OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

Honorable Oee. “. aheprrard 

Domptrolla of Fublfo Amounts 

Auatln, Texas 

“The quertioa ha 

M to whether a Preduot 

on(Ler the Fede 

Ii w, ‘what pa 

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 pihe dirae 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 asmcrlatlon to re$irs e& aalioel 

8took h&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~ 
~Onarable Gee. H. Sheppard, page 2 

35Otga llsd, O? Title 12, U.S.&A., 

f 

roridea 

for the organisetltdn or Produotiun Credit Ammoiat 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 a uo h 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 Produotion Credit 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 individual ellglbls to bsowia ~a 

borrower, mad then onlg with tho approtal o? the disoeteza 

of the aaawlatlen. ?&oh holder,03 alas8 B atook, within 

two yoara arter he hea osased to bd a borrower, .sh&l 

erohaago auoh alas8 B atook l t the iair book ralw (not 

to axooad par) thereor, as 4rtermlnad by the aaoooietioa, * 

ror olua A atook. All ato@k shell shape in diridanil 

diatr1bat1ona without preferenca, 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 Aarooiatfoo shall, Pador auoh ruler arid 

raguletiona as may bs pmaaribad by th8 Fmduotfon Credit Csrporntion of the district with 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 oonditlona the Prodnotion Crediti AaaoOiati0n IS 

authorized and ezxpowered to make laaaa to tarrfma ?or tha purpoao 

of enabling thsa to make home alte??aticma, repaim, end isprcnem4nta, ati to aall, dlaaount, assign, or otherwise dlapae 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 PRODDCTION CRFDIT OORPORA- 

'1'1Oh5, PRODUC'TION GRZDIT Af3SGCIATIGhS, RFGIONAL ARD GRNTRAL 

RANKS PGR COOPERATIW3.* Section llJ80, of said Yubahapter VI, 

pzovidee as 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 obligations 188ued by 

such banks, ar8ooiatlon8, or oerpontlon8 shall b8 asmpt 

both aa to prinaipal aud 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 taxation now 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 answera your 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 property and any 

tangible personal property or such . . . aesooiatlone, . . . and 

corporations shall be subjsot to Federal, State, Tarxltorial and 

loeal taxation to the aams extent as other elsdlar pieportr tud 

n Is do bsliate, however, in rim or the la8t aentehoe ot 

;a;d'Seotion 1190, quoted above, that the Bongre88 ha8, either 

expressly or by inpltoatlau, authorlred the properties oi a 

Prodnotion Credit Assooiatfoh to 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 Produotlou Credit Gorporatlon has been retired. 
xonorable Oeo. 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 questions submitted bgr. you. 

Pours very truly 

BY 

u m,sXarold MoCraokan 

bSiSt8llt 

xMoc:Awd 

.b.PPROVECJUL 16, 1g42