Court Opinion

ID: 4141971
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:16:42.220481+00
Date Added: 2024-06-11T14:33:53.874309
License: Public Domain

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'hanlcalCollege of Texas and
                           similarrevenue bonds issued by
                           other State colleges eligible as
                           tax reducing "Texas securities"
                           under the provlslons'of-the.Robert-
                           son Law; Articles“4765-4769, as'
                           amended; and as tax reduciiig Si3hp~
                           ities under Article 7064, as amend-
                           ed, and are they ellglble as au-
                           thorized 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 pur-
   pose of building dormitories, equipping power
   plants.and building and equipping laundry
   plants; and other slmilar~revenue bonds issu-
   ed by other State Colleges, such as John
   Tarleton College at Stephenville (which is
   a branch of A & M College), Texas State'Col-
   lege for Women, D:enton; and Texas Tecbnoltigl-
   cal College at Lubbock, which revenue bonds
   are not secured.bg valid first ll~ensupon
   Texas real estate but only by pledged revenue
   of the Colleges by or the projects for which
   they were fssuea, are eligible as tax reduc-
   ing '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, pro-
vides 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 Com-
    missioners 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 Fnsur-
    ante carriers shall pay an annual tax upon
    such gross premlum receipts as follows:
    . . . If any such insurance carrier shall
    have as much as otiefourth of its entire.
    assets; as shown by said sworn statement, ln-
    vested In any or all of the following secur-
    itles:'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, pro-
vides In part:
       "Each life Insurance compariynot organ-
    ized under the laws of this State, transact-
    ing 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 promls-
    sorg notes or other obligations secured by
    mortgage, deed'of trust, or other lien on
    Texas real estate and/or in loans to resi-
    dents-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-'taxeswhere greater amounts cif~the'finds''--
in6ntI6nedin said statutes are invested in the securities there-
in named.
       ArMtile 4725, Vernon's Annotated Ci+illStatutes, sets
forth the securities in which & life insurance company or&in-
lzed'under the lawi of this State may~lnvest or loan Its se-
curities. 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 'WateFsys-
    Grn or sew& systeti'whenspecial i?evenu&s.'to
    me&t the principal and interest paym6nts as
    they iiCcrueupoti'suchobligations shall have
    been'approptiiated,pledged or otherwise pro-
    vlded by tiuchmunicltality or educational ln-
    stitutlon; . . . . .
       ArtIdle 4706, Vernon's Annotated Civil Stat&e&, sets
fol"thor names the securitiesin which lnstirancecomp@nl&;. .
@ixcept'companl&swriting life, health and accident lxi%uraiice,
inaginvest their funds over and above their paid up capital
stock.
       In view of the foregolfigstatutes you'ape advised thtit
It.ls the 'oplnlon of thls'department that the above?nentiotied
revenue bonds are~not,eligible as~tax reducing "Texas secur-
itles"~unde? Article 4769 or Article 7064, supra, because ~'
&uch bonds are n-etpromissory notes or other obllgatlons'se-
?%Eed by-a.mortgage-;d&d of trust, or titherlien bn ~Texas
I'sale~st&te,etc., as set forthln Article 4769 as eligible
tax reducing securities. The same can'be said FeltitFveto
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 appropria-
tion, pledge or otherwise provided by such-educational instl-
tutlon as authorized by Article 4725, supra.
       Trusting that the foregoing fully answers your ln-
quiry, 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