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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