITUTION OF THE 

STATE OF TEXAS: AN ANNOTATED AND COMPARATIVE ANALYSIS 

273-277 (1977). 

MclpI Run at Austin Mm. Util. Dist. v. Monaghan, 93 1 S.W.2d 941, 945 (Tex. 1996) 

(Y4aple Run”); see also Clark v. Finley, 54 SW. 343, 345-46 (Tex. 1899) (local law is 

one the operation of which is con&d to tixed part of territory of state); Vincenr v. Srare 

ex rel. g@&rrzf, 235 S.W. 1084, 1086 (Tex. Comm’n App. 1921, judgm’t adopted) (“A 

local act is an act applicable only to a particular part of the legislative jurisdiction. A 

special or private act is a statute operating only on particular persons or private 

concerns.“). 

Section 11.23(c) provides a tax exemption for the tangible property of the Nature 

Conservancy alone; it does not describe a generic class that would include the property of 

the Nature Conservancy and any other organization like it. Section 11.23(c) is a special 

law in the classic, most obvious sense.t We are not aware of any case law suggesting that 

article VIII, section 2(a) (or any other constitutional provision) authorixes this tax 

exemption by special law. In sum, we believe it very likely that a court would conclude 

that because section 11.23(c) of the Tax Code names a specitic, private entity, the “Nature 

Consetvancy of Texas, Ineorporated,“s it is a special law and not a “general law” 

authorized by article VIII, section 2(a) of the Texas Constitution. 

Furthermore, we believe section 11.23(c) of the Tax Code runs afoul of article III, 

section 56 of the Texas Constitution, which spe&cally prohibits the legislature, “except 

as otherwise provided in this Constitution,” t?om enacting a local or special law 

authorizing the exemption of property from taxation. 

The purpose of Section 56 is to “prevent the granting of special 

privileges and to secure uniformity of law throughout the State as far 

as possible.” [Miller v. El Paso Cotmry, 150 S.W.2d 1000, 1001 

(Tex. 1941).] In particular, it prevents lawmakers from engaging in 

the “reprehensible” practice of trading votes for the advancement of 

personal rather than public interests. Id. 

‘As Braden states, “The term ‘special law’ should be. used only for a law that applies to a 

segment of the state--its people, its insthtions, its economy-in some sense other than geographical. An 

obvious example is a law granting John Doe a divorce. . . or a law granting a corporate charter to Tom, 

Dick, and Hany to operate an employment service.” 1 GEORGE D. BRALEN, THE Co NSlTNllON OF THE 

STATE OF TEXAS: AN ANNOTA~D m COMPARA~ ANALYSIS 277 (1977). 

zTax Code 5 11.23(c), 

p. 2410 
The Honorable Warren Chisum - Page 3 (DM-432) 

Mcqole Run, 931 S.W.2d at 945. We have been able to locate very few cases addressing 

statutes singling out a particular, named private person or entity for a special benefit or 

special treatment. The cases we have found, however, conclude that such statutes are 

unconstitutional. See, e.g., Sfate Highway Dep’f v. Go&am, 162 S.W.2d 934, 937 (Tex. 

1942) (holding that statute waiving immunity to suit to benefit particular, named individual 

violated equal protection guarantee, Tex. Const. art. I, 5 3, and was special law in 

violation of art. III, $56); City of &an Antonio v. YoungMen’s Chrisfim Ass’n, 285 S.W. 

844 (Tex. Civ. App.--San Antonio 1926, writ refd) (striking down special tax exemption 

for particular named groups on basis that exemption was not permitted by Tex. Const. art. 

VIII, $2, and that violated art. III, $56). Lie the statutory tax exemption for the Young 

Men’s Christian Association and the Young Women’s Christian Association3 that the 

court struck down in Young Men’s Christian Association, section 11.23(c) violates the 

prohibition in article III, section 56 because it “applies to an individual of a class and not 

to all of a class,” 285 S.W. at 846. For this reason, we believe it is quite likely that a 

court would conclude that section 11.23(c) is a special law in violation of article III, 

section 56. Cf: id. at 847.* 

The Nature Conservancy contends that section 11.23(c) of the Tax Code is not a 

local or special law because it has statewide effect relating to matters of general interest, 

relying upon Lower Colorado River Authority v. McGraw, 83 S.W.Zd 629 (Tex. 1935). 

In that case, the Texas Supreme Court concluded that a provision exempting bonds of the 

Lower Colorado River Authority (“LCRA”) from taxation was not a local or special law 

because although the legislation applied to a specific geographic area, the legislation 

operated upon a subject in which the state at large was interested. The Nature 

Conservancy also relies upon Stephensen v. Wood, 34 S.W.2d 246 (Tex. 1931), a case 

involving a challenge to fishing restrictions in certain coastal waters, for the proposition 

that natural resource preservation has statewide significance. 

In our opinion, Lower Colorado River Authority is inapposite because the court 

analyzed the tax exemption as a local rather than a special law: 

mt is settled that a statute is not local or special, within the meaning 

of this constitutional provision, even though its enforcement is 

confined to a restricted area, if persons or things throughout the state 

are at&ted thereby, or if it operates upon a subject that the people at 

large are interested in. [Stephensen v. Wbod, 34 S.W.2d 246 (Tex. 

1931).] An examination of this act convinces us that it operates 

upon a subject that the state at large is interested in. In tict, the 

3Hereinafter cokctively referred to as the “YMCA” 

*Becaose WC believe that Tax code section 11.23(c) violates article III, section 56, we do not 

consider whether it violates slate or federal constitution equal protection guarantees. 

p. 2411 
The Honorable Warren Chisum - Page 4 (DM-432) 

business and operation of this district is not restricted to a particular 

area. 

Lower Colorado River Auth., 83 S.W.2d at 636. J Furthermore, in Maple Run, 931 

S.W.2d 941, the supreme court cast doubt on the legal test employed in Lower Colorado 

River Auihori& Stephensen v. Wood and related local law cases: “[O]ur later cases have 

clarified that the ultimate question under Article III, Section 56 is whether there is a 

reasonable basis for the Legislature’s classification. . The significance of the subject 

matter and the number of persons aEected by the legislation are mere factors, albeit 

important ones, in determining reasonableness.” Id. at 947 (citations omitted). It may be 

the case that this reasonableness test is also the proper test for determining whether a 

statute describing a class according to non-geographic criteria is a special law in violation 

of article III, section 56. Here, where the legislature has named the Nature Conservancy 

specifically and has failed even to attempt to describe the Nature Conservancy as a 

member of a class, there is no classification to consider. Were a court to determine that it 

is appropriate to apply this reasonableness test to a class that by its terms is forever limited 

to one, however, we believe it would be compelled to conclude that it is unreasonable as a 

matter of law to accord a tax exemption to a specific, private entity by name and not to 

extend the tax exemption to other entities that share the same characteristics. 

The Nature Consetvancy contends that Young Men’s Christian Association is 

distinguishable because the YMCA (i) did not qualii for a tax exemption as a religious 

institution or public charity and (ii) did not conserve natural resources or perform a 

purpose of statewide significance, and (iii) because that case preceded the Texas Supreme 

Court’s decision in Lower Colorado River Aufhortty. The first argument suggests that a 

special-law tax exemption is permissible if the entity at issue otherwise qualiies for a tax 

exemption under article VIII, section 2(a). In fact, that is the premise of the Nature 

Conservancy’s initial “public charity” argument. This is a novel proposition, and one for 

which the Nature Conservancy provides no authority. Article VIII, section 2(a) is not 

self-executing. Furthermore, it provides for the enactment of general-law tax exemptions, 

not tax exemptions naming specific entities. 

The assertion that the Nature Conservancy, unlike the YMCA, performs a purpose 

of statewide significance, natural resources conservation, is an argument one would make 

sInterestingly, after addreskg article III, section 56, the court goes on to suggesthat even if the 

tax exemption were a special law under article III, section 56, the legislature would still be authorized to 

provide such an exemption for bonds of a state agency or political subdivision, implying that article III, 

section 56 was ultimately irrelevaato the tax exemption at issue: ‘[Nlohvitlstanding a amtihltional 

prohibition against exempting all property horn taxation, except such as is named in the Constitution. still 

the LegisIatum can exempt from taxation atate bonds and bonds of state agencies issued in their 

govemmentaI capacities, because such bonds are instrumentalities of government, and not property within 

the meaning of the above-mentioned wa&ntioasI prehibition.” Lower Colorado River Aufh., 83 S.W.2ti 

at 636. 

p. 2412 
The Honorable Warren Chisum - Page 5 (DM-432) 

to defend a local law. Again section 11.23(c) of the Tax Code is a special law and, 

furthermore, the approach taken in Lower Colorado River Authority, Stephensen v. Wood 

and other older local law cases has been called into question by Muple Run. Moreover, 

this argument fails to address the primary defect of section 11.23(c) of the Tax Code -- the 

fact that it singles out a private entity by name for special treatment. Finally, we disagree 

that Lower Colorado River Authority overrules or undermines Young Men’s Christian 

Association. It certainly does not do so expressly, nor, in our view, does it do so 

implicitly. The cases address different issues; the former case analyzes the LCRA tax 

exemption as a local law, whereas the latter case analyzes the YMCA tax exemption, 

which singled out two specific, private entities by name for special treatment, as a special 

law. 

In addition to prohibiting local or special laws exempting property t?om taxation, 

article III, section 56 also provides that “nothing herein contained shall be construed to 

prohibit the Legislature from passing special laws for the preservation of the game and fish 

of this State in certain localities.” The Nature Conservancy suggests that section 11.23(c) 

is a permissible local or special law because it supports the preservation of game and fish. 

The game and fish language in article III, section 56 appears to contemplate game and fish 

laws geared to a specific geographic area. See, e.g., Stephensen v. Wd, 34 S.W. 246. 

Section 11.23(c) of the Tax Code is a tax exemption, not a game and fish law, and is not 

limited to a certain geographic area.6 The Nature Consorvan cy has not provided any 

authority to support the contention that the game and fish language in article III, section 

56 authorizes legislation granting a private conservation entity a property tax exemption 

on a statewide basis. 

In sum, we conclude that section 11.23(c) of the Tax Code is not authorized by 

article VIII, section 2, or any other constitutional provision,’ and that it runs afoul of 

6Again, Tax Code, section 11.23(c) provides as follows: “The Natnre Co nservaney of Texas, 

Jncorporated, is entitled to an exemption from taxation of the tangible property it owns if the propetly is 

not held for gain, as long as the organization isa nonprofit corporation as deftted by the Texas Non-Profit 

Corporation Act.” Althongh the activities of the Nature Conservancy may preserve gamesndfkhsndit 

may hold the exempt property for this potpose, the tax exemption itself does not reqtdre that the exempt 

property he nsed to preserve game and fish. 

‘The Nature Conservancy does not argue that Tax Code, suction 11.23(c) is authorized hy article 

VlIl, section l-f of the Texas Constitntion. Became this provision does not anthorize across-the-board tax 

exemptions and, mormvor, does not appear to anthotize the legislatme to grant tax exemptions by special 

law, we do not consider it. See Tex. Const. art. WI, p l-f C[t]he 1egisJatnre may by law provide for the 

presetvation of cnhmal, historical, or natmal history resonrcos by . granting exemptions or other relief 

from state ad valorem taxes on approptiate property”; authorizing political snhdivision5 to grant 

exemptions or other relief on appropriate property). We also note that Tax Code, section 11.23(c) wss 

aacted in 1%9, see Act of May 29, 1%9,61st Leg., ch. 652, 5 1, 1%9 Tex. Gen. Laws 1950, 1950, 

whereas article VlfJ, section l-f was proposed and adopted in 1977, see S.J.R. 5, Act of May 20, 1977, 

65th Leg., 1977 Tex. Gen. Laws 3354.3354. 

p. 2413 
The Honorable Warren Chisum - Page 6 (DM-432) 

article III, section 56. Given this answer we turn to your final question: “If the chief 

appraiser who had been granting the exemption determined there was no constitutional 

basis for the same, would he have grounds to cancel the exemption and request payment 

of all back taxes?” We decline to address this question for two reasons. First, tax 

exemptions are granted on an appraisal district to appraisal district basis, and the facts of 

the tax status of the Nature Conservancy’s property may vary from district to district.* 

Furthermore, even if the facts in each appraisal district were uniform and undisputed, we 

doubt the utility of this office addressing this question because it appears to raise 

complicated legal issues of first impression that can only be definitively resolved by the 

judiciary. 

8We note, for example, that se&on 11.18 of the Tax Code provides for a tax exemption for “the 

buildings and tangible personal property” owned by a charitable organization. Tax Code $11.18(a). To 

be eligiile for the exemption, the entity must be organized exclusively to perform religious, charitable, 

scientific, literary, or educational purposes and must engage exclusively in performing one or more of 

certain sptdicd functions, which include “presetig or conserving wildlife.” Id. 8 11.18(d)(10). 

Subsection (j) of section 11.18 provides as follows: “exemption of an orgrmization preserving or 

consming wildliie is limited to land and improvements and may not exceed 1,000 acres in any one 

county.” Suh8ection (i) appear8 to provide that organizations preserving or coaserving wildlife, unliie 

other charitable organizations listed in section 11.18, are eligible for tax exemptions for land. It may be 

the case. that the Nature Conservancy qualifies as a charitable organization under &on 11.18 and has 

applied for and received tax exemptions on this basis. 

p. 2414 
The Honorable Warren Chisum - Page 7 (DM-432) 

SUMMARY 

Section 11.23(c) of the Tax Code, which provides for a tax 

exemption for the tangible property of a specific, private entity by 

name, is not a general law authorized by article VIII, section 2 of the 

Texas Constitution and is a special law in violation of article III, 

section 56. 

DAN MORALES 

Attorney General of Texas 

JORGE VEGA 

First Assistant Attorney General 

SARAH J. SHIRLEY 

Chair, Opinion Committee 

Prepared by Mary R. Grouter 

Assistant Attorney General 

p. 2415