DAN MORALES 

ATTORNEY GENERAL 

QMfice of tfp Rlttornep @eneral 

&date of GCexas 

October 19,1993 

Honorable BNIX Isaacks 

Criminal District 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. 

(RQ-191) 

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 is the total [value of the bonds a corporate] 

bondsman may execute?” This question is answered by Attorney General Opiion IM-799 

(1987). In that opinion, this office concluded that a county bail-bond board may not limit 

the total value of the 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 of the property held as security or in trust by the county bail-bond board 

on behalf of the bondsman. However, section 7 of the same article states “Subsection (g) 

of Section 6 does not apply to a corporate surety.” V.T.C.S. art. 2372p-3, 5 7(a). 

Because the statute explicitly makes the only restriction on the value of the bonds a 

bondsman may issue inapplicable to corporate bondsmen, there is no limit on the v&e of 

the bonds a corporate bondsman may issue. 

Is the irrevocable letter of credit 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 in trust to the board [that] exceed $50,000? 

p. 1383 
Honorable Bruce Isaacks - Page 2 (DM-264) 

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

states as follows: 

Upon notice from the board that the application has been 

tentatively approved, the applicant shall then: 

(1) deposit with the county treasurer of the county in which 

the license is to be issued 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 of this 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 said counties shall be 

$10,000 to be held in a special fund to be called the bail security 

ibn& 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 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 shall be $10,000, the condition of 

the trust being that the property may be 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, in bond forfeiture cases; the board shall file the deeds 

of trust in the records of each county in which the property is 

located, and the applicant shall pay the filing fees. 

(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 final judgment of forfeiture that may be made on any 

bonds on which the corporate licensee is surety. 

Although this section is far from clear, we think it means that, instead of supplying 

security in the form required by subdivisions (1) and (2) corporations must submit as 

p. 1384 
Honorable BNCX. hacks - Page 3 (DM-264) 

security an irrevocable letter of credit in compliance with subdivision (3).1 The general 

structure of the 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 a letter of credit as security. Contrary 

to the suggestion in a previous 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, 5 3(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 a bail bondsman’s license. 

Your third and fourth questions concern the irrevocable l&e-r of credit and are as 

follows: 

3. If the irrevocable &tter of credit is the only security ne3xsary for 

a corporation to execute bonds, then how much money must the 

letter of credit covef? 

4. Must the letter of credit be of unlimited time or must the sheriff 

accept a letter of credit with a time 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 

p. 1385 
Honorable Bruce Isaacks - Page 4 (~~-264) 

least $5O,ooO, in counties with populations of less than 250,000, the credit amount must 

be at least $10,000. 

We also conclude that the sheriff must accept a letter of credit even though it has a 

time limit. As a practical matter, few, if any, 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 a bail-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 insist on a letter of credit for an unlimited time.2 

Your remaining questions concern the appraisal value of the real estate an 

applicant intends to place in trust with the board. In particular. you ask 

5. Does the Bail Bond Board have the authority to question the 

appraisal value of the real estate the applicant intends to convey in 

trust to the board? 

6. Does the Bail Bond Board have the authority to obtain an 

independent appraisal value of the real estate the applicant intends to 

convey in trust to the board? 

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 of Denton, Texas? 

8. Does the Bail Bond Board have the authority to require that the 

renewal application for a license include a current m-appraisal of the 

real estate the applicant intends to place in trust with the 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 of the real estate. As we 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. we also note that a corporate bondsman must have the appropriate security on file 

when it writes bail bonds. 

p. 1386 
Honorable BNCX Isaacks - Page 5 (DM-264) 

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. 8 6(a)(4). Second, after receiving 

notice that the application has been tentatively approved, the applicant must 

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

applicant . . . which property shall be valued in the amount tndtcated 

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, 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 as requiring an applicant to submit, along with the deed of trust, an appraisal in 

the minimum amount required by the section and by an appraiser who has the 

qualitications listed in the section. DallaLF Count Bail Bond Board 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 

is adequate. 

As you indicate, the same principle resolves your seventh question and leads to the 

wnchrsion that the Denton County Bail Bond Board cannot require all real estate placed 

in trust with the board by an applicant to be located in Denton County. Requiring that the 

real estate be located in the county issuing the license would impose an additional burden 

on the applicants in excess of the statutory requirements. See Bemr County Bat1 Bond 

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 file the deeds of trust in the counties where the property 

is located. V.T.C.S. art. 2372~3, Q 6(t)(2). This directive implies that the legislature 

expected some of the real estate to be located in wunties other than the county issuing the 

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 in the county issuing the license. See H.B. 477, 72d 

Leg. (1991). 

p. 1387 
Honorable BNCC? Isaacks - Page 6 (DM-264) 

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 a real 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 a license under the act. The act requires original applications to list the real 

estate the applicant intends to convey in trust to the board. V.T.C.S. art. 2372~3, 

5 6(a)(4). For each parcel of real estate listed in the 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. 5 6(a)(4)(B) (emphasis added). The act also requires a fhst-time applicant to provide 

an appraisal of each parcel by an appraiser who has the qualifications listed in section 

6(fx2). Id. 5 6(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 set out in section 6(f)(2), V.T.C.S. 

SUMMARY 

There is no limit on the vahre of the bonds a wrporate bail 

bondsman may issue. 

An irrevocable letter of credit is the only security a corporation 

must provide when its application for a bail bondsman’s license is 

tentatively approved by the county bail-bond board. In counties with 

populations of 250,000 or more, the credit amount must be at least 

$50,000; in counties with populations of less than 250,000, the credit 

amount must be at least $10,000. The sheriff cannot, however, insist 

on credit for an unhited time; the sheriff must accept a letter of 

credit even though it has a time 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 

‘This conclusion assumesthatthebondsmanseekingtorenewhisorherLiaweusednal 

property BS security to obtain the original license. 

p. 1388 
Honorable Bruce Isaacks - Page 7 (DM-264) 

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, a board must require a renewal 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 of Texas 

WILL PRYOR 

Fii Assistant Attorney General 

MARYKELLER 

Deputy Attorney General for Litigation 

RENEAHJCKS 

State Solicitor 

MADELEINE B. JOHNSON 

Chair, Opiion Committee 

Prepared by Margaret A Roll 

Assistant Attorney General 

p. 1389