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




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