September 22, 

### 1961

Honorable Robert S. Calvert Comptroller of Public Accounts Capitol Station Austin, Texas

Dear Mr. Calvert: Opinion No.

### WW-1146

Re: Exemption frm inheritance taxes of certain devlaes and bequests to charitable institutions.

In connectionwith yr?ur request that this office furnish you with an opinion on the above captionedmatter, you have suppliedWI with the following facts.

Morris Glozman died November 14, &yp. By the terms of paragraph 4 of his lastwill and testament,which haa been duly admitted to probate, the decedent directed *.,.

. thatmy estatebe divided equally among The B'NAI B'RITR OLD FOIgS' HOME.at Memphis, Tennessee, THE SHRINE CRIPPIED CHIIDREN'SHOSPITAL FUVD OF Houston,Texas, and THE JEWISH CONSWPTIVE HOME of Denver, Colorado." ' 1

Whether an exemption from inheritancetares may be accorded these testamentary charitable giftsmuet 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, educational or charitableorganization or institution,or to any other person, corporationor associationnot included in any of the classesmentioned 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 thisArticle shallnot apply on propertypassing to or for the use of theUnited States, or to or for the use Of any religious, educational or charitable organization, incorporated,unincorporated or in the form of a trust, when suchbequest, devise or gift Se to be usedwithin this state. The exemption from tax under the precedingprovisions of this Article shall,without limiting ita applicationunderHonorable Robert S. Calve&, page b 

### (W-1146)

other appr;nprf&tl irircw&,ances,apply to all or eo much a? any boquwt, devise or gift to or for the uee of ,the %fted Stats, or * religioue, educationalor charitable orgwization, whPCh fs, in writing and prior to ,t??'r;

payment of the tax, irrevocablycommitted for woe exclusivelywithin the State of Texas or transferred to a religiow, e&cetional or charitable organfzation for use exclusive$ vrthin this state.
“Provided,father, that if the property eo passing 3.8 to or for the uee of a'reifgfous, educational,orcharitable organizationwhich conaucte ita operations on a regionalbaais, one such region of which ineludes the State of Texas, or army

part 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 lfmitedto, a youth prbgrem of physic&. fitness, character developent, and citizenshiptraining or likeprogram."

We willfirat coneiderwhet&& the devise and bequest to the Shrine Crippled Chfldren'e HospitalFund 'ofHouston,Texas, is exempt from inheritance taxes. You have furniehedue with the inheritancetax return file fn connectionwith the estate of this decedent. This return reveals that the correctname of the recipient of the bequest under consideration is The Arabia Temple CrippledChiLdren'eClfnic. This Clinic is a Texas corporation chartered for the purposes of'aupptirting"benevolent,charitable and educationalundertaki~n~a for crippled children not over the age of fourteen (14)yeare, regsrdlsso of race, 5+ded or color

. . .* 'Theoffice of the corporation ismafntnlned in Houston,Texas. On January 11, 

### 1961, at
a meeting of the Board of Trueteed of the corporation, a resolutionwae adopted chuthorizfr% the offfcers of the corporation to execute and deliver to the HonorableRobert 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 pr6pertypawing to the corporation ,under the decedent'swfll for use for charitablepurpoees exclusfvelywithin this State. A copy of this resolutfol togetherwith a letter from the Clinic, acting through the Chairman of the Board, was sent to HonorableRobert S. Calvert. In the Letter ,the Clinfd irrevocably committedal1 the property here involved for use for charitablepurposeswithin this State.

We thinkthst this devise and bequest is clearly exempt as one to a "charitable organizationand a 'gift D D ~ to be ueed.withinthis State ' and that the beqwet and devise has been 'irrevocablycommitted

. . . ) for use exclusivelywfthin the State of Texas. D Oa*. Since every condition of the otatutehaa been satisfied,we need not and do not pass upon

eHonorable Robert S. Calvert, page 

### ‘3 (~-1146)

the queetion of whether a speeiffc commitmentwae necessary,under the eubmitted facts, in connectionwith this particular devise and bequest.

We will now considerwhether the devise and bequest to the Jewish ConsumptiveHome of Denver, Colorado, is exempt frak inheritance taxes. The inheritancetax file reflects 'thatthe correct name of this beneficiary isThe National Jewiah Hoepita at Denver. The Hoapital la a non-profitColorado corporationhaving &s its corporatepurpose the operation of a hospftal or hospitals. According to the by-laws of the corporation, its specificpurpose is to treat,without charge, and without dietinction of creed, persona suffering from tuberculosisor diseases of the chest and to conduct education and'retiearch in this field. They also provide "The Services of this Hospital shallbe free and non-eectarian",and 'nonemay 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 resolutionwhich containa tbsfollowingparagraphs:
%HEREAS, theNational Jewisli'Bbspital at Denver is engaged solely and exclusiveb in charitable activitiee~ and,
"WHEfBW, the Bati&aiJewieh Hospital at Denver maintaina
a regular officewithin 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 $30,000.00within the State of Texas, eolely for charitablepnrposee;
"NOW,THEREFORE, IT Is HER%RY RESOLVED, that the National Jewish Hoepital at Denver irrevocablycommit all~propertieeand assets, of whatsoever typkLor titure, passing to it under and by
reason of the Last. Will and T'estement of Morris Glozman, deceaeed, for charitablepurposes excltiivelywithin the State of Texae and States contiguous to the Statb of Texas."

A copy of the resolution-in ita entiretyhas been forwarded to the HonorableRobert S. Calvert, togetherwith 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 charitablepurposes "exclusivelytithfn the State of Texas and States contiguoue thereto."

We have not been informed of the exact nature of-the charitable activitiee 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,I we will as~mne that the charitable activities to be carried on in this State by the UBB of the fun& are in connectionwith 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 questionwere not irrevocablyoommftted to exclusive use in Texas, 'but aleo 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 themere set of irrevocablycommitting a bequeet for charitable purposes to be used exclusivelywithin t1e State of Texas and States oontie;llous to the State of Texas, would eonatf.tzte the conduoting of the Hospital's operationa on a regional basis. ,1he Hospital admits charity patients,without limftatlona8 to residence. It is clear to us, that for a charitable organizationto conduct its operations on a "regionalbasfen, ae that term ia ueed in the statute, that the entire field of its operationswould have to be'divlded into separate and distinct regions and be of a permanentnature,wit&each region beiw subject to looalmenagement and control,under proper directfvea from the officers or directors of the charitable organization.

If it could be said that irre+ocab'ly canmitting a bequeet to be excluaivelyused in Texas and one oi:more States contiguous to Texas would conetitute the hospital's operetioksto be on a regionalbasis, and ff we are correct, end we believewe are) In stating that for a charitable organization 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 charitablebequests. The directors of the hospitalmake B similar commitment 88 to each additionalbequeat, (1)One to be used exclusively in T&as andNew Mexico, (2) one to be used excluefvely inTexas and Oklahcrma,(3) one to be u&ied exclusively in Texas andArkaneas, 

### (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 and Arkan%&+,

p be wed exclusively fn Ta, New Mexico and Ioufeiana, (8) on&to be used exclusively in Texas, New Mexfeo, Oklahcsna

MB Arkansas, (9) one'to:be used exclusively inTexas, New 

### Mexico, Oklahoma and Loufeiane, (10) one to be used exclusively inTexas. Oklahoma, andArkansae, (11) one to be used :exclLeivelyin 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 would result In the five tit&es 04 TBxa8, New Mexico, Oklahoma,Arkansas and Loaiolanabeing divided into fou&e& 88 tlarate regionswith Texas being in all fourteen regions, and eaeh of ,the,o er four statesbeing in seven of the regiona. This anomaly oould be furthermultiplied fndeffnitelyby irrevoaably oammltting euc.h funds to'certaindesimated 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 thereforebcla +&at an exemption frcm the inheritancetax for the devise to The National JewishHospftal at Denver cannot be obtainedmleas and until the funds in queetionare irrevocablycommitted to the exclu.us%ve
use inTexas. ,'

The third beneficiary of ,the teatator's largess is the B'NAI B*RITH OIII FOIKS' H@lE, at &mpbfa, Tenn6aeee. The inheritancetax return reflects that the correct name of this institution is the B'NAI B'RITH HOME ANDHOSPlTALFORTHEAGEQ, INC. ~TheB'NAI B'RITH HOME AND HOSPITAL was incorporatedunder the 18~8 of the State of Tennessee for the purpose of "' the support of a~ 'benevolent or charitable undertakinga8 a Lodge of Masons, Odd FeLlowa, hoapitala for the sick, houses of refuge or correction, orphan asylm, and aI1 other objectsof alike nature' end epeciffcallyfor the ownership and operation of a h,?meand hospital for the aged.* The bglaws of the Borneet&e that its ptipoee ie to operate a home and hospital in Memphie, Tennessee, and to provide for the physical and spiritualneeds of aged and infirmJew6 who residewithin 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 corporationhas furnished a certificatewhich containsthe informationthat many Texaslresidentshave resided in the Borne and recefvedhospital 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 a8member8 of the Board of Directors of the corporation.

Pursuant to a resolution adcp'ted by the Executive Committee of the Board of Directors of the corpotietion on January 23, 

### 1961, the B'NAI BS(m HOME AND HOSPITAL has irrevocablycommitted all of the propertypassfng to it, under the will in question, "for uBe for charitablepurposes exelusivelg within the State of Texas, Arkansas,TeMesaee and Ioulsiana.

. .nA copy of this resolutionhas been transmittedby the President of the corporation to the HonorableRobert S. Calvert, Comptroller of Public Accounts for the State of Texas, ,tcgether with a letteron behalf of the corporation stating that it is "a charitable organizationwhich conducts its operation on a regionalbasis, which includesthe State of TexaB."

We do not believe that this devise qualifies for exemptionunder the provfsiona of Article 

### 14.06. U&r the eubmittedfacts and, indeed by the express terms of the by-laws of the Home, its residentswhich are drawn from within the geographical limitsof District Grand Lodge #7, which embrace 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 questionare irrevocablyccemultted to the exclusiveuse inTexas.HonorableRobert S. Calvert, page 6 

### (~~-11446)

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

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 inheritancetaxes.

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: LeonardPaeamore