THE ATJTORNEYGENERAL 

OF I‘Ems 

Honorable 0. P. Lockhart, Chalrman 

Board of Insurance Commlssloners 

Austin, Texas 

Dear Sir: Opinion No. O-4374. 

Re: Are the $1,220,000;00 reiienue bonds 

issued by the Agricultural and 

Mec'hanlcal College of Texas and 

similarrevenue bonds issued by 

other State colleges eligible as 

tax reducing "Texas securities" 

under the provlslons'of-the.Robertson Law; Articles“4765-4769, as' 

amended; and as tax reduciiig Si3hp~ 

ities under Article 7064, as amended, and are they ellglble as authorized securities under Article 

4725, Vernon's Annotated Civil 

Statutes?. 

Your letter requesting the opinion of this department 

on the above stated question reads as follows: 

"Please advise whether the $1,220,000 -. 

of revenue bonds issued by the.Agrlcultural 

and Mechanical College of Texas'for the purpose of building dormitories, equipping power 

plants.and building and equipping laundry 

plants; and other slmilar~revenue bonds issued by other State Colleges, such as John 

Tarleton College at Stephenville (which is 

a branch of A & M College), Texas State'College for Women, D:enton; and Texas Tecbnoltiglcal College at Lubbock, which revenue bonds 

are not secured.bg valid first ll~ens upon 

Texas real estate but only by pledged revenue 

of the Colleges by or the projects for which 

they were fssuea, are eligible as tax reducing 'Texas securities' under the provisions 

of the Robertson law, Articles 4765-4769 as 

amended, and as tax reducing securities under 

Article 7064 as amended; and whether they 

are eligible as authorized securities under 

Article 4725." 
Honorable 0. P. Lockhart, page 2 o-4374 

Article 7064, Vernon's Annot&ted Civil Statutes, provides in part: 

"Every Insurance corporation, Lloyd's, 

or reciprocals, and any other organization 

or concern transacting the business of fire, 

marine, marine Inland, accident, credit, 

title, livestock, fidelity, guaranty, surety, 

casualty, or any other kind or character of 

Insurance business other than the business 

of life Insurance, and other than fraternal 

benefit associations, within this State at 

the time of filing its annual statement, 

shall report to the Board of Insurance Commissioners the gross amount of premiums 

receivedupon property located In this State 

or on risks located in this State during' 

the preceding year, and each of such Fnsurante carriers shall pay an annual tax upon 

such gross premlum receipts as follows: 

. . . If any such insurance carrier shall 

have as much as otie fourth of its entire. 

assets; as shown by said sworn statement, lnvested In any or all of the following securitles:'real estate in this State, bonds 

of this State or of any county, Incorporated 

city or town of this State, or other property 

in this State in which by law such insurance 

carriers may Invest their funds, then the 

annual tax of.anp such Insurance carriers 

shall be one and one half (1 l/2) per cent 

of Its said gross premium receipts; . e . a(( 

Article 4769, Vernon's Annotated Civil Statutes, provides In part: 

"Each life Insurance compariy not organized under the laws of this State, transacting business In this State, shall.axinually, 

on or before the Xst day of Mardh, make a 

report to the Commissioner, which report shall 

be sworn to by either the president or vice 

president and secretary or treasurer of such 

company, w~hlch shall show the gross amount 

of premiums, collected during the year ending 

on December,31st, preceding, from citizens 

of this State upon policies of insurance. 

Each such company shall pay annually a tax 

equal to four and sixty-five hundredths 

(4.65) per cent of such gross premium receipts. 
Honorable 0. P. Lockhart, page 3 o-4374 

When the report of the investment In Texas 

securities, as defined by law, of any such 

companies as of December 31st of any year 

shall-show that it has Invested on said date 

as much as thirty (30) per cent of its total 

Texas reserves as defined by law, in promlssorg notes or other obligations secured by 

mortgage, deed'of trust, or other lien on 

Texas real estate and/or in loans to residents-oFheld by such borrowers, the rate 

of occupation tax shall be reduced to four 

and fi:e one hundredths (4.05) per cent;... 

. . . . . . 

Each of the above mentioned statutes provides for a 

further reduction in-'taxes where greater amounts cif~the'finds' '-- 

in6ntI6ned in said statutes are invested in the securities therein named. 

ArMtile 4725, Vernon's Annotated Ci+ill Statutes, sets 

forth the securities in which & life insurance company or&inlzed'under the lawi of this State may~lnvest or loan Its securities. This statute provides in part: 

~3, . . . .-~or . in the bonds and warrants 

of any 8ducatlonal Fnititutlon of the States 

of .Texas; or any ~nicipally~owned 'WateFsysGrn or sew& systeti'when special i?evenu&s.'to 

me&t the principal and interest paym6nts as 

they iiCcrue upoti'such obligations shall have 

been' approptiiated, pledged or otherwise provlded by tiuch municltality or educational lnstitutlon; . . . . . 

ArtIdle 4706, Vernon's Annotated Civil Stat&e&, sets 

fol"th or names the securitiesin which lnstirance comp@nl&;. . 

@ixcept'companl&s writing life, health and accident lxi%uraiice, 

inag invest their funds over and above their paid up capital 

stock. 

In view of the foregolfig statutes you'ape advised thtit 

It.ls the 'oplnlon of thls'department that the above?nentiotied 

revenue bonds are~not,eligible as~tax reducing "Texas securitles"~unde? Article 4769 or Article 7064, supra, because ~' 

&uch bonds are n-et promissory notes or other obllgatlons'se- 

?%Eed by-a.mortgage-; d&d of trust, or titherlien bn ~Texas 

I'sal e~st&te, etc., as set forthln Article 4769 as eligible 

tax reducing securities. The same can'be said FeltitFve to 

such-bonds wFth refer&c& td~Article 7064 as’ Buch‘bonas~do 

not come within the securities mentioned in sald article. 
Honorable 0. P. Lockhart, page 4 o-4374 

With reference to your question as to whether such 

bonds are eligible as authorized securities under Article 

4725, Vernon's Annotated Civil Statutes, it is our opinion 

that such bonds are eligible 8s~ authorized securities under 

said article when the educational institution Issuing such 

bonds provides revenues to meet'the principal and Interest 

payments as they accrue upon such obligations by appropriation, pledge or otherwise provided by such- educational instltutlon as authorized by Article 4725, supra. 

Trusting that the foregoing fully answers your lnquiry, we are 

Yours very truly 

ATTORNEYGENERAL OF TEXAS 

By s/Ardell Williams 

Araell-'Williams 

Assistant . . 

AW:GO:wc 

APPROTW) MAR 4, 1942 

s/Grover Sellers 

FIRST ASSISTANT 

ATTORNEYGENEFUL . _. 

Approved OplnFon Committee by s/BWB Chairman