Untitled Texas Attorney General Opinion ( 1962 )

0 GENERAL
OF EXAS
AUSTIN11.TEXAS
August 24, 1962
Honorable Burney Walker Oplnlbn No. WW-1424
Criminal District Attorney .
Waco, Texas Re: Whether the Stllwell
Memorial Residence 1s
exempt from ad valorem
taxes under the stated
Dear Mr. Walker: facts
You have requested an opinion from this office as to wheth-
er or not Stllwell Memorial Residence, which Is to be operated by
the Texas Retired Teachers Residence Corporation, Is exempt from
ad valorem taxes.
In connection with, your letter you have attached Exhibit
A, which 1s copied as follows:
“STATEMENT OF POLICIES FOR STILWELLMEMORIAL
RESIDENC,E
OF LAKEAIR CENTER,WACO, TEXAS
“Stllwell Memorial Is a residence designed
Tor retirement living and providing sheltered
care for retrred member8 of the teaching pro-
fession of the State of Texas. It 1s lncor-
porated under the Non-profit Corporation Act
of the State of Texas for charitable and edu-
cational purposes.
“The Stllwell Memoilal Resldenoe for re-
tired teachers, hereinafter referred to as the
Realdenoe, is a project of the Texas Retired
Teachers Association who formed a Residence
Corporatlon for the purpose of creating this
Residence for the sheltered care of Its senior
citizens. The Corporation Is entitled the
Texas Retired Teachers Residence Corporation,
the President of which is Henry L. Poster, Sr.,
Box 767, Longview, Texas.
"The very foundation of the Residence has
been based upon oonizlbutlons from teachers
and others throughbut the State of 'Pexas.
. ..‘
Honorable Burney Walker, Page 2 Opinion No. Ww-1424
Moreover, the site 1s being donated for the
Residence through the Chamber of Commerce of
the City of Waco. The Federal Housing Ad-
ministration has given an Indication that
they will approve a 100 er cent loan In the
amount of approximately $ 914,000.00 under
Section 231 of the Federal Housing Act which
provides for housing for the elderly on a non-
profit basis. The 144,640 square feet of land
has been valued at $72,300.00 which is a con-
tribution.
“Various types of accomodatlons are pro-
vided In an effort to meet the retirement
needs of a cross-section of our senior
teachers.
“The Bylaws provide for an admlsslon.Sce
of $250 .oo . However, the Bylaws also pro-
vide that the Trustees shall~ admit eligible
appllcahts to the Residence on such terms
as the circumstances of any particular ap-
plicant may in their judgment warrant.
Each case Is handled on-an individual
basis and charity cases will be accepted.
No one wlll be denied admlsslon because
OS financial inability to pay the cost.
“The Bylaws provide for a deposit of
$250.00 to be held In a separate account
for health purposes for the lndlv1dual
with the residue to apply on the funeral
expenses of said resident. The balance
18 the property of the estate of the reei-
dent.
“Last illnesses and death8 OS the mem-
bers will be paid for by the Residence.
Should the lnltl6il $250.00 health deposit
be available, this will be applied. How-
ever, from a practical standpoint, the
Residence will have to absorb much of this
expense. This Js particularly true of
those residents who have minimum or no ln-
comes and the charitable cases where the
4250.00 deposit was waived.
“Those who are financially able to pay
all,thelr cost are expected to do so on a
basis to be determined by the type of
. .
Honorable Burney Walker, Page 3 Opinion No. W-1424
accomodatlons they desire and the Admissions
Committee of the Board of Directors. Bach
case will be a matter of lndlvldual~evalua-
tlon, negotiation, and mutual agreement*and
will be considered.on the basis of Its own
merit.
"The Dlrector&%ave proJected a budget
which establlshe~ rates for a minimum of
$140.00 for slngllFg to a few select accomo-
dations for doubti! at $260.00 a month.
"Provision8 will be made for those teach-
ers who have the minimum retirement Income
of $100.00 a month of which there are a
substantial number in the upper age brackets
where the need Is the greatest. These flg-
urea Include mea&s, administrative staff,
medical and interim nursing care as lndl-
cated, and a rout&e sustaining health ser-
vice. A small Infirmary area is provided
for those who will require interim bed
care e Whlle~thls type of community living
for senior citizens Is not appropriate for
every individual, there are large numbers
of teachers who, because of low salary pay-
ments and Inadequate retirement programs of
the past, desperately need this type of en-
vironment. It wi.$l provide friends, com-
panionship, and sheltered care for many.)df
those who have lived alone all their adult
lives.
"The Incomes of thls.'group are such that
in a non-proflt situation a number can af-
ford to pay &i! all their care. Of partl-
cular importance to th&s project are those
who cannot afford;,to pay. Because of the
mlnlmums for teadkier retirement or old
age assistance, ~'lt Is not anticipated that
there will be any requlrements:Lfor full
charity; I.e.,, 100 per cent. However, sub-
stantial dlffCnnces will have to be made
up from the other residents, from the aub-
sldy of the Home, and from continuing cam-
paigns among teachers for supplementation
of the Residence -:'not an individual.
"The tieachers+f the State of Texas have
made contrlbutibha to help underMete the
. ,
Honorable Burney Walker, Page 4 Opinion No. WW-1424
cost of thle facility and will continue to
contribute to Its support.. Without this
lnltlal subsidy and continuing assistance,
the Residence cannot afford to operate as
a number will be unable to pay the full
cost for their care.
“The entire three acres will be devoted
to this cause of retirement living at a
minimum of cost. ”
You have given us further Information that the Waco Cham-
ber of Commerce donated @pproxlmately three acres of land to
this corporation on which a building, or buildings, will be con-
structed for the operation of this ,corporatlon. The tract of
land atthls time Is vacant property. The deed was signed and
delivered by the Chamber of Commerce to the Texas Retired Teach-
ers Residence Corporation on May 3, 1962.
We are In agreement with your conclusions as set forth In
your letter that Stllwell, according to Exhibit A, Is to be oper-
ated In much the same manner as Morningside Manor, Inc. of San
Antonio, which was the subject matter of Opinion No. WW-1277
heretofore rendered by this department. You are advised that In
compliance with Opinion No. WW-1277, this corporation, when It
becomes operative, will meet the requirements of a purely public
charity, and will be exempt from ad valorem taxes.
As atated by you, the only question remaining is whether
or not Stllwell Is, at this Instant, exempt from ad valorem tax-
At the present time this property Is not being used as a
iklc charity or for charitable purposes and Is subject to ad
valorem taxes, so long a8 It Is just a vacant piece of land not
being put to any use.
In compliance with the rule laid down In Hedgecroft v.
City of Houstbn, 150 Tex. 654, 244 S.W.2d 632, this property
would become exempt for taxes as of January lot next after it
Is put to use by the Texas Retired Teachers Residence Corpora-
tion. It Is our opinion that the property Is taxable as of Janu-
ary 1st. of each year, and since It was not owned by the corpora-
tion on January 1, 1962, then It Is subject to taxes for this
year. If It Is still a vacant piece of property on January 1,
1963 and not being used, then It will be taxable for the year
1963, and so long thereafter, as It Is not ptit to a beneficial
use. Ae soon as the exempt corporation start8 construction on
the land, then It will become exempt from taxes beginning on the
following January 1st.
Quoting from the opinion of the Heduecroft case, supra, at
page 636, the court had the following to say:
I’ s
Honorable Burney Walker, Page 5 Opininn No. VW-1424
“Petitloner~s acts on and before Janu-
ary 1, 1949, an alleged in the petition,
the substance of which has been set out at
the beginning of this opinion, were part
of the necessary preparation and remodeling
of the building for operation a8 a hospital
and clinic. The work proceeded until it was
completed on May 13, 1949, and since that
time the hospital and cllnEc have been oper%..
ated as a public charity. The facts alleged
show, In our opinion, an actual and direct
use of the property on and prior to January 1,
1949, for the charitable puppose.”
SUMMARY
Under the stated facts, Stllwell Memorial Resl-
dence , to be operated by Texas Retired Teachers Resl-
dence ‘Corporation, will qualify as a purely public
charity, and the property In question will be exempt
from ad valorem taxes beginning on the January 1st
after construction Is started, and the property la
being used by the.corparatlon.
Youra very t&y,
WILL WILSON
Assistant
J=/@
APPROVED
:
OPINION COMMITTEE:
Morgan Nesbltt, Chairman
L. P. Lollar
Fred D. Ward
Robert Rowland
RNVIEWFDFOR THE ATTORNEY
OENh’RAL
By: Leonard Pasamore