E 0 GENERAL
March 25, 1957
”
Han;. Jack’q: Neal Opinion No. WW-74
County Attorney
Young county Re: Whether or not the royalty tnter-
Graham, Texas est and fee interest conveyed in
trust to the Ftrst National Bank
of Longview for the use and bene-
of the Roy H. Latrd Memorial
Hospital owned by the City of
Kilgore would be exempt from
Dear Mr. Neal: taxation,
You request the opinion of this office ufron the following
question presented in your letter:
“Annie B. Laird bequeathed to the First National
Bank of Longview, Texas, as trustee for the Roy H.
Laird Memorial Hospital, at Kilgore, Texas, certain
oil and gas interest in Young County, Texas, and the
Roy H. Laird Memorial Hospital in Kilgore is owned
and operated by the City of Kilgore, Texas.
“Mrs. Laird, at her death, owned a one-fourth
in fee of a 163 acre tract, a 367 acre tract and 292.6
tract and royalty interest of different percentage in
a number of tracts situated in Young County, Texas.
I am familiar with the fact that the city-owned hospi-
tal would be exempt from taxation but my question is
whether or not the royalty interest and fee interest
conveyed in trust to the bank for the use and benefit
of the Roy H. Laird Memorial Hospital owned by the
City of Kilgore, Texas, would come under this
exemption. . ..-
With your letter you submit a copy of the will of Annie B.
Laird. This will is the source of the title to the property in question,
which consists of certain fee and mineral interests in land owned by
Annie B. Laird. The wtll bequeaths to the First National Bank of
Longview, Texas, as trustee, property in ,trust for the Laird Memorial
Hospital owned by the Clty of Kilgore, a municipal corporation.
The City of Kilgore, a municipal corporation, is owner and
operator of the hospital. The property in question is exempt from
taxation under the Constitution and statutes of this State, unless the
fact that it is willed to the bank as trustee for the hospital, with the
. -
Hon. Jack Q . Neal, page 2 (WW-74)
qualification that only the income is to be paid to the hospital removes
exemption. We have concluded that this qualification does not have that
effect. The trustee can make no private use of the property, now or
ever, be it corpus or income. The trustee must hold it and pay the
income annually to the hospital, which is municipally owned.
Unqualified fee ownership in a municipality is not a condition precedent
to the exemption. San Antonio Independent School District v. Water
Works Board, 120 S.W.2d, 861 (Courtof Civil Appeals, 1937, writ ref.)
Section 1 of Article VIII of the Constitution provides ,in part,
as follows:
“All property in this State. . . other than
municipal, shall be taxed. . ..”
Section 2 of Article VIII of the Constitution also provides,
in part,as follows:
a,
. . . but the legislature may, by general laws,
exempt from taxation public property used for public
purposes; . . .*
Section 9 of, Article XI of the Constitution, after enumerating
certain properties of cities and towns exempt from taxation, such as
public buildings, etc., contains the following:
.I
. . . and all other property devoted exclusively
to the use and benefit of the public shall be exempt
from forced sale and from taxation, . . .((
Pursuant to this authority, the Legislature enacted Article
7150, Vernon’s Civil Statutes, which is in part as follows:
“The following property shall be exempt
from taxation, to wit:
“(4) All property, whether real or personal,
belonging exclusively to . . . any political subdivision
.,
. . .
The following cases, in principle, support the exemption of
this property from taxation: Corporation of San Felipe de Austin v.
State, 111 T. 108, 229 S.W. 84m,; \.
IJLCLZ~
CL^L_
-“:y
V. LL~
_.
of Houston, 146
md 277 (C.C.A. ~1940., error ref.); City of Shert-r Ian v. Williams, 84
T. 421, 19 S.W. 606, (1892); City of Abilene v. State, 113 S.W.Zd Ii31
(C.C.A. 1938); State v. Taylor, 72 T. 297, 12 Cj.w.6 (1888); A. & M.
Con. Ind, Sch. Dist. v. City of Bryan, 143 Tex. 384., 184 S.W.2d 914
x1945), affg. 179 S.W.2d 987 (C.C.A.)
Hon. Jack Q. Neal, page 3 (WW-74)
SUMMARY
Real property, whether fee or a mineral interest
willed to a bank, as trustee, for the use and
benefit of a hospital owned by a municipality,
is exempt from taxation under the Constitution
and statutes of ,this State; and the fact that the
trustee is directed to pay annually only the
income from the property to the hospital does
not destroy the exemption, since the municipality
is, in fact, the beneficial owner of the interest
in the property, both corpus and income.
Yours very truly,
WILL WILSON
Attorney General
BY
Asslstant
LPL:cs
APPROVED:
OPINION COMMITTEE
H. Grady Chandler, Chairman