. . I

.. i <

WlEL WILfsON A-l-roRNEY CazNERAL August 21, 195%

Honorable Burney Walker. Opinion No. WW-687 CriminalDistrict Attorney McLennan County Re: Propermethod of taxing Waco, Texas bank stockunder submitted facts. Dear Mr. Walker:

You have requested, that we ad.vise

you on the following question:

*If a national bank does not include the market value of its real estate In ascertaining the value of the assets of saidbank forpurposes of the annual statement of assets, should they be allowed to deduct the assessedvalue of said real estate from the assetswhen arriving at the value of the bank stock for determining tax liabllity~?"

In City of Abilene v/Meek, 311 S.W.2d 654 (Tex.Clv. App. 1958, .error.ref:,;the court wasconcerned with the meaning of Article 71 6, Vernonl~sCivil Statutes,which reads In part as:follows:

"Every banking corporation, State or national, doing business In this State shall, in the city or town in which it Is located, render its real estate to the tax assessor at the time and In the manner requlred~of individuals. At the time of making such rendition the .presldentor some other officer of saidbank shall file with said assessor a sworn statement showing the number and amount of the shares of said bank, the name and resld,ence

of each shareholder, and the number and amount of shares owned by him. Every shareholder of said bank shall, In the city or town where saidbank is located, render at their actual value to the tax assessor all ahares owned byhim in Such bank; and in case of his failure so to do, the assessor shall assess suchunrendered shares
as other unrendered property. Each share In such bank shall be taxed only for the difference between Its actual cash value and the proportionate amountper snare at which its real estate 1s. .

Honorable EUrney Walker,Page 2 (OpiMon 30. WW687)

assessed. Nothingherein shall be so const&& ‘asto tax national or State banks, or the Ehareholdersthereof, at a greater rate than is assessedagainst other moneyed capital In thehands of individuals.” (Emphasls supplied.)
The court stated,

that the statutewas plain and unambiguous and that each share shouldbe taxed only,for the differencebetween Its actual cashvalue and the proportionate amount per shareat which Its real estatewas assessed. In determining the value of the real estate, the city was required to accept its own assessedvalue thereof rather than the value as shown in the statementof the condition of the bank filedwith the Comptroller.

In OpinionNo. WW-439. this officeheld that In determiningthe value of bank stockthe assessment shouldbe basedupon the faircash market value of the stock rather than the value that would be obtainedby adding the value of the capital stock,t~he amount of surplus,undivided profits or reserve funds and dividing this by the number of shares of stock. Articles 7149 and 7174, V.C.S., deal with ,valuation and read, respectively, inpart as follows:

. . . ., ”1 Value.I

--the:,term,‘trueand fullvalue,’ wherever,’

used shallbe held to mean the fair market value, in cash, at the place where the property to which the term is applied shall be at the time of assessment,being the price which could be obtainedtherefor at private sale, and not at forced or auction sale.” 1,

. . . “In determining the true and fullvalue of real and personalproperty the assessor shall not ad,opt a lower or different standard of value because the same is to serve is a basis of taxation, nor shallhe adopt as a criterion of value the price for which suchproperty would sell at auction or a forced sale or in the aggregate with all the property,Inhis county; but he shallvalue each tract or lot by Itself, and at such sum and price as he believes the same to be fairly worth inmoney at the time such assessment Is made.”.. .

5

Honorable Gurney Walker, Page 3 (OpinionNo. ~~-687)

Ithas beenheld thatthere is no substantial difference in the terms (1)market value, (2) fairmarket value, (3) cashmarket value, (4) fair cash market value and (5) reasonable cashmarket value as these terms are used in the various constitutionaland statutoryprovisions pertaining to value for the assessment of taxes, -West Texas Hotel Co. v. City of El Paso, 83 S;W.2d 772 (Tex.Clv. App. 1335, error dism.).

Section 20 of ArticleVIII of the Texas Constitution contemplatesthat all property in a countymay be assessed at 100% of its fair cashmarket value; it has been uniformlyheld by the courts that a lesserpercentage may be used where suchpercentage is uniformly applied to all property, both real and personal. This for the reason that the equality and uniformity of taxation required by Section 1 of Article VIII of the Constitutionhas been satisfied. City of El Paso et al v. Howze, 248 S.W. 99 (Tex.Civ.App. 1923, e-Clark, 158 S.W.2d (Tex. Civ.App. 1942, error=, w.0.m.). 565

You are therefore advised that the assessment of the tax on the bank stock shouldbe based upon the actual cash value of such stock less the proportionate amount per share of the actual cash value of the real estate owned by the bank. If an evaiuation of less than .lOO$is used for some of the property within the county, it must be equally and uniformly applied to~a11taxpayers and property within the county. *,

SUMMARY

The assessment for ad valoreratax' purposes of bank stock shouldbe based upon the actual cash value of such stock less the proportionateamount per share of the actual cash value of the real estate owned b.? the bank. If an svaluation of less than 100% is~ uned~for some of the property~

within the county~,it must be equally and uniformly applied to all taxpayers and property within the county.
Very truly yours,

WILL WILSON Attorney GeneralHonorable BurneyWalker, Page 4 (OpinionNo. ~~-687)

MMP:bct

APPROVED:

OPINION COMMITTEE: Geo. P. Blackburn, Chairman

C. K. Richards J. Arthur Sandlln Howard Mays

REVIEWED FOR THE ATTORNEY GENERAL By: W. V. Geppert