Honorable Geo. H. Sheppard
Comptroller of Public Accounts
Austin, Texas
Dear Sir:                        Opinion No. O-5342
                                 Re:   Whether a bequest to
                                       the Masonic Temple
                                       Associationof Fort
                                       Worth Is exempt from
                                       the payment of inheri-
                                       tance taxes.
          In your letter oftMay 28, 1943, you inquired whether
a bequest to.the Masonic Temple Association of Fort Worth is
exempt from inheritance taxes by virtue of its being a bequest
to a charitable organizstion.
          The inheritance taxes normally applicable to bequests
and devises to associations and corporations are contained in
Article 7122, v. A. c. s., but the rate schedule therein estab-
lished is s.ubjectto the following proviso:
          "Provided, however, that this Article shall
     not apply on property passing to or for the use
     of the United States or any religious, educational
     or charitable organization when such beq.uest,
     devise or gift is to be used within this State."
It is apparent that this exemption obtains only when (a)~
the bequest is to one of the named types of organization, and
(b) the property bequeathed is to be used by such organiza-
tion within this State.
          Pertinent portions of the charter of the Masonic
Temple Association of Fort Worth are as follows:
          "First. The name of this corporation is "MABONIC
     TEMPLE ASSOCIATION OF FORT WORTH."
          "Second. The purpose for which this corporation
     is formed is to support charitable and benevolent
Honorable Geo. H. Sheppard, Page 2


     undertakings through the erection and maintenance of
     a building for the benefit of the various contri-
     buting lodges.
          "Third. The corporation shall have its place of
     business in the City of Fort Worth, Tarrant County,
     Texas.
          "Fourth.........
          "Fifth..........
         "Sixth. No money coming into the possession of
    this association, nor property of any kind, now or
    hereafter owned or to be owned by it, nor any assets
    arising therefrom, shall ever go or enure to the
    benefit of any certificate of donation holder in this
    association. All moneys realized by this association
    by the conveyance of properties from the respective
    contributing lodges'or orders, and all moneys received
    by contiribution,gifts and otherwise, shall be used for
    the liquidation of the indebtedness on the buildings
    and improvements of the association and for the
    carrying ,out of the purposes for which this association
    is organized.
         "Seventh. This association shall not have any
    capital stock, but for the purpose of raising and sup-
    plying part of the funds with nhich to erect and,main-
    tain a building, and to retire and pay off the bonds
    and other evidences of indebtedness which will be
    required in the building and completion of said building,
    the various lodges and orders contributing property,
    both real and personal, for such purposes shall be,issued
    certificates of donation pro rata upon the basis of
    such assets received from such contributing lodges
    or orders as the same bears to the total value of the
    buildings and property when said building and improvements
    have been fully completed.
          "Eighth. Each contributing lodge or order shall be
     entitled to be represented upon the board of trustees
     of said corporation by the election or appointment of
     three of its members respectively and each such
     contributing lodge or order shall be entitled to one
     vote at any meeting of said board of trustees,
     irrespective of the amount of certificates of donation
     owned by any one of said contributing lodges or orders.
Honorable Geo. H. Sheppard, Page 3


          "Ninth........."
          Although the charter describes the Association in
q'uestionas o;e formed to "support charitable and benevolent
undzrtakings, we feel that the Association is not the type
of charitable organization",comprehended by the proviso to
Article 7122.
          In the case of Masonic ,TempleAssociation et al
v. Amarillo Independent School District.,14 S.W. (2d) 128
(error refused), a corporation identical to the one here in
question in all material respects ex$ept that membership
therein was specifically limited to various Masonic bodies
and lodges of Amarillo, Texas," claimed an exemption from
ad valoretntaxation under Section 2 of Article VIII of our
Constitution permitting the legislature to exempt "buildings
used exclusively and owned by ...institutions of purely pub-
lic charity" and under Article 7150 (7), V.A.C.S., exempting
"all buildings belonging to institutions of purely public
charity. ~ :.I"Tndenying the,exemptionJudge Jackson ,~'
              ~.
pointed o.utthat since the various Masonic orders which were
stockholders in the Association and who used the building
were not "orders which do nothing but dispense charity, b,ut
which do dispense charity," the building in question was not
owned and used exclusively by an institution of purely public
charity.
          Admittedly, the constitutional and statutory
provisions involved in the Amarillo case differ from those
here under consideration, yet we feel that the principles
enunciated in that case are applicable here. If the Fort
Worth Association is a "charitable organization" within the
language of Article 7122, it obtains that status only because
of the use which is to be made of its building. Under the
charter the users of the building are denominated only as
the "various contributing lodges or orders," and the lodges
or orders which may be,accepted as holders of certificates of
donation may be Masonic or non-Masonic, domestic or foreign,
charitable or non-charitable. Moreover, although the build-
ing is to be erected and tnalr$ained'for the benefit of the
vario,uscontributing lodges, the charter affords no other
indication of the nature of the building or the 'useto which
it shall be put. Even if we could assume that all of the
contributing lodges will be, to a certain extent, charitable
organizations, the charter affords no guarantee that the
Honorable Geo. H. Sheppard,.Page 4


buildingwill be used wholly or In part to further the
charitable functions of such organizations.
          Furthermore, to claim the exemption provided by
Article 7122 it Is necessary that the bequest be one which
is to be used within,this State. Under the sixth clause
of the charter the bequest in question must be used for the
liquidation of the indebtedness on the buildings and improve-
ments of the Association and for the carrying out of the
purposes for which the Association was organized. The
charter provides no indication or guarantee that the
buildings or Improvements of the Association will byelocated
within this State, and the testator's will in no way
restricts the Association to using the bequest for buildings
or improvements within this State or to retiring the
indebtedness on such buildings or improvements. While the
Association is a domestic corporation~and while its place of
business is established at Fort Worth, still these facts are
not incompatible with out-of-state operation, nor, we feel,j
do they give rise to a presumption that the Association nil1
confine its activities to this State. In the case of San
Jacinto National Bank v. Sheppard, 125 S.W. (26) 715, in
construing a statute (Article 7119, V.A.C.S., prior to its
amendment in 1933) which taxed sharitable bequests whioh
uere "to be used without this State," Justice Baugh said
at p. 716:                     I

          "Roxhere in its charter was anything required
     to be done in Texas. Bar,@d the will of Milroy re-
     quire the funds derived from his devise to it to be
     us& in Texas. Clearly under the charter and said
     will the beneficiary corporation could have used
     the devise anywhere the directors thEreof should
     determine in their me,etingain Ohio+
Although the facts in that case involved a corporation located
In Ohio and operating in Texas but which was not required by
its charter to do ,so,while the facts immediately at hand
involve a c.orp,oration
                      locatea inTexas nhi& may operat,e
el,sewhereand which is not-forbidden by Its,charter to do so,
yet we feel that t,he,languageaf JusticeBaugh is here
p.e,rtinent
         . In accsrdanoe wi,ththis language, we feel that
a bequest is made exempt under Artible 7122 anly .whenthe
bequest is specifically required by the t,epms,ofthe will
to be used in t,Ns S,tateor when the pawexs of .the,
                                                   beneficiary
are limited in ,sucha manner that it ,canno,t
                                            legally ma$e use
                       of this State. C.onsequent,ly,
of the bequest out,s,ide,                            you are
Honorable Geo. H. Sheppard, Page 5


respectfully advised that the bequest in question falls
without the exemption contained in Article 7lZ! and that
said beq,uestis subject to the inheritance tax.
          Trusting that the foregoing fully answers yo'ur
inquiry, we are
                                     Very truly yours
                                ATTORNEY GENERAL OF TEXAS


                                By   /s/R.   Dean Moorhead
                                                 Assis.tant

Approved July 15,,1943
       Grover Sellers
First Assistant Attorney General

RDM/JP/c,s



                               APPROVED
                         OPINION COMMITTEE


                         BY      BWB
                              Chairman
