April 15, 1971 Honorable Jules Damiani, Jr. Criminal District Attorney 405 County Courthouse Galveston, Texas 77550
Dear Mr. Damiani: Opinion No. M-837 Re: Liability ofmedical fraternities at University of Texas Medical School at Galveston for ” advalorem taxes. You reqiie,st,odr ol&iion a6 lo

‘1. . . ðer the msdical fraternities at the University of Texas Medical ‘sirhbol at Galveston

. . iI,

are exempt i&m ‘ad‘valorkm taxes by reason of‘either or both ofthe following grounds authoiited inArticie VIII, Section i ofthe Texas Con-

. etltutioti.

(1) ‘1. . . buiidings used exclusively and owned

by persons or associations of $ersons for school puipoees . : .;I’ (2);. ,ya.,:,. .;, .~

institutions ,ofpurely ,public charity; .:. **, School bu’ildings,‘art exe&i@ by Sectibn 1of Article ‘7150, 

### veernon’s Civil Statutes*, which in its reietiant p6rtiob reads: “The foIloWing property &I\ be exempt from taxation, to-wit:

‘* All references to ‘statutes 

### are toVernon’b Civil Statutes unless

otherwise stated. -4049 -Honorable Jules Damiani, Jr., Page 2 (M-837)

“1. Schools and Churches - Public school houses.
. . All public colleges, public academies,
. . . and all such buildings used exclusively and owned by persons or associations of persons for school ~purposes; . . .‘I Also, you cite Section 22 of Article 7150 (Acts 1967, 60th Leg., R.S., p.. 319, ch. 152) which exempts the property of all fraternal organizations, as therein described, when used for certain purposes; this Section 22 reads as follows: “The property of all fraternal organizations shall be exempt from taxation for so long as the property is owned and used for charitable, benevolent, 

### re'- ligious, and educational purposes, and is not inwhole or inpart leased out to others,’ or otherwise used with aview to profit.

“The term ‘Fraternal Organization’ as used in this’Act shall mean, ‘A lodge, or lodges, engaged in charitable,’ benevolent, religious, and educational work, ’

-~However; thie Act -shall noteapply to any frs - ternal organization or lodge which pays to its members, either directly or indirectly, any type of insurance benefit, be itlife, health, accident or death benefit, or any 

### other type of insurance; neither shall any organization which shall dir~ectly or indiredtly participate or engage in any political activity, either in support of or in opposition to any c,andidate seeking any public office, have or be entitled to benefits as provided under this Act. ” Our opinion is that the evidence submitted by you is not sufficient to exempt the properties ofthese medical fraternities under any ofthe foregoing constitutional or statutory grounds. 1. We first consider whether these properties are exempt as school buildings under either ofthe above quoted provisions ofthe Constitution and ofArticle 7150, Section 1. -4050-Honorable Jules Damiani, Jr., Page 3 (M-837)

Inthis connection you request that we reconsider our former Attorney General’s Opinion No. M-12 (1967). inview ofthe holding of our Texas Supreme Court inthe case of San Antonio Conservation Society, Inc. v. City of San Antonio, 455 S.W. 2d 743 (Tex. Sup. 1970) and the case of City ofMemphis v. Alpha Beta Welfare Ass’n., 126 S.W. 2d 323 (Term. Sup. 1939. ) The San Antonio case was decided subsequently to our Opinion M-12, and the City of Memphis case was decided prior to our Opinion and was not cited nor referred to in our Opinion.

We quote the entire statement of facts which you submit in support ofyour claims for exemption:

“It should be noted from the outset that there is not sufficient dormitory space for male medical students attending the University of Texas Medical Branch. While some students live inprivate residences, the great majority of single male students live at fraternity houses which are normally operated as non-profit corporations and charitable associations adjacent to the campus. The fraternity programs are integrated with the University ofTexas Medical Branch and each fraternity maintains a supervised study program and amedical library for students. Such an arrangement gives each medical fraternity access to medical journals, textbooks, and specimens. In addition, each ofthe fraternities furnish the following educational benefits to the medical students as an assist to the Medical Branch:

“1. Maintenance of alibrary in each fraternity with access to medical journals, textbooks, and specimens (osteological, CNS, Histological, etc. )

“2. Provisions oftextbooks and study aids to most ofthe members offraternities in Years Iand II. These aids frequently include microscopes.

“3. Lecture sessions with faculty and private physicians in the fraternities. These occur at the rate of about one/month. Not only do

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.individual fraternities sponsor those sessions, but the Inter-fraternity Council and the Sophomore Class have had regular ‘Fireside Chats’ inthe fraternities featuring visiting dignitaries, faculty and administration.

“4. Tutorial sessions are frequently held in the fraternities by course instructors at student’s request. Attempts to review, clarify and emphasize material are made during these sessions.

“5. Orientation of new students to medical school and of each class to its’ ensuing years and to new assignments is a constant, ongoing procedure.

“6. Study sessions and review sessions of students and upperclassmen.

“7. ‘Mormal gatherings of students discussing clinical cases, management, and philosophy ‘and ethics ofmedicine occur continuously.

“8. Provide professional contacts and guidance inthe evolving professional behavior. Social functions form a small part of medical fraternities activity.

“9. These are not ‘typical Greek Letter fraternities’ but unique both as fraternities and as medical fraternities. They play alarge part inthe culture, heritage and attractiveness of UTMB.

“10. Provision of housing and preparation of meals for single students near the campus is of estimable value.

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“11. Hospital cafeteria and surrounding facilities could not support the number of people who would depend onthem if not for fraternities. !‘12. Availability of fraternities to hospital is of great importance when students are on call and must **come** to the hospital to give medications, evaluate patients, work up new patients or’go to surgery.

“13. There is no ‘school’ organized recreational/ social program. All activities stem from organization by the individual fraternities and the Inter-fraternity Council.

“14. ‘Patients being cared for by students are state patienta. ‘, Without the student’% help ~andavailab ility inmany areas, more administrative and nursing personnel would be required.
i:

..,~ “15. Fraternities have no reason for existences

except to **serve** the University and its student body. The Univereity,depends upon the fraternities to provide essential services ” ,andto nurture the professional growth of .medical students.

.“16. .;Services provided by the fraternities cost ~theUniversity nothing. ‘In-their absence, considerable expenee might have to be incurred to provide these benefits. ” :Our careful comparison of these facts with those set forth inour prior Opinion M-12 shows no new facts that would warrant holding the properties in question to be exempt. We consider the present facts to be only repetitive ofthose considered inOpinion M-12, without adding any new reason for holding the properties inquestion to be exempt. We refrain from considering here **again** all the reasoning and authorities presented inour former Opinion,
i4053-Honorable Jules Damiani, Jr., Page 6 (M-837)

but rather we refer to,it as the basis both infact and inthe legal authorities there cited for our holding inthis present opinion. See also Attorney General’s Opinion No. M-778 (1971. )

Inthe City of Memphis case, supra, the court construed a

### Constitutional exemption of property ‘I. . . held and used for purposes . . . educational
. . .’‘IThe Texas Constitutional provision exempts property used for “school purposes” and also ,institutions of “purely public charity
.” These provisions are different inwording and cannot be construed tobe the same in all situations. The rule was well stated inthe case of Little Theater of Dallas v. City of Dallas, 124 S.W. 2d 863 (Tex. Civ. App. 1939, nowrit):

~“Appellant cites a number of decisions from the

courts of other states, tending to show that
. . . debating clubs,
. . professor’s houses, dormitories and music associations were exempt from taxation, but these decisions were based upon and controlled by constitutional and statutory provisions ,peculiar to the respective states, hence are not controlling as authorities~here. I’ We note that in the City of Memphis case the only issue presented was whether the,real, estate of a general welfare corpo.ration was used by it exclusively;for 1’educational purposes, ” a constitutional and statutory ground fortax exemption. The Court noted: “The specific purpose for which Alpha Beta Welfare Association was created, as stated in its charter, is the ‘promoting and providing for medical and scientific education-of young men, and for the purpose of,owning property, both real and personal,. to be used exclusively infurthering the aforesaid purposes; . . .’

“The only witnesses who testified on the trial ofthe.case were three physicians introduced by the Association. Thus the facts ofthe case are not in controversy. ” 

### (126 S.W. 2d 324. ) In its concluding paragraph, theCourt concluded that under the great weight of authority tax exemptions have not been granted to college Greek letter


### -4054-Honorable Jules Damiani, Jr. , Page 7 (M-837)
fraternities, except under express statutory authority, and further said:

“In our opinion no blanket .rule can be laid down and made applicable to all fraternities. Whether or not the property of afraternity is exempt from taxation is dependent, as in all other cases, onthe use made ofthe property. Each case must be determined on its own facts
. . .I’ (126,s. W. 2d 326. ) We are inagreement with this reasoning; however, aside from the distinguishing legal and factual. aspects noted above from the factual situation presented, the holding was made inthe City of Memphis case only after trial and upon undisputed andnon-controversial.testimony. Likewise, in the San Antonio Conservation Society.case, supra, the trial court, upon stipulations ofthe parties and anon-controversial fact situation, had held, and the Supreme Court affirmed, that the Conservation Society had assumed, to amaterial extent, that which otherwise might become the obligation or duty ofthe-community or state,, the statutory and constitutional test for tax exemption. The’Court said: “The City concedes that the whole public receives the benefits of the Navarro House. ” (455 S.W. 2d 746.), ,’ Under the facts presented, no city, county or state taxing authorities have stipulated or conceded anything. We are presented only with .apartial statement ofmiscellaneous facts concerning educational benefits to the medical students who were fortunate ,enough tobe accepted into the fraternity houses. Thenamount of-charity dispensed, the confinement to public charitable purposes of-the-fraternityand.its perpetual dedicatioxiof the property to,public charity inthe charter, the conditions of admission or rejection to,all on a ;non-discriminatory.public charitable basis,. are all additional matters which must be considered not shown here. Inthis connection, the general evidentiary and legal guidelines have been noted inAttorney General Opinion No. C-697 (1966) and inHilltop Village, Incs v. Kerrville Independent School Dist. , 426 S.W. 2d943 (Tex. Sup. 1968). to which you are referred. Inview thereof, we are unable to say as amatter of law that the fraternities are entitled to ad valorem tax exemption. We do not say, however, that in a specific case such afraternity is precluded from the legal possibility of showing its property is owned andused~for school purposes or as an institution of purely public charity.

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Honorable Jules Damiani, Jr. , Page 8 

### (M-837)

We now consider whether the properties of the fraternities may be comprehended within Article 7150, Section 22 (Acts 1967, 60th Leg., R.S., p. 319, ch. 152) which exempts from taxation property of

‘I. . . all fraternal organizations . . . for so long as the property is owned and used for charitable, benevolent, religious, and educational purposes, and is not inwhole or inpart leased out to others, or otherwise used with aview to profit. ” (Emphasis added. ) The Legislature therein defined the term “Fraternal Organization” to mean, “A lodge, or lodges, engaged in charitable, benevolent, religious, and educational work. ” Assuming without deciding, that the above statute contemplates the exemption ofthe property of medical fraternities, nevertheless that statute, to be constitutional and inharmony with Section 2, Article VIII ofthe Constitution of Texas, must be construed to provide an exemption for such property only ifowned and primarily used as an “actual place of religious worship, ” or “for school purposes, ” or as “institutions of purely public charity. ” Unless the medical fraternities can bring themselves clearly within one ofthose enumerated exceptions, they are not exempt. The Legislature is powerless to grant an exemption that does not meet this constitutional concept and test. The City ofWaco v. Texas Retired Teacher Residence Corporation, NO. B-2179. Feb. 17. 1971. Tex. Sun. Ct
.:Attornev General Oninion Nos. M-778

_ (1971) and 

### M-517 (1969), and authorities therein cited; City ofSan Antonio v. Young Men’s Christian Association, 285 S.W. 844 (Tex. Civ. App. 1926, error ref. ) Thus, inthe case of fraternal associations granted such atax exemption by a general statute,, ithas been held that such a statute was violative of the implied limitations of a constitutional provision authorieing the Legislature to exempt property used exclusively for charitable purposes. Supreme Lodge, M.A.F.O. V. Board of Review, 223 Ill. 54, 79 NE 23, (Ill.Sup., 1906.)

Inthe above case, the Supreme Court of Illinois pertinently observed:

‘1. . .Obviously, then, ifthe fraternal beneficiary societies which are relieved from taxation by the statute under consideration do not fall within one of the classes whose property the Constitution provides


### -4056-. .

Honorable Jules Damiani, Jr., Page 9 (M-837)

may be exempted from taxation by general law, any act ofthe Legislature purporting to exempt their property from taxation is unconstitutional. The Legislature has no power to exempt from taxation any property other than that enumerated inSection 3ofArticle 9 ofthe Constitution. Such enumeration is an exclusion of all other subjects of exemption. . .” (at p. 24. ) Inview of our conclusion that college fraternities or sororities, including the medical fraternities, are generally held to be not exempt ~from taxation because they donot exist primarily for charitable or educational and benevolent purposes, we must necessarily likewise conclude that as a general rule the property of such organizations is not exempt under Section 22, Article 7150, when harmonized with Section 2, Article VIII ofthe Texas Consti- ”tution. As observed in Beta Xi Chapter of Beta Theta Pi v. City of New Orleans, 137 So. 204 (La. Ct. ofApp., 1931) while the practice of afraternity inperforming certain ch aritable work is commendable, tax exemption cannot beshown unless the character ofthe work undertaken is one ofthe principal objects ofthe organization, the doing of such work as relieves the State of some of its burdens, and that the property itself, and not only the organization, must be devoted to such undertakings. This is the well-settled rule inTexas. Hilltop Village, Inc. v. Kerrville Ind. Sch. Dist., 426 S.W. 2d 943 (Tex. Sup. 1968); River Oaks Garden Club v. City of Houston, 370 S.W. 2d 851 (Tex. Sup. 1963. ) The case of San Antonio Conservation Society, Inc. v. City ofSan Antonio, 455 S.,W. 2d 743 (Tex. Sup. 1970) is not controling under the facts we have under consideration.

We are unable to say as’a’matter of law that the medical fraternities in question constitute “lodges engaged in charitable, benevolent, religious, and educational work. ” Whenharmonized with Article VIII, Section 2, Constitution ofTexas, ’as stated in 51‘American Jurisprudence 602, Taxation, Section 627, this determination is ordinarily and most often aquestion offact inthe light of all the facts and circumstances involved, and further:

‘1. . . Although there are holdings to the contrary, the prevailing rule seems to be that such (fraternal) associations are not institutions of ‘purely public charity’ within the meaning of such aphrase inatax exemption provision. Inthis connection, ithas been pointed out that the word ‘purely’
-4057-Honorable Jules Damiani, Jr., Page 10 (M-837)

as thus used is intended to modify the word ‘charity’ and not the word ‘public’, so as to require the institution to have awholly altruistic quality and exclude from it every private or selfish interest or profit or corporate gain. (Parenthesis ours. ) Itis held that it is not enough to exempt property from taxation that one of several purposes or results of its use is charity. It is required to be the chief, ifnot the sole, object. 51Am. Jur. 605, Taxation, Sec. 631; Benevolent &Protective Order of Elks v. Houston, 44 S.W. 2d 488 (Tex. Civ. App. 1931, error ref. ), citing R.C.L.

It is therefore our conclusion that the facts and circumstances submitted are insufficient to present a case for tax exemption as amatter of law, the taxpayers having failed to discharge fully their burden of clear proof and any doubt being resolved against the exemption and infavor ofthe taxing power. SUMMARY The properties ofthe medical fraternities at the University of Texas Medical School at Galveston, Texas, are not shown to be entitled to ad valorem tax exemption as amatter of law under the facts and circumstances presented under either Section 1or Section 22 ofArticle 7150, Vernon’s Civil Statutes, as amended, and Article VIII, Section 2, Texas Constitution. Yours very truly, CRAWFORD C. MARTIN Attorney General of Texas

NOLA WHITE First Assistant Prepared by W. E. Allen Assistant Attorney General -4058-.

Honorable Jules Damiani, Jr. , Page 11
APPROVED: OPINION COMMITTEE Kerns Taylor, Chairman Arthur Sandlin John Reeves Ralph Rash Jack Goodman MEADE F. GRIFFIN Staff Legal Assistant ALFRED WALKER Executive Assistant (M-837)

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