HE A~~OIZNEP GENERAL
OFTEXAS
GERAID C. MANN A~JSTIN I,. TEXAU
Honorable 0. P. Lockhart, Chairman
Board of Insurance Commissioners
Austin, Texas
Dear Sir: OpFnion No. O-5539
Re: Mortuary funds of'mutual assess-
ment associations; Phether such
funds may be used ~to pay the oc-
cupation tax levied by Article
7064a, Vernon's Annotated Civil
Statutes.
The answer to the-question above stated, submitted in
your letter of August 11, 1943, is ruled by our Opinions num-
bered O-2988 and O-5337.
In the latter opinl.on,acopy ofwhlch you have,'we
rul'edthat mortuary or reserve funds are not taxable~as in;
cbme under the"Federa1 Revenue Act of 1936. Our conclusion ln
that opinion was based up&i the proposition that the funds'are,
by legislative act,'irrevocablg dedicated for the use and pro-
tectfon of the policyholders and are not income.
In our~Opinion~Ro.'O-298&we ruled that the tax levied
by Article 7064a, Vernon's Annotated Civil Statutes, could not
be paid out of the mortuary fund because of Section 12 of Artl-
cle 5068-1, Vernon's Annotated Civil Statutes. We enclose a
copy of that opinion for a clear discussion of the matter.
We therefore advise that the occupation tax above re-
ferred to cannot be paid out of the mortuary fund but must be
paid out of the statutory expense fund as provided by law.
Very truly your,3
ATTORNEX GEWERAL OF TEXAS
ER:db:wc By:.skElbertHoopei
ElbertRooper
APPRO- SEP 2, 1943 Assistant
s/Gerald C, Mann
ATTORNEYGENERAL OF TEXAS
Approved Opinion Committee By s/BWB Chairman