WVILL WILSON 

AlTORNEYG~NERAL 

October 10, 1961 

Honorable Robert S. Calvert Opinion NO. ~~-1160 

Comptroller of Public Accounts 

Capitol Station Re: Exemption from inheritance 

Austin, Texas tax of devise to Shriners 

Hospitals for Crippled 

Children under submitted 

Dear Mr. Calvert: facts. 

In connection with your request on the above-captioned 

matter, you have advised us of the following facts. L. Alberta 

Watkins and her husband, who predeceased her, had executed a 

joint and mutual will. Paragraphs 3 and 5 of this will read 

as follows: 

“3. In case of a common disaster of 

the undersigned testators causing the 

death of each of us, then,,in that event, 

we jointly and severally devise and 

bequeath all of the property, whether 

real, personal or mixed of which we,may 

die seized and possessed to Shriners 

Hospital for Crippled Children, a 

Corporation, for the use and benefit of 

the hospitals owned, operated, and maintained by said Corporation. 

8, 

. . . 

“5. In case either testator survives 

the other, but makes no other or later 

will, then In such event, the estate of 

such survivor shall pass under and according to the program of distribution set 

forth in numerical Paragraph Three above." 

Article 14.06, Title 122A, 20-A, Tax.-Gen., Vernon's 

Annotated Texas Statutes, provides an exemption from inheritance 

taxes for transfers to charitable organizations if such charitable 

organizations are to use the gift within this State. Article 

14.06 also contains the following further provisions for exemption 

which reads as follows: 

"Provided, further, that If the property 

so passing is to or for the use of a 
Honorable Robert S. Calvert, Page 2 Opinion No. ~~-1160 

religious, educational, or charitable 

organization which conducts its operations 

on a regional basis, one such region of 

which includes the State of Texas, or any 

part thereof, then a bequest, devise or 

gift to be used within such region shall 

be' deemed to be'used within this state. 

"For purposes of this paragraph a region 

shall comprise not more than five contiguous 

states, either in whole or in part, one of 

which is the State of Texas." 

The Attorneys for Shriners Hospitals for Crippled Children 

have supplied you with certain information which they deem 

pertinent in the determination of the taxability of the devise 

in question and which is offere~d in support of their position 

that said devise Is exempt from an inheritance tax. We quote 

the following excerpt from the letter submitted to you in 

connection with this matter. 

"Shriners Hospitals for Crippled Children 

is a wholly charitable corporation organized 

pursuant to the laws of the State of Colorado. 

This organization,owns and operates hospitals 

for crippled children located in different 

parts of the country; one such hospital being 

located in Shreveport, Louisiana, which 

services the region of Texas, Arkansas, 

Mississippi, and Alabama. In other words, 

crippled children of parents financially 

unable to supply needed orthopedic care, 

hospitalization and surgical treatment from 

the states mentioned are admitted for treatment at our Shreveport, Louisiana, hospital 

entirely without cost. Over the years since 

our hospitals have been in existence, many 

crippled children from the State of Texas 

have been admitted for treatment at a cost 

of many thousands of dollars which might 

otherwise have been spent in treating such 

children in public institutions within the 

State of Texas. 

"Shriners Hospitals for Crippled Children 

have always been affiliated with the Imperial 

Council of the Ancient Arabic Order of the 

Nobles of the Mystic Shrine of North America, 
Honorable Robert S. Calvert, Page ~3 Opinion NO. ~~-1160 

a fraternal order. The 'charitable corporation was organized tom operate the hospitals 

which administer the charitable work of the 

Shrine fraternal order. The Shrine is 

operated under the so-called Lodge System 

form of government, which means~ that Shrine 

Temples are chartered by the parent body 

and are~located throughout the country. 

Eleven such Shrine Temples are located in 

the State of Texas, one such temple being 

in Austinand another in Dallas, where the 

Watkins estate Is being administered. The 

other temples are at Amarillo; El Paso, 

Wichita Falls, Fort Worth, San Angelo, San 

Antonio, 'Waco, Houston and Galveston. The 

members of the Shrine fraternal order make 

annual payments toward the operation and 

maintenance of Shriners Hospitals for Crippled 

Children and the various Shrine Temples are 

responsible for locating and processing 

crippled children who are eligible for admission to our hospitals. The Shrine Temples 

also provide transportation for the children 

to and from the hospitals and assist in many 

other ways ,in furthering the charitable 

endeavors of the organization. 

II 

. . . 

"As indicated above, -the funds to be received 

by Shriners Ho~spitals for Crippled Children 

from the estate of L. Alberta Watkins will be 

used at the Shreveport, Louisiana unit of 

Shriners Hospitals for Crippled Children for 

the care and treatment of crippled children 

from the State of Texas. An affidavlt to such 

effect over the signature,of one of our corporate officers was to have been attached to 

the inheritance tax report. . .' 

The submitted affidavit was signed by George M. Saunders, 

Secretary of the Shriners Hospitals for Crippled Children. 

The substance of the affidavit Is that George M. Saunders is 

the Secretary of.the Shriners Hospitals for Crippled Children 

and that, as such officer, he ~1s authorized to make the statements contained In .the affidavit on behalf of the Shriners 

Hospitals. These,,statcments :are to theeffect that the 

Shriners Hospitals for Crippled Children is a charitable 
Honorable Robert S. Calvert, Page 4 Opinion NO. ~~-11.60 

Colorado corporation owning and operating hospitals for 

Crippled Children throughout the country and providing care 

for children of parents financially unable to provide such 

care. He states that the Hospitals are administered and 

operated on a regional basis and that one such hospital unit 

is located at Shreveport, Louisiana, and is known as the 

Shreveport unit of Shriners Hospitals for Crippled Children. 

He states that children from,,the State of Texas are treated 

there and that it is hereby . . .stipulated and agreed that 

the funds and/or assets received by Shriners Hospitals for 

Crippled Children from the estate of L. Alberta Watkins will 

be expended exclusively for the care, surgery, hospitalization 

and treatment of crippled children who are residents and 

domiciliaries of the State of Texas at the Shreveport, 

Louisiana, unit of said Shriners Hospitals for Crippled 

Children wholly without charge;. . ,' 

Attached to the affidavit is a copy of a resolution 

adopted by the Board of Directors of Shriners Hospitals for 

Crippled Children at a regular meeting held in Miami, Florida, 

on June 15, 1961. This resolution provides, in part, that, 

among other officers, the Secretary J.s authorized, directed 

and empowered in the name and in behalfof Shriners Hospitals 

for Crippled Children, a Colorado corporation, to take certain 

enumerated legal steps. Paragraph 3 of the resolution reads 

as follows: 

"To make and execute all necessary contracts 

and documents affecting the property of 

Shriners Hospitals for Crippled Children, 

and other properties of the corporation;" 

Paragraph 9 reads as follows: 

"To make and execute any and all papers 

and documents as may be necessary from 

time to time to comply with the laws of the 

state in which any of the properties of 

the corporation may be located for the purpose of protecting and safeguarding the same;" 

Paragraph 10 reads as follows: 

"To make and execute such agreements, 

papers and documents as may be necessary 

from time to time to settle any controversies 

over the properties of the corporation, or 

such suits as may be pending affecting the 

properties of the corporation, and as may 
Honorable Robert S. Calvert, Page 5 Opinion No. ~~-1160 

be deemed necessary. ‘for the’ protection bf 

the proparties of the corporati,on;” 

Tha foregoing facts clearly satisfy the requirements of 

the statute. The limitation as to the use and expenditure of 

the devise is in no way lnconsistant with the terms of the 

will. The Secretary of Shrlners Hospitals for Crippled Chlldren is plainly authorized to so bind the corporation. The 

regional operation of the Shriners Hospitals for Crippled 

Children within the states of Texas, Arkansas, Mississippi 

and Alabama meets the statutory requirement that the region 

shall comprise not more than five contiguous states, either 

in whole or In part, one of which is the State of Texas. 

In Attorney Qeneralls,Opinion No. W-1141, the following 

statament appears in connection with the proper construction 

of the statutory provision hare under consideration: 

II .The Legislature did not see fit 

to pr&ide any yardstick for measuring the 

amount of baneflts which this State should 

receive from the charitable organization 

operating on a regional basis; yet it Is 

avident that tha Legislature did not intend 

to accord an exemption for all charitable, 

bequests, devises or gifts since this regional 

axemptlon provision is limited to regions of 

not more than five contiguous states, either 

In whole or in part; one of which is the 

State of Texas. Therefore, necessarily the 

statute contamplates that this State receive 

some teneflt bafore exemption will be allowed 

. . . 

The “benefits tast” established by Opinion No. NW-1141 

as determinative of exemption has been mat in this case by 

Irrevocably committing the devise In question for the use 

and benefit of the crippled children of this State. You are, 

tharefora, advised that the devise Is exempt from an inheritance 

tax. 

SUMMARY 

A devisa to Shrlners Hospitals for 

Crippled Children, a Colorado charitable 

corporation, is exempt from an inherltanca 

tax undar Article 14.06, 20-A, Tax.-Gen., 

V.A.T.S., by vlrtua of the corporation’s 
Honorable Robert S. Calvert, Page 6 Opinion No. ~~-1160 

regional operation in the states of 

Texas, Arkansas, Mississippi, and Alabama 

and by its irrevocable commitment of the 

devise for the use and benefit of the 

crippled children of this State. 

Very truly yours, 

WILL WILSON 

Attorney General of Texas 

Assistant 

MMP:lmc 

APPROVED: 

OPINION COMMITTEE: 

W. V. Geppert, Chairman 

Henry Braswell 

Tom Burrus 

Linw~ard Shivers 

REVIEWED FOR THE ATTORNEY GENERAL 

By: Houghton Brownlee, Jr.