Hon. H. B. Rider
DeputysanklugChnl~eloner
DepartrmcmtofBanking
Au&in,  Teuae
Dear   Sir:

                                opinionNo. O-519
                                Be: Conetltutlonallty
                                                    of SenateBill
                                    No. 295,now penMng.
          '~lrie.wiu
                   wsnowledgereceiptof your *tter of mmb 16, 1939,
invhloh,ou requestthe opinionof thisDepeLrlmntasto taleoon&ltn-
tionallty of 6sllst.e
                   BilLI
                       Boo.295,nov pendln~In the Senateof Tw?ie,a
copy of vhlchyou enoloeedwithyonr letter.
              SenateBlllIlo.295 readsae follover
                                  "A BILL
                              To Be Entitled
            “An Aot to emendArtale 538 Of t&e ReYlee6'civllStatut0e
       80 (LBto providebank- serviceaend fhoilltiee  to em&'&t
       hadng auoh service;prmidlnfjoertain'reetridtiini2;~r+iling
       all lavsor parteof lawe in conflictherevlth,and declaring
       an emergency.              ~.
       "Be it enactedbythe Legislature
                                     of the Stateof Terse:
            "Se&ion 1. AmendArtiole538 of the RevleedCl~ilStatutaa
       60 aa tohereafterread(LBfollow:
            "'Art.538. Branohbanks. Ipobankingcorporations   organlaed
       underthe lava of thie State shallever engag>inbveineseatm?re
       than one plaae, whichshallbe ~eslgoated in lte oharter,exoept~~~
       .underthe con&ltloaehereinafter set out. Covntqor Statedeposl-
       toriesor countydepositories  not looatedat the countyaeat;'and
       ordhary clearinghousetrensaotione   betveembanke,are not affeoted
       by thisextiole.
Eon. IL B. Rider,Page 2 (O-519)


         nItehallbe lawfulforenybankto ftlrnleh
                                             and engply
     banklugeenloee,and faollltlee to areaeor oammltlea in which
     nobank la looatedandno bankingeervloee   orfaollltleeare
     available;provided, however,that the parrmtbank ehallnot
     furnlaheuoh servioeeand faollltlee to any area or oornmanlty
     looatedeleewhere otherthan +Ae oouutqin vhlohthe pamat
     bank is Moated; and providedfurther,thatbeforesuohparent
     ~JX& e&alleetabllmh and grantsucheenloee and faoilltlea,
     the oapltalofeaohparentbank ohallbe rainedten per oenlt.'
         “Sea.2. .All lfbwtv
                           or parteof lave lu ooufllotwith the
     provlslon~of thinAotarehe~~eelprerelJIre~a~d     to the
     extentof euah oonfllot.
          *sea.3. l%e faot that-    areasawl oammltlee are
     extremely           at presentby reaeonof the laok of
               handioapped
     bankingeervioeeand faollltlea,oreateeen -r-y       and an
     imperative publlaneaeseltythatthe Conet1tut1ona1Bul.e
     requiringblllm tobe readon threeeereraldayfs  ln eaohHoaee,
     be suepended,andthe eeme l~herebyen8peided,  and thisAot
     a&alltakeeffeatarrdbeIn foroefromand after lta paeeage,
     and.It IE 80 ennoted."
         The bill as hereinabovequotedpropoaeato authorize  any bank “to
furnishand supplybankingservices  and facllltieeto areasor coumamltiee
in whichno bank i8 locatedand uo bankingpervicesor facilities are avall-
able.” Althoughthe proposedbill doeenot specifically  otatethatbranch
banksare to be eatabllahed,it appear6to be quiteimpoee1bl.e for the
servicespropoaedto be furnlahed to be made availablein any otherman-
ner exceptby and throughthe establishmentof branchbar&slu the coumu-
nitieenot now served.
         Article16, Section16 of the Conatltution
                                                of the Stateof Texas
readsas followe:
        “TheLegislature shallby generallaw@,authorleethe ia-
    corporation
              of corporatebodleewithbankingand diecouutiag
    privileges,
              and shallprovidefor a eyatemof Statesupervl-
    slon,regulationand controlof euchbodieswhichwill ade-
    quatelyprotectand securethe depositors
                                         and creditorsthereof.
       “No such corporatebody shallbe chartereduntilall of the
    authorizedcapitalstockhas been aubecribedand paid for in’
    full in cash. Suchbody corporateshallnot be authorized to
    engagein businessat more than one placewhichshallbe des-
    iepatedin its charter.
         “NO foreigncorporation,
                               otherthan the nationalbanksof
    the UnitedStates,shallbe permitted to exercisebankingor
    discountingprivilegesin this State.”
Hon.M. B. Rider,Page 3 (O-519)


           We respectfully
                         callyourattention
                                         to that portionof Article
16, Section16 of the Constitution
                               whichprovides,"Suchbody corporate
ahaIlnot be authorizedto enga.ge
                               in buelnessat morethan one placewhich
shallbe designatedin its charter."
          It Is the opinionof thisDepartmentand you are so advisedthat
the proposedSenateBillNo. 295 is unconstitutional for reasonof being
In directconflictwiththe abovequotedprovisions   of Article16, Section
16 of the Constitutionof the Stateof Texas.
           Trustingthatthis satisfactorily
                                        disposesof your question,
ve are
                                               Very trulyyours
                                          A!PPORNEYGSNERALOFTEXAS
                                          By /a/ LloydArmstrong
                                                 LloydArmstrong
                                                      Assistant

L4:AW:IM
APPROVED:
/a/ W. F. Moore
FirstAssistant
ATIOPJiEIGENERALOFTEXAS
