DAN MORALES

ATTORNEY GENERAL 

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oftfp Rlttornep @eneral &date of GCexas
October 19,1993
Honorable BNIX Isaacks CriminalDistrict Attorney Denton county P.O. Box 2344 Denton, Texas 76202 Opinion No. DM-264

Re: Whether the Denton County Bail Bond Board is authorized to set a limit on the value amount of bonds which a corporate surety may provide, and related questions under article 2372~3, V.T.C.S. 

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Dear Mr. IsaacksI

You have requested an opinion on eight questions that relate to the authority of a county bail-bond board to regulate corporate bail bondsmen and to regulate the sect&y provided by applicants for bondsmen’s licenses. We will address these questions in the. order that you asked them.
Fist, you ask the following: “What isthe total [value of the bonds a corporate] bondsman may execute?” This question isanswered byAttorney General Opiion IM-799 (1987). Inthat opinion, this office concluded that acounty bail-bond board may not limit the total value ofthe bonds provided by a corporate bondsman. Section 6(g) of article 2372~3, V.T.C.S., restricts the value of the bail bonds a bondsman may execute to ten times the value ofthe property held as security or in trust by the county bail-bond board
onbehalf ofthe bondsman. However, section 7ofthe same article states “Subsection (g) of Section 6 does not apply to a corporate surety.” V.T.C.S. art. 2372p-3, 57(a). Because the statute explicitly makes the only restriction on the value of the bonds a bondsman may issue inapplicable to corporate bondsmen, there isno limit on the v&e of the bonds acorporate bondsman may issue.

Isthe irrevocable letter ofcredit the only security a corporation must provide upon the bail bond board’s tentative approval of the application, or must the corporation also do one of the following: (1) deposit a minimum of 850,000 with the board in [the form ot] a cashie-fs check, [certitlcate of deposit], or cash, or (2) [when the county’s population is at least 250,000], execute deeds of real property intrust to the board [that] exceed $50,000?

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Your question arises from the language of article 2372~3. section 6(f), V.T.C.S., which states asfollows:

Upon notice from the board that the application has been tentatively approved, the applicant shallthen: (1) deposit withthe county treasurer ofthe county inwhich the license isto be issued acashier’scheck, certificate ofdeposit, cash, or cashequivalent inthe amount indicated bythe applicant under Subdivision (5)of Subsection (a) of Section 6 ofthis Act, but in no event less than $50,000 except in counties with populations of less than 250,000 persons by the most recent federal census,the amount for applicants in saidcounties shallbe $10,000 to beheld inaspecial fund to be called the bail security ibn& or (2) execute intrust to theboard deedsto the property listed by the applicant under Subdivision (4) of Subsection (a) of Section 6 of this Act, 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 recognized professional appraiser society or trade organization that has an established code of ethics, education program, and professional certitlcation program, but in no event less than S50,OOO valuation, except in counties with populations of less than 250,000 persons by the most recent federal census, the amount for applicants in said counties shallbe $10,000, the condition of the trust being that the property maybe sold to satisfy any tinal judgment forfeitures that may be made in bonds on which the licensee is surety a&r such notice and upon such conditions as are required by the Code of Criminal Procedure, 1965, as amended, inbond forfeiture cases; the board shall file the deeds of trust in the records of each county in which the property is located, andthe applicant shallpaythe filingfees. (3) If the licensee is a corporation, it shall furnish to the sheriff an irrevocable letter of credit as a cash equivalent to satisfy any finaljudgment offorfeiture that may be made on any bonds onwhich the corporate licensee issurety. Although this section isfarfrom clear, wethink itmeans that, instead of supplying security in the form required by subdivisions (1) and (2) corporations must submit as

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security an irrevocable letter of credit in compliance with subdivision (3).1 The general structure ofthe section strongly suggests the legislature intended to give individuals who
are tentatively approved for a license two alternative ways to meet the security requirements, but to require corporations to submit aletter ofcredit assecurity. Contrary to the suggestion in aprevious opinion from this office, we do not believe that subdivision (3) requires a corporate bondsman to submit a letter of credit atIer a 6nal judgment of forfeiture on a bail bond. See Attorney General Opinion lh4-1245 (1990) n. 4. The preamble to the three subdivisions states that subsection 6(t) takes effect “[ulpon notice from the board that the application has been tentatively approved.” This language indicates that the entire section deals with security that must be posted at that time. Furthermore, we do not believe that section 6(f) can be read to require corporate bondsmen to comply with either subdivision (1) or subdivision (2), along with subdivision (3). To be eligible for a license as a bail bondsman, a corporation must be qua&d to write fidelity, guaranty, and surety bonds under the Texas Insurance Code. See V.T.C.S. art. 2372~3, 53(d)(2). A corporation qualified to write fidelity, guaranty, and surety bonds must meet fairly stringent capitalization requirements. In addition, it must post $50,000 in securities or cash with the State Treasurer as security. Ins. Code arts. 8.05, 15.06, 15.07. In light of this security requirement, we do not believe that the legislature could have intended to require corporations to post more security than individuals to qualify for abailbondsman’s license.

Your third and fourth questions concern the irrevocable l&e-r of credit and are as follows: 3. Ifthe irrevocable &tter ofcredit isthe only security ne3xsary for

a corporation to execute bonds, then how much money must the letter ofcredit covef? 4. Must the letter of credit be of unlimited time or must the sheriff accept aletter ofcredit with atime limit? Reading the provisions of section 6(f) together, we conclude that, although subdivision (3) requires a corporation to submit security in the form of a latter of credit, subdivisions (1) and (2) dictate the amount of security that must be provided. In othe-r words, in counties with populations of 250,000 or more, the credit amount must be at

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least $5O,ooO,in counties with populations of lessthan 250,000, the credit amount must be atleast $10,000.

We also conclude that the sheriffmust accept aletter ofcredit even though ithas a time limit. As apractical matter, few, ifany, responsible financial institutions would issue in irrevocable letter of credit for an unlimited time. Furthermore, nothing in the statute permits the sheriff or a county bail-bond board to insist on a letter of credit for an unliited time. Because the act expressly sets forth the requirements for obtaining a license as a bail bondsman, wunty bail-bond boards lack the authority to impose additional requirements on those seeking abail-bondsman’s license. Dullus Coun@Bail Bond Board v. Stern, 771 S.W.Zd 577, 580 (Tex. App.-Dallas 1989, writ denied). If wunty bail-bond boards lack this authority, county sheriffs must also lack this authority. Therefore, the sheriffcsnnot insiston aletter ofcredit for anunlimited time.2

Your remaining questions concern the appraisal value of the real estate an applicant intends to placeintrust with theboard. Inparticular. you ask

5. Does the Bail Bond Board have the authority to question the appraisal value ofthe real estate the applicant intends to convey in trust to theboard?
6. Does the Bail Bond Board have the authority to obtain an independent appraisal value ofthe real estate the applicant intends to convey intrustto theboard?
7. Does the Bail Bond Board have the authority to require the real estate the applicant intends to place in trust with the Board be located within the County ofDenton, Texas? 8. Does the Bail Bond Board have the authority to require that the renewal application for a license include a current m-appraisal ofthe real estate the applicant intends to place intrust withthe Board? With respect to questions five and sii we conclude that the bail-bond board does not have the authority to question the appraisal value of the real estate or to obtain an independent appraisal ofthe real estate. Aswe mentioned above, county bail-bond boards lack the authority to impose different or additional requirements for obtaining a bondsman’s license. Srein, 771 S.W.2d at 580. With respect to the real estate that an applicant intends to convey in trust to the board if the board grants the license, article

ZHowever.

wealsonotethata corporate bondsman

musthavetheappropriatesecurityonfile whenitwrites

bailbonds.

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2372~3 imposes two requirements.3 First, the applicant must list the property in his or her application for the license. V.T.C.S. art. 2372~3. 86(a)(4). Second, after receiving notice that the application hasbeententatively approved, the applicant must

execute in trust to the board deeds to the property listed by the applicant

...whichproperty shallbe valuedintheamounttndtcated
onanappraisal byareal estate appraiser who is amember ingood standing of a nationally recognized professional appraiser society or trade organization that has an established code ofethics, educational program, and professional certification program, but in no event less than $50,000 valuation, except in counties with populations of less than 250,000 persons.
.the amount for applicants in said wunties shallbe$10,000....
V.T.C.S. art. 2372~3,s 6(f)(2) (emphasis added). The Texas courts have interpreted this provision asrequiring an applicant to submit, along with the deed oftrust, an appraisal in the minimum amount required by the section and by an appraiser who has the qualitications listed inthe section. DallaLF Count Bail BondBoard v.Black, 833 S.W.2d 247, 249 (Tex. App.-Dallas 1992, no writ). If the applicant complies with these requirements the applicant baa produced sufficient security to qualify for a bondsman license, and the bail-bond board has no authority to require tiuther proof that the security isadequate.

Asyou indicate, the sameprinciple resolves your seventh question and leads to the wnchrsion that the Denton County Bail Bond Board cannot require all real estate placed intrust with the board by an applicant to belocated inDenton County. Requiring that the real estate be located inthe county issuing the license would impose an additional burden
on the applicants in excess ofthe statutory requirements. SeeBemr County Bat1Bond Board v. Lkckard, 604 S.W.2d 214 (Lx. Civ. App.-San Antonio 1980, no writ). Although article 2372~3 does not explicitly say the property can be anywhere, it does direct county bail-bond boards to filethe deeds oftrust inthe counties where the property is located. V.T.C.S. art. 2372~3, Q6(t)(2). This directive implies that the legislature expected some ofthe real estate to belocated inwunties other than the county issuingthe license. The most recent legislature reinforced this conclusion tiuther by considering and rejecting an amendment to article 2372p-3 that would have, among other things, explicitly required the real estate to be located inthe county issuing the license. See H.B. 477, 72d Leg. (1991).

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In response to your last question, we wnclude that the bail-bond board not only has the authotity to require, but also must require a renewal application to include a current appraisal&m each tming unit and an appraisal by areal estate appraiser who has the qualifications outlined in section 6(t)(2): Article 2372~3, section S(a), V.T.C.S., states that a renewal application must have the same form and content as an original application for alicenseunder the act. The actrequires original applications to listthe real estate the applicant intends to convey in trust to the board. V.T.C.S. art. 2372~3, 56(a)(4). For each parcel ofreal estate listed inthe application, the applicant must also provide, among other information, the following:

current stat~from each tmjng untt with power to assess or wllect taxes against the property.

. .indicating the net value of the property according to the current appraisal made by a real estate appraiser.... Id. 56(a)(4)(B) (emphasis added). The act also requires afhst-time applicant to provide
an appraisal of each parcel by an appraiser who has the qualifications listed in section 6(fx2). Id. 56(f)(2), us interpreted by Black, 833 S.W.2d at 249. Read together, sections 6(a)(4)(B), 6(f)(2) and 8(a) require that a renewal application include a current appraisal of the property from each taxing unit and an appraisal from a real estate apprakr who meets the qualilications setout insection 6(f)(2), V.T.C.S.
SUMMARY
There is no limit on the vahre of the bonds a wrporate bail bondsman mayissue.
An irrevocable letter of credit isthe only security a corporation must provide when its application for a bail bondsman’s license is tentatively approved bythe county bail-bond board. In counties with populations of250,000 or more, the credit amount must be at least $50,000; incounties with populations oflessthan 250,000, the credit amount mustbe atleast $10,000. The sheriffcannot, however, insist
on credit for an unhited time; the sheriff must accept a letter of credit eventhough ithasatime limit. County bail-bond boards lack the authority to impose different
or additional requirements for obtaining a bail bondsman’s license.. Therefore, a county bail-bond board cannot question the appraisal

‘ThisconclusionassumesthatthebondsmanseekingtorenewhisorherLiaweusednal propertyBS

securitytoobtaintheoriginallicense.

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value or obtain an independent appraisal of the real estate an applicant for a bail-bondsman’s license intends to convey in trust to the board as security. In addition, a county bail-bond board cannot require that the real estate be located in that county. On the other hand, aboard must require arenewal application to contain a current appraisal of the real estate from each taxing unit and an appraisal from a real estate appraiser who meets the qualiications set out in article 2372~3, section 6(f)(2), V.T.C.S.

DAN MORALES Attorney General ofTexas
WILL PRYOR Fii Assistant Attorney General

MARYKELLER Deputy Attorney General forLitigation
RENEAHJCKS State Solicitor
MADELEINE B.JOHNSON Chair, Opiion Committee Prepared byMargaret A Roll Assistant Attorney General

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