The Honorable Robert S. Calvert
Comptroller of Public Accounts
State Capitol
Austin, Texas 78711
                       Opinion NO. M- 228
                       Re:   Taxation for inheritance tax
                             purposes of devise and bequest
                             to the members of the Oak Hill
                             Cemetery Endowment Fund Commit-
                             tee as a part of the Oak Hill
                             Cemetery Endowment Fund under
Dear Mr. Calvert:            submitted facts.
       We quote the following from your letter requesting
the opinion of this Office on the above captioned matter:
            "flhe decedent7 died testate . . . May
       11, 1956, and allzf the required reports
       under the Inheritance Tax Law have been made
       and filed with this Department.
           "Under the terms of the last will and
      testament of the deceased, a bequest of one-
      fourth of the remainder of the estate was
      made 'to the then members of the Oak Hill
      Cemetery Endowment Fund Committee as a part
      of the Oak Hill Cemetery Endowment Fund,'
      of Flatonia, Fayette County, Texas, in the
      sum of approximately $35,000.00.
           II
            . . . We wish to be advised whether or
      not this bequest is exempt as provided under
      Article 14.015 of Chapter 14, Title 122A,
      Taxation-General.
            "We are furnishing you herewith the fol-
       lowing pertinent papers for your use in this
       connection:



                        -1114-
                                                        .   .
                                                                .   .




The Hon. Robert S. Calvert, page 2 (M-228)


            “1.   Copy of the last will and testament
       of -fihe decedent7.
            "2 . Articles of Association - Oak Hill
       Cemetery Endowment Fund Committee.
           “3.  Trust Indenture - Oak Hill Cemetery
      Endowment Fund Committee.
            "Brief - submitted by fihe attorney for
       the estatz7. . ."
       We have been advised of the following facts in the brief
submitted by the attorney for the Oak Hill Cemetery Endowment
Fund Committee, and further verification and history have been
supplied by the Mayor of Flatonia and other interested citi-
zens.
       The Oak Hill Cemetery is owned by the City of Flatonia,
Texas, and is located within its city limits. Chapter IX of
the Revised Ordinances for the Government of the City of
Flatonia, Texas, was codified and adopted on October lath,
1907, and provides, among other things, for the appointment of
a sexton, sale of lots, burial and keeping of records. Arti-
cle 137 of these Ordinances reads as follows:
            "Article 137. There shall be kept a
       separate account of all Moneys received
       from the sale of cemetery lots; ani the same
       shall be used only for the improvement and
       repairing of the City Cemetery."
       The funds realized from the sale of lots and local taxes
were not sufficient to properly maintain the Cemetery. In
order to assist the City in operating the Cemetery, the Oak
Hill Endowment Fund Committee and the Oak Hill Cemetery Assoc-
iation were established on July 8, 1949. The Articles of As-
sociation of the Oak Hill Cemetery Endowment Fund Committee
recites that seven named persons have associated themselves to
form an Endowment Fund Committee. The purpose of the Associa-
tion is to serve as trustee of such funds as may be donated
or as may otherwise come into its possession in conformity with
the purposes of any other trust agreement which may be entered
into by the Committee and any other persons desiring to create
a trust fund of not less than $500.00 for purposes pertaining
to the Oak Hill Cemetery.



                          -1115-
        c       .

.   *




            The Hon. Robert S. Calvert, page 3 (M-228)


                   Provision is made for the filling of vacancies in
            membership of the Committee of the Association in order to
            provide that the Committee shall be self-perpetuating.
               The trust indenture executed by the Oak Hill Cemetery
        Association of Flatonia recites the granting and delivery of
        certain properties to the persons who compose the Oak Hill
        Cemetery Endowment Fund Committee, as trustees, for the
        purposes previously set out. The total at the time of axe-
        ctiition
               was the amount of $3,95,0.00.
                   Paragraph V declares the purpose of the trust which
            may be briefly summarized and quoted as follows:
                          (1) The principal of the Endowment Fund is
                    to be kept intact forever.
                         "(2) So much of the income from such Oak
                    Hill Cemetery Endowment Fund as may be necessary
                    for such purpose shall annually be used by the
                    trustees for the maintenance of the lots here-
                    inafter enumerated'and specified, and for the
                    upkeep and maintenance of such other lots as
                    may hereafter be provided for by donations to
                    the Oak Hill Cemetery Endowment Fund as herein-
                    after provided."
                          (3) Any income from the Endowment Fund
                    which is not expended for the purposes set out
                    in paragraph (2) shall become a part of the
                    corpus of the Oak Hill Cemetery Endowment Fund.
                         "(4) It is contemplated that the trustees
                    may annually pay over the income from the Oak
                    Hill Cemetery Endowment Fund to the Oak Hill
                    Cemetery Association and rely upon such associa-
                    tion to maintain the lots for the maintenance
                    of which this fund is created.”
                   Paragraph VI sets out the specified lots for the main-
            tanance of which the income from the Endowment is to be cxpend-
            ed and enumerates on the official plat of said Cemetery each
            specified amount following the date of the donation, the donor's
            name and lot name and the plat number of the lot.




                                      -1116-
                                                       .   -
                                                               .   .




The Hon. Robert S. Calvert, page 4 (M-228)


       Paragraph IX provides that upon receipt of donations
of not less than $100.00 the trustees shall include in the lots
to be maintained out of the income of the Endowment Fund any
half lot specified by the donor; and further that, upon receipt
of donations in the amount of not less than $200.00, the
trustees shall include the lots to be maintained out of the in-
come from the Fund any full lot specified by the donor.
       Paragraph X reads as follows:
            "The oak Hill Cemetery Endowment Fund Com-
       mittee, being the trustees herein, is a volun-
       tary association of individuals for the purpose
       of serving as trustees under the provisions of
       this indenture, as well as to serve as trustees
       under other agreements relating to the Oak Hill
       Cemetery; and the Articles of Association of
       such Committee are attached hereto and made a
       part hereof as fully as though copied herein
       verbatim."
       Article 14.015, Ch..14, Title 122A, 20A, Tax.-Gen.,
V.A.T.S., enumerates the transfers which are exempt from in-
heritance taxes. If the devise and bequest here under con-
sideration is to be exempt, it must come within the provisions
of subdivision (3) of Article 14.015. This provision reads as
follows:
            "Public Use. Property transferred to or
       for the use of this state or any town therein
       for public purposes."
       Although under the terms of the trust indenture the in-
come from the trust fund is to be expended only for maintaining
specified graves within the Cemetery rather than all graves with-
in the Cemetery, we hold that since title to the Cemetery lots
is vested in the City of Flatonia, the authorized expenditures
are for a public purpose and do relieve the City of Flatonia
of a duty and an obligation imposed by Article 137 of the City
Ordinances.
       Subdivision (3), above quoted, has never before been
construed since its enactment in 1965. Acts 59th Leg., Ch.
402, p. 830. Clearly, the use of the income from the trust
will be a use for the benefit of the City of Flatonia and




                         -1117-
The Hon. Robert S. Calvert, page 5 (M-228)


therefore a use for a public purpose. Thus, we conclude that
the devise and bequest in question is exempt from inheritance
taxes and you are accordingly so advised. This opinion is
expressly limited to the facts presented and is not to be con-
strued as applying generally to devises and bequests to non-
profit cemetery associations.


                       SUMMARY

       Devise and bequest to the members of the Oak
       Hill Cemetery Endowment Fund Committee as a
       part of the Oak Hill Cemetery Endowment Fund
       is exempt from inheritance tax under the sub-
       mitted facts.




                                 orney General of Texas

Prepared by Marietta McGregor Payne
Assistant Attorney General

APPROVED:
OPINION COMMITTEE
Hawthorne Phillips, Chairman
Kerns B. Taylor, Co-Chairman
W. V. Geppert
2. T. Fortescue III
Richard Chote
Jim Swearingen
A. J. Carubbi, Jr.
Executive Assistant Attorney General




                       -1118-
