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.

Wehave received your letter from which wequote as follows:
"The Inheritance TaxDivision of the Office of the State Comptroller of Public AC

### counts has 

### asserted aclaim against Gertrude A. Hermfor State Inheritance Taxonthe value of anannuity payable to her by the Teacher Retirement System of Texas. She is receiving this annuity as the sister andnominee of Hattie L. Herm, adeceased memberof the Teacher Retirement System. Miss Hattie L. Hermtaught in the public schools of Texas for 43years, deposited $4,986.25 to her account in the Teacher Retirement System and namedGertude A. Hermto receive any payments which after her death might be dueunder the terms of the Teacher Retirement Lawof the State of Texas. TheComptroller has set a value of $13,190.20 on this annuity. Miss Hattie L. Hermdied 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 anannuity or a retirement allowance, to the return of contributions, annuity, or retirement allowance itself, any optional benefit or anyother right accrued or accruing to any person under the provisions of this Act, andthe moneys in the various funds created by this Act, are hereby exempt from any State or municipal tax, and
-976Mr. Frank M.Jackson, Page 2 (Opinion No. C-202 )

exempt from levy andsale, garnishment, attachment, or any other process whatsoever, and shall be unassianable exceot as in this act specifitally provided. I” L
Youcall attention to Opinion No. 1957, bythis office, which held that the of the 1937Act Is of noeffect since the not carry anotice of the above exemption Youalso 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 wereconsider said opinion, especially in the light of twoacts of 1955 and 1963.

Webelieve that said Opinion No. WW-92has noeffect on such benefits accruing onor 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 andhadacaption reading as follows:

“AnAct amending Chater 470, Acts of the

Regular Session of the z5th Legislature (as heretofore amended) pertaining to the Teacher Retirement System of Texas; prescribing the conditions uponwhich this Act shall become effective as alaw: declaring the Act to be severable; anddeclaring anemergency.”
Section 9of the original Act of 1937 above quoted from your letter 

### was madeSection 16of 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 42Tex. 383 !+8;5& ardoGuyt;; v. Texas LandMtg. Co. Ltd.
, 82Tex. 496,

. . (8 1. Thecase of English &Scottish American Mortg. &Inv. Co. v. Harde, 93Tex. 289,,++ 3w lfo [lonnl 3s directly in
/, Y

. . . . A”, \A,““, &I point and is decisive onthy eouestion of the su caption of the 1955 amendment: fficiency of the In 1897 the Legislature passed anact entitled “Anact to amendArticles 641and 642, Chapter 2, title 21, of the Revised Civil Statutes of Texas relating to the treat ion of corporations ~” (Emphasis ours). Thebody 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 dobusiness in this state shall

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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 ~suchpermit 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 namedin the title to the act. If we could disregard the reference in the title to the number of 

### the article of the Revised Statutes tobe amended, and look alone to the words ‘relating to the 

### creation of private corporations,’ as expressing the whole subject of the act, it maybe 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, andof the course of legislation based upon their authority, it must be held that such areference to the number of anarticle in acode, such as our Revised Statutes, is sufficient, in the title of an act amendatory thereof, to allow anyamendment germane to the subject treated in the article referred to. Gunter v. Mortgage Co., 82Tex. ;K);, 17S.W. 840; State v. McCracken, 42Tex. Manydecisions from other states to the sameeffect might -becited. 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, andthat such provisions can be ascertained by reading the article to be amended. However questionable maybe the practice, and the declsions bywhich it has been recognized as valid, it has been so long andso often followed that this court would not bejustified in nowholding it to be aviolation 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, andnot merely such parts of It as relate to the creation of corporations.

. .'
TheTexas Supreme Court cited the above case with approval InBoard of Water hgineers v. City of SanAntonio, 155Tex. 111, 283S.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 astate tax.

Youare therefore advised that since the effective date of the 1955 amendmentof the Teacher's Retirement System, that the right of aperson to anannuity or aretirement allowance, to the return of contributions, annuity, or retirement allowance Itself, anyoptional benefit or any other right accrued or accruing to anyperson under the provisions of this Act, andthe monies in the various funds created by this Act are exempt from state andmunicipal taxes, Including the State Inheritance *ax.

TheAct of 1955 provides that said amendment shall become effective onNovember 6, 1956, and for that reason we say that Opinion No. WW-92Is 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 anannuity or aretirement allowance, to the return of contributions, annuity, or retirement allowance itself, any optional benefit or any other right accrued or accruing to anyperson under the provislon,s of this Act, andthe

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

monies in the various funds created by this Act are exempt from state andmunicipal taxes, including the State Inheritance Tax.
Yours very truly,
WAGGONER

CARR Attorney General of Texas

Assistant HGC/jp
APPROVED:
OPINIONCOMMITTEE: W.V. Geppert, Chairman
John Reeves Albert P. Jones Linward Shivers Robert Smith
APPROVED

FORTHEATTORNEY GENERAL Byt Stanton Stone



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