               E
                       OF   a‘EXAS



                      September 21, 1961


Honorable Robert S. Calvert
Comptroller of Public Accounts
Capitol Station
Austin, Texas                        Opinion No. WW-1147
                                     Re:   Exemption from lnherl-
                                           tance taxes of devise
                                           and bequest to The
                                           Seeing Eye, Inc., Mor-
Dear Mr. Calvert:                          ristown, New Jersey.
    We quote the following excerpt from your letter request-
ing the opinion of this office on the above captioned mat-
ter.
       "Mrs. May Margaret Powell died testate, a resl-
   dent of Dallas County on January 31, 1957. After
   making several special bequests, the residue of her
   estate was devised to a number of charitable orga-
   nizations, some of which were located In Texas and
   some without. One of the organizations sharing in
   the estate is The Seeing Eye, Inc., of Morristown,
   New Jersey.
        "We are furnishing you herewith a copy of the
    last will and testament of the deceased as well as
    a copy of a letter from The Seeing Eye, Inc., in
    which they outline their method ofspending the be-
    quest in Texas."
    The residuary clause of the last will and testament of the
decedent made an outright, unrestricted devise and bequest of
a portion of the estate to certain charitable institutions,
among them The Seeing Eye, Inc., Morristown, New Jersey.
    You have furnished us with a copy of a letter from the Rxe-
cutive Vice President of The Seeing Eye, Inc. We quote the
following excerpts from this letter:
       "The Seeing Eye is Incorporated as a non-profit
   philanthropy under the laws of the State of New
   Jersey, and our only operational base Is here in
   Morristown, New Jersey. We serve qualified blind
   residents of the United States, its possessions
Honorable Robert S. Calvert, Page 2, Opinion No. WW-1147

    and Canada and we never discriminate as to race,
    color, creed or geographical location within the
    territory mentioned.

        "Qualified blind persons seeking our ser-
    vice come to Morristown for one month's tra-l-
    ning, with board and room provided here at the
    school. When the trainees return home with their
    dogs, we maintain close relationship with them
    by mail, telephone or personal visit, as their
    need for assistance may require.
        "During the fiscal year ended September 30th,
    1955, we placed 18 dogs with qualified blind
    Texans; for the next ensuing fiscal year 10; and
    to date in the current fiscal year 6.
        "There are at present 98 Texans using Seeing
    Eye Dogs, most of whom are engaged in gainful em-
    ployment and are not recipients of tax-supported
    relief. Since the Seeing Eye was founded in 1929,
    199 dogs have been assigned to Texans.
        "Any funds bequeathed to us under the Will of
    the late May Margaret Powell we hereby certify,
    shall be ear-marked for operating expenses in ser-
    ving Texans at the rate of $2,000 each. When the
    funds bequeathed are exhausted, we will notify
    you SC that you will know the spirit of the law,
    at least, has been fulfilled."
     The question presented, therefore, is whether, under the
submitted facts, the proposed ear-marking of funds for opera-
ting  expenses In serving Texans is sufficient to obtain an
exemption under the controlling statutory provision which,
at the date of the death of the decedent, was Article 7122,
Revised Civil Statutes of Texas (1925), as amended by S.B.
266, Acts 1955, 54th Leg., p0 1032, ch. 389, 1.

    The pertinent portion of Article 7122 provides that the
schedule of taxes contained therein:
        "shall not apply on property passing to or for
    the use of the 'UnitedStates, or to or for the use
    of any religious, educational or charitable orga-
    nization, incorporated, unincorporated or in the
    form of a trust, when such bequest, devise or gift
    is to b'eused within this State. .Theexemption
    from tax under tha preceding provisions of this Ar-
Honorable Robert S. Calvert, page 3, Opinion No. WW-1147




    title shall, without limiting its application under
    appropriate circumstances, apply to all or so much
    of any bequest, devise or gift to or for the use of
    the United States, or a religious, educational or
    charitable organization, which is, in writing land
    prior to the payment of the tax irrmrncshlrr  ram-
    mitted for use exclusively within the  State
                                       -_ ~..    of  Texas
    or transferred t0 a religious, educationXl?FEFichari-
    table organization for use exclusively within this
    State." (Emphasis our's)
    This Department has already ruled that the fact that a cha-
ritable institution is a foreign corporation does not render
it ineligible for the exemption on property passing to "any
. . . charitable organization when such bequest, devise or gift
is to be used within this State." Attorney General's Opinion
s-198 (1956). It follows that an institution seeking to be-
come eligible for the exemption provided by the last sentence
of the Statute, as quoted above, Is not disqualified to re-
ceive the exemption on the ground that the institution is a
foreign corporation.
    We turn our attention to the question of whether the words
"use exclusively within the State of Texas" mean that the pro-
perty must not only be used for the exclusive benefit of Texas
charity, but also be kept at all times within the State and
administered and dispensed within the State in accomplishing
such purpose.
    It has been held that the general rule of strict construc-
tion of exemption statutes is not followed in considering ex-
emptions in favor of a charitable, religious or educational
institution. 84 C.J.S. 533, Taxation, Sec. 281. Moreover,
exemptions from inheritance taxes are construed strictly a-
gainst the taxing authority and liberally In favor of the
exemption. Lewis v. O'Hara 130 S.W.2d 379 (Civ. App. 1939):
State v. Hogg, 54 S W 2d 2'(
                           4( Civ. App. 1932, rev. on other
     d   123 T    508: 70 S.W.2d 699, 72 S.W.2d 593). 61
E??l&!'6, TaxEtion, See. 2413.
    To be borne in mind also is the rule that in ascertaining
the intent of the Legislature the language of an enactment is
to be viewed in light of the object of the legislation. 39
Tex. Jur. 216, Statutes, Sec. 216. In this connection Corpus
Juris Secundum states as follows:
        "A statute providing a tax exemption for a cha-
    ritable institution is to be fairly, liberally and
    reasonably construed, with an eye to the spirit of
Honorable Robert S. Calvert, page 4, Opinion No. WW-1147




    of the laws, to the end of arriving at the intention
    of the State to encourage charity.
        D 0 D“The underlying reason for the exemption
    is that it is given in return for the performance
    of functions which benefit the public.
        II     The fundamental ground of all such exemp-
    tions: where
           ’ *   allowed, is a benefit conferred on the
    community by charitable and benevolent institutions
    in relieving the State to some extent of the burden
    resting on it to care for and advance the interests
    of its citizens,” 84 C.J.S. 533-536, Taxation, Sees.
    281,282,
    We said in Attorney General’s Opinion s-198 (1956):
        “Exemptions to charitable institutions are bot-
    tomed upon the fact that they render service to
    the State for which reason they are relieved of cer-
    tain tax burdens.”
    In Halff v. Calvert, 281 S.W.2d 178 (Civ. App. 1955, error
ref., n.r.e.1 the Court had under consideration this same Ar-
ticle, save for the last sentence quoted above. There it was
stated at pages 180 and 181:
               The exception contained in Article 7122
    provide; &at the schedule of taxes containedtherein
    ‘shall not apply on property passing to or for the
    use of the United States or any religious, educa-
    tional or charitable organization when such bequest,
    devise or gift is to be used within this State.”
    The Legislature has thus decided that the greater
    good may be served by exempting certain property
    from taxation, considering the use to which it is
    dedicated. A use of property which alleviates a
    burden which the State or its political subdivi-
    sions would otherwise necessarily bear at public ex-
    pense, or a ?&sethereof which fulfills or accompli-
    shes the generally accepted charitable objectives
    of the people of the State, is recognized as a pro-
    per subject of tax exemption by specific legislative
    enactments,”
    From the foregoing it is apparent that the subject exemp-
tion has as its o’bjectthe encouragement of charity for the
exclusive benefit of the State or, in other words, the alle-
viation of a burden which the State or its political subdi-
Honorable Robert S. Calvert, page 5, Opinion No. WW-1147




visions would otherwise necessarily bear. This being the case,
the exemption should be construed, if possible, so as to ef-
fectuate that purpose.
    Would not the furnishing of seeing-eye dogs to the needy
blind of Texas be a service to the State of Texas by alle-
viating in some degree a charitable burden on the State of
Texas and its political subdivisions? Manifestly, it would,
and the fact that the subject bequest is administered and
dispensed outside of the State is plainly irrelevant to the
accomplishment of this object.
    A construction of the subject exemption which would re-
quire a bequest to be administered and expended in the State
as well as being used for the exclusive benefit of charity
in this State would thus thwart the general policy of the law
to encourage charity and, indeed, the apparent purpose of the
present exemption which is to encourage the dedication of
property exclusively to charity in Texas. We cannot believe
that the Legislature intended to deny to Texas charity the
benefit of gifts, devises and bequests where they are ,admi-
nistered outside the borders of the State for the exclusive
benefit of Texas charity. To the contrary, we are constrained
to believe that in using the words "use exclusively within
the State of Texas" the Legislature intended for the exemption
to follow the benefit of the use of the property and to be al-
lowed on property which has been properly commited for use ex-
clusively in the State of Texas in the sense that the benefit
of the use of such property is to accrue exclusively to Texas.
    Therefore, the subject devise and bequest to Ihe Seeing-
Eye, Inc. is entitl.ed to exemption under the above quoted
portion of Article 7122 at such time as the property is by
said corporation 'in writing and prior to the payment of the
tax, irrevocably committed for use exclusively within the State
of Texas" as construed herein.
    However, The Seeing-Eye, Inc..has not yet complied with
Article 7122 by irrevocably c,ommittingthe property. It is
elementary that an irrevocable commitment does not arise from
a mere letter from the executive vice-president of the corpo-
ration. The institution claiming the exemption under this
statute must pres,entaat.isfactoryevidence that the governing
board of the institution has expressly authorized the irrevo-
cable commitment and the irrevocable commitment must be made
pursuant to such authorization. Unless and until The Seeing-
Eye, Inc. performe.this condition precedent the property is
not entitled to the exemption.
Honorable Robert S. Calvert, page 6, Opinion No. WW-1147'




                            SUMMARY

           A devise and bequest to The Seeing-Eye, Inc.,
        being a foreign charitable corporation which
        would manage and dispense the property without
        the borders of Texas for the exclusive benefit
        of Texans, can, under the facts presented, be-
        come an exempt devise and bequest under Article
        7l'Z?at such time, if ever9 as the corporation
        presents satisfactory evidence that the govern-
        ing board of the corporation has authorized the
        irrevocable commitment of such property for such
        purpose and the irrevocable commitment is, in
        fact, made pursuant to such authorization.

                           Very truly yours,



                                    LSON
                                    y General

                           By:
HB/rd
APPROVED:
OPINION COMMITTEE
Morgan Nesbitt, Chairman
Linward Shivers
Riley Fletcher
William H. Rem&ill
REVIEWED FOR .TREATTORNEY GENERAL
BY:
Leonard Passmore
