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Hon. William J. County Attorney Lubbock County Lubbock, Texas 

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AUSTIN aa.TEXAS

March 8, 1957
Gillespie Opinion No. WW-47 Re: Exemption from advalorem taxes of commercial property held in trust by the Board of Directors of Texas Technological Dear Mr. Gillespie: College for student loan fund.

You have requested anopinion ofthis office on the above captioned subject and have advised us of the following facts. One- tenth ofanestate was devised to the Board ofDirectors ofTexas Technological College “as arevolving trust fund to be loaned to deserving poor **boys** and girls who may be endeavoring to obtain their education inTexas Technological College inLubbock”

. OnMarch 10, 1933, aPartitition Order was entered by the 99th Judicial District Court partitioning to the Board of Directors Lot 12,Block 134, Original Town of Lubbock, tobe used in accordance with the bequest. A deed to the Board conveying anoutstanding 19/128 interest inthe property was delivered and recorded in 1938. The property is rented, ‘and the Comptroller of the College has filed anaffidavit with the Tax Assessor-Collector ofLubbock County to the effect that the entire net income from the property has been used and is being used in accordance with the terms of the **trust.**

It is universally recognized that gifts to promote education constitute charitable gifts; and ithas been specifically held that a gift in **trust** to provide loans “to ambitious and worthy boys and girls, who are financially unable to secure aneducation and would otherwise be deprived thereof ” created acharitable trust. Powers v. First Nat. Bank of Corsicana, 138Tex., 604, 161S.W.Zd 273, 280, 281 (1942) and authorities cited therein.

Since the property inquestion constitutes the corpus of a ch,aritable **trust,** exe&ption could only be accorded under Section 7of Article 7150, enacted inpursuance to the constitutional authorization ofSection 2ofArticle VIII to exempt “institutions of purely public charity”

. Section 7reads as follows:

“Public charities. - All buildings belonging to institutions of purely public charity, together with the lands belonging to and occupied by such institutions not leased or otherwise used with aview to profit, unless such rents and profits and all moneys and credits are appropriated by such institutions. . .

Hon. William J.Gillespie, page 2 (WW-47)

solely to sustain such institutions and for the benefit ofthe sick and disabled members and their families and the burial of the same, or for the maintenance of persons when unable to provide for themselves, whether such persons are members of such institutions or not. An institution ofpurely public charity under this article is one which dispenses its aid to its members and others insickness or distress, or at death, without regard to poverty or riches of the recipient, also when the funds, property and assets of such institutions are placed and bound by its laws to relieve, aid and administer inany way tothe relief of its members when inwant, sickness and distress, and provide homes for its helpless anddependent members and to educate and maintain the orphans of its deceased members or other persons.” The rule is well established inthis State that the property exemption granted to “public charities” covers only real property and the improvements thereon with afurther requisite that the charity must make anactual, direct andexclusive use of the property for charitable purposes. Property actually used for private purposes is not exempted even though the rental income arising from this private **use** may go to charity. Santa Rosa Infirmary v. City ofSanAntonio, Tex.Comm.App., 259 S.W. 926 (1924); Masonic Temple Ass’n v. Amarillo School Dist., 14S.W.2d 128 (Tex.Civ.App. 1928, error ref.); Benevolent and Protective Order ofElks, Lodge 151v. The City of Houston, 44 S.W.2d 488 (Tex.Civ.App. 1931, error ref.); City of Longview v. Markham - McRee Memorial Hospital, 137Tex. 178, 152 S.W.2d 1112 (1941); Markham Hospital v. City ofLongview, 191S.W.Zd 695(Tex.Civ.App. 1945, error ref.); Malone-Hogan Hospital Clinic Foundation, Inc., v. City of Big Spring, 288 S.W.Zd 550 (Tex.Civ.App.

‘1956, error ref. n.r.e.).

Under the facts submitted for our consideration, no exemption can be granted inthis case since the charity does not make an actual, direct and exclusive use of the property for its charitable purposes. SUMMARY Rented property which is held by the Board of Directors ofTexas Technological College in trust, is not exempt from State and county ad valorem taxes even though all the income therefrom is being used as astudent loan fund becauseHon. William J. Gillespie, page 3 (WW-47)

the charity does not make an actual, direct and exclusive use of the property for charitable purposes.
**Yours very**  **truly,** WILL WILSON Attorney General

APPROVED: OPINION COMMITTEE H. Grady Chandler, Chairman MMP: cs