                               ATTORNEY GENERAL OF TEXAS
                                             GREG        ABBOTT




                                                 October 28,2011



The Honorable Mike Jackson                                  Opinion No. GA-0890
Chair, Committee on Economic Development
Texas State Senate                                          Re: Whether a local board of realtors is a
Post Office Box 12068                                       "nonprofit community business organization" for
Austin, Texas 78711-2068                                    purposes of section 11.231 of the Tax Code
                                                            (RQ-0970-GA)

Dear Senator Jackson:

        You ask whether local boards of realtors qualify for the property tax exemption the
Legislature created in section 11.231, Texas Tax Code.! Added in the Eighty-first Legislature,
section 11.231 provides a property tax exemption for "nonprofit community business organizations."
TEX. TAX CODE ANN. § 11.231 (West Supp. 2010); see Act of May 31, 2009, 81st Leg., R.S., ch.
1417, § 3,2009 Tex. Gen. Laws 4472, 4474-75. You tell us that "[s]everal appraisal district
around the state ... have encountered local realtor boards applying for this exemption." Request
Letter at 1. You state that your original intent in adopting the provision was to allow "chambers of
commerce to spend money on local economic development initiatives rather than property taxes."
Id.

        "The question whether a particular property is exempt from taxation depends on the facts
of the particular situation." Tex. Att'y Gen. Op. No. GA-0827 (2010) at 2. This office does not
determine questions of fact, and we therefore cannot ultimately determine whether a tax exemption
applies. See Tex. Att'y Gen. Op. No. GA-0485 (2006) at 4 (recognizing that question of property
tax exemption involves questions of fact and is outside the purview of an attorney general opinion).
Moreover, the chief appraiser of the appraisal district in which the property is located is statutorily
charged in the first instance with determining whether property is tax exempt. See TEX. TAX CODE



          !See Letter from the Honorable Mike Jackson, Chair, Committee on Economic Development, Texas State
Senate, to Honorable Greg Abbott, Attorney General of Texas at 1 (May 10, 2011), https://www.oag.state.tx.us/opin/
index_rq.shtml ("Request Letter"). Briefing we received in connection with your request asks us to consider section
11.231's constitutionality. Brief from Jon Miller, Law Offices of Rodgers & Miller, P.C., to Jason Boatright, Chair,
Opinion Committee at 1,3 (Oct. 18,2011). We limit this opinion to the question you have asked about the interpretation
of section 11.231, presuming, as a court is required to do, that the statute is constitutional. See TEX. GOV'T CODE ANN.
§ 311.021(1) (West 2005) (stating that the Legislature intends statutes to be constitutional); Nootsie Ltd. v. Williamson
Cnty. Appraisal Dist., 925 S.W.2d 659, 662 (Tex. 1996) (presuming that a statute is constitutional); see also Tex. Att'y
Gen. Op. No. GA-0762 (2010) at 4 n.5 (noting that opinions are limited to the specific question asked by an authorized
requestor) .
The Honorable Mike Jackson - Page 2            (GA-0890)




ANN. § 11.45(a) (West 2008) ("The chief appraiser shall determine ... each applicant's right to an
exemption."); see also St. Joseph Orthodox Christian Church v. Spring Branch Indep. Sch. Dist.,
110 S.W.3d 477,479 n.6 (Tex. App.-Houston [14th Dist.] 2003, no pet.) (recognizing that chief
appraiser initially determines right to a tax exemption). Thus, we cannot definitively determine
whether any particular organization, including a local board of realtors, qualifies for the exemption
under section 11.231. We can, however, address in general terms the legal issues raised by your
request.

       Subsection 11.231 (a) defines a "nonprofit community business organization" to be an
organization that meets certain requirements. See TEX. TAX CODE ANN. § 11.231 (West Supp.
2010). Specifically, the Legislature required that qualifying organizations must (1) have been in
existence for at least the preceding five years; (2) be organized as a nonprofit corporation and as a
501(c)(6) organization, but not be a statewide organization; (3) have maintained, for at least the
preceding three years, a dues-paying membership of at least 50 members; and (4) have an
uncompensated, member-elected board of directors, be primarily supported by membership dues,
not support or be supported by a political action committee, and be "engaged primarily in performing
functions listed in Subsection (d)." Id. § 11.231(a) (emphasis added). In addition to the above
requirements, subsection 11.231 (d) further requires that

               [t]o qualify for an exemption under this section, a nonprofit
               community business organization must be engaged primarily in
               performing one or more of the following functions in the local
               community:

                     (1) promoting the common economic interests of commercial
                     enterprises:

                     (2) improving the business conditions of one or more types of
                     businesses; or

                     (3) otherwise    providing   serVIces   to   aid in    economic
                     development.

Id. § 11.231(d) (emphasis added) .

        Under the plain language of subsection 11.231 (a), in order to receive the tax exemption an
entity must be "engaged primarily in" performing one of the functions listed in subsection 11.231 (d).
See id. § 11.231(a)(4)(C). Section 11.231 emphasizes the word "primarily" by repeating it in the
requirements listed in both subsection 11.231 (a) and in the list of particular economic development
functions in subsection 11.231(d). See id. § 11.231(a), (d). Absent a specific definition in the Tax
Code or a judicial opinion construing the provision, we consider the ordinary meaning of the word
"primarily." See TEX. GOV'T CODE ANN. § 311.011(a) (West 2005) ("Words and phrases shall be
read in context and construed according to the rules of grammar and common usage."). In its most
The Honorable Mike Jackson - Page 3                       (GA-0890)



common usage, the term "primarily" means: "In the first place, first of all, preeminently, chiefly,
principall y; essentially." xn OXFORD ENGLISH DICTIONARY 472 (2d ed. 1989). As the term is used
in the context of the statute, we believe an entity is primarily engaged in performing one of the
functions listed in subsection 11.231(d) if the entity's preeminent, chief, or principal purpose is
performing that function.

         You indicate that your intent was to provide an exemption for local chambers of commerce.
See Request Letter at 1. Although that statement may manifest your intent, the Texas Supreme Court
has ruled that the statement of a single legislator does not determine legislative intent. See AT&T
Commc'ns of Tex., L.P. v. Sw. Bell Tel. Co., 186 S.W.3d 517,528-29 (Tex. 2006). The Texas
Supreme Court has further stated that "[w]here [the] text is clear, text is determinative of
[legislative] intent." Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 437 (Tex. 2009).
Accordingly, we are required to rely on the plain text of the statute, which grants the exemption
not to a. "chamber of commerce" butto a "nonprofit community business organization." TEX. TAX
CODE ANN. § 11.231(a) (West Supp. 2010). There is no indication in the text of section 11.231 that
the exemption was meant exclusively for a chamber of commerce.

        Under the plain language of section 11.231, an entity that is not a chamber of commerce but
that otherwise satisfies the elements in subsections 1 1.231 (a) and 11.231(d), as determined by the
chief appraiser, is a "nonprofit community business organization" that qualifies for the exemption.
Whether an entity's preeminent, chief, or principal purpose is the performance of one of the
particular economic development activities specified in subsection 11.231 (d) is a question of fact
outside the scope of the opinion process. 2 Tex. Att'y Gen. Op. No. GA-0827 (2010) at 2.




           2As indicated earlier, the chief appraiser of the appraisal district in which the property is located is charged in
the first instance with determining whether property is tax exempt. TEx. TAX CODE ANN. § lIAS(a) (West 2008); see
also N. Alamo Water Supply Corp. v. Willacy Cnty. Appraisal Dist., 804 S.W.2d 894, 899 (Tex. 1991) ("Statutory
exemptions from taxation are subject to strict construction because they undermine equality and uniformity by placing
a greater burden on some taxpaying businesses and individuals rather than placing the burden on all taxpayers equally.
Accordingly, the burden of proof clearly showing that the organization falls within the statutory exemption is on the
claimant.") (citations omitted).
The Honorable Mike Jackson - Page 4          (GA-0890)




                                      SUMMARY

                      Under section 11.231, Texas Tax Code, an entity that is
               engaged primarily in performing one of the section's listed economic
               development functions, as determined by the chief tax appraiser, is a
               "nonprOfit community business organization" that qualifies for the
               property tax exemption set forth in the section.




DANIEL T. HODGE
First Assistant Attorney General

DAVID J. SCHENCK
Deputy Attorney General for Legal Counsel

JASON BOATRIGHT
Chair, Opinion Committee

Charlotte M. Harper
Assistant Attorney General, Opinion Committee
