                                   1966


Honorable Lowell C. Rolt,          Opinion   No. C-731
District Attorney
Upshur County                      Re:    Taxability for ad valorem
Gilmer, Texas                             tax purposes of property
                                          owned by Radio Church of
                                          God and Ambassador College,
                                          part of which is used by
Dear Mr. Halt:                            Imperial School.

       Your letter requests an opinion of this office 'concern-
ing the exempt status of a portion of 1525 acres of land In
Upshur County, Texas, part of which is owned by Radio Church
of God, a part owned by Ambassador College and a part of
which Is u'sedby Imperial School, which Is a school operated
by Radio Church of God." We quote further from your letter.~
         ?l!he,factsconcerning this property, a8
         well as we can ascertain them, are as
         follows:
                      "RADIO CHURCH OF GOD
         "The Radio Church of God was originally
         chartered in California as a non profit
         Radio Church corporation on February 20,
         1947 and was granted a Certificate of
         Authority by the Secretary of State of
         Texas on the 2nd day of October,'lg63.
                                                             >
          ?Phe purpose or purposes which it pursues
          In the State of Texas are as follows:
                 "The nonprofit vocation of managing the
                 temporal affairs and promoting the
                 splrltual, educational and other benevo-
                 lent Interest of the Church, and without
                 limitation upon the generality of the
                 foregoing, proclaiming the Gospel by
                 radio, printing, personal evangelism


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    Honorable Lowell C. Holt, Page 2 (C-731)


                  and other means of com\iniCatLoZ;
                  establishing Churches and ordaining
                  ministers; operating schools and
                  classes for the spiritual Intellectual,
                  and physlcal development'of its members
                  and affiliates; acquiring property,
                  real, personal or mixed, and mortgaging,
                  leasing, selling, exchanging or other-
                  wise disposing of the same, subject to
                  the provlsions, Vernon's Annotated
                  Clv'ilStatutes, Miscellaneous Corpora-
                  tion Laws, Article 1302-4.01 and
                  Article 13024.05; receiving inter
                  vivos or testamentary gifts and dona-
                  tions, engaging in such other secular
                  activities, permitted by law, as are
                  necessary or expedient to carry out
                  the foregoing.
             "The Church activities are financed solely
             from members and contributions from co-workers.
             Never in the history of the Church have funds
             been solicited In any of the Church literature,
             its world-wide evangelistic and charitable pro-
             grams; over Its world-wide radio broadcasts nor
             have any public fund raising campaigns ever been
             conducted for the financing of the Church.
             "Attendance at the Big Sandy Church services
             range from 750 to 800 each week. Services  are
             held weekly for members.
              "The Church and its activities are exempt from
              Federal Taxation because of its religious,
              charitable and non-profit nature and it should
              be pointed out that the Church is strictly a
              religious, educational and charitable organi-
              zation. Th c        11     f P blic Accounts
              m,      TexEs ~~%soe~d~udg~d     it exempt f;om
              the Corporate Franchise Tax and Limited Sales
              Tax of the State of Texas.
              "Faculty members are transferred from time to
              time from one campus to the other in order that
              each of the colleges will maintain the same




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        Honorable Lowell C. Holt, Page 3 (C-731)


                 degree'of scholastic excellence. At
                 each college, certain members of the
                 faculty are required to reside on the
                 campus, viz: Heads of Departments, Dean
                 of Men and Women and other AdmInIstratIve
                 Heads.
                 "AQQroXimately 16,000 people attend the
                 Church worship services each fall and
                 spring. During the year, there will be
                 three (3) separate meeting days of the
                 Church for a one day session at which a
                 minimum of 1800 people will attend for
                 these three (3) separate meetings.
                         "AMBASSADOR COLLEGE
                 "Ambassador College Is a co-educational
                 liberal arts college with regular faculty,
                 organized on campus student body and main-
                 tains curriculum at the collegiate level.
                 "The College Is exempt from Federal Taxa-
                 tion under Section 510 (c) 3 of the Internal
                 Revenue Code. The Comptroller of Public
             t   Accounts, Austin, Texas has also.adjudged
                 it exempt from the Corporate Franchise Tax
                 and Limited.Sales Tax of the State of Texas.
                 "Ambassador College at Big Sandy is one of
                 three (3) Ambassador Colleges operated and
                 functioning as a college in the world. The
                 original Ambassador College at Pasadena,
                 California was chartered as a nonprofit
                 organization by the State of'Callfornla on,
                 April 8, 1951. A Certificate of Authority
                 was Issued to Ambassador College to operate
                 as a nonprofit corporation In the State of
                 Texas on the 9th day of September, 1963.
                 The purpose of Ambassador College as certi-
                 fied to conduct its activities in the State
                 of Texas are as follows:
                      "Those necessary for the establishment,
                      maintenance and conduct of an educational



                                -3514-
Honorable Lowell C. Halt, Page 4 (c-731)


               institution of regular curriculum to
               Instruct and train students for successful
               lives and for active duty in the ministry
               of world-wide evangelism and of organizing
               and conducting local churches by the Radio
               Church of God, which purposes Include,
               but without limitation upon the generality
               of the foregoing, are:
               "1) to establish, maintain and conduct
               an educational institution, co-educa-
               tional, on the undergraduate levei, in
               the field of liberal arts and theology,
               and in conjunction a graduate school of
               theology;
               "2) to own, lease, rent, purchase,
               receive or acquire such property, both
               real and personal, asis required for
               the conduct of classes, academic and
               business administration, fund raising,
               dormitory and student housing, campus,
               recreational and athletic grounds and
               facilities, laboratories, studies,
               printing, library, gymnasium, farm
               properties, livestock and equipment for
               practical class demonstration and train-
               ing, and whatsoever property or~facllltles
               Andyequipment are deemed necessary and
               desirable for the purpose of educating
               and training the enrolled students of this
               college;
               "3) to receive and solicit by proper
               means donations, gifts, endowments,
               legacies, special funds for specific
               needs pertaining to the general purposes
               of the college, or to borrow funds and
               to mortgage or pledge property as security
               for same, for the carrying out of the
               educational purposes of this institution.
          "Students enrolled in Ambassador College are
          required to pay tuition, but this is only a




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     Honorable Lowell C. Holt, Page 5 (c-731)


              small fraction of the operational budget
              requirements. In fact, Ambassador College
              operates at a deficit and is supported by
              Radio Church of God. In fact, Ambassador
              College is a creature of the Radio Church
              of Godand its charter specifically states
              that a part of its purpose Is preparing
              ministers of the Radio Church of God
              through Its school of theology.
                         "IMPERIAL SCHOOL
              'In addition to Ambassador College, Imperial
              School, which is at the elementary and high
              school levels;13 conducted on the property
              In the name of Ambassador College and Radio
              Church of God referred to herein. All of
              Its activities have also been exempt from
              Federal Taxation under Section 510 (c) 3 of
              the Internal Revenue Code. The Comptroller
              of Public Accounts, Austin, Texas, has also
              adjudged It exempt from the Corporate
              Franchise Tax and Limited Sale3 Tax of the
              State of Texas. Imperial School Is financed
              by the Radio Church of God.
                          "USES OF ACREAGE
              "The entire acreage owned by the hereinabove
              mentioned institutions is shohn by a map
              attached hereto and made a part hereof
              marked Exhibit 'A'. It will be noted that
              the tracts are numbered and are colored in
              various color3 for the purpose of showing
              more clearly the different use8 being made
              of the various tract3 owned by the instltu-
              tlon named.
              "Those tracts of land colored red, viz:
              numbers 1, 2, X-3, 4, 9, 10, 11, 12, 13,
              14, 15; 1.6, 26, 27 and 28 are used exclusively
              for religious, charitable and educational pur-
              poses. This use Includes the buildings,
              grounds and Improvements, none of which
              Produce any Income or revenue to Ambassador


                               -3516-
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    Honorable Lowell C. Holt, Page 6 (C-731)


              College, Radio Church of God or Imperial
              School. School, College, Church and/or
              maintenance buildings along with dormitories,
              school dining halls, faculty houses, recrea-
              tional grounds and encampment grounds are
              located in this area. Upon an eXaminatlOn
              and Investigation of the grounds, we
              come to the conclusion that this area and
              the facilities, buildings and grounds
              located thereon are necessary to fulfill the
              requirements of the School, College and
              Church.
              "A small portion of tracts numbered 2 and 9
              are outlined in yellow for the purpose of
              showing certain uses being made of that
              particular portion, which 13 explained as
              follows:
              "On this yellow portion, Radio Church of
              God and Ambassador College have constructed
              resident houses. Ten of these houses are
              occupied by heads of departments, dean of
              women and dean of men, and the superinten-
              dent of buildings, grounds and maintenance.
              These faculty members and. superintendent of
              buildings, grounds and maintenance are paid
              regular salaries and are required to~live
              in the residences furnished by the School
              and Church. They pay no rent for the
              occupancy of same. The houses used by the
              faculty produce no income or revenue for
              the Church or School. These various
              faculty members are required to live on the
              campus because the School is co-educational
              and the College authorities feel that this
              13 necessary in order to maintain the high
              degree of morality required by its students.
              However, a majority of the faculty members
              and employees of the Church, College Andy
              School live off campus in neighboring towns.
              "Six houses are occupied by ministers of
              the Radio Church of God, who are also faculty
              members. The Church furnishes these houses
              to its ministers as provided under Article
              7150b, V.A.C.S.
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     Honorable Lowell C. Holt, Page 7 (c-731)


              'Those tracts colored blue, viz: number3 5, 6,
              7, ,8, l?, 13, 13, 20, 21, 23, 24 and 25 are
              owned by the Church and School but they are
              being used for grazing and farming purposes
              and~though a part of the products comings
              from these tract3 are used in connection
              with the Church and School, a major portion
              of such products are sold commercially and
              are not a part of those tracts enumerated
              above which are used for religious and edu-
              cational purposes. These tracts In the
              future, or a portion of them, will probably
              be used In connection with an agricultural
              program to be offered by the College, said
              tracts to be used a3 experimental farms and
              demonstration In such program, but at the
              present time they are not being used a3 such
              and In our ,opinlon,based on the brief sub-
              mitted herewith, they are not subject ;40tax
              exemption under the laws of our State.
            We wish to acknowledge the excellence of the brief
     which you have submitted In connection with your request
     and concur in your conclusion that the tracts being used
     for grazing purposes, to wit, tracts number3 5, 6, 7, 8,
     17, 18, 19, 20, 21, 23, 24 and 25 are not exempt from ad
     valorem taxation. St. Edwards College v. Morris, 82 Tex.
     1, 17 S.W. 512 (18911.
            It Is not the province of this office to pass on
     questions of fact. With regards to tracts 1 2, X-3, 4,
     9, 10, 11, 12, 13, 14, 15, 16 26 27 and 26 you make
     the following statements at pige 4 of'your brief:
               If
                . . . 'Ihebuildings, land, play ground3
               and Improvements are necessary to the three-
               fold operation of the organizations. These
               grounds, buildings, Improvements and other
               facilities are used jointly bx the Church
               and educational institutions.
     Based on the assumption that these statement3 are factually
     correct, we also concur in your conclusion that these tracts
     are exempt from ad valorem taxation. We have reached our
     cOnClUSl?nS In view of the following constitutional and statu-
     tory Provisiqns and their construction by our courts.

                              -3518-
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        Honorable Lowell C. Halt, Page 8 (C-731)


               Sec"lcn
                  ”    o
                       L of Prt!cln
                                 ,  - VIII of the Texas Corstltutlon
        authorizes the Legislature, within the llmltations therein
        prescribed, to grant certain exemptions from ad valorem taxes.
        Secticn 2 provides, in part, as follows:
                  1,
                          the legislature may, by gz;;~i
                  law: *exempt from taxation
                  placks or fif7 religious    worship, also
                  any proper'ijrwned by a church or by a
                  strictly religious society for the
                  exclusive use as a dwelling place for
                  the ministry of such church or religious
                  society, and which yields no revenue
                  whatever to such church or religious
                  society; provided that such exemption
                  shall not extend to more property than
                  1s reasonably necessary for a dwelling
                  place and in no event more than one
                  acre of land; . . . all buildings used
                  exclusively and owned by persons or
                  associations of persons for school
                  purposes and the necessary furniture
                  of all schools . . . ."
               Pursuant to these authorizations, the Legislature
        enacted Articles 7150 Andy7150b, Vernon's Civil Statutes.
        Article 7150 reads, In part, as follows:
                 "The following property shall be exempt
                 from taxation, to-wit:
                 "1. Schools and Churches. Public
                 school houses and actual places of
                 religious worship, also any property
                 owned by a church or by a strictly
                 religious society, for the exclusive
                 use as a dwelling place for the
                 mtnlsters of such church or religious
                 society, the books and furniture
                 therein and the grounds attached to
                 such buildings necessary for the pro-
                 yg ;;;~euPancy,use and enjoyment of
                           and which yields no revenue
                 whatever'to such church or religious
                 society; provided that such exemption
                 as to the dwelling place for the ministers
                 shall not extend to more~property than Is
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      Honorable Lowell C. Holt, Page 9 (C-731)


               reasonably necessary for a dwelling
               place and in no event to more than
              .one acre of'land. . . . a~ndall such
               buildings used exclusively and owned
               by persons or assoclatlons,,ofpersons
               for school purposes; . . ,

            Article 7150b reads   a8 follows:
               "There.1~ hereby exempted from taxation
               any property owned exclusively and In
               fee by a church for the exclusive u3e
               as a dwelling place for the ministry of
               such church and which property yields n3
               revenue whatever to such church; provided
               that such exemption shall not extend to
              'more property than is reasonably necessary
               for a dwelling place and ln no event more
               than one acre of land; and provided further,
               that the fact that the ministry uses a por-
               tion of the dwelling as their study, library
               or office shall not prevent the property
               from being considered as being used exclu-
               sively as a dwelling place. For purposes
               of this Act, 'church' Includes a strictly
               religious. society; and 'ministry of such
               church' means these persons whose prin-
               cipal occupation is that of serving In the
               clergy, ministry, priesthood or presbytery
               of an.organized church or religion, whether
               they are assigned to a local church parish,
               synagogue, cathedral or temple or to Some
               larger unit of the church organization and
               whether they {erform administrative func-
               tions or not.
              We are here faced with the appllcablllty and, as we
      view It.,the overlapping of several exemption provisions.
      The "actual places of religious  worship" on the tracts
      are within the plain and unambiguous language of both the
      statute  and the Constitution and are exempt. Furtherm'ore,
      the statutory provision exempting "the grounds attached to
      such buildings necessary for the proper occupancy, use and
      enjoyment of the same, and which yields no rexenue what-
      ever to such church or religious society.        Is not
      limited to the church building proper, and'g;ounds necessary




                                  -3520-
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         Honorable Lowell C. Holt, Page IO (C-371)


         to give access to the church or from o;?epart of the church
         to another. but Includes land3 around such buildings reason-
         ably necessary for convenient ingress and egress, ilght;alr,
         or appropriate ornamentation. City of Houston v. Cohen, 204
         S.W.2d 671 (Tex.Clv.App. 1947, error ref., n.r.e.). As pointed
                                                                    2Cl
         E% 2s                                                      be
         "necessary ground3 would be a question of fact.
                 Adverting to your description of tract3 numbered 2 and
         9, you state that "Six houses are occupied by ministers of
         the Radio Church of God, who are also faculty members". You
         suggest  that these houses are furnished to the ministers In
         accordance with the provisions of Article 7150b. ExemDtion
         cannot be accorded under the provisions of'7i50b In view of
         City of Houston v. South Park Baptist  Church, 393 S.W.2d 354
         lTex.Clv.App. 1965. error ref.) which~held that Section 2 of
         Article VIII authorizes the Legislature to exemptonly one
         dwelling place for the ministry of the church. If these
         dwellings are to be exempt, It would be by virtue of the fact
         that the ministers are also faculty members. We pass, there-
         fore, to a consideration of whether this use of these bulld-
         lngs by ministers as faculty members brings this property
         within the exemption provided in Article 7150 for "all such
         buildings used exclusively and owned by persons or assocla-
         tlons of persons for school purposes;' . . .I'
                We quote and‘reafflrm the following excerpt from
         Attorney General'3 Opinion No. C-l (1963).
                   "A house owned by a school 13 exempt from
                   taxation, even though a faculty member or
                   student thereof reside therein, If such
                   residence Is to afford protection, guld-
                   ante and training to students outside of
                   the classroom, or if such residence 1s
                   for the convenience of the college by
                   reason of their residing at that particular
                   locality with reference to their obligations
                   to the school, or for some reason with ref-
                   erence to the.property Itself which Is the
                   concern of the college rather than of them-
                   selves and Is In fact used exclusively for
                   school purposes. Cassiano v. Ursullne
                   Academy (supra); Red v. Morris (supral;



                                   -3521-
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      Honorable Lowell C. Holt,      Page 11 (C-731)


                Smith v. Feather, 229 S.W.2d 417 (Clv.App.
                Tl 01 ludgment reformed snd affirmed 149
                Tez5 462* 234 S W 2d 418 (1950); Cornell
                Universliy v. !&orne, 57 N.Y.S.2d.TN.Y.
                s    C   194 ). Opinion No. V-09 of Attorney
                G~~era~'of ?'zx& (1947)."

             Ever since the decision of the Supreme Court in Cassiano
      v. Ursullne Academy, 64 Tex. 673 (18851, the policy of this
      State has conslatently been proclaimed to be as stated at page
      675 of that opinion.
                "It  has been the policy of the state since
                1849 to encourage educational enterprise3
                by exempting them from any share of the burdens
                     overnment. . . . The constitution of
                    2 so far from modifying this policy, makes
                108f7
                munltlcent provisions for the maintenance of
                free schools. There has been no antagonism
                between the public and private schools to
                warrant the Inference that the framers of
                the constitution, !n the use of the word
                building, Intended a spiteful dlscrlmlnatlon
                against private schools.
                "The education of the masses is now recognized
                as a function of state government. Those who,
                from charitable considerations, to forward
                sectarian views, or for private profit, have
                organized or conducted schools, have assisted
                the state in the performance of a duty It owes
                to Its citizens, which cannot be too thoroughly
                performed, and which the state has never assumed
                that It had either the means or the machinery of
                doing sufficiently well without private asslst-
                ante. !Phe.UrsulineAcademy 1s performing Its
                part in this branch of the public service, and
                it should rather be encouraged by aids, than
                impaired In its usefulness by a tax upon its
                pitiful revenues.
                 0
                     .   .   .   .



                "All the buildings and all the land sought to
                be sold by appellant were necessary and used
                for the proper and economical conduct of the


                                     -3522-
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     Honorable Lowell C. Halt, Page 12 (C-731)


               school.    . . The grounds were used for
               the recreation of the pupils, and to'supply
               the school with vegetables. Authority Is
               not wanting to extend the exemption to land
               much less directly employed to forward the
               interests of the school. . . ,'I

     The moot resent aoknowledgment of this ease by our Supreme
     Court is River Oaks Garden Club v. City of Houston, 370 S:W.2d
     851, 856 193).
             Assuming that you are correct in your determination as
      a fact that all of the buildings, land, play grounds and improve-
      ments comprised In tracts 1, 2, x-3, 4, 9, 10, 11, 12, 13, 14,
      15, 16, 26, 27, and 28 are presently used solely and exclusively
     -for educational purposes, we reiterate thatwe concur In your con-
      clusion that the above numbered tracts are efempt from ad valorem
      taxation.

                          SUMMARY
                    Actual places of religious worship on
               land which belongs to the Radio Church of
               God are exempt from ad valorem taxes as is
               the land,around such places reasonably
               necessary for convenient ingress and egress,
               light, air or appropriate ornamentation.
               All of the buildings and all of the land
               which are necessary and properly used to
               forward the interest of Ambassador College
               and Imperial School are exempt from taxa-
               tion. The land which belongs to Ambassador
               College and which is used for grazing and
               farming purposes is not exempt from ad valorem
               taxation.
                                         Yours very truly,
                                         WAGGONER CARR
                                         Attorney General



     MMP/fb


                                -3523-
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          Honorable Lowell C. Holt, Page 13 (C-731)


          APPROVED:
          OPINION COMMITTEE
          W. V. Geppert, Chairman
          MarionObledo
          W. E Allen
          Pat Bailey
          Kerns Taylor
          APPROVED FOR THE ATTORNJS GENERAL
          BY: T. B. Wright




                                    -3524-
