Gerald C. Mann 

Hon. George Ii. 

c0mpt r0im 0r 

Austin, Texas 

Dear Sir: 

Sheppard 

Public Accounts 

‘Opinion 100. O-3834 

Rer Concerning the 

assessment for taxation 

of shares la Federal 

Savings and Loan Associatldns. 

We have your letter of July.30, 1941, requesting our 

opinion in response to the following questlonst 

“1. Are Federal Savings & Loan Associations 

required to pay ad valorem taxes on their shares 

outstanding? 

“2. Are Federal Savings and Loan Assoclations domiciled in this State required to render 

their pro arty 

Section 5 fi 

for taxes on the basis set forth in 

of the 1929 Building and Loan Act, 

known as Article 881(a), Section 53, V.A.C.S.?* 

Article 88la-57a, Vernon,‘s Annotked Civil Statutes, 

reads as followsi 

“Every Federal Savings and Loan Association 

incorporated under the provisions of ~Home Qwners’ 

Ioan Act ol 1933, as now or hereafter @ended, 

d?mlclled in ~the State of Texas, and’the holders 

of shares or accounts issued by any suoh association shall have all the right.%, powers, and privlleges, and shall be entitled to the same exemptions 

and lnunuh~tles to whloh bulldiag ‘,a& loan assoclations organized under the laws of this State and 

holders of the share or share accounts of such 

assoclat Ions are entitled. n 

Subdlvigloq (h) of Section 1464, Title 12, U.S.C.A., 

reads t 

l’(h) Exemptlong from. taxation. Such associatlons,, includipg their franchises capital; reserves, 

and surplus,, and ~thelr loans and i ncome; shall be 

exempt from all taxation ‘now or here’after Imposed by 

the United States, and all shares of such associations shall be exempt both as to their value and the 
Hon. Georgs H. Sheppard; page 2 (O-3834) 

income therefrom from all taxation Coxcept surtaxes, estate inheritance, and gift taxes) now 

or hereafter 1 mposed by the United ~Statrs; and 

no State, territorial county, munlclpal, or local’ 

taxing authority shali impose any tax one such 

associations or their franchise, capital, reserves, 

surplus, loans, or Income greater than that imposed by suoh authority on other similar local mutual or coo{eratlve thrift and home financing lnstitutlona. 

Artlole 88la-54, Vernon’s Annotated Civil Statutes, 

reads as followsc 

“At the annual meeting or at any meeting 

called for that purpose, any two or more building 

and loan associations organized undar the laws of 

this stats may, by vote of two-thirds of all share- 

‘holders of each of the different associations, resolve to consolidate into one association upon such 

terms as shall be mutually agreed.upon by the direotors of such associationsi or any such assoolation may transfer its engagements, funds and property to any other such association upon such terms 

as may be agreed upon by its board of directors, 

whrn approved by two-thirds of all the shares of 

all members convened in special meeting for that 

purpose, the notice sent to each member of record 

speolflcally stating the object of the meeting; If 

such notlos shall state affirmatively the terms 

upon whioh such consolidation is contemplated and 

shall stats that any member not present at the 

mestlng in pereon or by rrpresentatlvr will be re- 

,garded as having voted for the transfer or consolidation, su@h absent member shall be counted as 

bslng among the required two-thirds affirmatlva 

vota but suoh transfrr shall not prs judlcr ths 

rlgh t of any orsdltor of any such aasoclatlon to 

hevs paymsnt of his debt out of the assets and property thereof, nor shall any crsdltor be thereby dsprlved of or pre judlcrd in any right of action then 

existing against the offlcsrs or direotors of said 

aasooiatlon any nrglsot or misconduct providing 

that ths reorganized association shal i be liable 

for all obligations to stockholders of the assoclatlons existing prior to such consolidation, and 

providing further, that no consolldat.ioa or transfer provided herein shall taks rffeot until the 

terms and conditions have been approved by the Banking Commissioner of Texas, and until a copy of the 
Hon. George 8. Sh4ppsrb. pagr ,3 (O-38344) 

rssolutioa, csrtlfled by a maj.orltp of the board 

of dlractors .of each association, shaI1’ bo filed 

,. with. said Banking Cossslaslonsr of Texas~, and recordsd in the. same mannsr herrlnbrfors provldid 

for amendments to charters.* 

In our ~‘oplnlon, Ho. O-&i6 we held that shares in a 

.Federal :Savlnga and Loan Assooiatlon are subject to taxation. 

. In ~that, opinion WI ware not .oalled upon to advise a4 to whom 

the Ians should bs taxab.ls~, thet, ls, as ‘to the Asroolation or 

to the owmr. Hwever, these shares being prop4rtg, they 

would clearly be taxable to the owner, not to the Association. 

Article 7152, Relrlsed Civil Statutes., provides in part: 

!‘AlI~groperty shall be listed or rendered in 

thr namer f ollowingr 

“(l)L.Bp the owner* Bvery person of .full age 

and sound mind,, being a resident of this State., 

shall list all of his real estat4, monsys, orsdlta, 

bonds nor stock of joint stock or other oompa~si4s 

(when the pro ertp of such company:,18 not.,asse.ss@ . 

in this State P , moneys loaned or invested., ahhulties, franchises, royaltlss, andall other. property. 

:: 

n* + *a 

See also, Artlclss 7161 and 7162, Sectlons.3’7, 38 

and 43, Bevlssd Civil Statutes. Pour first question is therefore answered in ths negative. This, however, la not to ,be 

oonstrusd as saylag that aonry on hand which has been racelvea 

by such ah Assoclatloa through ths issu5r4c4 of any such shares 

doss not hats to bs listed as an assrt uadrr (01 of Article 

881a-53. It should be so listed. 

We pass now to a consldsratlon of your second question. On May 12, 1938, Assistant Ottornsy General Ullllford 

advised you in substance that the proprrtlss of these Assoclations should be assessed as provldrd la brtlclr .881a-53 far 

building and loan associations, with which opinion we substant lally agrss. In view of Artlolr 8, Section 1 of the Statr 

Conatitutloa, providing that “all property la &his &ate 

owned by natural persons or corporations, other than nun i 

whether 

4hall be taxed in proportion to its value, 

clpal, 

which shall be ascertained as may be provided by law, u such Associations certainly 

can have no complaint to the application of Article 881a-53 to 

thsm. Ye say this particularly In view of th4 permission given 

by the statute to maks d4duotioAs (o-1) and (o-2). The properties of such ah Association should be assessed and consist of 

three itema, (a), (b) and (cl. Item (a) is the value of office 
Hon. George H. Smppard, page 4 (O-3834) 

- 

furniture and fixtures. Item (b) la the value of real estate. 

Items (a) is the value of all its assets, less three deductions, 

viz: (1) accounta payable end notes payable, and (2) book 

value of shares outstanding, and (3) the assessed value of the 

fbrnlture and flxturs5 ahd real estate’held by the association 

and rendered by it for taxation. The sum of items (a), (b) and 

(c) will be the total assessed value of the properties of the 

Association.. If other properties in the county are systematically assessed at a percentage of value less than the whole, 

the properties of such 4asoclations, of course, will receive 

the same treatment. 

Yours very truly 

ATTORNEY GEtWtAL OF TEXAS 

By /s/ Glenn R. Lewis 

Glenn B. Lewis, Assistant 

APPROVED AUG 18, 1941 

/a/ Gerald C. Mann 

ATTOFWEY GENIAL OF TBXAB 

APPROVRD: CK&HIO~NCK$TEE 

BY: J 

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