November 26, 1963 Honorable Doug Crouch Opinion No. C-184 Criminal Dietrlct Attorney Tarrant County RE: Whether the housing for'the Fort Worth, Texas elderly known as Lake Crest Efltates owned~ and operated by Christian Homes, Inc., a non-profit corporation 18 exempt. from ad valorem taxea. D&r Mr. Crouch: .r You h&e requeeted'our opinion on the above referenced subject, and In connectlon,therewlth have given us the following facts: Lake Crest Estates Is a housing development compoaed.of 343 tw&bedroom.housea, together wlth a community center and a Chapel. Title to the.entlre project ia vested in 8 Texas non- proflt.corporat1on known a8 Chrlstlaii Homes, Inc, The ltiltlal directors of the .corporatlon were pa&ore of five local churches who agreed:to sponsor the project. The.re are .no timbers of the corporation and any vacancies on the Board ape filled by vote of the reinalnlng directors. . Funde.to construct the proJect riere obtained by a bank loan backed by a one hundred per cent guarantee from the Federal ,Houalng Administration. The corporation has entered into. a re- gulatoryagreement with the Federal Houslng.Admlri1atratlon. Tenancy 18 not limited to persons 62 years of age or over (aged person a8 defined by 12 USC 14019) but they a% ~to be given prl- ority of opportunity to rent the units. Basic rental la $107,.50 per month on a lease .@aals and la charged all tenants under 62 yeare of age and those over 62.who are able to pay. Rent under the&V-law8 of the corporation may be reduced by the Board of DIrectora for aenlor citizens in need The only services provided _ by.the corporation other~than the housing unit la free use of the community center with It8 swimming ~001,~ recreation and meeting rooms, and chapel. These fadllltles are used free of charge by those over 62. Those tenants under 62 may use these facilities by paying a charge of $5.00 per month. The corporation has no sources of Income other than the rental from the housing units; Income, If any, from the community center, and possible con- tributions from sptinsore or others. -892- Honorable Doug Crouch, Page 2 (No. C-184 ) AS of August 23, 1963, only twelve of the 343 units are occupied, as set out below: (a) Four (4) units are occupied by employees of the corporation as part of their . salary. (b) One (1) unit la occupied by a senior citizen (over 62) at a reduced rental. (c) Seven (7) units are occupied by Indl- viduala under 62 years of age, who. are not retired, and who pay the full rental of $107.50 per month. The Federal H&sing Admlnlstratlon has, for the present, waived the requirement that priority of opportunity be given to those 62 years of age or over and the’ project Is leasing without regard to,age or financial condition. All tenants must enter In- to a written lease with the corporation for a minimum period of six (6) months. You’have asked. the ,followlng questions: “Is ‘the housing for the elderly ‘project knotin as Lake. Crest Estates owned and bperated by Christian Homes, Inc., a non-proflit corpora- tltin, exempt from ad valorem taxes as ‘an ,lnstl-. tutlon bf public charity?” “Can port.loni of a qualifying project thit are vacantbecause no aged peraon.has applied to occupy them be rented or leased to others without the Institution .losIng lts~ exemption; and, can such an Institution furnish quarters ~to Its employees and their families, on the premises, 83~ part ~of their compensation or salary, without losing, Its exempt status?” Article VIII, Se&Ion. 2 o b the Constitution. of the StaM of Texas has empowered the Legislature to ekempt f-m taxation certain enumerated properties a&ng.whlch are’ . . . lnatltutlons of purely public charity. ” In pursuance to ,th ! a particular con- stltutlonal grant,~the Legislature enacted Section 7. Article 7150, Vernon’s Civil Statutes, which effectuates exempt1ofi.t.o ths extent of the exemptive powers conferred by Article VIII, Ssc- tlon 2. We are of the o&Ion that under the %tated. facts In th1.s case, Lake Crest Estates cannot qualify ao as to be exempt from ad valorem taxes. -89% Honorable Doug Crouch, Page 3 (No. C- 184 ) A building la not exempt from taxation unless it is both owned and used exclusively by an lnstltutlon of purely public charity. City of Houston-vs: Scottish Rite Ekne%oleni Association, 111 Texas Dl, 230 s.w. 97811921).ve cited case, held that an Instltutldn wai one of "purely public charity" where first It made no gain or profit;. second, It accompllshed.ends wholly benevolent; and, third, It beneflted.persons, Indefinite in numbers and In personalltIes,by preventing them through absolulie gratuity, from becoming burdens to society and the State. The Supreme Court also held that a non-profit organization whose actlvl- ties were only partly charitable could not qualify as an Institution of purely public charity. In the situation before us here, the facts show that thla property does ,not meet the quallflcatlons set forth In the above cited case: It la shown that the property Is leased lndls- crlmlnately to persons of acy age Irrespective of whether they are in need of financial assistalice. You are,.therefore, advised that In our opinion the Lake Crest Estates owned and operated by Chrlstlan Homes, Inc., la not exempt from ad valorem taxes. SUMMARY. ------- Under the stated facts the property Involved In @la opinion la not at the present time- be$ng used exolualtrely-.bg an inatl- tutlon of purely public charity, and Is, therefore, not exempt from ad valorem taxes. Yours very truly, WAGGONER CARR Attorney General of Texas Assletant Attorney General APPROVED: OPINIONCOMMItiEE W. V. Geppert Chairman Arthur Sandlln Ernest Fortenberry Paul Phy APPROVEDFOR THE ATTORNEYGENERAL By: Stanton Stone -894