. . 

The Attorney General of Texas 

December 31, 1982 

MARK WHITE 

Attorney General 

Supreme Court Building 

P. 0. BOX 12548 

Austin, TX. 78711. 2548 

51214752501 

Telex 9101874.1367 

Telecopier 5121475.0266 

1607 Main St., Suite 1400 

Dallas. TX. 75201-4709 

2141742-8944 

4824 Alberta Ave.. Suite 160 

El Paso, TX. 79905.2793 

9151533-3484 

1220 Dallas Ave., Suite 202 

Houston, TX. 77002.6986 

7131650.0666 

806 Broadway. Suite 312 

Lubbock, TX. 79401.3479 

8061747-5238 

4309 N. Tenth. Suite S 

McAllen, TX. 78501-1685 

5121682.4547 

200 Main Plaza, suite 400 

San Antonio, TX. 78205-2797 

5121225-4191 

An Equal Opportunity/ 

Affirmative Action Employer 

Honorable Mike Driscoll 

Harris County Attorney 

1001 Preston, Suite 634 

Houston, Texas 77002 

Dear Mr. Driscoll: 

Opinion No.MW-553 

Re: Tax exemption of property 

used for religious purposes 

You ask two questions concerning ad valorem tax exemption of 

property used for religious purposes. Your first question is: 

Is it the duty of the county tax assessorcollector to collect delinquent taxes on land 

owned in fee by a church with a reversionary 

interest in the grantor who has not claimed an 

exemption when said property is claimed to be 

exempt from taxation because it is used as a home 

for a needy family and said property yields rent 

revenue to said church? 

The threshold question is whether property owned by this church 

can be exempt from ad valorem taxation when it is used as a home for a 

needy family and the property yields rent revenue to the church. Our 

answer is limited to the particular circumstances considered. We 

conclude that the property here is not tax exempt because it fails to 

qualify either as exempt property of a religious organization or as 

property of a charitable organization exempt under present statutes. 

Therefore, it is the duty of the county tax assessor-collector to 

collect delinquent ad valorem taxes on the property. 

Article VIII, section 2 of the Texas Constitution provides the 

following in pertinent part: 

[Tlhe legislature may, by general laws, exempt 

from taxation... actual places of religious 

worship, also any property owned by a church or by 

a strictly religious society for the exclusive use 

as a dwelling place of the ministry of such church 

or religious society, and which yields no revenue 

whatever to such church or religious society; 

provided that such exemption shall not extend to 

more property than is reasonably necessary for a 

dwelling place and in no event more than one acre 

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Honorahle Mike Driscoll - Page 2 (Mw-553) 

of land; . . . and institutions of purely public 

charity; and all laws exempting property from 

taxation other than the property mentioned in this 

Section shall be null and void. 

The foregoing constitutional provision is not self-executing; it 

permits (but does not require) the legislature to exempt certain types 

of property from taxation. Pursuant to this authority, the 

legislature enacted section 11.20, Property Tax Code, exempting 

certain specified property of religious organizations, and section 

11.18, Property Tax Code, exempting certain specified property of 

organizations meeting listed criteria which qualify them as 

"charitable organizations". 

In order to qualify for exemption from ad valorem taxation, 

property must fall within either a self-executing constitutional 

provision or a statute adopted pursuant to article VIII, section 2 of 

the Texas Constitution. See River Oaks Garden Club V. City of 

Houston, 370 S.W.Zd 851 (Tex.'1963). Moreover, though property falls 

within a ournorted . . statutorv exemntion. it will be exemnt . onlv I if such 

an exemption is permitted by the constitution. Dickison V. Woodmen of 

the World Life Insurance Society, 280 S.W.Zd 315, 317 (Tex. Civ. App. 

- San Antonio 1955, err. ref'd); Santa Rosa Infirmary V. City of San 

Antonio, 259 S.W. 926, 931 (Tex. 1924). In this instance, we need not 

reach the constitutional issue because the subject property falls 

within the ambit of neither section 11.18 nor section 11.20 of the 

Property Tax Code. We will first address whether the property is 

exempt under section 11.20, which pertains to religious organizations. 

Section 11.20 declares the following in pertinent part: 

(4 An organization that qualifies as a 

religious organization as provided by Subsection 

(c) of this section is entitled to an exemption 

from taxation of: 

(1) the real property that is owned by 

the religious organization, is used primarily 

8s a place of regular religious worship, and is 

reasonably necessary for engaging in religious 

worship; 

(2) the tangible personal property that 

is owned by the religious organization and is 

reasonably necessary for engaging in worship at 

the place of worship specified in Subdivision 

(1) of this subsection; 

(3) the real property that is owned by 

the religious organization and is reasonably 

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Honorable Mike Driscoll - Page 3 (MW-553) 

necessary for use as a residence (but not more 

than one acre of land for each residence) if 

the property: 

(A) is used exclusively as a 

residence for those individuals whose 

principal occupation is to serve in the 

clergy of the religious organization; and 

(B) produces no revenue for the 

religious organization; and 

(4) the tangible personal property that 

is owned by the religious organization and is 

reasonably necessary for use of the residence 

specified by Subdivision (3) of this 

subsection. 

. . . . 

(d) Use of property that qualifies for the 

exemption prescribed by Subdivision (1) or (2) of 

Subsection (a) of this section for occasional 

secular purposes other than religious worship does 

not result in loss of the exemption if the primary 

use of the property is for religious worship and 

all income from the other use is devoted 

exclusively to the maintenance and development of 

the property as a place of religious worship. 

(e) For the purposes of this section, 

'religious worship' means individual or group 

ceremony or meditation, education, and fellowship, 

the purpose of which is to manifest or develop 

reverence, homage, and commitment in behalf of a 

religious faith. 

Section 11.20 exempts real and tangible persons1 property if it 

is owned by a religious organization, used primarily as, or at, a 

place of regular religious worship, and is reasonably necessary for 

engaging in religious worship. In construing article VIII, section 2 

and the now repealed article 7150, V.T.C.S., (the predecessor statute 

to section 11.20) the Texas Supreme Court declared that "["Ihat 

constitutes an actual place of religious worship as those words are 

used in the Constitution and statutes is a fact issue which the 

claimant has the burden to prove." Davies V. Meyer, 541 S.W.Zd 827, 

829 (Tex. 1976). We do not resolve issues of fact in the opinion 

process, but we note that there is no allegation in the materials 

submitted to us that the subject property is used as an actual place 

of religious worship. Assuming this to be the case, it is clear that 

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Honorable Mike Driscoll - Page 4 @fW-553) 

the subject property does not fall within section 11.20(a)(l) and (2); 

therefore, we need not consider by whom property subject to a 

reversionary interest is "owned" within the meaning of the statute. 

We turn to the second exemption permitted for religious organizations. 

Section 11.20(a)(3) exempts only real property owned by the 

religious organization and reasonably necessary for use as a 

residence. This exemption applies only if the property is used 

exclusively as a residence for the clergy and produces no revenue for 

the religious organization. Again, assuming the truth of the facts 

presented to us. the subject property is not used exclusively as a 

residence for the clergy and does produce revenue for the religious 

organizations. Thus, the property is not exempt under section 

11.20(a)(3). (Such restrictions =PPlY only to the religious 

organization's parsonage. Property Tax Code 911.20(a)(3)(A) and (B). 

We note that neither the statute, section 11.20(s) and (b), Property 

Tax Code, nor the constitution, require that the actual place of 

religious worship be exclusively so used or that it produce no 

revenue. Davis V. Congregation Agudas Achier, 456 S.W.2d 459, 461 

(Tex. Civ. App. - San Antonio 1970, no writ).) 

Under the facts given us, clearly, the subject property is not 

exempt under any of the provisions of section 11.20 exempting property 

belonging to a religious organization. 

Section 11.18 of the Property Tax Code concerns exemptions for 

charitable organizations. It provides the following in pertinent 

part: 

(a) An organization that qualifies as a 

charitable organization as provided by Subsection 

(c) of this section is entitled to an exemption 

from taxation of the buf~ldings and tangible 

personal property that: 

(1) are owned by the charitable 

organization; and 

(2) except as permitted by Subsection 

(b) of this section, are used exclusively 

by qualified charitable organizations. 

(b) Use of exempt property by persons who are 

not charitable organizations qualified as provided 

by Subsection (c) of this section does not result 

in the loss of an exemption authorized by this 

section if the use is incidental to use by 

qualified charitable organizations and limited to 

activities that benefit the beneficiaries of the 

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Honorable Mike Driscoll - Page 5 (m-555) 

charitable organizations that own or use the 

property. 

(c) To qualify as a charitable organization 

for the purposes of this section, an organization 

(whether operated by an individual, as a 

corporation, or as an association) must: 

(1) b= organized exclusively to 

perform religious, charitable, scientific, 

literary, or educational purposes and, 

except as permitted by Subsection (d) of 

this section, engage exclusively in 

performing one or more of the following 

charitable functions: 

(A) providing medical care 

without regard t0 the 

beneficiaries' ability to pay; 

(B) providing support or 

relief to orphans, delinquent, 

dependent, or handicapped children 

in need of residential care, 

abused or battered spouses or 

children in need of temporary 

shelter, the impoverished, or 

victims of natural disaster 

without regard t0 the 

beneficiaries' ability to pay; 

(C) providing support t0 

elderly persons or the handicapped 

without regard t0 the 

beneficiaries' ability to pay; 

(D) preserving a historical 

landmark or site; 

(E) promoting or operating a 

museum, zoo, library, theater of 

the dramatic arts, or symphony 

orchestra or choir; 

(F) promoting or providing 

humane treatment of animals; 

(G) acquiring, storing, transporting, selling, or distributing 

water for public use; 

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Honorable Mike Driscoll - Page 6 (MN-553) 

(H) answering fire alarms and 

extinguishing fires with no 

compensation or only nominal 

compensation to the members of the 

organization; 

(I) promoting the athletic 

development of boys or girls under 

the age of 18 years; 

(.I) preserving or conserving 

wildlife; 

(K) promoting educational 

development through loans or 

scholarships to students; 

(L) providing halfway house 

services pursuant to a certification ss a halfway house by the 

Board of Pardons and Paroles; or 

(M) providing permanent 

housing and related social, health 

care, and educational facilities 

for persons who are 62 years of 

age or older without regard to the 

residents' ability to pay; 

(2) be operated in a way that does not 

result in accrual of distributable 

profits, realization of private gain 

resulting from payment of compensation in 

excess of a reasonable allowance for 

salary or other compensation for services 

rendered, or realization of any other form 

of private gain and, if the organization 

performs one or more of the charitable 

functions specified by Paragraph (C), (D), 

(E) , 093 (G), (J), (K), or CM) of 

Subdivision (1) of this subsection, be 

organized as a nonprofit corporation as 

defined by the Texas Non-Profit 

Corporation Act; and 

(3) by charter, bylaw, or other 

regulation adopted by the organization to 

govern its affairs: 

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Honorable Mike Driscoll - Page 7 (MW-553) 

(A) pledge its assets for use in 

performing the organization’s charitable functions; and 

(B) direct that on discontinuance 

of the organization by dissolution or 

otherwise the assets are to be 

transferred to this state or to an 

educational, religious, charitable, or 

other similar organization that is 

qualified as a charitable organization 

under Section 501(c)(3), Internal 

Revenue Code of 1954, as amended. 

(d) Performance of noncharitable functions by 

a charitable organization that owns or uses exempt 

property does not result in loss of an exemption 

authorized by this section if those other 

functions are incidental to the organizations’s 

charitable functions. 

(e) In this section, ‘building’ includes the 

land that is reasonably necessary for use of, 

access to, and ornamentation of the building. 

(f) An exemption authorized by Paragraph (J) 

of Subdivision (1) of Subsection (c) of this 

section is limited to land and improvements and 

may not exceed 1,000 acres in any one county. 

Based on the information which we have received, we conclude that 

the subject matter is not exempt as a charitable institution from ad 

valorem taxes for two reasons. First, we have been presented with no 

charter or bylaw indicating that the church is “organized exclusively 

to perform religious... purposes and... engage exclusively in 

performing one or more of [a list ofthirteen specified] charitable 

functions.” (Emphasis added). Section 11.18(c)(l)(A)-(~), Property 

Tax Code. Indeed, no charter or bylaws may exist at all. As we noted 

in Attorney General Opinion MW-288 (1980), section 11.18 “establishes 

new criteria for deter-raining whether property owners are eligible for 

charitable tax exemptions.” 

In our opinion, the definition of ‘charitable 

functions’ in section 11.18(c)(l) clearly serves 

not to enlarge the meaning of ‘purely public 

charity’ but to deny tax exemptions to property 

owned by institutions of purely public charity 

that are not organized to perform the charitable 

functions defined. Where section 11.18 has the 

effect of denying tax exemptions to organizations 

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Honorable Mike Driscoll - Page 8 0%553) 

that might otherwise have been properly allowed 

them, it will be enforced. (Emphasis added). 

Id. The organization which owns the subject property is apparently a 

religious organization organized, however informally, for primsrily 

religious purposes. It is not a charitable organization incidently 

engaging in religious activities. While the organization is organized 

to perform religious purposes, it does not in addition engage 

"exclusively" (or even primarily) in one or more of the enumerated 

charitable purposes set out in the statute. The fact that a claimant 

performs some charitable activity has not been sufficient to qualify 

the organization for tax exemption as a charitable organization. City 

of Amarillo V. Amarillo Lodge No. 731, A.F. a A.M., 488 S.W.Zd 69, 72 

(Tex. 1972). In order to determine whether an ornanization aualifies. 

one must look to the principal activity of the claimant. See Most -- 

Worshipful Prince Hall Grand Lodge, F. 8 A.M. of Texas V. City of Fort 

Worth, 435 S.W.2d 274 (Tex. Civ. App. - Fort Worth 1968, writ ref'd 

n.r.e.). The principal activity of the church is religious, not 

charitable. The organization does not meet the requirements of 

section 11.18(c)(l)(A)-(M), Property Tax Code. 

We are not unmindful of the holding in City of McAllen V. 

Evangelical Lutheran Good Samaritan Society, 530 S.W.2d 806 (Tex. 

1975), wherein the supreme court, in construing article VIII, section 

2 of the Texas Constitution together with the now repealed article 

7150, V.T.C.S. (the predecessor to section 11.18, Property Tax Code) 

stated that although charitable institutions are entitled to an 

exemption of only that property which is used by the institution 

exclusively for the purposes of a purely public charity, it does not 

follow: 

that every use of the property must be 

gratuitous.... Nor does it follow that all 

religious or other benevolent activities must be 

excluded in the operations of the hospital or 

home. It is no fatal defect to join charitable 

and religious purposes; the exemption will not be 

withdrawn so long ss the charitable requirements 

are met. 

530 S.W.Zd at 810-11. As we declared in Attorney General Opinion 

MW-288 (1980), "[tlhe key is the emphasized language 'so long as the 

charitable requirements are met.' Former article 7150, section 7, 

V.T.C.S., did not require that the institution claiming an exemption 

be organized exclusively for certain charitable purposes and no other. 

The present statute does." (Emphasis added). As we stated above, the 

claimant organization is not so organized. 

Second, section 11.18(c)(3) requires that the charter, bylaws, or 

regulations adopted by the organization to govern its affairs: 

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Honorable Mike Driscoll - Page 9 (MW-553) 

(A) pledge its assets for use in performing the 

organization's charitable functions; and (B) 

direct that on discontinuance of the organization 

by dissolution or otherwise the assets are to be 

transferred to this state or to an educational, 

religious, charitable, or other similar organization that is qualified under Section 501(c)(3), 

Internal Revenue Code of 1954, as amended. 

(Emphasis added). 

The organization's governing document makes no such provision. Again, 

under the facts submitted, the organization fails to satisfy the 

"charitable" requirements of section 11.18; the property is therefore 

taxable in the absence of another applicable exemption. See City of 

McAllen V. Evangelical Lutheran Good Samaritan Society, supra; Hilltop 

Village V. Kerrville Independent School District, 426 S.W.Zd 943 (Tex. 

1968); City of Waco V. Texas Retired Teacher Residence Corporation, 

464 S.W.Zd 346 (Tex. 1971). Because we are aware of no other 

applicable exemption, we advise in answer to your first question that 

it is clearly the duty of a county tax assessor-collector to collect 

delinquent taxes on property not exempt from ad valorem taxes. 

Your second question is: 

Is it the duty of the County Tax AssessorCollector to collect delinquent taxes on land 

presently owned in fee by a church with 

reversionary interest in the grantor if the taxes 

were imposed on a non-exempt owner for tax years 

prior to the donation of the building to the 

church? 

From your question, we understand the following to be the case. 

Ad valorem taxes were assessed against the property while it was owned 

in fee simple absolute by a person who later conveyed the property, 

subject to a reverter clause, to the church. The taxes were not paid 

and are presently delinquent. We understand you to be asking upon 

whom the liability for the delinquent ad valorem taxes should rest, 

the present or former owner. We conclude that the grantor, who, we 

understand, was the owner of the property when the delinquent taxes 

were imposed, is personally liable. 

Section 32.07, Property Tax Code, provides in pertinent part: 

(a) Except as provided by Subsection (b) of this 

section, property taxes are the personal 

obligation of the person who owns or acquires the 

property on January 1 of the year for which the 

tax is imposed. A person is not relieved of the 

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Honorable Mike Driscoll - Page 10 (MW-553) 

obligation because he no longer owns the property. 

(Emphasis added). 

We therefore conclude that the person who owned the property on 

January 1 of the year for which the unpaid tax was imposed is 

personably liable for the tax. Of course, the taxable interest in the 

property is itself subject to sale for the satisfaction of unpaid 

taxes validly assessed against it, whoever might have been its owner 

when the taxes accrued. Tax Code 032.01. See Attorney General 

Opinion H-1108 (1977). But see Tax Code 933.06 (Residence homesteads 

of aged -- deferred collection). 

SUMMARY 

It is the duty of the county tax 

assessor-collector to collect delinquent taxes on 

church-owned property in the fact situation 

presented. The person who owned the property on 

January 1 of the year for which the unpaid tax was 

imposed is personally liable for the delinquent ad 

valorem taxes, but the taxable interest in the 

proprety is subject to sale for the satisfaction 

of unpaid taxes validly assessed, whoever might be 

personally liable for the taxes. 

M A R-K WHITE 

Attorney General of Texas 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

RICHARD E. GRAY III 

Executive Assistant Attorney General 

Prepared by Jim Moellinger 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Susan L. Garrison, Chairman 

Jon Bible 

Rick Gilpin 

Bob Lattimore 

Jim Moellinger 

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