                 HE   A~~OIZNEP            GENERAL
                          OFTEXAS

GERAID C. MANN            A~JSTIN   I,. TEXAU




    Honorable 0. P. Lockhart, Chairman
    Board of Insurance Commissioners
    Austin, Texas
    Dear Sir:                 OpFnion No. O-5539
                              Re: Mortuary funds of'mutual assess-
                                   ment associations; Phether such
                                   funds may be used ~to pay the oc-
                                   cupation tax levied by Article
                                   7064a, Vernon's Annotated Civil
                                   Statutes.
           The answer to the-question above stated, submitted in
    your letter of August 11, 1943, is ruled by our Opinions num-
    bered O-2988 and O-5337.
           In the latter opinl.on,acopy ofwhlch you have,'we
    rul'edthat mortuary or reserve funds are not taxable~as in;
    cbme under the"Federa1 Revenue Act of 1936. Our conclusion ln
    that opinion was based up&i the proposition that the funds'are,
    by legislative act,'irrevocablg dedicated for the use and pro-
    tectfon of the policyholders and are not income.
           In our~Opinion~Ro.'O-298&we ruled that the tax levied
    by Article 7064a, Vernon's Annotated Civil Statutes, could not
    be paid out of the mortuary fund because of Section 12 of Artl-
    cle 5068-1, Vernon's Annotated Civil Statutes. We enclose a
    copy of that opinion for a clear discussion of the matter.
           We therefore advise that the occupation tax above re-
    ferred to cannot be paid out of the mortuary fund but must be
    paid out of the statutory expense fund as provided by law.
                                       Very truly your,3
                                    ATTORNEX GEWERAL OF TEXAS
    ER:db:wc                          By:.skElbertHoopei
                                           ElbertRooper
    APPRO-   SEP 2, 1943                   Assistant
    s/Gerald C, Mann
    ATTORNEYGENERAL OF TEXAS
    Approved Opinion Committee By s/BWB Chairman
