                         THE     ATTBRNES              GENERAL
                                     OF    ?t-ElXAS

      CWAWFORD     c. MARTIN
                                  Ausnnr.T~xam        78711
        *TTORNEY   OENERAI.

                                      July 27, 1967

         Honorable Robert S, Calvert
         Comptroller of Public Accounts
         State Capitol
         Austin, Texas
                                        Opinion No, M-110
                                       Re:   Whether devise and bequest
                                             to a Cemetery Association
                                             is exempt from inheritance
         Dear Mr D Calvert:                  tax e
                In your letter requesting the opinion of this Office on
         the above captioned matter, you iacluded a copy of the articles
         of incorporation of the Cemetery Alsociation in question, This
     ... charter recites that the corporation is to be formed pursuant
     ‘., to the provisions of Article 1121, subdivision 5, Acts 1897,
         ~0188, P,D. 5935.  Article 1121 enumerated specific purposes
     ‘, for which corporat.ionscould be created at the time the charter
         was granted on October 4, 1925. Subdivision 5 reads as follows:
         “The maintenance of a public or private cemetery or crematory,”
         There is no charter provision which requires perpetual care,
         This opinion does not pass upon the taxability of gifts to au&
         cam~tsry associations as have eotrblished perpe,tualcare t.z~#b
         funds pursuant to the provisions of Article 912a-15, Vernon’s
:.       Civil Statutes, which provides that perpetual care trust funds
         are “expressly permitted and shall be and be/i5127 deemed to be
         for charitable and eleemosynary purposesO”
                 If this devise and bequest is exempt from inheritance
         taxes, it must come within the provisions of subdivision (2) of
         Article 14,015, Taxation-General, Vernonus Civil Statutes, which
         enumerates exempt transfers, Subdivision (2) of.Article 14,015
         ,reads as.follows:

                         “(2) Religious, Charitable and Educa-
                   tional Organizations, Property passing to
                   or for the use of charitable, educational,
                   or religious societies or institutions,
                   incorporated, unincorporated, or in the
                   form of a trust, provided that no part of
Honorable Robert S.,Calvert, page 2 (M-110)


       the net earning6 of any such organiza-
       tion inures to the benefit of any private
       shareholder or individual."
Specifically, the Cemetery Association could qualify for ex-
emption only if it be deemed a "charitable" corporation. We
are of the opinion that it cannot.
       Section '2 of Article 1121 provided that corporations
might be created for "the support of any benevolent, charitable,
educational or missionary undertaking." Had the Legislature
deemed that "a public or private cemetery or crematory" was em-
braced within the provision for charitable undertakings, itwould
not have deemed it necessary to add the,fifth subdivision, above
quoted. Further, as aforesaid, the Legislature did deem it neces-
sary to declare in Article 912a-15 that perpetual care trust funds
shall be deemed for charitable purposes.
       Another provision of our Constitution and of the statutes
illustrates the same distinction. Article VIII, Section 2 of the
Constitution authorizes the Legislature to exempt certain classes
of property from ad valorem taxes. It reads, in part, as follows:
            il
             * 0 +,but the legislature .may, by general
       laws, exempt from taxation public property used for
       public.purposes; 0 0 0 places of burial not held
       for private or corporate profit; 6 . . and institu-
       tions of purely public charity; and all laws ex~empt-
       ing property from taxation other than the property
       above mentioned shall be null and void."
       Pursuant to this Constitutional authorization, the Legis-
lature enacted Article 7150, Vernon's Civil Statutes, Section 7
of Article 7150 reads as follows:
           "All buildings 'belonging to institutions
      of purely~public charity, together with the lands
      belonging to and occupied by such institutions not
      leased or otherwise used with a .viewto profit, un-
      less such rents and profits and all moneys and
      credits are appropriated by such institutions solely
      to sustain such in,stitutionsand for the benefit of
      the sick and disabled members and their ,familiesand
      the burial of the same, orfor the maintenance of
      persons when unable to provide for themselves,
      whether such persons are members of such institu-
      tions or not, An institution of purely public chari-
      ty under this article is one which dispenses ,ito
                           - 508 -
Honorable Robert S. Calvert, page 3 (M-110)


         aid to its members and others in sickness
         or distress, or at death, without regard to
         poverty or riches of the recipient, also when
         the funds, property and asset6 of such institu-
         tions are placed and bound by its laws to re-
         lieve, aid and administer in any way to the re-
        &.sf:,,ofits member6 when in want, :6$$@66s and
         distress, and.provfde homes for its helpless
         and dependent members and @educate   and main-
         tain the orphans of its deceased members or other
         persons.”
Section 3 of Article 7150 reads as follows:

              "3.  Cemeteries, - All lands used ex-
         clusively for graveyards or ground6 for burying
         the dead, except such as are held by any person,
         company OP corporation with a view to profit, or
         for the purpose of speculating fn the sale there-
         of,”
       The above quoted portions of Section 2 were adopted in
1876.  Had the framers of the Constitution considered places of
burial not held for private or corporate profit institutions of
purely public charity, it would not have been necessary to pro-
vidc a separate authorizatfon for the efftmptionthereof, Pur-
suant to this separate specific authorization, Section 3, above
quoted, was enacted,
        We realize that what may be deemed “charitable” for the
 method or purpose of creating a corporation or for the purpose
 of obtaining an@sm@ion    from ad valorem taxes is not necessar-
 ily determinative of’what may be deemed “charitable” for the pur-
 poses of obtaining an exemptfon from inheritance taxes. However,
 courts in other jurisdictions have been influenced by similar dif-
 ferentiatfons in determining the &a%$b;bLlity
                                             for_qucceasion tax
 purposes of devises and bequests to cemetery’i,orpcrat,lons.;
                                                             Re Hill,
 160 Atl. 916.(Me.Sup. 1932), held that a cemetery association could
 not be regarded as a charitable institution within the meaning of
 a statute exempting from inheritance tax legacies to or for the
 use of charitable institutions, where the Legislat.ure,by provid-
 ing that cemetery corporations shall be organized a6 charitable
 corporations and by specifically exempting them from taxation not-
 withstanding a general exemption of benevolent and charitable lnsti-
.$utions, had indicated that it does not view them as falling within
 the category of charitable institutions. This case recognize6 that
 some cases have allowed as an exemption payments for the improve-
 ment, care, and upkeep of a family burial plot and for the erection
                             -509-
,I
f.
 ,,,,   Honorable Robert S. Calvert, page 4 (M-&+0)


        of monument6 thereon, provided the testator himself is to be bur-
        ied therein; but these cases are grounded on the proposition
        that directions to place monramentson a family burial ground
        where,the testator directs or+xpe~cts that he will be buried,
        may be granted an exemption under a liberal interpretation of
        a deduction allowed for funeral expenses, Under the facts as
        presented to this Office, obviously the devise and beauest to
        the Ce~e~cry'Association cannot be treated as a funeral,expense
        of the decedent,
               Re Hill Is annotated in 83 A.L,R, 931 in an Annotation
        entitlemp,tion      from succession tax in respect of bequests
        or expenditures in connection with cemetery and burial." This
        Annotation cites a number of cases, Bullock v. Commissioner of
        Corporation & Taxn,, 156 N-E, 743 (Mass.Sup,'l927), held that a
         ift to a cemetery corporation for erecting a chapel in which to
        iold burial services was not exempt from succession tax a6 being
        for a charitable purpose since burial service6 would be held for
        members or lot owners only,
        134 N.E. 183 (reversing (1921lcf;g~eA~~e~:~a~~P’!s82~‘yNsebp365J
        178, which reversed (1920) 11 Misc. 73, 186 N,Y.Supp 674) where
        the testator gave all of his residuary estate, amounting to nearly
        $l,OOO,OOO to the Beekman Family Association. Contra: Bushong v.
        Taylor, 33 S.W,2d 80 (Tenn.Sup, 1930).
               For all the foregoing reasons, the devise and bequest to
        the Cemetery Association in question is subject to an inheritance
        tax.
                                     SUMMARY
                    Under 6ubmFtted facts a devise and be-
               quest to the @$&t@?~Association   in question
               is subject to aninheritance tax.




                                                 General of Texas
        MMP:ms
        Prepared by Marietta McGregor Pa
        Assistant Attorney General
Honorable Robert S. Calved,    page 5 (M-110)


APPROVED:
OPINION COMMITTEE
Hawthorne Phillips, Chairman
Kerns B, Taylor, CoXhairman
Alan Minter
James Broadhurst
Paul Mart,in
John R, Grace
STAFF LEGAL ASSISTANT
A. J, Carubbi, Jr.




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