January 13, 1964 

Mr. Frank M. Jackson 

Executive Secretary 

Opinion No. C-202 

Teacher Retirement System of Texas Re: Whether benefits under 

201 East 14th Street the Teacher RetireAustin 14, Texas ment System Act, as 

amended in 1955, are 

subject to inheritance 

Dear Mr. Jackson: tax. 

We have received your letter from which we quote as 

follows: 

"The Inheritance Tax Division of the Office of the State Comptroller of Public ACcounts has asserted a claim against Gertrude 

A. Herm for State Inheritance Tax on the value 

of an annuity payable to her by the Teacher 

Retirement System of Texas. She is receiving 

this annuity as the sister and nominee of 

Hattie L. Herm, a deceased member of the 

Teacher Retirement System. Miss Hattie L. 

Herm taught in the public schools of Texas 

for 43 years, deposited $4,986.25 to her 

account in the Teacher Retirement System and 

named Gertude A. Herm to receive any payments 

which after her death might be due under the 

terms of the Teacher Retirement Law of the 

State of Texas. The Comptroller has set a 

value of $13,190.20 on this annuity. Miss 

Hattie L. Herm died July 29, 1962. 

"Since the enactment of the first Teacher 

Retirement System act in 1937, the statute 

has carried the following provision, in substance: 

"'The right of,,a person to an annuity or a 

retirement allowance, to the return of contributions, annuity, or retirement allowance itself, any optional benefit or any other right 

accrued or accruing to any person under the 

provisions of this Act, and the moneys in the 

various funds created by this Act, are hereby 

exempt from any State or municipal tax, and 

-976 
Mr. Frank M. Jackson, Page 2 (Opinion No. C-202 ) 

exempt from levy and sale, garnishment, attachment, or any other process whatsoever, and shall 

be unassianable exceot as in this act specifitally provided. I” L 

You call attention to Opinion No. 

1957, by this office, which held that the 

of the 1937 Act Is of no effect since the 

not carry a notice of the above exemption 

You also state that the Board of Trustees 

- 

WW-92, dated October 17, 

above quoted provision 

caption of the Act did’ 

from inheritance taxes. 

of the Teacher Retirement System requests tnat we reconsider said opinion, especially 

in the light of two acts of 1955 and 1963. 

We believe that said Opinion No. WW-92 has no effect on 

such benefits accruing on or after November 6, 1956 for the 

reasons hereinafter stated. 

Chapter 530, page 1638 of the Acts of the Regular Session 

of the 54th Legislature, 1955 (V.C.S. Art. 2922-l) amended the 

Teacher Retirement System Act of 1937 and had a caption reading 

as follows: 

“An Act amending Cha ter 470, Acts of the 

Regular Session of the z 5th Legislature (as 

heretofore amended) pertaining to the Teacher 

Retirement System of Texas; prescribing the 

conditions upon which this Act shall become 

effective as a law: declaring the Act to be 

severable; and declaring an emergency.” 

Section 9 of the original Act of 1937 above quoted from 

your letter was made Section 16 of the Act of 1955 in identical 

language of the exemption set out in the Act of 1937. Since the 

Act of 1955 amends the Act of 1937, the caption of the 1955 Act 

above quoted is sufficient. State v. McCracken 42 Tex. 383 

!+8;5& ardoGuyt;; v. Texas Land Mtg. Co. Ltd. , 82 Tex. 496, 

. . (8 1. 

The case of English & Scottish American Mortg. & Inv. 

Co. v. Harde, 93 Tex. 289,,++ /, 3 Y . w . . . lfo A”, [lonnl \A,““, 3s &I directly in 

point and is decisive on thy e ouestion of the su 

caption of the 1955 amendment: 

fficiency of the 

In 1897 the Legislature passed 

an act entitled “An act to amend Articles 641 and 642, Chapter 2, 

title 21, of the Revised Civil Statutes of Texas relating to the 

treat ion of corporations ~ ” (Emphasis ours). The body of the act 

in addition to matters relating to the creation of cornorations. 

in its last proviso, read as follows: 

II 

permits 

that foreign corporations obtaining 

io do business in this state shall 

-977- 

> 
Mr. Frank M. Jackson, Page 3 (Opinion No. C-202 ) 

show to the satisfaction of the secretary 

of state that fifty per .cent of their authorized capital stock has been subscribed, and 

that at least ten per cent of the authorized 

capital has been paid in, before ~such permit 

is issued. ” 

The Court stated: 

“The contention of plaintiff is that the 

last proviso, relating to permits to foreign 

corporations, is not embraced within the subject named in the title to the act. If we 

could disregard the reference in the title to 

the number of the article of the Revised 

Statutes to be amended, and look alone to the 

words ‘relating to the creation of private 

corporations,’ as expressing the whole subject 

of the act, it may be true that such expression 

would not be broad enough to admit provisions 

concerning the Issuance of permits to foreign 

corporations. This it is unnecessary to decide, 

since, in view of the previous decisions in 

this and other courts, and of the course of 

legislation based upon their authority, it must 

be held that such a reference to the number of 

an article in a code, such as our Revised 

Statutes, is sufficient, in the title of an 

act amendatory thereof, to allow any amendment 

germane to the subject treated in the article 

referred to. Gunter v. Mortgage Co., 82 Tex. 

;K);, 17 S.W. 840; State v. McCracken, 42 Tex. 

Many decisions from other states to the 

same effect might -be cited. The reason for 

the decisions holding this proposition must be 

that the naming of the article to be amended 

directs attention to all of the provisions 

there,in, as the subject of the amending act, 

and that such provisions can be ascertained by 

reading the article to be amended. However 

questionable may be the practice, and the declsions by which it has been recognized as valid, 

it has been so long and so often followed that 

this court would not be justified in now holding 

it to be a violation of the constitution. The 

effect of the reference to the article to be 

amended is not restricted by other language 

of the title to the act in question. Such other 

language is, as far as it goes , properly descriptive 

of the subject of the amended as well as of the 

-978- 
Mr. Frank M. Jackson, Page 4 (Opinion No. C-202 ) 

amendatory act. It simply does not cover 

the whole of the subject; but the reference 

to the number of the article to be amended 

does Include, as the subject of the amendatory 

act, the whole subject embraced by the provisions of the former. It Is that article which 

the title proposes to amend, and not merely 

such parts of It as relate to the creation of 

corporations. . .' 

The Texas Supreme Court cited the above case with approval In Board of Water hgineers v. City of San Antonio, 155 Tex. 

111, 283 S.W.2d 722 (1955). 

This 1955 amendment in unequivocal language states that 

the teacher's annuities, retirement allowancesA et cetera, "are 

hereby exempt from any state or municipal tax. The Inheritance 

tax Is a state tax. 

You are therefore advised that since the effective date 

of the 1955 amendment of the Teacher's Retirement System, that 

the right of a person to an annuity or a retirement allowance, 

to the return of contributions, annuity, or retirement allowance 

Itself, any optional benefit or any other right accrued or accruing to any person under the provisions of this Act, and the 

monies in the various funds created by this Act are exempt from 

state and municipal taxes, Including the State Inheritance *ax. 

The Act of 1955 provides that said amendment shall 

become effective on November 6, 1956, and for that reason we 

say that Opinion No. WW-92 Is not effective as applied to benefits under said Retirement Act accruing since said date. 

SUMMARY 

Since the effective date of the 1955 amendment 

of the Teacher's Retirement System, the right of a 

person to an annuity or a retirement allowance, to 

the return of contributions, annuity, or retirement allowance itself, any optional benefit or any 

other right accrued or accruing to any person 

under the provislon,s of this Act, and the 

-979- 
Mr. Frank M. Jackson, Page 5 (Opinion No. C-202 ) 

monies in the various funds created by this 

Act are exempt from state and municipal taxes, 

including the State Inheritance Tax. 

Yours very truly, 

WAGGONER CARR 

Attorney General of Texas 

Assistant 

HGC/jp 

APPROVED: 

OPINION COMMITTEE: 

W. V. Geppert, Chairman 

John Reeves 

Albert P. Jones 

Linward Shivers 

Robert Smith 

APPROVED FOR THE ATTORNEY GENERAL 

Byt Stanton Stone 

-980-