Hon. H. B. Rider

Deputy sanklug Chnl~eloner DepartrmcmtofBanking Au&in, Teuae

Dear Sir: opinion No. O-519 Be: Conetltutlonallty of Senate

Bill No. 295,

now penMng. '~lrie.wiu

wsnowledge

receipt of your *tter of mmb 16, 1939, invhloh,ou request the opinion

of this DepeLrlmntas

to taleoon<ntionallty

of 6sllst.e

BilLI Boo. 295,nov pendln~

In the Senate

of Tw?ie,

a copy of vhlch

you enoloeed

withyonr letter. Senate BlllIlo.

295 readsae follover
"A BILL To Be Entitled “An Aot to emend

Artale 538 Of t&eReYlee6'civllStatut0e 80 (LB to provide

bank- servicea

end fhoilltiee

to em&'&t hadng auoh service; prmidlnfj

oertain'reetridtiini2;~r+iling all lavsor parteof lawe in conflict herevlth,

and declaring an emergency. ~. "Be it enactedby the Legislature of the Stateof Terse: "Se&ion 1. Amend

Artiole

538 of the Revleed

Cl~ilStatutaa 60 aa tohereafterread (LB follow:
"'Art. 538. Branohbanks. Ipo banking corporations

organlaed under the lava of thie State shallever engag>inbveinese atm?re than one plaae, whichshall be ~eslgoated

in lte oharter,

exoept~~~ .under the con<loae

hereinafter

set out. Covntq

or Statedeposltories or county

depositories

not looated

at the county

aeat;'and ordhary clearinghouse trensaotione

betveem banke, are not affeoted by thisextiole.Eon. IL B. Rider, Page 2 (O-519)

n Itehallbe lawfulfor enybankto ftlrnleh

and engply banklug eenloee,

and faollltlee

to areaeor oammltlea in which nobank la looatedand no bankingeervloee

orfaollltlee

are available;

provided,

however,

that the parrmt

bank ehallnot furnlah euoh servioee

and faollltlee

to any area or oornmanlty looated eleewhere

otherthan +Ae oouutq in vhloh thepamat bank is Moated; and provided further,

that before suohparent ~JX& e&all

eetabllmh and grantsuch eenloee and faoilltlea, the oapltalofeaoh

parent bank ohall

be rained

ten per oenlt.' “Sea.2. .All lfbwtv

or parteof lave lu ooufllot with the provlslon~

of thin

Aotarehe~~eelprerelJIre~a~d to the extent of euah oonfllot. *sea. 3. l%e faot that- areas awl oammltlee are extremely

handioapped

at present

by reaeon

of the laok of banking eervioee

and faollltlea,

oreatee en -r-y and an imperative

publla neaeselty

that the Conet1tut1ona1Bul.e requiringblllm

tobe readon three

eereraldayfs

ln eaohHoaee, be suepended,and

the eeme l~herebyen8peided, and this

Aot a&alltake effeatarrdbe In foroefromand after ltapaeeage, and. It IE 80 ennoted." The bill as hereinabove quoted propoaea

to authorize

any bank “to furnish and supply

banking

services

and facllltiee

to areas

or coumamltiee in which

no bank i8 located

and uo banking

pervices

or facilities

are avallable.” Although

the proposed

bill doee

not specifically

otate thatbranch banksare to be eatabllahed, it appear6

to be quiteimpoee1bl.e for the services

propoaed

to be furnlahed

to be made available in any other

manner except

by and through

the establishment

of branch

bar&s lu the coumunitiee not now served. Article

16, Section

16 of the Conatltution of the Stateof Texas readsas followe:

“TheLegislature

shall by general

law@, authorlee

the iacorporation

of corporate

bodlee with banking and diecouutiag privileges,

and shall

provide for a eyatem

of Statesupervlslon, regulation

and control

of euch bodies which will adequately protect and secure

the depositors

and creditors

thereof. “No such corporate

body shall

be chartered

until all of the authorized

capital stock has been aubecribed

and paid for in’ full in cash. Such

body corporate

shall not be authorized

to engage in business

at more than one place which shall

be desiepated in its charter. “NO foreign

corporation,

other than the national

banksof the United

States, shall be permitted

to exercise

banking or discounting

privileges

in this State.”Hon.M. B. Rider, Page 3 (O-519)

We respectfully

call yourattention

to thatportion

of Article 16, Section

16 of the Constitution which provides,

"Such body corporate ahaIl not be authorized

to enga.ge

in buelness

at more than one place which shall be designated

in its charter." It Is the opinion

of thisDepartment

and you are so advised that the proposed

Senate BillNo. 295 is unconstitutional for reason

of being In direct

conflict

with the above

quoted provisions

of Article

16, Section 16 of the Constitution of the State

of Texas. Trusting

that this satisfactorily disposes

of your question, ve are Very truly yours A!PPORNEYGSNERALOFTEXAS By /a/ Lloyd

Armstrong Lloyd Armstrong Assistant L4:AW:IM APPROVED: /a/W. F. Moore First Assistant ATIOPJiEIGENERALOFTEXAS