Untitled Texas Attorney General Opinion

QBfficeof tfy SZlttornepQikneral
Qtate of IlIlexae
DAN MORALES April 20.1992
AlToRNEY
GENERAL
Honorable Jack Skeen, Jr. Opinion No. DM-108
Smith County tlimhal District Attorney
coulItycourthouse Re: Whether rule Bll(c). of the
Tyler, Texas 75702 Rules and Regulations of the Smith
County Bail Bond Board which pro-
hibits an original bail bond applicant
from executing deeds of trust in
property as security for obligations in-
curred in the bonding business is
invalid as inconsistent with article
2372p-3, V.T.C.S. (RQ-205)
Dear Mr. Skeen:
You ask about the validity of a rule adopted by the Smith County Bail Bond
Board (hereinafter the board) under which original applicants for bail bond licenses
must make the statutorily required security deposit in the form of a cashier’s check,
certificate of deposit, cash or cash equivalent, but may not execute deeds to real
property in trust to the board in satisfaction of the security deposit requirement.
Article 2372p-3, V.T.C.S., governs the licensing of .bail bondsmen.by county
bail bond boards. Section S(f)(2) directs the board to “issue licenses to those
applicants who qualify under the terms of this Act+” Section 6 provides for the
application for the license, the board’s inquiries to determine the applicant’s
qualifications, and a board hearing on the application. Subsection (a)(4) of section
6 requires that the application include a “statement listing any nonexempt real
estate owned by the applicant that the applicant intends to convey ‘m trust to the
board to secure payment of any obligations incurred by the applicant in the bonding
business.” The applicant must include in connection therewith a statement from
each taring unit assessing or collecting taxes on the property indicating that there
are no outstanding tax liens on it and showing the net value of the property
according to the current appraisal. V.T.C.S. art. 237213-3, 0 6(a)(4)(B). Also,
subsection (a)(5) of section 6 requires that the application indicate “the amount of
cash or cash value of any certificate of deposit or cashier’s checks which the
applicant intends to place on deposit with the county treasurer to secure payment of
any obligations incurred by tbe applicant in the bonding business.”
p. 540
Honorable Jack Skeen, Jr. - Page 2 (DM-108)
Subsection (e) of section 6 provides, in part, that if the board is satisfied with
the application, it shall tentatively approve it “subject to the application being
perfected by the filing of the security deposits required of licensees under this Act.”
Subsection (f) of section 6 provides in relevant part:
Upon notice from the board that the application has been
tentatively approved, the applicant .shall then:
(1) deposit with the county treasurer . . . a cashier’s check,
certificate of deposit, cash, or cash equivalent in the amount
indicated by the applicant under Subdivision (5) of Subsection
(a) of Section 6.. . but in no event less than $50,000 except in
counties with populations of less than 250,000 persons.. . the
amount.. . shallbes1o,ooo...;or
(2) execute in trust to the board deeds to the property listed
by the applicant under Subdivision (4) of Subsection (a) of
Section 6 . . . which property shall be valued in the amount
indicated on an appraisal by a real estate appraiser who is a
member in good standing of a nationally recognixed professional
appraiser society or trade organization that has an established
code of ethics, educational program, and professional certifica-
tion program, but in no event less than $50,000 valuation, except
in counties with populations of less than 250,000
persons.. . , the amount.. . shall be $10,000, the condition of
the trust being that the property may be sold to satisfy any final
judgment forfeitures that may be made in bonds on which the
licensee is surety.. . . (Emphasis added.)
In our opinion, the abovequoted provisions clearly contemplate that the
applicant, in order to satis@ the security deposit requirement, has the option of
either depositing a certificate of deposit, cashier’s check, cash or a cash equivalent,
in the requisite amount under subsection (f)(l), or executing deeds to property
valued in the requisite amount in trust to the board under subsection (f)(2). We do
not believe the board has the power to restrict the statutorily provided for
alternative means through which the applicant may satisfy the security deposit
requirement by refusing to accept deeds to property in trust executed to the board
under subsection (f)(2) in satisfaction of the requirement.
p. 541
Honorable Jack Skeen, Jr. - Page 3 t DM-1 o 8 )
Section S(f)(l), gives the county bail bond board bmad authority “[t]o
exercise any powers incidental or nv to the administration of this Act” and to
“prescrii and post any rules necessary to implement this Act.” However, Texas
authorities have held that the ‘board does not have the power to impose on
applicants for bail bondsmen licences requirements different from or additional to
those of the act. See TexasFire & CasualtyCo. v. Hanir CountyBail Bond Bd, 684
S.W.2d 177 (Tex. App.-Houston [14th Dist.] 1984, writ ref’d n.r.e.); Berur Cou@v
Bail Bond Bd v. Deck&rd,604 S.W2d 214 (Tex. Civ. App.-San Antonio 1980, no
writ); Attorney General Gpinions JM-1057 (1989); JM-875 (1988).
Jn Deckmd, the court held that the bail bond board was without authority to
require that applicants meet the security deposit requirement by depositing a letter
of credit in an amount greater than the minimum required by the statute, stating
that the statute contained “no language granting power to make rules relating to the
qualifications which must be met by applicants for licenses.” 604 S.W.2d at 217. It
should be noted that at the time of the Deck& decision, article 2372p-3 expressly
gave the board rule-making authority only with respect to “the making of bail bonds
by bondsmen within the county.” See Acts 1973,63d Leg., ch. 550, at 1521 (former
provisions of section 5(b) of article 2372p-3, V.T.C.S.).
However, in TexasFire and Gzualty Company, the court considered a board
rule-, providing, as had the rule in Deckwzf, that an applicant must deposit in
satisfaction of the security deposit requirement a letter of credit in an amout
greater than the statutory minimum. Since De&&, article 2372~3 has been
substantially amended. Acts 1981,67th Leg., ch. 312 at ,875. Section 5, subsection
(f)(l) read at the time of TexasFire and Cm Company,as it does now, that the
board had power “to prescribe and post any rules necessary to implement this Act.”
Nevertheless, Teaa Fire wtd Guualty Companyreached the same result as L&&r&
The court stated that under the security deposit provisions, with the exception of the
minimtm~ amount set by the statute, “the appZicmr is to determine the amount of the
deposit. The local rule takes this responsibility from the applicant and assumes it
itself.. . . [and] thus impermissibly impose[s] additional and conflicting burdens on
bail bond applicants.” 684 S.W.2d at 179 (emphasis in original).l
lGmptvt Austin Y.Hanis Can@ Bail kkmdBcnmi, 1% S.WCZd
65 (Tex ASP.-Houston [lst
D&t.]1988,writdenied) (upholdinga board’sdenialof an appticationbasedoa applicant’violation
s of
the ad when previouslyliccnsut). cining Drckmd, the court stated that “the Board’s ability to review
an applicant’past
s recordas a liceosedbail boadsmaudots not imposeaa additionalqualifieatioq
bllrdeq condition, or rcsbiction in cxcas of or inconsistent titb the stahltoryprovisiolls.” 7% s.wJd
at 67.
p. 542
Honorable Jack Skeen, Jr. - Page 4 (``-108)
Under the reasoning of Term Fire and Chualty Company,the board would in
our opinion - by providing that only cashier’s checks, certificates of deposit, cash or
cash equivalents were acceptable in satisfaction of the security deposit requirement,
and not deeds to property - impermisst%ly usurp a determination which the statute
leaves to the applicant. Section 6 in subsection (f)(l), (2) provides that the
applicant may either deposit a cashier’s check, certificate of deposit, cash or cash
equivalent, or execute deeds in trust to the board.
Attorney general opinions on the board’s authority are consistent with this
conclusion. Attorney General opinion JM-g75 construed the provisions of section
6(f) to require an applicant to either deposit cash, etc., in the minimum amount or
execute deeds to property of such value, and concluded that the board had no
authority to depart from that requirement and accept as the security deposit a
combination of cash and deeds to property in order to make up the minimum
requisite amount. Attorney General opinion JM-1057 found the board without
authority to license a person to act as bondsman in another county or to control
collection of a bond in another county.2
Again, section 5(f)(2) directs the board to “issue licenses to those applicants
who qualify under the terms of this Act.” In our opinion, the board does not have
the power to refuse acceptance, in satisfaction of the security deposit requirement,
of deeds to property executed in trust to the board in accordance with the provisions
of section 6(f)(2).
You also ask whether, if the board must accept deeds to property executed in
trust to the board for purposes of the security deposit requirement, it may
nevertheless require “that a certain percentage of the allowable security be in the
form of cashier’s checks, certificates of deposit, or other cash equivalents.” As
dkcussed with reference to your first question, the board has no power to change
the requirements of the act regarding the licensure of applicants. Section 6(f)(2) on
its face permits an applicant to satisfy the security deposit requirement by executing
deeds in trust to the board. Where the applicant executes such deeds to property
%k note that Attorney Gweral opinion JIM-1012(1989) which found that the statute gave
the board w authorityto prohibit a bondsman’semployment of persons comicted of c&ah crimes,
wasovwrulcdbyDouprcarntyBpilBondBdv.Stcin,~lS.W3d``uA~.-Dallas1989,writ
denied). That court found that opinion’s r&nce 011Dcckord and TansFI andcizruo@ Gmpmy
'misplaced... Shcc the Bail Bond Act expresslysets forth the requirementsfor a hose, U~ese.courts
corredy rwsowd that the local boards Wed the authority to impose different or additional
rcquinm~t~.... (Hlowcver,thcBailBoadActdocsaotcxpsslysetfortJ2e&&lityrqoiremenk
for empl~ of iiculsecs. Thus, such analy& is inapplicableto the present case.” i71 S.W2d at 580.
p. 543
Honorable Jack Skeen, Jr. - Page 5 (DM-108)
valued in sufficient amounts, the board does not have the power to require that the
applicant additionally deposit a cashier’s check, certificate of deposit, cash or cash
equivalent. (Also, as noted above, Attorney General Opinion JM-875, specifically
concluded that the act did not contemplate the board’s accepting a combination of
cash, etc.. and deeds to property to make up the requisite amount of security
deposit.)
SUMMARY
A wmty bail bond board. is without authority to provide
that an applicant for a bail bondsman License must make the
security deposit required by section 6(f) of article 2372~3,
V.T.C.S., in the form of a cashier’s check, certificate of deposit,
cash or cash equivalent, and that he may not satisfy the
requirement by executing deeds to property in trust to the board
in accordance with the provisions of section 6(f)(2)
DAN MORALES
Attorney General of Texas
WILL PRYOR
First Assistant Attorney General
MARY KELLBR
Deputy Assistant Attorney General
RENEAHXCKS
Special Ass&ant Attorney General
MADELElNE B. JOHNSON
Chair, Opinion Committee
Prepared by William Walker
Assistant Attorney General
p. 544