DAN MORALES

AlToRNEY GENERAL 

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Qikneral Qtate ofIlIlexae April 20.1992
Honorable Jack Skeen, Jr. Opinion No. DM-108 Smith County tlimhal District Attorney coulItycourthouse Re: Whether rule Bll(c). of the Tyler, Texas 75702 Rules and Regulations of the Smith County Bail Bond Board which prohibits an original bail bond applicant from executing deeds of trust in property as security for obligations incurred in the bonding business is invalid as inconsistent with article 2372p-3, V.T.C.S. (RQ-205)

Dear Mr. Skeen:

You ask about the validity of a rule adopted by the Smith County Bail Bond Board (hereinafter the board) under which original applicants for bail bond licenses must make the statutorily required security deposit in the form of a cashier’s check, certificate of deposit, cash or cash equivalent, but may not execute deeds to real property in trust to the board in satisfaction ofthe security deposit requirement.
Article 2372p-3, V.T.C.S., governs the licensing of.bail bondsmen.by county bail bond boards. Section S(f)(2) directs the board to “issue licenses to those applicants who qualify under the terms of this Act+” Section 6 provides for the application for the license, the board’s inquiries to determine the applicant’s qualifications, and a board hearing on the application. Subsection (a)(4) of section 6 requires that the application include a “statement listing any nonexempt real estate owned by the applicant that the applicant intends to convey ‘mtrust to the board to secure payment of any obligations incurred by the applicant in the bonding business.” The applicant must include in connection therewith a statement from each taring unit assessing or collecting taxes on the property indicating that there
are no outstanding tax liens on it and showing the net value of the property according to the current appraisal. V.T.C.S. art. 237213-3,0 6(a)(4)(B). Also, subsection (a)(5) of section 6 requires that the application indicate “the amount of cash or cash value of any certificate of deposit or cashier’s checks which the applicant intends to place on deposit with the county treasurer to secure payment of any obligations incurred by tbe applicant in the bonding business.”

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Subsection (e) of section 6provides, in part, that ifthe board is satisfied with the application, it shall tentatively approve it “subject to the application being perfected by the filing of the security deposits required of licensees under this Act.” Subsection (f) ofsection 6 provides in relevant part:

Upon notice from the board that the application has been tentatively approved, the applicant .shallthen:
(1) deposit with the county treasurer

. . . a cashier’s check, certificate of deposit, cash, or cash equivalent in the amount indicated by the applicant under Subdivision (5) of Subsection (a) of Section 6..

.but in no event less than $50,000 except in counties with populations of less than 250,000 persons..
.the amount..

. shallbes1o,ooo...;or (2) execute in trust to the board deeds to the property listed by the applicant under Subdivision (4) of Subsection (a) of Section 6

. . .which property shall be valued in the amount indicated on an appraisal by a real estate appraiser who is a member in good standing of a nationally recognixed professional appraiser society or trade organization that has an established code of ethics, educational program, and professional certification program, but in no event less than $50,000valuation, except in counties with populations of less than 250,000 persons..
. , the amount..

. shall be $10,000, the condition of the trust being that the property may be sold to satisfy any final judgment forfeitures that may be made in bonds on which the licensee is surety..

. . (Emphasis added.)

In our opinion, the abovequoted provisions clearly contemplate that the applicant, in order to satis@ the security deposit requirement, has the option of either depositing a certificate of deposit, cashier’s check, cash or a cash equivalent, in the requisite amount under subsection (f)(l), or executing deeds to property valued in the requisite amount in trust to the board under subsection (f)(2). We do not believe the board has the power to restrict the statutorily provided for alternative means through which the applicant may satisfy the security deposit requirement by refusing to accept deeds to property in trust executed to the board under subsection (f)(2) in satisfaction ofthe requirement.

p. 541Honorable Jack Skeen, Jr. - Page 3 tDM-1o8)

Section S(f)(l), gives the county bail bond board bmad authority “[t]o exercise any powers incidental or nv to the administration of this Act” and to

“prescrii and post any rules necessary to implement this Act.” However, Texas authorities have held that the ‘board does not have the power to impose on applicants for bail bondsmen licences requirements different from or additional to those of the act. See TexasFire& Casualty Co.v. Hanir County

BailBondBd, 684 S.W.2d 177 (Tex. App.-Houston [14th Dist.] 1984,writ ref’d n.r.e.); Berur Cou@v BailBondBd v.Deck&rd, 604 S.W2d 214 (Tex. Civ. App.-San Antonio 1980, no writ); Attorney General Gpinions JM-1057 (1989); JM-875 (1988).

JnDeckmd, the court held that the bail bond board was without authority to require that applicants meet the security deposit requirement by depositing a letter of credit in an amount greater than the minimum required by the statute, stating that the statute contained “nolanguage granting power to make rules relating to the qualifications which must be met by applicants for licenses.” 604 S.W.2d at 217. It should be noted that at the time of the Deck& decision, article 2372p-3 expressly gave the board rule-making authority only with respect to “the making ofbail bonds by bondsmen within the county.” See Acts 1973,63d Leg., ch. 550, at 1521 (former provisions of section 5(b) of article 2372p-3,V.T.C.S.).
However, in Texas

Fireand Gzualty Company, the court considered a board rule-, providing, as had the rule in Deckwzf, that an applicant must deposit in satisfaction of the security deposit requirement a letter of credit in an amout greater than the statutory minimum. Since De&&, article 2372~3 has been substantially amended. Acts 1981,67th Leg., ch. 312 at ,875. Section 5, subsection (f)(l) read at the time of Texas Fireand Cm Company, asit does now, that the board had power “to prescribe and post any rules necessary to implement this Act.” Nevertheless, Teaa Firewtd Guualty Company reached the same result as L&&r& The court stated that under the security deposit provisions, with the exception of the minimtm~amount set by the statute, “the appZicmr is to determine the amount of the deposit. The local rule takes this responsibility from the applicant and assumes it itself..

. . [and] thus impermissibly impose[s] additional and conflicting burdens on bail bond applicants.” 684 S.W.2dat 179(emphasis in original).l

lGmptvt Austin Y.

Hanis Can@ Bail kkmdBcnmi,1% S.WCZd 65 (Tex ASP.-Houston [lst D&t.] 1988, writ denied) (upholding

aboard’s denial ofanapptication

based oaapplicant’s

violation of the ad when previously

liccnsut). ciningDrckmd,the courtstatedthat “theBoard’sabilitytoreview an applicant’s

pastrecordas a liceosed

bailboadsmau

dots notimpose

aa additional

qualifieatioq bllrdeq condition,orrcsbiction in cxcas of or inconsistenttitb the stahltoryprovisiolls.”7% s.wJd at67.

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Under the reasoning of TermFireandChualtyCompany, theboard would in
our opinion - by providing that only cashier’s checks, certificates of deposit, cash or cash equivalents were acceptable in satisfaction of the security deposit requirement, and not deeds to property - impermisst%lyusurp a determination which the statute leaves to the applicant. Section 6 in subsection (f)(l), (2) provides that the applicant may either deposit a cashier’s check, certificate of deposit, cash or cash equivalent, or execute deeds in trust to the board. Attorney general opinions on the board’s authority are consistent with this conclusion. Attorney General opinion JM-g75 construed the provisions of section 6(f) to require an applicant to either deposit cash, etc., in the minimum amount or execute deeds to property of such value, and concluded that the board had no authority to depart from that requirement and accept as the security deposit a combination of cash and deeds to property in order to make up the minimum requisite amount. Attorney General opinion JM-1057 found the board without authority to license a person to act as bondsman in another county or to control collection ofa bond in another county.2 Again, section 5(f)(2) directs the board to “issue licenses to those applicants who qualify under the terms of this Act.” In our opinion, the board does not have the power to refuse acceptance, in satisfaction of the security deposit requirement, of deeds to property executed in trust to the board in accordance with the provisions of section 6(f)(2).

You also ask whether, ifthe board must accept deeds to property executed in trust to the board for purposes of the security deposit requirement, it may nevertheless require “that a certain percentage of the allowable security be in the form of cashier’s checks, certificates of deposit, or other cash equivalents.” As dkcussed with reference to your first question, the board has no power to change the requirements ofthe act regarding the licensure of applicants. Section 6(f)(2) on its face permits an applicant to satisfy the security deposit requirement by executing deeds in trust to the board. Where the applicant executes such deeds to property

%k note thatAttorneyGweral opinion JIM-1012 (1989)which found thatthe statutegave the boardw authorityto prohibita bondsman’semploymentof persons comicted of c&ah crimes, wasovwrulcdbyDouprcarntyBpilBondBdv.Stcin,~lS.W3d~~uA~.-Dallas1989,writ denied). That courtfound thatopinion’sr&nce 011 Dcckordand Tans

FI and cizruo@ Gmpmy 'misplaced...

Shcc theBailBondActexpressly setsforththe requirements fora hose, U~ese.

courts corredy rwsowd that the local boards Wed the authorityto impose different or additional rcquinm~t~.... (Hlowcver,thcBailBoadActdocsaotcxpsslysetfortJ2e&&lityrqoiremenk forempl~ ofiiculsecs. Thus,suchanaly&is inapplicable tothe presentcase.”i71 S.W2d at580.

p. 543Honorable Jack Skeen, Jr. - Page 5 (DM-108)

valued in sufficient amounts, the board does not have the power to require that the applicant additionally deposit a cashier’s check, certificate of deposit, cash or cash equivalent. (Also, as noted above, Attorney General Opinion JM-875, specifically concluded that the act did not contemplate the board’s accepting a combination of cash, etc.. and deeds to property to make up the requisite amount of security deposit.)
SUMMARY

A wmty bail bond board. is without authority to provide that an applicant for a bail bondsman Licensemust make the security deposit required by section 6(f) of article 2372~3, V.T.C.S., in the form of a cashier’s check, certificate of deposit, cash or cash equivalent, and that he may not satisfy the requirement by executing deeds to property in trust to the board in accordance with the provisions ofsection 6(f)(2)

DAN MORALES Attorney General of Texas

WILL PRYOR First Assistant Attorney General

MARY KELLBR Deputy Assistant Attorney General

RENEAHXCKS Special Ass&ant Attorney General

MADELElNE B.JOHNSON Chair, Opinion Committee Prepared by William Walker Assistant Attorney General

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