                          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.
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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
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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
