                                September 22, 1961


Honorable Robert S. Calvert                  Opinion No. WW-1146
Comptroller of Public Accounts
Capitol Station                              Re:     Exemption frm inheritance
Austin, Texas                                        taxes of certain devlaes
                                                     and bequests to charitable
Dear Mr. Calvert:                                    institutions.

     In connection with yr?urrequest that this office furnish you with an
opinion on the above captioned matter, you have supplied WI with the fol-
lowing facts.

     Morris Glozman died November 14, &yp.   By the terms of paragraph 4
of his last will and testament, which haa been duly admitted to probate,
the decedent directed *.,. . that my estate be divided equally among
The B'NAI B'RITR OLD FOIgS' HOME.at Memphis, Tennessee, THE SHRINE CRIP-
PIED CHIIDREN'S HOSPITAL FUVD OF Houston, Texas, and THE JEWISH CONSWP-
TIVE HOME of Denver, Colorado." '      1

     Whether an exemption from inheritance tares may be accorded these
testamentary charitable gifts muet be determined in view of the provisions
of Article 14.06, Title lZ!A, Tax.-Gen., Ch. 14, V.A.T.S. The pertinent
provisions of Article 14.06 are the following:

              "If passing to or for the uee of the United States,
         to or for the u8e of any other person or rel%gioue, edu-
         cational or charitable organization or institution, or
         to any other person, corporation or association not in-
         cluded in any of the classes mentioned in the preceding
         portions of the originaYAct known as Chapter 29 of the
         General Laws of the Second Called Session of the 38th
         Legislature, the tax shall be:
              *.    .   .   .

               “Provided, however, that this Article shall not
         apply on property passing to or for the use of the United
         States, or to or for the use Of any religious, educa-
         tional or charitable organization, incorporated, unin-
         corporated or in the form of a trust, when such bequest,
         devise or gift Se to be used within this state. The ex-
         emption from tax under the preceding provisions of this
         Article shall, without limiting ita application under
Honorable Robert S. Calve&,   page b   (W-1146)



         other appr;nprf&tlirircw&,ances, apply to all or eo
         much a? any boquwt,  devise or gift to or for the uee
         of ,the%fted Stats, or * religioue, educational or
         charitable orgwization, whPCh fs, in writing and
         prior to ,t??'r;
                      payment of the tax, irrevocably committed
         for woe exclusively within the State of Texas or trans-
         ferred to a religiow, e&cetional or charitable organf-
         zation for use exclusive$ vrthin this state.

              “Provided, father, that if the property eo passing
         3.8to or for the uee of a'reifgfous, educational,or charit-
         able organization which conaucte ita operations on a
         regional baais, one such region of which ineludes the State
         of Texas, or armypart thereof, then a bequest, devise or
         gift to be used within e&h region shall be deemed to be
         used within thiu state. '

              '?or purpoaeu of this paragraph, a religious, educa.-
         tfonal, or charitable organization ehall include, but not
         be lfmited to, a youth prbgrem of physic&. fitness, character
         developent, and citizenship training or like program."

     We willfirat coneider whet&& the devise and bequest to the Shrine
Crippled Chfldren'e Hospital Fund 'ofHouston, Texas, is exempt from inheri-
tance taxes. You have furniehed ue with the inheritance tax return file fn
connection with the estate of this decedent. This return reveals that the
correct name of the recipient of the bequest under consideration is The
Arabia Temple Crippled ChiLdren'e Clfnic. This Clinic is a Texas corpora-
tion chartered for the purposes of'aupptirting"benevolent, charitable and
educational undertaki~n~afor crippled children not over the age of four-
teen (14) yeare, regsrdlsso of race, 5+ded or color . . .* 'Theoffice of
the corporation is mafntnlned in Houston, Texas. On January 11, 1961, at
a meeting of the Board of Trueteed of the corporation, a resolution wae
adopted chuthorizfr%the offfcers of the corporation to execute and deliver
to the Honorable Robert S. Crlvert, Comptroller of Public Accounts of the
State of Texao, on behalf a& in the name of the corporation, an agreement
irrevocabu committi~ all the pr6perty pawing to the corporation ,under
the decedent's wfll for use for charitable purpoees exclusfvely within this
State. A copy of this resolutfol together with a letter from the Clinic,
acting through the Chairman of the Board, was sent to Honorable Robert S.
Calvert. In the Letter ,the Clinfd irrevocably committed al1 the property
here involved for use for charitable purposes within this State.

     We thinkthst this devise and bequest is clearly exempt as one to a
"charitable organization and a 'gift D D ~ to be ueed.within this State
. . .') and that the beqwet and devise has been 'irrevocably committed
for use exclusively wfthin the State of Texas. D Oa*. Since every con-
dition of the otatute haa been satisfied, we need not and do not pass upon


                                                     e
Honorable Robert S. Calvert, page ‘3 (~-1146)



the queetion of whether a speeiffc commitment wae necessary, under the
eubmitted facts, in connection with this particular devise and bequest.

     We will now consider whether the devise and bequest to the Jewish
Consumptive Home of Denver, Colorado, is exempt frak inheritance taxes.
The inheritance tax file reflects 'thatthe correct name of this bene-
ficiary is The National Jewiah Hoepita at Denver. The Hoapital la a
non-profit Colorado corporation having &s its corporate purpose the opera-
tion of a hospftal or hospitals. According to the by-laws of the corpora-
tion, its specific purpose is to treat, without charge, and without die-
tinction of creed, persona suffering from tuberculosis or diseases of the
chest and to conduct education and'retiearchin this field. They also pro-
vide "The Services of this Hospital shall be free and non-eectarian", and
'none may enter who can pay - none can pay who enter".

     On December 28, 1960, the Board of Trustees of The National Jewish
Hospital at Denver adopted a resolution which containa tbsfollowing para-
graphs:

         %HEREAS, the National Jewisli'Bbspitalat Denver is
     engaged solely and exclusiveb in charitable activitiee~ and,

         "WHEfBW, the Bati&aiJewieh Hospital at Denver maintaina
     a regular office within the State of Texas for the purpose of
     conducting and carrying on ite charitable activities; and,

         "WHEREAS, the Hational Jewish Roapital at Denver expends,
     annually, between $25,COO.OO and $30,000.00 within the State
     of Texas, eolely for charitable pnrposee;

         "NOW, THEREFORE, IT Is HER%RY RESOLVED, that the National
     Jewish Hoepital at Denver irrevocably commit all~propertiee and
     assets, of whatsoever typkLor titure, passing to it under and by
     reason of the Last.Will and T'estementof Morris Glozman, deceaeed,
     for charitable purposes excltiively within the State of Texae and
     States contiguous to the Statb of Texas."

     A copy of the resolution-in ita entirety has been forwarded to the
Honorable Robert S. Calvert, together with a letter from The Honorable
Philllp Houtz, Secretary of The Natfonal Jewish Hospital at Denver. In
this letter, Mr. Houtz stat& on-behalf of the Hospital that it irrevocably
commits all the property received %er   the will, in question, for uee for
charitable purposes "exclusively tithfn the State of Texas and States con-
tiguoue thereto."

     We have not been informed of the exact nature of-the charitable activi-
tiee carried on, and to be carried on>'by use of the bequested funds, by the
Hospital in this and contiguous States. For the purpose of this opinion,
    we will as~mne that the charitable activities to be carriedon in this State
    by the UBB of the fun& are in connection with the aotual operation of the
    Hospital for tte use end benefit of Texas residents. However, in vfew of
    the fact that the fun&a in question were not irrevocably oommftted to ex-
    clusive use in Texas, 'butaleo to use in "States contiguous thereto", we
    are of the opinion that an exemption for thie devise and bequest cannot
    be obtained, unleao and until the fund8 are irrevocably ccmmitted to the
    exclusive ude fn Texas.           ,

         We do not believe that the mere set of irrevocably committing a be-
    queet for charitable purposes to be used exclusively within t1e State of
    Texas and States oontie;llous
                                to the State of Texas, would eonatf.tztethe
    conduoting of the Hospital's operationa on a regional basis. ,1heHospital
    admits charity patients, without limftatlon a8 to residence. It is clear
    to us, that for a charitable organization to conduct its operations on a
    "regionalbasfen, ae that term ia ueed in the statute, that the entire field
    of its operations would have to be'divlded into separate and distinct regions
    and be of a permanent nature, wit&each region beiw subject to looalmenage-
    ment and control, under proper directfvea from the officers or directors of
    the charitable organization.

         If it could be said that irre+ocab'lycanmitting a bequeet to be ex-
    cluaively used in Texas and one oi:more States contiguous to Texas would
    conetitute the hospital's operetioks to be on a regional basis, and ff we
    are correct, end we believe we are) In stating that for a charitable organi-
    zation to operate on a regional bssie, that its entire field of operations
    would have to be divided into separate and distinct fields, the following
    anomaly could result. New Mexico, Oklahoma, Arkansas and Louisiana are the
    only states contiguous to Texas. We will aeeume that the Hospital is the
    recipient of thirteen additional charitable bequests. The directors of the
    hospital make B similar commitment 88 to each additional bequeat, (1) One
    to be used exclusively in T&as and New Mexico, (2) one to be used excluefvely
    in Texas and Oklahcrma,(3) one to be u&iedexclusively in Texas and Arkaneas,
    (4)  one to be used exclusively fti"rexas &id Iaufsiana, (5) one to be ueed
    exclueively inTexas, New Mexico kma Oklahoma, (6) one to be used exclusively
    In Texas, New Mexico
                   p     and Arkan%&+,             be wed exclusively fn Ta,
    New Mexico and Ioufeiana, (8) on&to be used exclusively in Texas, New Mexfeo,
    OklahcsnaMB Arkansas, (9) one'to:be used exclusively in Texas, New Mexico,
    Oklahoma and Loufeiane, (10) one to be used exclusively inTexas. Oklahoma,
    and Arkansae, (11) one to be used :exclLeively in Texas, Oklahana and Iouisfana,
    ‘(12)one to be used exclusively in Texae, Oklahoma, Arkansas and Louisiana,
    and (IJ) one to be used exclusively in Texas. Arkansas and lauisfana. This
I   would result In the five tit&es 04 TBxa8, New Mexico, Oklahoma, Arkansas and
    Loaiolana being divided into fou&e&   88 arate regions with Texas being in
                                           tler four states being in seven of
    all fourteen regions, and eaeh of ,the,o
    the regiona. This anomaly oould be further multiplied fndeffnitely by ir-
    revoaably oammltting euc.hfunds to'certain desimated portions of Texas, a8
    the statute provides, *one such region of which includes the State of Teqhs,
    or any part thereof. . .*
Honorable Robert S. Calvert, page 5 (WW-1146)



  . We therefore bcla +&at an exemption frcm the inheritance tax for the
devise to The National Jewish Hospftal at Denver cannot be obtained mleas
and until the funds in queetion are irrevocably committed to the exclu.us%ve
                                  ,'
use in Texas.

     The third beneficiary of ,theteatator's largess is the B'NAI B*RITH
OIIIFOIKS' H@lE, at &mpbfa, Tenn6aeee. The inheritance tax return re-
flects that the correct name of this institution is the B'NAI B'RITH HOME
ANDHOSPlTALFORTHEAGEQ,     INC. ~The B'NAI B'RITH HOME AND HOSPITAL was
incorporated under the 18~8 of the State of Tennessee for the purpose of
"' the support of a~ 'benevolentor charitable undertaking a8 a Lodge of
Masons, Odd FeLlowa, hoapitala for the sick, houses of refuge or correction,
orphan asylm,   and aI1 other objectsof alikenature' end epeciffcally for
the ownership and operation of a h,?meand hospital for the aged.* The bg-
laws of the Borneet&e that its ptipoee ie to operate a home and hospital
in Memphie, Tennessee, and to provide for the physical and spiritual needs
of aged and infirm Jew6 who reside within the geographical limits of
District Grand Iodge #7.  The geographical limits of B'NAI B'RITH District
Grand Lodge #7 embrace the following states: Alabama, Arkansas, Louisiana,
M%ss%as%pp%, Oklahoma, Texas and Tennessee. The Secretary of the Executive
Committee of the Board of Directors of the corporation has furnished a
certificate which contains the information that many Texaslresidents have
resided in the Borneand recefved hospital care during its existence. He
states that at times there have been aa many aa 20 persona from Texas and
that there me presently in residence at the Home and Hcapital I2 Texans.
He points out that residents of Texas a& required to eerve a8 member8 of
the Board of Directors of the corporation.

     Pursuant to a resolution adcp'tedby the Executive Committee of the
Board of Directors of the corpotietionon January 23, 1961, the B'NAI BS(m
HOME AND HOSPITAL has irrevocably committed all of the property passfng to
it, under the will in question, "for uBe for charitable purposes exelusivelg
within the State of Texas, Arkansas, TeMesaee and Ioulsiana. . .n A copy
of this resolution has been transmitted by the President of the corporation
to the Honorable Robert S. Calvert, Comptroller of Public Accounts for the
State of Texas, ,tcgetherwith a letter on behalf of the corporation stating
that it is "a charitable organization which conducts its operation on a
regional basis, which includes the State of TexaB."

     We do not believe that this devise qualifies for exemption under the
provfsiona of Article 14.06.  U&r   the eubmitted facts and, indeed by the
express terms of the by-laws of the Home, its residents which are drawn
from within the geographical limits of District Grand Lodge #7, which em-
brace seven, not five states. In view of this and our holding above 88
to The National Jewish Hospital at Denver, we are constrained to hold that
an exemption under the provisions of Article 14.06 cannot be obtained
unless and until the funds fn question are irrevocably ccemulttedto the
exclusive use in Texas.
Honorable Robert S. Calvert, page 6 (~~-11446)




              The devise to The &bia   Temple Crippled Children'8
              Clinic is exempt from inheritance taxes.

              The devise to The National Jewish Hospital at Denver
              and the devise to the B'NAI B'Rith Old Folka Home,
              under the present state of facts, is not exempt frcsn
              inheritance taxes.

                                          Yours very truly,

                                          w1LT.l
                                               wILsoN
                                          Attorney   General   of Texas



                                          By:    W. V. Geppert
                                                 Aasiatant Atbrney   General




OPINION COMMITTEE
Morgan Nesbitt, Chairman

Linward Shivers
Riley Fletcher
Wm. R. Hemphill

REVEWEDFORTHEAl'POIUYEYGENERAL
BY: Leonard Paeamore
