COPY

Eonorablr maodo A. Will&m8 

### Chairman

andbeatlta Dirootor

opbllon Ilo.0-6088 

### Ior Aretherrntlonedlmlltldualr

in th8 88@O~t Ot th@ Liquidating Dlrislon of the ' Board of In8urM00, coEl.arionur wIthin th8 m@,caw of Article LlEitlb-17 (g)?

Your request for an~opinion a8 to whether the indiTidual8 tr8at.d in the 1ekt.r oiHr. Wfll 0, %llOX,Liquidator, to b. I.080. William8 dr8 in thr 8mplOyment Of thm Llqtidating Diririenor tha Board o? In8uranor 0o1ml88ionerr rithia the nraning of Artlola 68Llb-17 (6),Vernon’8 Ravimd Civil 8t6tUt.8 has been roooiy8d. IOU hare attaohul a oopy of the letter bornEr. Knox whioh reads inpart a8 follows:

*TheLiquidatingDlri8ion of the Board of InrrurariO8&mmi88iOn~8 lra8orsated 

### and 18 aLaitlthU3d

### PUrruent to House Bill 249 of the 40thLegislature, inoorporoted in theRerieed Stetutee as Article 5060-C. The writer Is the Liquidator desfgnztedby the Board OS Innsuranoe

Commlrolonerrr



### end la the Receiver OFpointedby the respective District Courts in oonneotion with the recelvershlpsdesaribed on the attached 113t. The Board of Xnsuranoe Commiaeioners employs all personnel of theDivi8lon, fix08 salaries snd has the right of terminationof employment at will. It eprroves the salary expenditures along with other ex>enaes inoident to the reoeiverahlps.

### bnorablr Olaudr A. lIlllam, Pago 8

-ho fund8 with thloh the omplo~oo8 uo paid lOPU

### irOE the 88tfit.8 

### of the 

### r@celrrrrhfpr thee 8elv88. Th8 mplo~err work ruio~ly tm all re08iTU8hip8 U the OW881Oll 68Md8, NO 80~ 

### let84 UOUTW l

OOWlt Of th. tiM 8mt ia 0-08 ?iOn 

### with thi mrk of the refiqootive rr.rlrsrrkl~8 i8 maintained in 

### th8 o?fim but an 

### approximationi8 **krpt** a8 

### th.buia O? the

### proration oithr ~Q10~008

’ 88lWiU 

### fra the V=iOI.l8 rOO@iV8r8hi>8. **i8 ub8M**  **theiirrtaad** 

### tlfteoatho? thm%%%‘ Of OOW88 lM?atO2OOOl48 ~0 kog$ im the offi with r.8



### P 08%to the 

### ori& of.'tho fb48 with whloh 

### oaoh 08q ofre rooolvor8hlp. ha8 bean pal(. during th8

### lib of the Th. 

### EOtti mr@tiOll Of fund8 OOMOqlmatly fairly uour8to 

### moat of tlmo o? l



### aoh 

### ropsoronU thoapportloa- ~liqoidatioa8," 

### in tho 

### mspootivo

TOlAX r*qUO8t 

### f\rzthor 8tat88 

### that%hOn 

### Lh. ]caOX,a8 

### LIquidatori taker 

### otor an la8ur~oo oorpny, ho ofton koopr
on 

### Its ayroll outaln 0r it8 amp1opoerwho are famlllar with it8 

### bur% 088 and Who a88i8t him in liquidationproce88. On those eJ+OyeCI8'rage8 he pay8booial eoouritytaxes to the 

### fodoral Bcvrrnmont. In nddltlonhe pay8 8oolal seourlty tax On 

### th8 8mOUllt8

Oi the W

’4@8 Of hi8 Ofii08 for00uhlah UO ohargoable e.@in8t the 

### putioulu in8IUUOO oompany ln 

### QUO8- tion. 

### Tha 8OrTiO.8 ~rformad by thue old 8m~loyOe8 Oi the oommy a8 wd.l a8 

### the 8UVioe8 of 

### thr 8Bi&31OyU18 Of th8 llquldatlng ofiloe ere to be oon8ideredsm

10 uo further advi8ed that the llquidatlon divirion a8 oreated by rtatute 18 housed in a dlff8rontoffloe from that of the IneuranceDepartment of the State of Texas; the: the employee8of the Llquldatlng Divialon ~arrormno duties in the offioes o? the Insuranoe Comii88ion; that the work o? the perrons ~nplogod in theLiquidating Dlrlalon Is solely that of working on the various lneurance companiesthat are in llqulde~ion; that thesepars,-ns are under the direct eupervlalon and oontrol ofMr. Will 0.Knox, Liquidator; that they are chosen or employed

### by Mr. Knox subject to the approval of the Board of Insuranoe Comaissioners.

Article 5221b, Secdsn 17 (e)read3 :z part a3 follo:vs:Eonorabla ClaudmA. Wllllam8, Page 5

*(o) *Lmploylngunit' mean8 any lndlrldual or typo of organization, including any partnership, asrooiation, trust, estate, joint stook oompany, ineuraaor oompany,or corporation,whether domestlo
or rorelgn, or the raoalvar trU8t80 or IUoOe88Or thorao # trU8t.e in bankruptoy,
8ontatiVOO? a daOaa8ad p8rs:n or the legal reprowhloh ha8 or aubsequent to January 1, 1958 

### had in It8 employ ona or more individual8performing rorrlcer for it within thil 3tRtO.

. ."
Sootlon 11 (6) (1)provldrr:
"(6) (1) '-lo-nt' eubjeot to the othar rOvi8lOn8 Of this #ub8aotion,mean8 8uvic8,inolud8utIoo in intorrtato 00mmo~00, prforrd 

### for wager or under any oontraotof hlro, writton or oral, 8xpr.88 Or im lied tormodby M f prorldod that any 8OrViO.8 parndlvfdual for waged rhallbe deamsd to bo employment rubjoot to thl8 Aot ~11888 and until it 

### 18 8hOWIi

t0 ttl08di8faOtiOn Of thr &52&88iOIl that ruoh IndlvIdual ha8 been and will continue to bo frar rrom control or direction over the performanoe of suoh servlaee both under his contract of 

### 8arv1oe and in fact."
3eotion 

### 17 (g) (6). roads: 

### "(6) The tarm 'aployment' shall not inolude:
*(A) 3ervice performed in the employ of this State, or of any polltloal subdivieion thereof, or of any lnstrumentalltyof this State or its polltloal aubdlvialons;n

The faots related in the letter of the Liquidator
ae well as your letter show that there ere two cleases of per.xr?sto Je coxldered i: this or~inlor.: First, there ere t%ose Fersons timt were in ti-:e x2lol.l;ent

of the compmy prior to the eppolntment of the Liquidator. These l~dlvlduol; continue their employment for e sufficientperiod of time to enable the Liquidator to closeout the bujl?es3 in thet particular office of the company. They are paid by the Liquidator out of the essets cf fke >or;,~&ny; ‘?-e:r:1.5,-e

oflionorsbloQlsudrA. WIllIams, 

### Pago4



### employmsnt romlns the same; the only sss0ntlaidirr8rsnoe in thslr employmentbring that ths Liquidator is their supervisor rathu than the former ottlou of the oompsny. Thry wsro In 

### employment under thmTsxu 

### Unmmploymsnt Oorpensatlonhot 

### prior to ths tlms 

### thr Llquldator 

### took oontrol of thobuslnosr. It oamot bo dirputsd that undu our 

### statuts they nould haro boon in smployment If s reooltrr had boon sppolnted

### by the oourt.



### 8800~4, thsro armother In4irI4uals omployo4 in thr Aurtin 0rri08 of the 

### Llquldator.. ws uo inro~oa that the80 persons puforr 

### fhoir ssrrioos In snothor and 4if’formt ottloo an4 bullally from 

### that of tho 8tato 

### Insur~o~~~sslon) that nono 

### of ths ssrrloss perform04 by ths parsons

### in the liquida

### tion 6ItlsIon l

rtsln to tho goners1 dutlosof the Boar4 ot Insuruloo t3oiaui

ssIonors. 

### Thilr 4utios areoonilamdatriot to thr lIquI4atIonsof the rsrious I~ursnos oompsnlos. Ths sals.rlos

of sll of thsss 

### parsonssro apportione4 upon 

### time applied and arepaid 

### fromths 

### ussts ot the 

### rarlouo lnsuranoo 00mpflI*s. The Btato oi Tsxu pays no put of their sslsry.

At ths time ths Liquidator took po8sdsslon of the sssets of the various oompanlesunder 

### a oourt ardor the equitable tit18 to the assets 414 not pass to ths State of Toxaa but remelnod for ultimate dlstrlbutlon to their oreditorsan4 polloyholdors. The Leglslaturoplaced the llqul4atlon of 

### tho lnsursnos oomp~Iss in 

### the controlof the Board c$ Inruranob &mmls8lonors an4 ths Liquidator, not for the benefit of tho State of Texas but to oonserve the assets of the ruIou8 l8tstsSfor the bonofit a? the oreditorsan4 polloyholdors.

If a reoelver had been appolntodby the oourt to liquidate the assets of the vsrlous oompaniesnow in the hands of the Liquidator sue!, a receiver Wouldnot have been an exempt employer under the terms of our Aot. Under the statute now in force relative to the liquidation of lnrursnceoompanios, it is the duty of the Dlstriot Court to appoint the statutory Liquidator as receiver of various companies. He is appointed receiver for each ccmiiyany and act3 as reoelver as well as Liquidator. Aa do other reoelvers he muat take the oath to qualify es receiver.

We do not believe nor intend to infer that persons in the e,“.yloyment cf the Board of Insurance Cowissioners in the performnnoe of the general duties of theiroffice are In employmentunder theUnemployment CompensationAct. Clearly, they are not.,

, .



### Eonorablo Olaub A. Wllllsms, Pago 

### 5

to prorido Tho Unsmploymrnt Oomponsatlon Lawot Toxas was l 

### nastsd soourltiy



### to psrsons tsmporarily out or 

### smploymnt; the l 

### mploysr oompsnIoa wsrs required to oontrlbuto to a fund 00 lnsuro some roller from unsmplomont to thrir smployoos,



### Th0 l ompanlssbeing lfquidats4 by our appoint06

### orrioor
are prlvatr 

### sorporatlons the assets are those of prlvato 

### lnelvl4uals and the Llqu dator i acts for private buslnsss and not for the Btato of Texas. sup. (84) 113. 9.0 Whlto rs:Boland, 5 I. Y



### Ile hare 

### no doolslons of tho oour%sof Toxas upon this quostlon as tho problom uIses from ths applloatlon of a

### now17 l naate4 aohems of 

### ssalsl loglslation; IO do 

### havs a deolslon

### of tho Stata 

### of.irr York 

### sustalnlng our position. & Bar Klnnoy, 

### 14 I. I. guP’ (R6) pa 

### 11, tho 

### rourt hold tho 

### St&o Iasurruoo Liquidator lablo for 

### the payment of unmsplo~rnt tax08 u n ths puson. 

### doing ths iiquie4tLry work 

### In I!&*0rri08. 

### T hr8 queatloa was asrtiflsd to tho Court of of NewYork, 

### an4 la that opinion, founo

### Apeals of the Stats & 84 Mi R. (M) 494 the 

### oourt ho14 that tho llquldator was not an 

### l xorpt rmpla~or udo~ the unemployment oompensatlon aot.

Tho Federal Government has epeolfioallyprovldod in SS VSCA lE4a that *anyreceiver, 

### rsfarss, trustee, or 

### other offloor or agent appoints4by sny 0. 8. Courtwho 

### Is authori804 by said oourt to aoneuat any buslnssa or rho oonduotsw buslnsss shall, from Md aftrr JWO 18, 1934, be NbJsot to all Stato ani looal tax.8 applloablo to suoh busInoss the same as 

### If suoh bu?lnass was ccnduatedby an individual

### or oorporatlon.w

'In the ease 

### O?Mid-AmerlOa, 31 te4. Sup. 601,

### the trustee WBS held liable for unemployment taxesbased upon wages paid to persons employed for the liquidation of e bankrupt estate.
The Le:*islatureof Texas FrGVidOe in Yeotic;n 17 (e) OS Article 52Elb that en emrlcFlnG unit should include “insurance cornpan or corporation,whether domejtio or Foreign,
or the reaeiver, trustee in benkruptcy, trustee or auooessor thereof,.:

. .* Is the llquld-.torin this InstrnoererformIng sns-different functions than those of a receiver or trustee? We think net. The Legislature olearly lctendedthat the yersonq r;sedin the llquidaticz of these estate3 should benefit from the uneF,:loymentcompensation act.Honorable Claude A. Wllllams, Pare 6

The onlydirect 

### authority on this point is found in tho opinion of tho 3uprams Court of 19. T. in InRI Xlnnsy, 14 N. Y. hp. (24) 11. The Hew York Court states that the psrsons in tho lnsurencr liquidating offloe are Wet smployoos
or the Stat0 or an aganoy thorbof for tha purpose Of othu 

### atatutss relating to other employees, e. g. thr Clvll Servloe Law, Soolal Yecurlty Law of thoOnIts States, Federal XnooaoTax Law from whloh employsea are normally exempt."

Ue, thubfors, advise you that all or the psrrons aployod ln 

### tho 1IquldatIon o'tt&avarious lnsuranoa oompanlas
asmentlone4 in your request are in the aployment of the iiquieatlng eivIrlon 0r the Boar4 0r Insurance Commlsslonors wlthln themsanlng of Article 5221b, 17 (g),Vernon's Revised Clrll statutss.

Tours very truly

ATI!ORXEY GlTNFlRAL

CF TDLAS

APPROVEDMY 29, 1941 8/ 

### llrorer Sellers FXRST A93IsTANT ATTOFiNZYOlSNFZAL 

## m S/ Norris HoeRen h3si~atRnt

APFROVED - O?lnlon CoaTJttee
Bp BiEl - Chairman



### 06 -GEL