Gerald C. Mann

Hon.GeorgeIi. 

### 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.

Wehave your letter of July.30, 1941, requesting our opinion in response to the following questlonst

“1. AreFederal Savings &Loan Associations required to pay advalorem taxes ontheir shares outstanding?

“2. AreFederal Savings and Loan Assoclations domiciled in this State required to render their pro arty Section 5

fi for taxes onthe basis set forth in of the 1929Building 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~HomeQwners’ Ioan Act ol 1933, as nowor 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 ofthis 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 andincome; shall be exempt from all taxation ‘nowor here’after Imposed by the United States, and all shares of such associations shall be exempt both as to their value and theHon. Georgs H. Sheppard; page 2 (O-3834)

income therefrom from all taxation Coxcept surtaxes, estate inheritance, and gift taxes) now or hereafter 1

mposed bythe United ~Statrs; and
no State, territorial county, munlclpal, or local’ taxing authority shali impose any tax onesuch 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 homefinancing lnstitutlona.

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

“At the annual meeting or at anymeeting called forthat purpose, any two or more building and loan associations organized undar the laws of this stats may, byvote 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 bythe direotors of such associationsi or any such assoolation maytransfer its engagements, funds and property to any other such association upon such terms
as maybe agreed upon by its board of directors, whrn approved bytwo-thirds of all the shares of all members convened in special meeting for that purpose, the notice sent to each memberof 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 byrrpresentatlvr will be re- ,garded as having voted for the transfer or consolidation, su@habsent member shall be counted as bslng amongthe required two-thirds affirmatlva vota but suoh transfrr shall not prsjudlcr ths rlght of any orsdltor of any such aasoclatlon to hevs paymsnt of his debt out of the assets and property thereof, nor shall any crsdltor bethereby dsprlved of or prejudlcrd in any right of action then existing against the offlcsrs or direotors of said aasooiatlon any nrglsot or misconduct providing that ths reorganized association shali 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 bythe Banking Commissioner of Texas, and until acopy of theHon. George 8. Sh4ppsrb. pagr ,3 (O-38344)

rssolutioa, csrtlfled by amaj.orltp of the board of dlractors .of each association, shaI1’ bo filed

,. with. said Banking Cossslaslonsr of Texas~,and recordsd in the. samemannsr herrlnbrfors provldid for amendments to charters.*

In our~‘oplnlon,Ho. O-&i6 weheld that shares in a .Federal :Savlnga and Loan Assooiatlon are subject to taxation.

. In ~that, opinion WIware not .oalled upon to advise a4 to whom the Ians should bs taxab.ls~, thet, ls, as ‘tothe 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 followingr

“(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 norstockof joint stock or other oompa~si4s (when the pro ertp of such company:,18 not.,asse.ss@

. in this State P, moneys loaned orinvested., 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 onhand which has been racelvea by such ah Assoclatloa through ths 

### issu5r4c4of any such shares doss not hats to bs listed as an assrt uadrr (01 of Article 881a-53. It should be so listed.

Wepass nowto a consldsratlon of your second question. OnMay12, 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 andloan associations, with which opinion wesubstantlally agrss. In view of Artlolr 8, Section 1 of the Statr Conatitutloa, providing that “all property la &his &ate owned bynatural persons or corporations, other than nuni whether

4hall be taxed in proportion to its value, clpal, which shall be ascertained as maybe provided by law,usuch 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 officeHon. 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 bythe association and rendered by it for taxation. The sumof 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 apercentage of value less than the whole, the properties of such 4asoclations, of course, will receive the sametreatment.

Yours very truly

ATTORNEY

GEtWtALOFTEXAS By/s/ Glenn R. Lewis Glenn B. Lewis, Assistant

APPROVED

AUG18, 1941 /a/ Gerald C. Mann ATTOFWEY

GENIAL OFTBXAB

APPROVRD:

CK&HIO~NCK$TEE BY: **J** GIUsawawb