OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN

HonorableOee. “. aheprrard Domptrolla of FublfoAmounts Auatln, Texas

“The quertioaha M to whether a Preduot 

### on(Ler

the Fede Ii w, ‘whatpa valoaer tsx?

stook taxabl to tnir llqmrtasnf tfon owenlted ad valora tnxoo. mat to the nd nuah as brrias o+rlght by the - e3 I8 its taxnbrr - 0 or Hatlonal Bratpa

~ln~lfd, of Tit&a 12, O.&GI.A., 08, prnmxa and duties of Pmduo2; U.S.C.A., authorl~~ rueh becribo a& pay top a&am **A** olatiion

looatmd IFa

pihedirae nmount 8ufrlolont to malrntaln

the a held by it aad ot&er hoLdarm /’ ai Clam A atoak equal, as nearly aa my be, Eo twenty pr 

### ourturn et the rolwaa or loans ~m&icr or 

### to be iwile by said emooletioa. ‘l&t statute further ,pzwMor that the Wodaot~oa Credit Gvrpbntfon amy at any *lne require ths asmcrlatlonto re$irs e& aalioel 8tookh&Ld by the 4OFpWQt.iOr? In euoh a8bOOleth&, ti irs the $Umamt of‘

the corporation,

t&e wsooiation bar rw~ourma arai~labls tbe?Qfoxo~~OnarableGee. H. Sheppard,page 2

35Otga llsd, O? Title 12, U.S.&A., froridea for the organisetltdn or ProduotiunCreditAmmoiat 0~8. &motion ll31s, of said Tit18 12, U.S.C.A., ralatillg~

t0 thB OBpft51 StOOk OS PrOdUOtioil Credit ~a50aiatioale, proviEee es t011ws: -he atoek of auoh lwooietlona shall be di~idad into 8harea of $5 ssah~ and therr shall be two aJ.aaaaa Of Suoh atoak; (1) Ofa A atook whiah la to be had by ProduotionCredit Corporations, and *iOh may be peroh~ad **and** held by Investors, and (2) slaaa B StOOk rzllsh my b. pumhaaed only by iarm? borrwers ?rmn the aaaooietion

and iudiriduala

aligiblo to besore bormmara. C1a88 **B stork**  only **~sh8l.l**be **entitlod** to rotin(g ri$hta **but** oaoh holder oi auoh atoah shall bs entitled to no more than one rots. Ho olers B stock, or a&xy intera& therein or right to receive dlridanda tharaan,shall bs tranatarred by set o? partiss or'op8~atIcm o? law sroept ta amthey ?armo~ borrewer or an individualellglblsto bsowia ~a borrower, mad then onlg with tho approtal o? the disoeteza of the aaawlatlen. ?&oh holder,03alas8 B atook, within **two** yoara arter he hea osased to bd a borrower, .sh&l erohaagoauoh alas8 B **atook** l t the iair book ralw (not to axooad par) thereor,as 4rtermlnadby the aaoooietioa, * ror olua A atook. All ato@k shell shape in diridanil diatr1bat1ona

withoutpreferenca,but tile directors O? ths araooiation

MJ, ia their dia6~a8ion, app&y the emoimt of any divldsnd payabla to a holdaT e? olaaa B stack **to** any indabtedneas

of suoh holilar

to the raaooiation. Olaae A atook shell be T;re?erred as to assata of the aaaoeiation upon liquidation.

. . .* Se&ion llPg, O? Title 12, U.S.D.A.,praridea that -ah Produotion**Credit** Aarooiatfooshall, Pador auoh ruler arid raguletionaas may bs pmaaribad by th8 Fmduotfon Credit Csrporntion of the districtwith RFDFWal O? the O096ZnOr Of tha Fara Credit &M.nlatratlon, inrest its ?unds and make loana **tar** farmars far general agxlaultural purposes in the mmnar therein ~roolded. section 11314543, o? Title 12, U.S.C.A.,prO~lda8 that under orrrtein oonditlonathe ProdnotionCrediti AaaoOiati0nIS authorizedand ezxpowered to make laaaa to tarrfma ?or tha purpoao of enablingthsa to **make**home alte??aticma, repaim, end isprcnem4nta, ati to aall, dlaaount,assign, or otherwisedlapae O? any loans made by them fn the ma8mar provided ,th8rOin.mmaabl8 Gao. 8. aheppard,page 9

18 entitled:

Subchapter

VI, of Chapter 7 Of Title 12, **U.S.C.A.,** "PROVISIGRS

CWON TO PRODDCTIONCRFDIT **OORPORA-** '1'1Oh5, PRODUC'TION

GRZDITAf3SGCIATIGhS, RFGIONALARD GRNTRAL RANKS PGR COOPERATIW3.* Section llJ80, of said Yubahapter VI, pzovideeas Iollows:

aThe Cmtral Rank iW Cooperativea, and the Produetlon Credit Corporatlon8, Produotiou**Crsdit** Arroolatiou8, and Bank8 for Cooperatlres, and their obligationa, **organized under**  thlm ohapter, 8hall **be deemed**  to be fnetrumeutalltlor oi the United Statea, w a8 8ueh, any end all aotr8, dobenturaa,bondr, and other ouch obligations188ued by such banks, ar8ooiatlon8,or oerpontlon8 shall b8 asmpt both aa to prinaipalaud Aatosrst tram all taxation (naept surtaxam,astate, Inheritance, and gift tame) hoa, or heroafter **iapoesd** by the United Stete8 or **by say**  State, Terzltorlsl, or looal taxing aathorltj. Suoh **banks** a88oolatlon8, **and** oorporationa,

their **proprrtl,** their iranehire8,aapltal, reserdPto8,

surplu8,and other fund8, **and** their inoam8, rball be **aaapt** tmra all taxationnow or **hereafter** inpored**by** the United States or by any State. Terrltorlsl.or looal

We think that it ia olear that Seotlon llso, quoted **above,** olearly answerayour quostiaprl,end that notm or the property nor aasete of a hoduotlua OreQit Aasooistlon am subjeot to the taxing power of this State eroept "that any real propertyand any tangiblepersonalproperty or such

. . . aesooiatlone,

. . . and corporations

shall be subjsot to Federal,State, Tarxltorialand loeal **taxation** to the aams extent as other elsdlarpieportr tud n Is do bsliate,however, in rim or the la8t aentehoe ot ;a;d'Seotion

1190, quoted **above,** that the Bongre88ha8, either expresslyor by inpltoatlau, authorlredthe propertiesoi a Prodnotion**Credit** Assooiatfohto be taxed the 8am6 a8 other property 8ubjeot to th6 jurlsdiotlon 0r the taxing power 0r the State **or** Tern8 after the atoo:: held in it by the ProduotlouCredit Gorporatlon has **been** retired.xonorableOeo. R. Sheppard,page 4

Sinae theme are no SpsOirifJ raOt8 presented **to** u8 **b,t** you in your lnquirl,we trimt that the r0rsgoing f'ullp mawem the questionssubmittedbgr. you.
Pours **very** truly

BY u m,sXarold **MoCraokan**

bSiSt8llt **xMoc:Awd**

.b.PPROVECJUL 16, 1g42