Gerald C. Mann
Hon. George Ii.Sheppard ‘Opinion 100. O-3834
c0mptr0im 0r Public Accounts Rer Concerning the
Austin, Texas assessment for taxation
of shares la Federal
Savings and Loan Asso-
Dear Sir: ciatldns.
We have your letter of July.30, 1941, requesting our
opinion in response to the following questlonst
“1. Are Federal Savings & Loan Associations
required to pay ad valorem taxes on their shares
outstanding?
“2. Are Federal Savings and Loan Assocla-
tions domiciled in this State required to render
their pro arty for taxes on the basis set forth in
Section 5fi of the 1929 Building and Loan Act,
known as Article 881(a), Section 53, V.A.C.S.?*
Article 88la-57a, Vernon,‘s Annotked Civil Statutes,
reads as followsi
“Every Federal Savings and Loan Association
incorporated under the provisions of ~Home Qwners’
Ioan Act ol 1933, as now or hereafter @ended,
d?mlclled in ~the State of Texas, and’the holders
of shares or accounts issued by any suoh associa-
tion shall have all the right.%, powers, and privl-
leges, and shall be entitled to the same exemptions
and lnunuh~tles to whloh bulldiag ‘,a& loan assocla-
tions organized under the laws of this State and
holders of the share or share accounts of such
assoclat Ions are entitled. n
Subdlvigloq (h) of Section 1464, Title 12, U.S.C.A.,
reads t
l’(h) Exemptlong from. taxation. Such associa-
tlons,, includipg their franchises capital; reserves,
and surplus,, and ~thelr loans and i ncome; shall be
exempt from all taxation ‘now or here’after Imposed by
the United States, and all shares of such associa-
tions shall be exempt both as to their value and the
Hon. Georgs H. Sheppard; page 2 (O-3834)
income therefrom from all taxation Coxcept sur-
taxes, estate inheritance, and gift taxes) now
or hereafter 1mposed by the United ~Statrs; and
no State, territorial county, munlclpal, or local’
taxing authority shali impose any tax one such
associations or their franchise, capital, reserves,
surplus, loans, or Income greater than that im-
posed by suoh authority on other similar local mu-
tual or coo{eratlve thrift and home financing ln-
stitutlona.
Artlole 88la-54, Vernon’s Annotated Civil Statutes,
reads as followsc
“At the annual meeting or at any meeting
called for that purpose, any two or more building
and loan associations organized undar the laws of
this stats may, by vote of two-thirds of all share-
‘holders of each of the different associations, re-
solve to consolidate into one association upon such
terms as shall be mutually agreed.upon by the di-
reotors of such associationsi or any such assoola-
tion may transfer its engagements, funds and prop-
erty to any other such association upon such terms
as may be agreed upon by its board of directors,
whrn approved by two-thirds of all the shares of
all members convened in special meeting for that
purpose, the notice sent to each member of record
speolflcally stating the object of the meeting; If
such notlos shall state affirmatively the terms
upon whioh such consolidation is contemplated and
shall stats that any member not present at the
mestlng in pereon or by rrpresentatlvr will be re-
,garded as having voted for the transfer or consoli-
dation, su@h absent member shall be counted as
bslng among the required two-thirds affirmatlva
vota but suoh transfrr shall not prs judlcr ths
rlgh t of any orsdltor of any such aasoclatlon to
hevs paymsnt of his debt out of the assets and prop-
erty thereof, nor shall any crsdltor be thereby ds-
prlved of or pre judlcrd in any right of action then
existing against the offlcsrs or direotors of said
aasooiatlon any nrglsot or misconduct providing
that ths reorganized association shal i be liable
for all obligations to stockholders of the assocla-
tlons existing prior to such consolidation, and
providing further, that no consolldat.ioa or trans-
fer provided herein shall taks rffeot until the
terms and conditions have been approved by the Bank-
ing Commissioner of Texas, and until a copy of the
Hon. George 8. Sh4ppsrb. pagr ,3 (O-38344)
rssolutioa, csrtlfled by a maj.orltp of the board
of dlractors .of each association, shaI1’ bo filed
,. with. said Banking Cossslaslonsr of Texas~, and re-
cordsd in the. same mannsr herrlnbrfors provldid
for amendments to charters.*
In our ~‘oplnlon, Ho. O-&i6 we held that shares in a
.Federal :Savlnga and Loan Assooiatlon are subject to taxation.
. In ~that, opinion WI ware not .oalled upon to advise a4 to whom
the Ians should bs taxab.ls~, thet, ls, as ‘to the Asroolation or
to the owmr. Hwever, these shares being prop4rtg, they
would clearly be taxable to the owner, not to the Association.
Article 7152, Relrlsed Civil Statutes., provides in part:
!‘AlI~groperty shall be listed or rendered in
thr namer f ollowingr
“(l)L.Bp the owner* Bvery person of .full age
and sound mind,, being a resident of this State.,
shall list all of his real estat4, monsys, orsdlta,
bonds nor stock of joint stock or other oompa~si4s
(when the pro ertp of such company:,18 not.,asse.ss@ .
in this State P , moneys loaned or invested., ahhul-
ties, franchises, royaltlss, andall other. property.
::
n* + *a
See also, Artlclss 7161 and 7162, Sectlons.3’7, 38
and 43, Bevlssd Civil Statutes. Pour first question is there-
fore answered in ths negative. This, however, la not to ,be
oonstrusd as saylag that aonry on hand which has been racelvea
by such ah Assoclatloa through ths issu5r4c4 of any such shares
doss not hats to bs listed as an assrt uadrr (01 of Article
881a-53. It should be so listed.
We pass now to a consldsratlon of your second ques-
tion. On May 12, 1938, Assistant Ottornsy General Ullllford
advised you in substance that the proprrtlss of these Assocla-
tions should be assessed as provldrd la brtlclr .881a-53 far
building and loan associations, with which opinion we substan-
t lally agrss. In view of Artlolr 8, Section 1 of the Statr
Conatitutloa, providing that “all property la &his &ate whether
owned by natural persons or corporations, other than nun i clpal,
4hall be taxed in proportion to its value, which shall be as-
certained as may be provided by law, u such Associations certainly
can have no complaint to the application of Article 881a-53 to
thsm. Ye say this particularly In view of th4 permission given
by the statute to maks d4duotioAs (o-1) and (o-2). The prop-
erties of such ah Association should be assessed and consist of
three itema, (a), (b) and (cl. Item (a) is the value of office
Hon. George H. Smppard, page 4 (O-3834)
-
furniture and fixtures. Item (b) la the value of real estate.
Items (a) is the value of all its assets, less three deductions,
viz: (1) accounta payable end notes payable, and (2) book
value of shares outstanding, and (3) the assessed value of the
fbrnlture and flxturs5 ahd real estate’held by the association
and rendered by it for taxation. The sum of items (a), (b) and
(c) will be the total assessed value of the properties of the
Association.. If other properties in the county are systemati-
cally assessed at a percentage of value less than the whole,
the properties of such 4asoclations, of course, will receive
the same treatment.
Yours very truly
ATTORNEYGEtWtAL OF TEXAS
By /s/ Glenn R. Lewis
Glenn B. Lewis, Assistant
APPROVEDAUG18, 1941
/a/ Gerald C. Mann
ATTOFWEY GENIAL OF TBXAB
APPROVRD:CK&HIO~NCK$TEE
BY: J
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