Honorable Robert S. Calvert

Comptrollerof Public Accounts State of Texas Austin, Texas 78701 Opinion No. M-1110

Dear Sir: Re: Exemption of Arlington Park Corporation from franchlee tax under Art. 12.03, Title 122A, Taxation-Genera1,V.C.S.
You have requeated quotedmatter: an official opinion on the following

"TheArlington Park Corporationwas Issued a Certificateof Incorporationon April 7, 1971 under the Texas Non-Proflf CorporationAct (Article 1 96, Revised Civil ,Statutesof Texas, a8 amended3.

. The corporationwas organized at the Instance of the City of Arlington for the purpose of providing sports events, other entertainmentand recreation for the citizens of Arlington and others. Its primary activities Include the operation and management of Arlington Stadium, the home of the Texas Rangers major league baseball team, and Seven Seas, a recreational sea-lifepark. The stadium and park belong to the City of Arlington. It apparently is anticipated that significant profits will be generated by the business activities of this corporation,which profits will be transferred to the City of Arlington for Its exclusive use. "The Corporationhas requested exemption from payment of the franchise tax under Article 12.03 of the Franchise Tax Act on the baeis that it **is** a 'corporationhaving no capital stock and organized for the exclusivepurpose of promoting the public interest of any county, city, or town, or other area within the state'. Copies

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of the Articles of Incorporation, the by-laws and the Lease-Operatingagreementbetween the corporationand the City of Arlington are enclosed. "Your opinion is respectfullyrequestedwhether theArlington Park Corporation qualifies for exemption under Article 12.03 of the Franchise Tax Act." From a study of thematerial accompanyingyour request, and in particular,Article eight of theArticles of Incorporation, we have concluded that the corporation Is organized withoutmembership or capital Stock, Is non profit sharing, and that the exclusivepurposes and proposed operations of the corporation, as expressed In its franchise and agreementwith the city, are substantiallyin accord with thepurposes and QrOQOSed activities summarized in your request. Article 12.03, Title 122A, Taxation-General,Vernon's Civil Statutes, exempts from the impositionof the franchise tax "any corporationhaving no capital stock and organized for the exclusive purpose of promoting the public interest of any county, city, or town, or other area within the state." This exemption is applicable to any corporation organized and operatingwithin its **terms,** regardless of the engendering of profits by such operations. Consequently, it is the opinion of this office, from the facts presented, that theArlington Park Corporationas organized, qualifiesunder the terms of Article 12.03 for exemption from the imposition of the franchise tax if it is operated solely Ilforthe exclusivepurpose of promoting the public interest." We furnishherewith a copy of Attorney General's Opinion No. c-76 (1963) which delineates the elementsnecessary to justify exemption under thisArticle.

SUMMARY

The Arlington Park Corporation,having no capital stock and organized for the exclusive Qurpose of promoting the public interest of the City

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Honorable Robert S. Calvert,page 3, (M-1110)

of Arlington, TeXaE, is entitled to exemption under Art. X.03, Title 122A, Taxation-General,V.C.S. from imposition of the franchise tax if it **Is** operated solely for the exclusive purpo'ireof promoting the public interest.
very truly, p?, 

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.NARTIN eneral of Texas Preparedby Bob Lattlmore ASSiStant Attorney General APPROVED: OPINION CONNITTEE Kerns Taylor, Chairman W. E. Allen, Co-Chairman
James Quick Bill CaIIIQbell Kenneth Nordquist Joseph Sharpley SAMUEL D. MCDANIEL Staff Legal ASSiStant ALFRED WALKER Executive **AEEiEtaIIt** NOLA **WHITE** First ASSiStant

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