                              ATTORNEY GENERAL OF TEXAS
                                           GREG        ABBOTT




                                             November 20,2012



The Honorable Jo Anne Bernal                        Opinion No. GA-0977
EI Paso County Attorney
500 East San Antonio, Room 503                      Re: Whether a county bail bond board may permit a
EI Paso, Texas 79901                                licensed bail bond holder to change part of the
                                                    collateral he or she posted as security (RQ-1067 -GA)

Dear Ms. Bernal:

        You request an opinion regarding the authority of a county bail bond board ("Board") to
"accept a combination of cash and real property security from a licensed bondsman."1 Specifically,
you ask whether a Board can "authorize a licensed bail bondsman to withdraw a portion of his
deposited or executed security and replace it with a different type of collateral if doing so results in
a combination of security types to meet the minimum security requirement under [section] 1704.160
[of the Occupations Code.]" Request Letter at 1.

        When a person in a county with a Board applies for a bail bond surety license and the
application is conditionally approved, the applicant must "deposit with the county treasurer a
cashier's check, certificate of deposit, or cash in the amount stated on the application under Section
1704. 154(b)(2)(E); or ... execute in trust to the board each deed to the property listed on the
application under Section 1704.154(b)(3)." See TEX. OCC. CODE ANN. § 1704.160(a)(l)(A)-(B)
(West 2012) (emphasis added). Neither the monetary deposit nor the total value of property
executed in trust may individually "be less than $50,000." Id. § 1704. 160(b), (d). This office
concluded in Attorney General Opinion JM-875 that the statutory predecessor2 to section 1704.160
did not authorize the Bexar County Bail Bond Board to accept a certificate of deposit for $20,000
and a real property deed valued at $30,000 from an applicant to satisfy the $50,000 minimum
security amount. See Tex. Att'y Gen. Op. No. JM-875 (1988) at 2-4. However, you tell us it is
"unclear the extent to which ... JM-875 applies to a licensed bondsman, as opposed to an
applicant." Request Letter at 2. As explained below, we conclude that JM-875 remains correct, and
its analysis is equally applicable to a licensed bondsman.



         ILetter from Honorable Jo Anne Bernal, El Paso Cnty. AU'y, to Honorable Greg Abbott, Tex. Att'y Gen. at 1
(June 4,2012), http://www.texasattorneygeneral.gov/opin ("Request Letter").

        2See Act of June 1, 1987, 70th Leg., R.S., ch. 921, § 2,1987 Tex. Gen. Laws 3109, 3110.
The Honorable Jo Anne Bernal - Page 2            (GA-0977)




         In examining a statute, our goal is to give effect to the Legislature's intent as expressed
in the statute's plain language. See R.R. Comm'n of Tex. v. Tex. Citizens for a Safe Future &
Clean Water, 336 S.W.3d 619, 628 (Tex. 2011). Section 1704.160 uses the disjunctive word
"or" in expressing the two avenues available for posting security. See TEX. OCC. CODE ANN.
§ 1704.160(a)(1)(A)-(B) (West 2012). An applicant may make a monetary deposit or he may
execute real property deeds in trust to the Board. See id. The amount an applicant must post, in the
case of a monetary deposit, is "the amount stated on the application," and in the case of real
property deeds, is "each deed to the property listed on the application." Id. Regardless of the
avenue an applicant chooses, the value of the posted security "may not be less than $50,000." Id.
§ 1704.160(b), (d). If the license holder fails to maintain the security amount posted, the Board must
immediately suspend the license. Id. § 1704.253(a). Because the plain language of the statute places
an obligation on a licensed bondsman to maintain "the amount of security required by [section
1704.160] ," a licensed bondsman must keep intact the amount and type of collateral indicated on his
or her application throughout the period of licensure. Id. § 1704.1600). Any substitutes for the
initial collateral type are precluded by the statute. Thus, in answer to your first question, a licensed
bondsman may not withdraw a portion of the security deposited or executed under section 1704.160
and replace it with a different type of collateral.

        Your second question is whether a Board may "authorize a bondsman to post additional
security in a form different from that originally deposited or executed after the initial minimum
security deposit required under [section] 1704.160 has been satisfied." Request Letter at 1. You
point to two statutory provisions that, in your view, "do not restrict the type of security that a licensee
may deposit or execute to add to or replace security to the same type of collateral as that originally
deposited under [section] 1704.160." Id. at 2-3 (discussing sections 1704.203 and 1704.206); see
also TEX. OCC. CODE ANN. §§ 1704.203 (West 2012) ("Bail Bond Limit; Additional Security"),
1704.206 ("Replacement of Security"). We discuss each provision in turn .

         The first provision, section 1704.206, concerns the replacement of depleted security. See
TEX. OCC. CODE ANN. § 1704.206 (West 2012). If a license holder fails to pay a final judgment on
a forfeiture of a bail bond, the judgment is paid from the security deposited or executed under section
1704.160. See id. In such a case, a license holder "shall deposit or execute additional security in
an amount sufficient to comply with [section 1704.160]." Id. (emphasis added). By requiring that
the replacement security must comply with section 1704.160, the statute requires that the
replacement security be of one type of collateral or the other in the amount indicated on the
application, which amount may not be less than $50,000. See id. § 1704. 160(a)-(b), (d). Thus, to
the extent that the posting of replacement security under section 1704.206 merely replaces that
portion of the initial security that has been depleted, the replacement security must be in the same
form as the existing collateral.

        The second provision you raise, section 1704.203, establishes bail bond limits for individual
license holders for bonds they execute in a particular county. See id. § 1704.203. The extent of a
license holder's authority to execute bonds depends upon the dollar value of outstanding bond
obligations as compared with a multiple of the value of the property held as security or in trust for
The Honorable 10 Anne Bernal - Page 3           (GA-0977)




the license holder under section 1704.160. See id. This bond-to-security ratio sets the limit on the
dollar amount of bonds that can be executed. Section 1704.203 provides that "[a] license holder, at
any time, may increase the limits prescribed by this section by depositing or executing additional
security." Id. § 1704.203(d). You argue that additional amounts deposited or executed for the
purpose of increasing the bond-to-security ratio may be "in any form." Request Letter at 3. A
deposit or execution of additional security under section 1704.203 does not contemplate the
disturbance of the original security under section 1704.160, which remains intact in a single form
of collateral. Because section 1704.203 does not otherwise limit the type of collateral that may be
posted to increase the bonding limits, we see no reason why additional security could not be posted
in a collateral form that is different from the one originally posted to meet the requirement of section
1704.160. We find support for this proposition in subsection 1704.203(f), which sets forth the
various bond-to-security ratios on a sliding scale based on seniority. See TEX. Occ. CODE ANN.
§ 1704.203(f) (West 2012). Under that subsection, a surety licensed after September 1, 1999, who
has been licensed between two and four years "may not execute ... bail bonds that in the aggregate
exceed 10 times the value of property held as security under Section 1704. 160(a)(l)(A) plus six
times the value of property held in trust under Section 1704.160(a)(l)(B)." Id. § 1704.203(f)(2)
(emphasis added). If the Legislature had contemplated that the total amount of securi ty posted would
be limited to a single collateral type, it would not have referred to the simultaneous holding of two
different types of collateral in expressing the bond-to-security ratio. See In re Allen, 366 S.W.3d
696,706 (Tex. 2012) (quoting State v. K.E.W, 315 S.W.3d 16,21 (Tex. 2010)) ("every word or
phrase in a statute is presumed to have been intentionally used with a meaning and a purpose").

        Thus, in answer to your questions, to the extent that replacement security posted under
section 1704.206 replaces a portion of the initial security that has been depleted, the replacement
security must be in the same form as the existing collateral. By contrast, additional security posted
under section 1704.203 beyond the amount initially posted may be in a form different from that
originally deposited or executed.
The Honorable Jo Anne Bernal - Page 4        (GA-0977)




                                      SUMMARY

                       A licensed bondsman may not withdraw a portion of the
               security deposited or executed under section 1704.160 of the
               Occupations Code and replace it with a different type of collateral.

                        To the extent that replacement security posted under section
               1704.206 of the Occupations Code replaces a portion of the initial
               security that has been depleted, the replacement security must be in
               the same form as the existing collateral. Additional security posted
               under section 1704.203 of the Occupations Code beyond the amount
               initially posted may be in a form different from that originally
               deposited or executed.




DANIEL T. HODGE
First Assistant Attorney General

JAMES D. BLACKLOCK
Deputy Attorney General for Legal Counsel

JASON BOATRIGHT
Chairman, Opinion Committee

Becky P. Casares
Assistant Attorney General, Opinion Committee
