Untitled Texas Attorney General Opinion

TEE,~-JTO~NEY GENERAL
OFTEXAS

Honorable Gordon C. Cass
County Attorney
Lampasas, Texas

Dear Sir: Opinion No. O-3156
Re: Whether property of and shares
in Lampasas Federal Savings and
Loan Association are subject to
Taxation.

We have your letter of February 12, 1941, requesting our opinion
a,s to whether (1) the property owned by the Lampasas Federal Sav-
ings and Loan Association (Such as City lots, buildings, furniture
and fixtures), and (2) shares in said association, are subject to
State and county taxes, together with your appreciated brief on
such questions.

The Home Owners' Loan Act of 1933 is found beginning with Sectj~on
1462, Chapter 12, Title 12, U.S.C.A. Subdivision A of Section
1463 reads as follows:

"(a) Creation; directors. The Board is hereby authorized and
directed to create a corporation to be known as the Home
Owners' Loan Corporation, which shall be an instrumentality
of the United States, which shall have author&y to sue and
to be sued in any court of competent jurisdiction, Federal
or State, and which shall be under the direction of the Board
and operated by it under such by-laws, rules, and regulations
as it may prescribe for the accomplishment of the purposes
and intent of this section. The members of the Board shall
constitute the Board of Directors of the Corporation and shall
serve as such directors without additional compensation."

Subdivision (c) of Section 1463 provides that:

"The bonds issued by the Corporation under this subsection
shall be exempt, both as to principal and ineerest, from all
taxation (except surtaxes, estate, inheritance, and gift taxes)
now or hereafter imposed by the United States or any District,
Territory, dependency, or possession thereof, or by any State,
county, municipality, or local taxing authority. The Corpora-
tion, including its franchise, its capital, reserves and sur-
plus, and its loans and income, shall likewise be exempt from
Honorable Gordon C. Cass, page 2 O-3156

such taxation; except that any real property of the Corpora-
tion shall be subject to taxation to the same extent, accord-
ing to its value, as other real property is taxes...."

The organization of Federal Savings and Loan Associations is
authorized by Subdivision (a) of Section 1464, U. S. C. A,, which
reads as follows:

"(a) Organization authorized. In order to provide local
mutual thrift institutions in which people may invest their
funds and in order $0 provide for the financin- 'of the homes, the
Board is authorized, under such rules anu regu Batiori3, as it
may prescribe, to provide for the organization, incorporation,
examination, operation, and regulation of associations to be
known as *Federal Savings and Loan Associations,' and to is-
sue charters therefor, giving primary consideration to the
best practices of local mutual thrift and home-financing in-
stitutions in the United States."

Subdivision (f) said Section 1464 reads as follows:

'f(f)Associations as members of Federal Home Loan Bank. Each
such association, upon its incorporation, shallbecome auto-
matically a member of the Federal Home Loan Bank of the dis-
trict in which it is located, or if convenience shall require
and the Board approve, shall become a member of a Federal
Home Loan Bank of an a~djoinirigdistrict. Such associations
shall qualify for such membership in the manner provided in
chapter 11 of this title with respect to other members,"

Subdivision (h) of said Section reads as follows:

'l(h) Exemptions from taxation, Such associations, including
their franchises, capital, reserves, and surplus, and their
loans and income shall be exempt from all taxation now or
hereafter imposed by the United States, and all shares of
such associations shall be exempt both as to their value and
the income therefrom from all taxation (except surtaxes, es-
tate, inheritance, and gift taxes) now or hereafter imposed
by the United States; and no State, territorial, county, muni-
cipal, or local taxing authority shall impose any tax on such
associations or their franchise, capital, reserves, surplus,
loans, or income greater than that imposed by such authority
on other similar local mutual or cooperative thrift and home
financing institutions."

Subdivision (k) of said Section 1464 reads as follows:

w(k) Federal Savings and Loan Associations, or Federal Home
Loan Banks as fiscal agents of United States, When designated
for that purpose by the Secretary of the Treasury, any Federal
. -

Honorable Gordon C. Cass, page 3 O-3156

Savings and Loan Association or member of any Federal Home
Loan Bank may be employed as fiscal agent of the Government
under such regulations as may be prescribed by said Secre-
tary and shall parform all such reasonable duties as fiscal
agent of the GoTrernment as may be required of it. Any Feder-~
al Savings and Loan Association or member of any Federal Home
Loan Bank may act as agent for any other instrumentality of
the United States when designated for that purpose by such
instrumentality of the United States. (June 13, 1933, c. 64,
5, 48 Stat. 132; Apr. 27, 1934; c. 16t?,5, 6 48 Stat. 645.,
646; Nay 28, 1935, c. 150, 18, 49 Stat. 297.j

The Federal Home Loan Bank Act is found beginning with Section 1421,
Chapter 11, Title 12, U. S. C. A. Sub-division (cl of Section
1426, U.S.C.A., makes provision for stock subscription for members
of the Federal Home Loan Bank. Section 1430, U,S.C.A., makes pro-
vision for advances or loans by the Federal Home L,oan Bank to its
members. Section 1433, U.S.C.A., provides certain broad exemptions
from taxation for the Federal Home Loan Bank, but it is not pro-
vided that such exemptions shall be available to members of such
bank.

The fact that Congress expressly clothed the Home Owners" Loan
Corporation with exemption from any taxation except upon its real
nroperty (Section 1463~) and extended the same exemption to Federal
Savings and Loan Associations from taxation by the United States
but as to local taxation merely provided that "no State, terri-
torial, county, municipal, or local taxing authority shall impose
any tax on such associations as their franchise, capital, reserves,
surplus, Loans or income greater than that imposed by such auti:ority
on other similar mutual or cooperative thrift and home financing
institutions, "we think leaves the State and counties free, so far
as the Federal statutes are c oncerned, to tax both the real and
personal property of Federal Savings and Loan Associations, as well
as shares of stock therein, The Congress merely took the precau-
tion of protecting them from discriminatory taxation, which our own
Constitution and statutes also forbid,

Article 8Sla-57a, Vernon's Annotated Civil Statutes, reads as
follows:

"Every Federal Savings and Loan Association incorpornted un-
der the provisions of Home Owners * Loan Act of 1933, as now
or hereafter amended, domiciled in the Sta~te of Texas, and
the holders of shares or accounts issued by any such associa-
tion shall have all the rights, powers, and privileges, and
shall be entitled to the same exemptions and immunities to
which building and loan associations organized under the laws
of this State and holders of the share or share accounts of
such associations are entitled."
 .

Honorable Gordon C. Cass, page 4 o-3156

Neither in Article 88la-53, Vernon's Annotated Civil Statutes,
Article 7150, Revised Civil Statutes, nor in any other Texas
statutes, do we find an exemption of any of the property men-
tioned by you from State and county taxation -- even if Article 8,
Section 2, State Constitution, would permit the Legislature to
extend such an exemption.

Answering your question, it is our opinion that all of the property
in question, including the shares, is subject to ad valoretn taxes
levied by the county and State.

Yours very truly,
APPROVED FEB. 21. 19h.1
GERALD C. MANN .' ATTORNEY GENERAL OF TEXAS
ATTORNEY GENERAL OF TEXAS

By Glenn R. Lewis
Assistant
GRL:lm:ml