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:
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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.
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c .
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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.
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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
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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
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