# TEIEATJ~TORNEYGENEXCAL OF 7rEms

I-Ion. William A. Harrison Commissioner ofInsurance International Life Building Austin 14, Texas Opinion No. WW-1062
Re: Whether anassociation of employees under the stated facts are entitled to the exemption ofArt. 14. 17ofthe Texas Insurance Code even though its operating expen,- se8 exceed $300 per month.
Dear Sir:
Your request concerns the interpretation of certain amendments by the ,Legislature in 1959 to that portion ofthe Texas Insurante Code exempting certain associations from some aspects ofthe mutual assessment laws. These exemptions are found inArt. 14.17 of said Code. * Prior to the 1959 amendments, Art. ,14,. 17stated these exemptions inthe following terms:

‘1.

. -provided no provision ofthis andthe preceding article shall be construed to apply to associations which limit their membership to the employees and the families of employees of any particular designated firm, corporation, or individual, andwhich are not operated for profit andwhich pay no commissions to anyone and whose operating expenses donot exceed One Hundred ($100.00) Dollars per month;.

. .”

“Reference throughout are to the Texas Insurance Code unless otherwise indicated.Hon. William A. Harrison, page 2 (WW-1062)

During the 56th Legislature in 1959, this same exemption provision was twice amended, first, by S.B. 241, Acts 1959, page 661, ch. 304, andthen by H.B. 796. Acts 1959, page 1085, ch. 496. As finally passed, both bills were identical except that the former increased the permissible expense factor from $100 to $150, while the,latter purported to increase the permissible expense factor from $100 to $300. Infinal form, then, Art. 14. 17now reads as follows:

‘1.

. .provided no provision ofthis andthe preceding Article shall be construed to apply to associations which limit their membership tothe employees and the families of employees ofany particular designated firm, corporation, or individual, nor shall it apply to associations which limit their membersh,ip to bona fied borrowers ofa Federal agency in Texas and members ofthe borrower’s immediate family who are living with him andwho are not engaged innonfarm work for their chief income, andwhich association has been in existence for atleast five (5) years, and which are not operated forkprofit andwhich pay~no commissions to anyone andwhose operating expenses donot exceed Three Hundred Dollars ($300) per month,;

. . .”
One additional class ofassociations is exempted, namely: associations which limit their membership toborrowers ofa Federal agency, etc. Your question is whethe~rthe limitations as to the amount of operating expen,ses applies to the associations named other than associations of borrowers ofa Federal agency.

At the outset there does not appear to be any evidence that the Legislature intended to eliminate this restriction which for almost thirty years has conditioned the general exemption granted by Article 14.17 and its predecessors and yet continue a restriction ofthe same nature for anew class ofassociations brought within the exemption. The last expression by the Legislature onthis subject matter was H.B. 796, and itis with this measure that we are concerned. Its caption provides :.-

Hon. William A. Harrison, page 3 (WW-1062)

“An act amending Art. 14.17 ofthe Texas Insurance Code so as to increase the One Hundred Dollars ($100) per month expense factor of certain associations to Three Hundred Dollars ($300) per month; providing additional exemptions; and declaring an emergency. I’
Two purposes clearly appear from the caption: 1) to increase the $100 per month expense factor of certain associations to $300 per month, and 2) to provide additional exemptions. Itis at once apparent that the phraseology ofincreasing the expense factor could only apply to those associations previously exempt. The primary objective ofany attempt to interpret legislation is to give effect to legislative intent, and it is difficult to conceive ofany clearer evidence of such intent than is present inthe instant caption. Since the actual language ofthe amendment is not inconsistent with the manifest legislative intent, we hold that the restriction onthe expense factor applies to all ofthe associations exempted by Article 14. 17.
SUMMARY
To be an exempt association under Article 14. 17ofthe Texas Insurance Code, expenses may not exceed $300 per month.
**Very truly**  yours,
WILL WILSON Attorney General ofTexas

BY isLIts lL!LAkL Fred B. Werkenthin Assistant Attorney General FBW:lmc APPROVED: OPINION COMMITTEE: W. V. Geppert, Chairman Jerry Roberts Thomas Burros B. H.Timmins W. 0. Shultz REVIEWED FOR THE ATTORNEY GENERAL BY: Morgan Nesbitt