Your request for opinion has been received and aarefully considered by this department. We quote from your request as follows:

"In your opinion dated February 26, 1938, and written by Honorable Riohard Erooks, Assistant Attorney General, it nas held that mutual assessment life insurance corporations operating under At-tide 4859f (House Bill 303) are subject to taxation under Article 7064a: and it was also held that the Mortuary and Expense Fund of such corporations are to bear the tax in the seme proportion that they of the last ruling, of course ,f is that the EOortuary Fund of such corporations may legally pay a part of the premium tax.

Y<our opinion is now requested whether or not the Mortuary or Relief %nd of mutual assessment associations (including mutual assessment life insurance corporations operating under Article 4859f) subject to Senate Bill 135, Acts of the Forty-sixth Legislature, may pay any part of the premium tax imposed by Article 7064a. In this connection, piease refer to Section 12 of Senate M,!.', 135 which provides that only c&aims and to a limited extent the cost 0:' defending aontested claims 'and nothing else' may be paid from t'ne Mortuary or Relief Fund." Since the rendition of the Brooks' opinion, referred to in your letter, the 48th Legislature of '~eras enacted Senate Ml.1 135, new codified as Article 506&l, Vlomon~s Annotated 33x8s Ci.vil Statutes. ';his act applies to the ki::d :liid character of insure!GC companies' nsmsd in the bill and is applicn- ble to mutual assessment life insuranae companies operating under Article 48.59f, V.S.T.C..S., Section 12 of Article 5068-l reads as follows%

"Sec. 12. Assessments when colLected shall be divided into at l&t two (2) funds. Gne (1) of\%?& shall b-s the mortuary or relief fund, -7 t&whatever nsme it may be calied in the different associations,~from-

which claims under certificate'; shall bs paid, and to a llmited extent, the ,cost of defending oontestudclaims,m-a% the other 'funds shall be the expense fundsfrom whioh expenses may be ‘paid. At least sixty (605)per oent~f,assessments collected, except the member- ship fee, must be placed in the mortuary or relief fund. 'The mortuary or relief funds may be invested only in such securities as are a legal investment for the reserve funds of stock lifer Insurance companies. "Such association shall provide in its by-lams for the portion of its assessments to be allotted to the nort;iary or relief fund and may provide for the payment out of said mortuary or relief fund of attorneys' fles and necessary expenses arising out of the defense, settlement, or of contested claims. Any such payments out of the; mortuary or zent relief fund for other than claims shall be subject-to approval of the Board of Insuranoe Commissioners.

"A separate record shall be kept of the mortuary or relief funds of each group, club, or class, and the mortuary or relief funds of one group, olub, or olass shall not be used to pay the claims or obliga- tions of any other group, club, or alass."

Ir ~viw of the above quoted statute it his the opinion of this department that your question should be mswered in the negative and it is so answered. That portion of,the Erooks' opinion which holds to the contrary is hereby expressly overruled.

%JF:aw:ml

A?F'p.OViD JAN. 30, 1941

Gerald C. Mann

Attorney General of Texas .r