Untitled Texas Attorney General Opinion ( 1974 )

The Honorable Fred Galindo Opinion No. H- 230
Criminal District Attorney
Cameron County Re: Where Elks Lodge failed to
Brownsville, Texas 78520 pay taxes, under belief it was
exempt under a statute later
declared unconstitutional may
taxing authority waive interest and
penalties ?
Dear Mr. Galindo:
You have requested our opinion on the question of whether the San
Benito Elks Lodge can lawfully be exempted from the payment of ad valorem
property taxes. If our answer to this question is in the negative, you then
ask whether the taxing authorities may excuse the lodge from paying interest
and penalties on the taxes that have accrued against it to date.
Article 8, 5 1, of the Texas Constitution requires all taxation to be
equal and uniform. Section 2 of Article 8 authorizes the Legislature to
exempt the property of “institutions of purely public charity” from taxation.
In $ 22 of Article 7150, V. T. C. S. , the Legislature attempted to exercise
this authority by making the property of all fraternal organizations exempt
from taxation “for so long as the property is owned and used for charitable,
benevolent, religious, and educational purposes, and is not in whole or in
part leased out to others, or otherwise used with a view to profit. ” Feeling
that its property qualifies under the 5 22 exemption, the San Benito Lodge has
paid no ad valorem taxes from 1969 to the present time.
In 1972 the Texas Supreme Court had occasion to consider rhe validity
of exempting fraternal organizations from taxation in City of Amarillo v.
Amarillo Lodge No. 731, A. F. &A. M., 488 S.W.2d 69 (Tex. 1972). The court
ruled that the property of the masonic lodges in question in that case could not
constitutionally be exempted from taxation and that $ 22 was unconstitutional
pm 1073
The Honorable Fred Galindo, page 2 (H-230)
insofar as it applied to their property.
In its opinion the Court adopted a very strict interpretation of the
constitutional provision permitting the Legislature to exempt from taxation
the property of institutions of purely public charity. It stated:
“The characteristics of an institution of
purely public charity have been considered in several
other cases. While the benevolent ends sought to be
accomplished may take some form other than alms-
giving, it is essential that the organization assume,
to a material extent, that which otherwise might
become the obligation or duty of the community or
the state. It is also essential that the institution be
organized and operated exclusively for purposes of
public charity. ‘I (488 S. W. 2d at 71).
The Court concluded that the masonic lodges in question in Citv of
Amarillo were not institutions of purely public charity. It pointed to the
fact that their property was used for conducting lodge meetings, initiations, .,
and ceremonials in order to promote good fellowship among their members
and emphasised t~hat such activity by itself did not “lighten any public burden”.
Neither the community nor the state was under any duty to provide or support
the lodge work of private fraternal organizations. Accordingly the lodges in
question were not used exclusively for charitable purposes and could not
constitutionally be exempted from taxation.
In a letter submitted for our consideration in connection with this opinion
request, the San Benito Lodge described its activities as follows:
“During these years in question this lodge
has given directly or indirectly to the school and city
a total of $7,141.47 in contributions to educational and
community welfare programs. This does not include
the use of our faciiities by the Beef Club, Band Boosters,
Cub Scouts, Explorer Scouts. Texas State Teachers
Association, Quarterback Club, P. T. A. , F. F. A.,
p. iC74
The Honorable Fred Calindo. page 3 (H-230)
Cheerleaders and many more at no cost to any
of them. We have had barbecues honoring our local
police, firemen, county and state police, Border
Patrol, and local judges to thank them for a job
well done. We have donated during this time
$8, 500. 00 to the Texas Elks Crippled Children’s
Hospital. ”
The Supreme Court did not declare 5 22 of Article 7150 unconstitutional
per se in Citv of Amarillo, The City of Amaiille dec‘isibn ~has’b&n iriterpr’eted
by’the Court as casting substantialdoubt on the propriety of tax exemption for build-
.
ings of fraternal orders.. ‘See v~lcohohc Beverape C-n Y. National
Sportsmen Fraternal Order of Texas, Inc., 495 S.W. 2d4549( Tex. Civ. App. ,
Houston list Dist. I, 1973). While the activities of the San Benito Lodge are
undoubtedly in part charitable, they are not exclusively so. The “public
burden” is not lightened by some of the listed activities. Neither the community
nor the state is under any obligation to provide or support such activities.
Ordinarily whether or not a particular use of property qualified it for
tax exemption as purely public charity is a question of fact which we would
not decide. Where, as here, we have been furnished by the organization with
a description of the uses, stated, we assume, in their most favorable light,
we are entitled to base our determination on them. Assuming the facts
furnished us to be true, the San Benito Lodge, as presently operated, is not
exempt from paying ad valorem property taxes under the line of legal authorities
culminating in the decision of City of Amarillo v. Amarillo Lodge No. 731, supra
The Supreme Court opinion in that case makes it plain that $ 22 of Art. 7150
does not pass constitutional muster insofar as it attempts to exempt from taxa-
tion organizations whose activities are not exclusively charitable.
Your second question requires us to determine whether the San Benito
School Board can waive all interest and penalties that have accrued against
the Lodge to date. In Attorney General Opinion WW-107 (1957) the question
was whether the tax collector of a school district could forgive or ignore taxes
lawfully assessed. This office said:
p. 1075
‘3
The Honorable Fred Galindo, page 4 (H-230)
“The duties and powers of tax collectors
are derived from the Constitution and statutes and
such as may be reasonably inferred therefrom. Their
duties pertaining to the collection of taxes, whether
current or delinquent, are purely ministerial. They
have no discretion such as forgiving or ignoring the
collection of taxes lawfully assessed. . . . It is
true that the Legislature has the power to forgive
delinquent taxes which have been due for a period
of a least ten years (Section 55, Article III of the
Constitution). As a corollary to this the Legislature
would have the authority to forgive penalty and
interest on delinquent taxes by general law even
though less than ten years past due, because they
do not constitute a part of the tax, but the tax collector
is without authority to release or ignore the collection
of accrued penalty and interest on delinquent taxes.
Jones v. Williams, 121 Tex. 94, 45 S.W.2d 130
(1931). ”
This general rule was made applicable to penalties and interest due on
delinquent taxes in Attorney General Opinions O-6596 (1945); V-835 (1949);
V-1517 (1952), and therefore requires a negative answer to your second question.
SUMMARY
Whether or not the property of a fraternal lodge is exempt
from taxation under $ 22 of Article 7150, V. T. C. S. depends upon a
determination of whether the lodge is a purely public charity and its
property is used for purely public charitable purposes.
Despite the good faith belief that it owed no taxes, if the property
of the lodge is found to be taxable, the taxing authorities are without
authority to waive either penalties or interest.
,Yours very truly,
Attorney General of Texas
p. 1076
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L
-\ The Honorable Fred Calindo, page 5 (H-230)
APPROVEXD: I -
DAVID M. KENDALL, Chairman
Opinion Committee
p. 1077