            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
