Untitled Texas Attorney General Opinion ( 1942 )

THE ATJTORNEYGENERAL
OF I‘Ems
Honorable 0. P. Lockhart, Chalrman
Board of Insurance Commlssloners
Austin, Texas
Dear Sir: Opinion No. O-4374.
Re: Are the $1,220,000;00 reiienue bonds
issued by the Agricultural and
Mec'hanlcalCollege of Texas and
similarrevenue bonds issued by
other State colleges eligible as
tax reducing "Texas securities"
under the provlslons'of-the.Robert-
son Law; Articles“4765-4769, as'
amended; and as tax reduciiig Si3hp~
ities under Article 7064, as amend-
ed, and are they ellglble as au-
thorized securities under Article
4725, Vernon's Annotated Civil
Statutes?.
Your letter requesting the opinion of this department
on the above stated question reads as follows:
"Please advise whether the $1,220,000 -.
of revenue bonds issued by the.Agrlcultural
and Mechanical College of Texas'for the pur-
pose of building dormitories, equipping power
plants.and building and equipping laundry
plants; and other slmilar~revenue bonds issu-
ed by other State Colleges, such as John
Tarleton College at Stephenville (which is
a branch of A & M College), Texas State'Col-
lege for Women, D:enton; and Texas Tecbnoltigl-
cal College at Lubbock, which revenue bonds
are not secured.bg valid first ll~ensupon
Texas real estate but only by pledged revenue
of the Colleges by or the projects for which
they were fssuea, are eligible as tax reduc-
ing 'Texas securities' under the provisions
of the Robertson law, Articles 4765-4769 as
amended, and as tax reducing securities under
Article 7064 as amended; and whether they
are eligible as authorized securities under
Article 4725."
Honorable 0. P. Lockhart, page 2 o-4374
Article 7064, Vernon's Annot&ted Civil Statutes, pro-
vides in part:
"Every Insurance corporation, Lloyd's,
or reciprocals, and any other organization
or concern transacting the business of fire,
marine, marine Inland, accident, credit,
title, livestock, fidelity, guaranty, surety,
casualty, or any other kind or character of
Insurance business other than the business
of life Insurance, and other than fraternal
benefit associations, within this State at
the time of filing its annual statement,
shall report to the Board of Insurance Com-
missioners the gross amount of premiums
receivedupon property located In this State
or on risks located in this State during'
the preceding year, and each of such Fnsur-
ante carriers shall pay an annual tax upon
such gross premlum receipts as follows:
. . . If any such insurance carrier shall
have as much as otiefourth of its entire.
assets; as shown by said sworn statement, ln-
vested In any or all of the following secur-
itles:'real estate in this State, bonds
of this State or of any county, Incorporated
city or town of this State, or other property
in this State in which by law such insurance
carriers may Invest their funds, then the
annual tax of.anp such Insurance carriers
shall be one and one half (1 l/2) per cent
of Its said gross premium receipts; . e . a((
Article 4769, Vernon's Annotated Civil Statutes, pro-
vides In part:
"Each life Insurance compariynot organ-
ized under the laws of this State, transact-
ing business In this State, shall.axinually,
on or before the Xst day of Mardh, make a
report to the Commissioner, which report shall
be sworn to by either the president or vice
president and secretary or treasurer of such
company, w~hlch shall show the gross amount
of premiums,collected during the year ending
on December,31st, preceding, from citizens
of this State upon policies of insurance.
Each such company shall pay annually a tax
equal to four and sixty-five hundredths
(4.65) per cent of such gross premium receipts.
Honorable 0. P. Lockhart, page 3 o-4374
When the report of the investment In Texas
securities, as defined by law, of any such
companies as of December 31st of any year
shall-show that it has Invested on said date
as much as thirty (30) per cent of its total
Texas reserves as defined by law, in promls-
sorg notes or other obligations secured by
mortgage, deed'of trust, or other lien on
Texas real estate and/or in loans to resi-
dents-oFheld by such borrowers, the rate
of occupation tax shall be reduced to four
and fi:e one hundredths (4.05) per cent;...
......
Each of the above mentioned statutes provides for a
further reduction in-'taxeswhere greater amounts cif~the'finds''--
in6ntI6nedin said statutes are invested in the securities there-
in named.
ArMtile 4725, Vernon's Annotated Ci+illStatutes, sets
forth the securities in which & life insurance company or&in-
lzed'under the lawi of this State may~lnvest or loan Its se-
curities. This statute provides in part:
~3,
. . . .-~or
. in the bonds and warrants
of any 8ducatlonal Fnititutlon of the States
of .Texas; or any ~nicipally~owned 'WateFsys-
Grn or sew& systeti'whenspecial i?evenu&s.'to
me&t the principal and interest paym6nts as
they iiCcrueupoti'suchobligations shall have
been'approptiiated,pledged or otherwise pro-
vlded by tiuchmunicltality or educational ln-
stitutlon; . . . . .
ArtIdle 4706, Vernon's Annotated Civil Stat&e&, sets
fol"thor names the securitiesin which lnstirancecomp@nl&;. .
@ixcept'companl&swriting life, health and accident lxi%uraiice,
inaginvest their funds over and above their paid up capital
stock.
In view of the foregolfigstatutes you'ape advised thtit
It.ls the 'oplnlon of thls'department that the above?nentiotied
revenue bonds are~not,eligible as~tax reducing "Texas secur-
itles"~unde? Article 4769 or Article 7064, supra, because ~'
&uch bonds are n-etpromissory notes or other obllgatlons'se-
?%Eed by-a.mortgage-;d&d of trust, or titherlien bn ~Texas
I'sale~st&te,etc., as set forthln Article 4769 as eligible
tax reducing securities. The same can'be said FeltitFveto
such-bonds wFth refer&c& td~Article 7064 as’ Buch‘bonas~do
not come within the securities mentioned in sald article.
Honorable 0. P. Lockhart, page 4 o-4374
With reference to your question as to whether such
bonds are eligible as authorized securities under Article
4725, Vernon's Annotated Civil Statutes, it is our opinion
that such bonds are eligible 8s~authorized securities under
said article when the educational institution Issuing such
bonds provides revenues to meet'the principal and Interest
payments as they accrue upon such obligations by appropria-
tion, pledge or otherwise provided by such-educational instl-
tutlon as authorized by Article 4725, supra.
Trusting that the foregoing fully answers your ln-
quiry, we are
Yours very truly
ATTORNEYGENERAL OF TEXAS
By s/Ardell Williams
Araell-'Williams
.. Assistant
AW:GO:wc
APPROTW) MAR 4, 1942
s/Grover Sellers
FIRST ASSISTANT
ATTORNEYGENEFUL . _.
Approved OplnFon Committee by s/BWB Chairman