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            OFFICE   OF THE     ATTORNEY GENERAL    OF TEXAS
                                   AUSTIN
GROVERSELLERS
*TTOIINLIGLNLRAL




m,    Rd6u Hutohlnr
countf AtmnV
muIt county
~rronrlllr, Tuar




                              oportlor wlthln thhsoounty
                              op ohutrrod  ando? tho pro-
                               1528b BCS o? ~taar?
                       anawor quostian No. 1 in tho
                       thr Dirtriot  Court of tho County
                    talaa~   tax hare jurl6dlotlai   la
     a dollnqwnt tax suit againet thr rleotrlo     oo-op?
           *I M unable to ilad any oasrr hIpzopattEah
     will  anmor tho above two quoatloa8,
     oontentlon  of thhr l!lootrlo Co-op that uador rootion
     25(r) of Art1010 1528b tha oorporatlon belay a non-
     profit pub110 utility ir not 8UbjoOt    t0 8n ad taloroa
     taz la+),  and it la tholr rurttlar oontantlcm that
     broauss tho R#al    ~1rOtrliiOatlm Addnirtratiai      a8
     an agonoy of the Fedora1 Gotsrnwmt h88 a Dood of
s:oo. UU        HUtOhh8,      P-0   2


     Trurt 0 rooord oworl~    all tho roportior      of tbr
     oo-op loortod rlthln the oollntl t L t they   would bo
     8UbjOOt a11y to (token) pqB@ilt8   rat&r    than regular-
     1     a88088Od 8d ValOra           hX.8     a8 11110apply   to PrOpOr-
     tI 08 brlonglag to         othar oorpaeatlanr.
             ‘1will
                  lp p r o o iayto
                                o ur
                                   l881 8ta lan00
                                               thlr
     matter..

           Rll OxengtlOn8 frm ad Taloram taxor mU8t bo bared
upon the prorlr10118of Sootion 2 oi Artlolo lIII of the Con-
#titution  Of Texas.    That 8OOtim authorloor tho Lc~lrlaturo
to exup t oertaln property fraa taxation,       rod prolidar  furthor
tbst *a 1 law8 oxom tlnu propsrtg from taxation       othsr than tho
proprty p aboro aan tp onod 8hall be null and rold," wo aro ua-
able to Ulnd in raid Sootlon any prorlrlm whloh would author-
1x8 the l xunptlm of poporty      boloa@lry to 8n lleotrloal oo-
oprratlvo  lnoorporated   tiar  tha  prorl8l~ar   of Artlalo  1526b   .
from ad ralorom taxoa.

             The oorporatlom luthorlaod by tho prorl8loa8 of
artlolo    1528b are prlrato   oorporatlonr, and tho more faot
that   tho# a?0 noa refit     oorpcratlonr      door not maho thr  tu
lxompt. Thor aro lpa no 80~80 8tatO agonoler,           a8 aro tha
rariour Dirtriot     and AuthOritior       oro8tod dirootly by Aot8
Of the L@8htU?O       pUr8Ufh     t0 tit1010     m,   SOOtiUl 59, Of
th0 COLl8titUtlOli.

             srotlon       25 of Art1010       1526b road8 a8 roii0~I
            *(a)   Eaoh oorpcaatloa  da11 bo oporatod without
     profit    to its momborr but the  rator,    fro8 , ront8, or
     othor ohar(lr8 for ll#OtriO onorg        a136 an) OthOr
     iaollltlor, 8llpp11r8, lqulplpent, Or 8artloo8 fur-
     nl8hd     by the OOrpO?OtlOn 8ball be 8UfflOiOnt at
     all tin.8
           "(1) To pay all o rating and malntraawo        ox-
     ~I¶808 neOO88ary or do8 ?rable   iOr th0 prudent OOII-
     duot Of it8 bU8lnWS    ald the prinOIps1  Of and in-
     tsrart on tho obligation8   irrwd   Or l88UfArsdby th
     oorporatlw  in tho porformanoo                of tha purpo80 for
     whloh it war organlxd, and
go% Cedar Butohlnn,                    P8gO 8




                     “(2)    Poor the oroatloo        Of 208WVO8r
              ‘(b)      The rwonuoa of the oorpaatlc+ ahall bo
         dorotod flrrt  to tho paymat or oporatrry ana
         malntmanoa u      a808 and tho    rlnolpal  md la-
         torrrt On Out8 r UkdLng obllgat P =I)   and thOr0aft.r
         t0    8UOh rO8OmO8             fO? ilU~Ot~eJlt,
                                          nOW OCfi8trUOtiOIA,
         dopraolatlm, and oontlngoaolrr an tho Board ray
         fran tlmo to tin0 prororlbr,
            '(0)   Rev0n~O8 not ro ulrod       for tho purpo8ar rot
         facth in Sub-rsotion      (b ‘f of thl8 Saotion rhall     bo
         roturnsd from tlmo to tlmo to thr moaborr OQ a ro
         r a tabasir  looordlag to tho amount       of buriarrr    i on0
         with laoh during      tho porlod, llthrr la oaoh, La
         abatoaont of ourrant      aharger   foe olootrlo    morgy,
         or otherwlro     a8 tbr Board dOtOrlDina8l    but   8UOh ro-
         turn may be mado by wy of grnrral rata roduotlon
         to mabarr,    if   th0 Board 80 OlOOt8,”

                 Certainly  therr    18 nothing in thl8 8OOtiM to In-
dloatr        d l~gl8latlro   lntontiao   to aompt    any part of tho pro-
pertlrr        of 8uoh 000oporatlrer     from taxation,

              Attention 18 oallod                 to Seotlon   30 of tho dlootrio
Cooper    atlrr Corporatlan Aot t
                             formed hsroundrr &all jn~
                     %orporatlom
         annually           on   or   boforo
                                 May fkrt   to the Soorotary
         of State, a lloo~o   fro of Ten bollarr   ($10) and
         ruoh oorporatloM shall be asnpt     from all othor
         OX0180 tax08 Of rhst8ootOr   kind Or oharaotar,.
         fEmphasl8 addod)
                     Thl8
                   1s the on4 rsfusnor    to a tax sremptlon oon-
talned           ontire aot, and rinol it 18 limltod to lxoi8o
              in the
hXe8   it EiU8t bs OOll8tNlOd l S 8 t8Oit ?~OO&UlitiOll that 8UOh
corporations   ar8   8ubjeot to au  other typI8 of taxo8,

           ‘fhe faot that tho I?. Yb A,, an lganoy of thbr Padrral
Corerment,    18 the holder of a deed of trurt on thr propsrtla8
of the oorporatlon   oamot ohangr the lbwo oonolwlon.       Tho
Rdu-      Hutohiar,        Pa@ 4


R. V. A. hold8 no aore than tho nabd 1~~81 tit10 to tho pro-
pa ty, while thr l    qultabk    tltla, tha u8e, r,amdar in the ao-
oporatlto.    It 18 rottiod that tho property      lurt bo rurdorod
& 888888Od ti the Il=O Of tha trU8tO?,          and th0 trU8tOO   18
not llablo  for any part of the tuo8 looruin8 thoroon.          Harvo)
T. ROvldmt      Inrohmant     Co., 156 S, 19, ll27) Buttr8m v. Oray
county, 62 red. (2) 47.
               h        aU8WOr t0   JOW  8eOand qUO8tial     ThO 8btUtO8
pertaining         to    ruit8 to  ?Or401080  tax lion8  (Art8.  7326    7326,
7326.1,      and 7345b)       rrqulrr thlt r uo h  lltr  bo brought h     the
--~
bhtrlot       oourt of       tha OountY   la uhloh thr rM1 rrtatr     $8
81tUa tOd.

               Far JoUr goner81       infora8tion  and lS8i8tUlOO WOwo
urolcslag      herowlth       a oopr of our Oplalon No. O-2600.
                                                     Tour8    row     truly,




                                                             Arthur     L. Molhr
                                                                        A8Bi8taUt
