Did a child-care facility contracted for Levels I-IV services qualify for Texas's residential-facility vehicle-tax exemption?

Plain-English summary

Texas Attorney General Letter Opinion LO-90-75 declined to decide whether a particular licensed residential child-care facility qualified for the motor vehicle tax exemption in Texas Tax Code § 152.093.

The statute required the facility to provide 24-hour residential care to both children who did not require specialized services or treatment and children who were emotionally disturbed, with both groups permitted to live together. The facility had contracted to provide Levels I through IV care.

No statute, rule, or legislative history mapped those phrases to the recommended care levels. Determining whether the facility served the required groups therefore involved factual findings, which the Attorney General did not make in the opinion process.

What this means for you

This opinion did not grant or deny the exemption. It explains why the facility-specific question could not be answered as a pure issue of law.

Common questions

Q: Did the Attorney General find the facility exempt?

A: No determination was made.

Q: Did Levels I-IV automatically satisfy § 152.093?

A: The opinion said no legal authority allowed that conclusion as a matter of law.

Citations and references

• Texas Tax Code Chapter 152 — identified as imposing motor vehicle sale, rental, and use taxes.
• Texas Tax Code § 152.093 — quoted for the historical residential child-care facility exemption.
• Texas Human Resources Code Chapter 42 — cited for child-care facility licensing.
• Texas Human Resources Code § 31.004(a)(7) — cited as printed for the coordinating council's advisory authority.
• Texas Human Resources Code § 41.027(a) — quoted for placement in contract residential care conforming to adopted levels.
• H.B. 3146, 71st Legislature (1989) bill analysis — reviewed but found unhelpful on the disputed phrases.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=MVT
• Opinion: https://star.comptroller.texas.gov/view/9010L1107C14

Original ruling text

October 9, 1990

Jim Mattox
Attorney General

Honorable Bruce Gibson
Chairman
Committee on Government Organization
House of Representatives
P.O. Box 2910
Austin, Texas 78768-2910

LO-90-75

Dear Representative Gibson:

Chapter 152 of the Tax Code imposes a tax on the sale, rental, or use of
motor vehicles in this state. Section 152.093 of the code exempts from
the reach of the tax those motor vehicles purchased, used, or rented by
child-care facilities licensed under chapter 42 of the Human Resources Code
if the facility provides certain services.

You inform us that a certain child-care facility licensed under chapter 42
of the Human Resources Code that has entered into a contract with the Texas
Department of Health to provide specified levels of child-care services has
sought the tax exemption and that the office of Comptroller of Public
Accounts has refused to grant it. The refusal was based on the uncertainty
as to whether a licensed facility that agrees to provide by contract the
specified services falls within the ambit of the exemption. Therefore, you
ask us whether the specific child-care facility about which you are
concerned is entitled to the section 152.093 exemption.

We do not resolve or determine issues of fact in the opinion process;
rather, we construe statutory and constituttional provisions consistent
with principles of statutory construction, issuing opinions on matter of
law. The resolution of your question necessarily would require us to
determine issues of acts. Therefore, we decline to answer your request.

Section 152.093 of the Tax Code provides:

(a) The taxes imposed by this chapter do not apply to a motor vehicle;

(1) purchased, used, or rented by a qualified residential child-care
facility; and

(2) intended for use primarily in transporting the children residing in
the facility under a state license.

(b) In this section, "qualified residential child-care facility" means
a child-care facility:

(1) licensed under Chapter 42, Human Resources Code, to provide
residential care 24 hours a day to both:

(A) children who do not require specialized services or treatment; and

(B) children who are emotionally disturbed; and

(2) in which children of both classifications listed in Subdivision (1)
are permitted by the license to live together in a single residential
group. (Emphasis added.)

You inform us that a child-care facility licensed under chapter 42 of the
Human Resources Code has contracted with the Texas Department of Human
Services to provide certain levels of child-care services. The services
that the facility has contracted to provide fall within specific
definitions approved by the Texas Health and Human Services Coordinating
Council (1) setting forth the recommended levels of service for residential
care. (2)

(1). Chapter 131 of the Human Resources Code governs the creation and
specifies the duties of the Texas Health and Human Services Coordinating
Council. The council is authorized to, inter alia,

provide advice to agencies, organizations and governmental entities
concerning the analysis of needs and the development evaluation, and
coordination of health and human services. (Emphasis added.)

Hum. Res. Code Section 31.004(a)(7).

(2). Subsection (a) of section 41.027 of the Human Resources Code provides:

The department shall use a system for the placement of children in contract
residential care, including foster care, that conforms to the levels of
care developed and adopted by the Texas Health and Human Services
Coordinating Council.

The definitions recommended by the council set forth six different levels
of care to be provided, depending upon the needs of the individual child.
Thus, Level I requires the provision of more routine care and supervision
for children deemed "normal," while Level VI requires the provision of
constant care and supervision for children deemed severely impaired or
disabled. The child-care facility about which you are concerned has entered
into a contract to provide care corresponding to Levels I through Level IV.

A child determined to fall within Level I is described as follows:

Adequate functioning in all developmental and/or environmental areas.
There may be transient difficulties, "every-day" worries, and occasional
misbehavior, but (sic) would be regarded as a 'normal' child; responds to
'normal' discipline. The caregiver provides routine home environment with
guidance and supervision to meet the needs of the child.

The service needs of a child that falls within this level are defined as
follows:

Children and adolescents at this level of care need an environment that
provides maintenance and ensures emotional and physical well-being in a
family-oriented setting.

The provisions regarding therapeutic interventions for this level of care
state:

The caregiver provides consistency, reassurance, regular parenting and
activities designed to develop normalized social skills.

The highest level of care that the child-care facility about which you are
concerned agreed to provide is Level IV. Children determined to fall within
Level IV are described as follows:

Substantial problems; have physical, mental, or social needs and behaviors
that may present a moderate risk of causing harm to themselves or others,
poor or inappropriate social skills, frequent episodes of aggressive or
other antisocial behavior with some preservation of meaningful social
relationships. Require treatment program in a structured supportive setting
with therapeutic counseling available by professional staff.

The service needs of a child determined to fall within Level IV are defined as
follows:

Children and adolescents at this level of care have physical, mental, and
emotional needs and behaviors that may present a low to moderate risk of
causing harm to themselves or others. They require physical environments
and treatment programs in which most activities are therapeutically
designed to improve social, emotional and educational adaptive behavior.
These children may require psychological or psychiatric services which are
integrated into the residential program to assess and monitor admission,
discharge, and treatment plans.

The provisions regarding therapeutic interventions state:

The caregiver provides therapeutic interventions within the milieu designed
to improve the child's functioning. The caregiver provides formalized
behavioral programs implemented by professional staff, and formalized
interactions between professional staff and children, such as individual,
group and family therapy.

The only language of section 152.093 of the Tax Code that acts to limit the
granting of the exemption to facilities offering certain types of care is
the language found in subsection (b) that defines "qualified residential
child-care facility." A qualifying facility must be licensed to provide
residential care 24 hours a day to both:

(A) children who do not require specialized services or treatment; and

(B) children who are emotionally disturbed.

The issue is whether a child-care facility that agrees to provide
child-care services at Levels I through IV is providing services to
"children who do not require specialized services or treatment" and to
"children who are emotionally disturbed." The Tax Code itself does not
define the scope of those phrases. The legislative history of section
152.093 of the Texas code is not helpful either. Bill Analysis, H.B. 3146,
71st Leg. (1989). There is no indication that the Tax Code amendment was
enacted with the council-recommended levels of care in mind. And finally,
the phrases are nowhere defined in the Human Resources Code or in rules
promulgated pursuant to the code. Thus no legal authority allows us to
determine as a matter of law the definition or scope of the Tax Code
limitation on the granting of the exemption. Because we do not resolve or
determine issues of fact in the opinion process, we are unable to answer
your request.

Very truly yours,

Jim Moellinger
Assistant Attorney General
Opinion Committee

APPROVED: Rick Gilpin, Chairman
Opinion Committee

Sarah Woelk, Chief
Letter Opinion Section