E Y GENERAL
OF-XAS
-&
Hon. Robert S. Calvert Opinion No. WW-92
Comptroller of Public Accounts
Capitol Station Re: Whether death benefits
Austin 11, Texas under Teachers' Retire-
ment System are subject
Dear Mr. Calvert: to inheritance taxes.
You have advised us of the following facts.,
The decedent designated a beneficiary in accordance with
the applicable provisions of the Teachers' Retirement
System Act. The amount of these benefits was not included
in the inheritance tax report filed with the Comptroller's
Department. The attorney for the estate takes the position
that such benefits should not be included in view of Section
16, paragraph 1 of Article 2922-l of Vernon's Civil Statutes,
which reads as follows:
"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 accruing to any person under
the provisions of this Act, and the
monies in the various funds created by
this Act, are hereby exempt from any
State or municipal tax, and exempt from
levy and sale, garnishment, attachment,
or any other process whatsoever, and
shall be unassignable except as in this
Act specifically provided."
The caption of the original Teachers' Retirement
System bill reads as follows:
"An Act to carry into effect
Section 48a of Article III of the
Constitution; to establish a Teachers'
Retirement System of Texas; to deter-
mine membership and conditions of
membership in said System; to provide
for a Board of Trustees of said System
and for the administration of its
affairs; to provide fcr officers and
i. .
Hon. Robert S. Calvert, page 2 (WW-92)
a Medical Board and to define their
duties; to provide for the adoption
of actuarially-made mortality, service
and other tables as may be deemed
necessary; to provide for the creation,
management and distribution of the
Teacher Reserve Fund, the State Accumu-
lation Fund, the Annuity Reserve Fund,
the Interest Fund, the Permanent Re-
tirement Fund, and the Expense Fund
of the said System; and to provide a
method of financing said System; pro-
viding that no appropriation shall
ever be made by the Legislature out
of the General Funds for the payment
of retirement benefits; and providing
c that such payments can only be made
out of special taxes levied as author-
ized in the constitutional amendment
for the retirement of teachers; making
an appropriation of Twenty-five Thousand
($25,OOO,OO) Dollars out of the General
Revenue Funds of the State of Texas not
otherwise appropriated, and declaring
an emergency." Acts 1937, 45th Leg.,
pa 1178, ch. 470.
This caption carries no notice of an exemption
from inheritance taxes. Therefore, it is not necessary
for us to determine what effect, if any, paragraph 1 of
Section 16 would have had had the bill complied with the
requirements of Section 35 of Article III of the Texas
Constitution, which Section reads as follows:
"No bill, (except general appropri-
ation bills, which may embrace the various
subjects and accounts, for and on account
of which moneys are appropriated] shall
contain more than one subject, which shall
be expressed in its title, But if any
subject shall be embraced in an act, which
shall not be expressed in the title, such
act shall be void only as to so much there-
of, as shall not be so expressed."
You are, therefore, advised that Teachers' Retire-
ment System deat,hbenefits should be treated as an asset a-.f
a decedent's eetate for inheritance tax purposes,
Hon. Robert S. Calvert, page 3 (WW-'92)
SUMMARY
The receipt of benefits by designated
nominee under Teachers' Retirement
System Act is subject to inheritance
tax.
Yours very truly,
WILL WILSON
Attorney General of Texas
W. V. Geppert
Assistant Attorney General
MMp:gs
APPROVED:
OPINION COMMITTEE
George P. Blackburn, Chairman
B. H. Timmins
John B. Webster
W. V. Geppert
REVIEWED FOR THE ATTORNEY GENERAL
By:
James N. Ludlum