The opinion
. .
The Attorney General of Texas
December 31, 1982
MARK WHITE
Attorney General
Honorable Mike Driscoll Opinion No.MW-553
Supreme Court Building Harris County Attorney
P. 0. BOX 12548
Austin, TX. 78711. 2548
1001 Preston, Suite 634 Re: Tax exemption of property
51214752501 Houston, Texas 77002 used for religious purposes
Telex 9101874.1367
Telecopier 5121475.0266 Dear Mr. Driscoll:
1607 Main St., Suite 1400
You ask two questions concerning ad valorem tax exemption of
Dallas. TX. 75201-4709 property used for religious purposes. Your first question is:
2141742-8944
Is it the duty of the county tax assessor-
collector to collect delinquent taxes on land
4824 Alberta Ave.. Suite 160
El Paso, TX. 79905.2793
owned in fee by a church with a reversionary
9151533-3484 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
1220 Dallas Ave., Suite 202
for a needy family and said property yields rent
Houston, TX. 77002.6986
7131650.0666
revenue to said church?
The threshold question is whether property owned by this church
806 Broadway. Suite 312 can be exempt from ad valorem taxation when it is used as a home for a
Lubbock, TX. 79401.3479
needy family and the property yields rent revenue to the church. Our
8061747-5238
answer is limited to the particular circumstances considered. We
conclude that the property here is not tax exempt because it fails to
4309 N. Tenth. Suite S qualify either as exempt property of a religious organization or as
McAllen, TX. 78501-1685 property of a charitable organization exempt under present statutes.
5121682.4547 Therefore, it is the duty of the county tax assessor-collector to
collect delinquent ad valorem taxes on the property.
200 Main Plaza, suite 400
San Antonio, TX. 78205-2797 Article VIII, section 2 of the Texas Constitution provides the
5121225-4191 following in pertinent part:
An Equal Opportunity/ [Tlhe legislature may, by general laws, exempt
Affirmative Action Employer 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 if such
. . . I
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, trans-
porting, 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 certifica-
tion 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 charit-
able 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 organiza-
tion 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 Assessor-
Collector 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
p. 2026