  WI&       WILSON
*%-ro-         CaENERAI.
                             December 28, 1962


         Honorable Robert S. Calvert        Opinion No. WW-1514
         Comptroller of Public Accounts
         Austln,'Texas                      Re:   Whether, under the facts
                                                  submitted, a corporation
                                                  chartered by a Police
                                                  Officers' Assoclat-ionis
                                                  exemot from the fran-
                                                  chisk~tax required by
                                                  Chapter 12,,Title 122A,
         Dear Mr. Calvert:                        Taxation--General,V;A.TS.
               This is in reply to your request for an opinion on
         whether a certain corporation chartered by a Police Officers'
         Association is exempt from the payment of franchise taxes.
               Article 12.01, Chapter 12, Title 122A,   V.A.T.S., imposes
         a franchise tax In words as follows:
                  "(1.) Except as herein provided, every domestic
               and foreign corporation heretofore or hereafter
               chartered or authorized to do business in Texas
               or doing business In Texas, shall, on or before
               May 1st of each year, pay in advance to the Secre-
               tary of State t franchise tax for the year
               following ...
         Article 12.03 of said Chapter 12 provides in part as follows:
                  "The franchise tax Imposed by this Chapter shall
               not apply to ... corporations organized ;.: for
               strictly educational purposes, or for purely
               public charity ..."
               You do not give any facts as to how the corporation in
         question is actually operated; but you state the purpose "
         clause of its charter, and we will answer on the assumption
         that it is operated strictly in accordance with the purpose
         clause. The purpose of the corporation is stated as follows:
                  "The purpose or purposes for which the Association
               Is formed are as follows: The support of any benevo-
               lent, charitable, or educational undertaking and
               particularly to promote and develop friendly and
Hon. Robert Calve&     Page   2   Opinion No. WW-1514


      fraternal spirit among all of the employees of
      the Police Department, and to generally increase
      the efficiency of the Police Department by pro-
      viding lectures, instructions, written material,
      and other educational aids In their duties."
      The answer to your question as to whether this corporation
is liable for franchise taxes depends on whether, under the
words of Its purpose clause, this corporation Is organized
"for strictly educational purposes, or for purely public
charity."
       We have been unable to find a court decision directly in
point, but some cases construing other statutes are helpful
in deciding this question. In the case of Conley v. Daughters
of the Republic, 106 Tex. 80, 156 S.W. 197, the Supreme Court,
‘in deciding whether a cornoration was lawfullv created under
the statute authorizing a-private corporation"for "educational
undertakings," said:
         "Whatever educates Is within the meaning of
      (educational undertaking'. Education in the
      sense as used In the statute Includes: 'In its
      broadest sense, ... not merely the instruction
      received at school or college, but the whole
      course of training, moral, intellectual and phy-
      sical; Is not limited to the ordinary instruction
      of the child in the pursuits of literature. It
      comprehends a proper attention to the moral and
      religious sentiments of the child. And it is
      sometimes used as synonymous with l"learnlng"l.
      14 Cyc. p. 1230."
The general trend of the Legislature of Texas to be generous
in its exemption from taxation of educational projects is
stated in the case of Harris v. City of Fort Worth, 142 Tex.
600, 180 S.W.2d 131, as follows:
         "The Constitution and the Statutes of this
      State evince a liberality in the exemption from
      taxation of property for educational or religious
      purposes."
      A case in another state that is helpful In deciding
this question Is the case of Ancient and Accepted Scottish
Rite of Freemasonry v. Board of Commissioners, 122 Neb. !~66,
241 NW 93. in which the Sunreme Court of Nebraska decided
       v-.

that a Scottish Rite Temple was exempt from ad valorem taxes
Hon. Robert Calvert    page 3    Opinion No. WW-1514


under ‘theNebraska statute exempting “property owned and
used exclusively for educational, religious, charitable ...
purposes,” even though the building included a banquet hall
and was also used for social activities for its members; and
in its decision the Court said:
         ” ... lexicographers and the ,courtsagree in
      defining ‘educational’ as pertaining to ‘education.’
      The latter word taken in its full sense is a broad,
      comprehensive term and may be particularly directed
      to either mental, moral or physical faculties, but
      in its broadest and best sense it embraces them all,
      and includes not merely the instructions received
      at school, college, or university, but the whole
      course, of training-&moral, intellectual, and
      physical.
         “An educational purpose Is synonymous with an
      educational undertaking, and whatever educates is
      within the meaning of an ‘educational undertaking.‘”
      We are not unmindful of the recent case of Phlnne
Dougherty 307 Fed.2d 357, in which the United Sta -T72&
                                                    es       of
-         or the 5th Circuit held that a gift to a student aid
fund for the benefit of a university fraternity was not exempt
from income taxes under the statute exempting income to corp-
orations “organized and operated exclusively for educational
purposes .‘I Thearemption was not allowed In that case because
the court, apparently, approved the finding of the Treasury
Department to the effect that the fraternity wa? “operated to
provide most importantly social club facilities and that the’
 ‘fraternity house serves both the educational purposes of the
University and the social purposes of the fraternity.” We do
not think that the Phinney case would control this case, be-
cause in this case we must pres?lmethat that the corporation
in question does only those things stated in the purpose
clause of its charter, which does not contemplate social pur-
poses.
      An examination of the purpose clause shows that the
purpose stated therein can be divided in two parts, the first
 art beginning with the words “the support of any benevolent,
c aritable, or educational,un$ertaklng,” and the second art
+i--
reading in full as follows:   ... to generally increase #iT
efficiency of the Police Department by providing lectures,
instructions, written material, and other educational aids in
their duties .I’
Hon. Robert Calvert    page 4     Opinion No. WW-1514


      We unhesitatingly are of the opinion that the second
part of the purpose clause is “for strictly educational
purposes” within the terms of the exemption statute; and the
words are so plain that we do not believe that there could be
any argument about them.
      We are also of the opinion that the first &    of the
purpose clause Is "for strictly educationamposes,     or for
purely public charity;’ but we realize that there could be
some argument in this regard, and for that reason we will
discuss the words of the first art of the purpose clause
which says: “The supportmany %- enevolent, charitable, or
educational undertaking and particularly to promote and deve-
lop friendly and fraternal spirit among all of the employees
of the Police Department ... .‘I The words “benevolent, charl-
table, or educational undertaking" clearly come within the
provision of Article 12.03, exempting a corporation organized
for “educational purposes or for purely public charity.” The
additional words of the purpose clause that follow, to-wit,
"and particularly to promote and develop friendly and fraternal
spirit among all of the employees of the Police Department,"
are not as clear in that regard; but we construe those words
to be an explanation or amplification of the preceding words,
that Is, they particularize a specific phase of the main sub-
ject, that of benevolence, charity and education.
      It is our opinion that the corporation in question,
under the purpose clause set out above, is exempt from the
franchise tax imposed by Article 12Dl Taxation--General,
V.A.T.S.
                        SUMMARY
         A corporation ,organized by a Police
      Officers' Association to support a "bene-
      volent, charitable, or educational under-
      taking and particularly to promote and
      develop friendly and fraternal spirit
      among all of the employees of the Police
      Department" and ti incIB3m efficiency by
      providinglectures, Instructions, written
      material and other eucational aids, Is
      exempt under Article 12.01, Taxation--
      General, V.A.T.S. from the payment of
Hon. Robert Calvert   page 5     Opinion No. WW-1514



     a corporation franchise tax.
                          Yours very truly,
                          WILL WILSON
                          Attorney General of Texas



                               Cecil C. Rotsch
                               Assistant Attorney General
CCR:bjh
APPROVED:
Opinion Committee:
W. V. Geppert, Chairman
Pat Bailey
Dudley McCalla
Norman Suarez
Tom Peterson
REVIEWED FOR THE ATTORNEY GENERAL
BY: LEONARD PASSMORE
