Ron. Robert S. Calvert
Comptroller   of Public Accounts
Capitol Station
Austin, Texas                               Opinion No. S-62

                                            Re:    Exemption from inheritance
                                                  tax of bequest to such corpo-
                                                  ration, association  or trust
                                                  fund as trustees may select
                                                  for certain charitable  pm.-
Dear Sir:                                         poses.

                   We quote the following excerpt from your letter re-
questing    the opinion of this office on the above-captioned subject.

                   *We desire the opinion of your office with
            respect to the correct exemption applicable   to a
            bequest made under Clause XI asamended       by
            Clause SMTH of the codicil to the last will and
            testament of Godcheaux A. C. Halff. deceased,    of
            Bexar County, Texas.

                    ‘Clause    XI of the will as amended by Clause
            SDCTH of the codicil devises        three-eighths      (3/8)
            of the residue to the decedent’s         brother and nephew.
            or thesurvivor.       as Trustees    for public charitable
            uses and purposes--one-half          (l/2)    to the National
            Jewish Hos ital at Denver, Colorado,             and the other
            one-half    (1 P2) of three-eighths     (3/8) ‘to such cor-
            poration, association      or trust fund as his Trustees
            may select for any one or more or all of the follow-
            ing charitable     purposes for the relief of the poor.
            to wit: Hospitalizationi       the promotion of health; the
            relief of the afflicted and other medical aid; the re-
            lief of poverty;    the advancement        of education; gov-
            ernmental      or municipal    purposes.’

                   -The surviving    trustee, Hugh A. L. Halff, ne-
            phew of the decedent,    has made and filed with this
            department   an inherftance    tax report for the Estate
            of Godcheaux A. C. Halff. and under Schedule E
            thereof has reported    the one-half   (l/Z) of three-
            eighths (3/8) of the residue devised to the National
.
                &Ion.     Robert   S. Calvert.   page 2 (S-62)
           2%



                              and a tax due thereon in the amount of $203,968.57.
                              The other one-half (l/Z) of three-eighths (3/8) of
                              the residue the Trustee is claiming exenp t as pro-
                              vided in Article 7122.

                                    ‘In view of the holding in the Presbyterian
                             Case (198 S.W.Zd 282) we ask you to advise this de-
                             partment whether the one-half    (l/2)  of three-eighths
                             (3/8) of th e residue devised to the Trustees    for se-
                             lected charitable   purposes by the Trustee’s is exempt
                             or taxable as provided in Article    7122.”

                                    The pertinent        provisions   of Article   71224lass      E,
                V.C.S.,     are the following:

                                    “Foreign bequest.     If passing to or for the use
                             of the United States, to or for the use of pny other
                             person or reIigious.    educational   or charitable organ-
                             ization . . . the tax shall be . . . provided, however,
                             that this Article  shall not,apply on property passing
                             to or for the use of the United States or any religious,
                             educational or charitable organieation      when such be-
                             quest, devise or gfft is to be used within this State;*

     c                           In the Presbyterian    Church case, .the decedent be-
                queathed one-half of her ,estate to the Presbyterian      Church in the
                United States.   No limitation as to ‘use. of the property w.ithin the
                State of Texas was expressed      fn the,wfll.  The Presbyterian   Church
                operates in many states and in foreign lands.        The proper Church
    ,...        authorities. sfter the decedent’s    death, obligated the Church to use
                the bequest in its entirety in thenState of Texas.     The Court held
                that the “manifest purpose of the statute is to exempt a devise or
                bequest passing sunder a will from the payment of the tax imposed
                onfy when such devise or bequest.is      to be used in this State.

                                     The Court    also    said at page 285:

                                    *Nor .is the fact that the.partfes   have stipulated
                             that the appellant Church has. promised       and will use
                             the property fn Texas material      to a proper coaetruc-
                             tion of the statute.  The Legislature     has provided no
                             form or ‘method by whfch, the taxing authorities       might
                             ascertain whether a larger or lesser       use may be made
                             of the property by the devisee or legatee in order to
                             secure or create an exemption from the payment of
                             the tax imposed by the statute.”

                                     The facts    presented     by your,request     are clearly
 .




             Hon. Robert   S. Calvert,   page 3 (S-62)




             governed by the Presbyterian    case.  Mr. Halff’s will contained no
             language limiting the trustees in their selection  of a charitable  cor-
             poration, association  or trust fund to Texas charitable  enterprises.
             Thus the property passed upon Mr. Halff’s death without restriction
             as to where it will be used. It is therefore not within the overall
             exemption provided in Class E but is taxable thereunder.



                                                 SUMMARY

                               Property   passing by will to certain trustees
                       to be given to such charitable corporation,      associa-
                       tion or trust fund as said trustees may select is
                       subject to an inheritance    tax under Article   7122.
                       V.C.S.,   since no limitation as to use of the property
                       within the State of Texas was expressed       in the will.
                       Presbyterian     Church in the U. S; v. Sheppard,    198
                      .S,W.Zd 282 (Tex. Civ. App, 1946, error ref. n.r.e.).

                                                         Yours   very   truly,

                                                  JOHN BEN SHEPPERD
                                                    Attorney General


 :j   ..
.’
                                                 ‘Marietta   McGrego#            Creel
                                                         Assistant
             APPROVED:

             W. V. Geppert
             Taxation Division

             C. K. Richards
             Reviewer

        .:   BurnelI Waldrep
         ;   Executive Assistant
       .::
       5:;. John Ben Shepperd
       ;:i~
        .   Attorney General