January 13, 1964
Mr. Frank M. Jackson Opinion No. C-202
Executive Secretary
Teacher Retirement System of Texas Re: Whether benefits under
201 East 14th Street the Teacher Retire-
Austin 14, Texas ment System Act, as
amended in 1955, are
subject to inheritance
Dear Mr. Jackson: tax.
We have received your letter from which we quote as
follows:
"The Inheritance Tax Division of the Of-
fice of the State Comptroller of Public AC-
counts has asserted a claim against Gertrude
A. Herm for State Inheritance Tax on the value
of an annuity payable to her by the Teacher
Retirement System of Texas. She is receiving
this annuity as the sister and nominee of
Hattie L. Herm, a deceased member of the
Teacher Retirement System. Miss Hattie L.
Herm taught in the public schools of Texas
for 43 years, deposited $4,986.25 to her
account in the Teacher Retirement System and
named Gertude A. Herm to receive any payments
which after her death might be due under the
terms of the Teacher Retirement Law of the
State of Texas. The Comptroller has set a
value of $13,190.20 on this annuity. Miss
Hattie L. Herm died July 29, 1962.
"Since the enactment of the first Teacher
Retirement System act in 1937, the statute
has carried the following provision, in sub-
stance:
"'The right of,,a person to an annuity or a
retirement allowance, to the return of contri-
butions, annuity, or retirement allowance it-
self, any optional benefit or any other right
accrued or accruing to any person under the
provisions of this Act, and the moneys in the
various funds created by this Act, are hereby
exempt from any State or municipal tax, and
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Mr. Frank M. Jackson, Page 2 (Opinion No. C-202 )
exempt from levy and sale, garnishment, attach-
ment, or any other process whatsoever, and shall
be unassianable exceot as in this act specifi-
tally provided. I” L
You call attention to Opinion No. WW-92, dated October 17,
1957, by this office, which held that the above quoted provision
of the 1937 Act Is of no effect since the caption of the Act did’
not carry a notice of the above exemption from inheritance taxes.
You also
- state that the Board of Trustees of the Teacher Retire-
ment System requests tnat we reconsider said opinion, especially
in the light of two acts of 1955 and 1963.
We believe that said Opinion No. WW-92 has no effect on
such benefits accruing on or after November 6, 1956 for the
reasons hereinafter stated.
Chapter 530, page 1638 of the Acts of the Regular Session
of the 54th Legislature, 1955 (V.C.S. Art. 2922-l) amended the
Teacher Retirement System Act of 1937 and had a caption reading
as follows:
“An Act amending Cha ter 470, Acts of the
Regular Session of the z 5th Legislature (as
heretofore amended) pertaining to the Teacher
Retirement System of Texas; prescribing the
conditions upon which this Act shall become
effective as a law: declaring the Act to be
severable; and declaring an emergency.”
Section 9 of the original Act of 1937 above quoted from
your letter was made Section 16 of the Act of 1955 in identical
language of the exemption set out in the Act of 1937. Since the
Act of 1955 amends the Act of 1937, the caption of the 1955 Act
above quoted is sufficient. State v. McCracken 42 Tex. 383
!+8;5& ardoGuyt;; v. Texas Land Mtg. Co. Ltd. , 82 Tex. 496,
. . (8 1.
The case of English & Scottish American Mortg. & Inv.
Co. v. Harde, 93 Tex. 289,,++ 3 w lfo [lonnl
/, Y . . . 3s directly
. A”, in
\A,““, &I
point and is decisive on thye ouestion of the su fficiency of the
caption of the 1955 amendment: In 1897 the Legislature passed
an act entitled “An act to amend Articles 641 and 642, Chapter 2,
title 21, of the Revised Civil Statutes of Texas relating to the
treat ion of corporations ~” (Emphasis ours). The body of the act >
in addition to matters relating to the creation of cornorations.
in its last proviso, read as follows:
II that foreign corporations obtaining
permits io do business in this state shall
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Mr. Frank M. Jackson, Page 3 (Opinion No. C-202 )
show to the satisfaction of the secretary
of state that fifty per .cent of their author-
ized capital stock has been subscribed, and
that at least ten per cent of the authorized
capital has been paid in, before ~such permit
is issued. ”
The Court stated:
“The contention of plaintiff is that the
last proviso, relating to permits to foreign
corporations, is not embraced within the sub-
ject named in the title to the act. If we
could disregard the reference in the title to
the number of the article of the Revised
Statutes to be amended, and look alone to the
words ‘relating to the creation of private
corporations,’ as expressing the whole subject
of the act, it may be true that such expression
would not be broad enough to admit provisions
concerning the Issuance of permits to foreign
corporations. This it is unnecessary to decide,
since, in view of the previous decisions in
this and other courts, and of the course of
legislation based upon their authority, it must
be held that such a reference to the number of
an article in a code, such as our Revised
Statutes, is sufficient, in the title of an
act amendatory thereof, to allow any amendment
germane to the subject treated in the article
referred to. Gunter v. Mortgage Co., 82 Tex.
;K);, 17 S.W. 840; State v. McCracken, 42 Tex.
Many decisions from other states to the
same effect might -be cited. The reason for
the decisions holding this proposition must be
that the naming of the article to be amended
directs attention to all of the provisions
there,in, as the subject of the amending act,
and that such provisions can be ascertained by
reading the article to be amended. However
questionable may be the practice, and the decl-
sions by which it has been recognized as valid,
it has been so long and so often followed that
this court would not be justified in now holding
it to be a violation of the constitution. The
effect of the reference to the article to be
amended is not restricted by other language
of the title to the act in question. Such other
language is, as far as it goes , properly descriptive
of the subject of the amended as well as of the
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Mr. Frank M. Jackson, Page 4 (Opinion No. C-202 )
amendatory act. It simply does not cover
the whole of the subject; but the reference
to the number of the article to be amended
does Include, as the subject of the amendatory
act, the whole subject embraced by the provi-
sions of the former. It Is that article which
the title proposes to amend, and not merely
such parts of It as relate to the creation of
corporations. . .'
The Texas Supreme Court cited the above case with approv-
al In Board of Water hgineers v. City of San Antonio, 155 Tex.
111, 283 S.W.2d 722 (1955).
This 1955 amendment in unequivocal language states that
the teacher's annuities, retirement allowancesA et cetera, "are
hereby exempt from any state or municipal tax. The Inheritance
tax Is a state tax.
You are therefore advised that since the effective date
of the 1955 amendment of the Teacher's Retirement System, that
the right of a person to an annuity or a retirement allowance,
to the return of contributions, annuity, or retirement allowance
Itself, any optional benefit or any other right accrued or ac-
cruing to any person under the provisions of this Act, and the
monies in the various funds created by this Act are exempt from
state and municipal taxes, Including the State Inheritance *ax.
The Act of 1955 provides that said amendment shall
become effective on November 6, 1956, and for that reason we
say that Opinion No. WW-92 Is not effective as applied to bene-
fits under said Retirement Act accruing since said date.
SUMMARY
Since the effective date of the 1955 amendment
of the Teacher's Retirement System, the right of a
person to an annuity or a retirement allowance, to
the return of contributions, annuity, or retire-
ment allowance itself, any optional benefit or any
other right accrued or accruing to any person
under the provislon,s of this Act, and the
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Mr. Frank M. Jackson, Page 5 (Opinion No. C-202 )
monies in the various funds created by this
Act are exempt from state and municipal taxes,
including the State Inheritance Tax.
Yours very truly,
WAGGONER CARR
Attorney General of Texas
Assistant
HGC/jp
APPROVED:
OPINION COMMITTEE:
W. V. Geppert, Chairman
John Reeves
Albert P. Jones
Linward Shivers
Robert Smith
APPROVEDFOR THE ATTORNEYGENERAL
Byt Stanton Stone
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Untitled Texas Attorney General Opinion
Combined Opinion