Fourth Court of Appeals votes 2-1 to overturn 79th District Court ruling

Christopher Maher, Jim Wells County Correspondent

In a 2-1 decision announced Wednesday, an appeals court in San Antonio overturned a ruling in the 79th District Court in Jim Wells County that had given tax exempt status to a local apartment complex.

The Fourth Court of Appeals in San Antonio issued its decision Wednesday in the case entitled "Jim Wells County Appraisal District and Jim Wells County Appraisal Review Board vs. Cameron Village, Ltd."

The decision of the appeals court overturned a ruling of summary judgement issued by visiting District Judge Robert Pate in the case in February 2006.

Pate's ruling came in a lawsuit brought against the Jim Wells County Appraisal District by Cameron Village Ltd., the company that owns the Cameron Village Apartments in Alice.

The company claimed it should be granted tax exempt status since on Dec. 24, 2003, the company entered into a general partnership with Community Action Corporation of South Texas (CACOST), a non-profit organization with offices in Alice.

The appraisal district contended the apartments began as a for-profit enterprise, and the addition of CACOST to the partnership did not warrant a tax exemption. Under that partnership CACOST owns .01 percent of the partnership, and although Cameron Village Ltd. is labeled a "limited partner," it actually owns the remaining 99.99 percent of the partnership.

Judge Pate's ruling granted Cameron Village, Ltd. tax-exempt status beginning Dec. 24, 2003, and would have required the district to return more than $93,000 in taxes collected from the company in 2003, 2004 and 2005.

In writing her majority opinion, Justice Phylis J. Speedlin of the Fourth Court of Appeals said the key issue in the case was the interpretation of Section 11.182 of the Texas Property Tax Code, which deals with tax exemptions for non-profit organizations, and she disagreed with Cameron Village, Ltd.'s interpretation of that law.

"Cameron Village cannot simply pick and choose among statutory requirements which are listed in the conjunctive to determine which are 'applicable' to them and which are not," Speedlin wrote.

Speedlin also disagreed with case law presented by attorneys for Cameron Village, Ltd. that the company indicated backed its claims that CACOST met the requirements of "ownership" outlined in the tax code.

That case law was upheld by an appellate court in Houston in a 2-1 decision, but Speedlin said she sided with the dissenting opinion in that case.

"With all due respect to our sister court, we find the dissent in (that case) to be the more persuasive opinion," Speedlin wrote.

In her own dissent of the decision presented by the court of appeals on Wednesday, Justice Rebecca Simmons said she believed Cameron Village, Ltd. should be granted tax exempt status under the law.

Simmons said the majority's opinion in favor of the appraisal district ignored wording in the law that seemed to provide tax exempt status for companies that had a limited partnership with tax-exempt organizations.

"Because of the long standing principle that the 'legislature is never presumed to have done a useless act,' the majority's review of section 11.182 is incomplete," Simmons wrote.

The case is expected to be appealed to the Texas Supreme Court in the coming weeks.