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          OFFICE      OF THE ArCORNEY         GENERAL    OF TEXAS
                                     AUSTIN




Boaorrblr Qmrlr~          tsokhart
Mate  TreaMrer
Aurtln,       Toraa




                                                   quert    for an opleloa,

                                                        County Clerk
                                                        0 inion a8 to
                                                        4100, R.&S.,
                                              19, qremptr primit*
                                              ularly Y, L. xooay
                                               orated),. Oalvertoa,
                                                 the wmdaent    on
                                               en ln~trumsntr.




~Revlred Bitll        St*tutea   of Perar.
                The Note Stamp Rooording Tax Act, to-tit, orid
              7047r, prorlder thrt %o. . . inrtrummt rhdl br
                                                                         y: -
                                                                                324


Bonorebl6      Charlay   Lo&hart,     page 2


ill@& or reoordrd by u\r aotmty olrrk la this State until
thrre~hsa been affIxad tb luoh Inatrunent     atuapa In aooord-
anoa wIth.the    provieIona* of aald atatuts,   and fixer a tax
baaed upon the amount of the note6 or obligation6       eaour
br the inatrusant     riled or reoordad, and provlaaa   that Ppay-
ment af tha tax . . . ah611 be avId6noad br afflrlng       the
atampa  Iaaued bf the State through ths Btate Treaaurar and
the County Clarka* a6 pr6aorIbad In the atetuta.
          Senate Bill 97, paaaea bj the Forty-aavanth  LagIr-
lature  eh8ngaa the taxing leotlon of the 14w, to-wit, pan-
graph 1.1, by aaaleg lasguag6,  aa iollwar
               I       nor ahall thI8 aectfoa apply to Inatru-
         aanta,'n&      or other obligation8      t&an br or de be-
         &lf of Uatloeal     Bum      Aaroalatlona    org*aIcwd ueaer
         the law6 ot the UnIt.ed 3 tator,     nor lnatluaenta,  notee
         or other obllgatloer    token by or on bahalf of State
         Bankln    Corporation6 of the State oi Taxaa errateb
         under t itle 16 of the Revlard Civil Statutaa of Taxae,
         . . .a
             rfll ba notloed that
               It                    the only *State B6nkIng Cor-
porattona’ exeapted by bald L&mate Bill 97 6ra thoaa loruata&
under Title 16 of the RevIeea Civil Statutea of Texaa.“‘~Ae
lxam;aatIon of aald Title  16 diaeloaea   that the only refer-
ease as&a In it to private benkrln# ~natitutioaa 18 la hrtiole
641 (Chapter 8, Title 16, Revlaed Civil Statute6 or Taxsc),
vhloh read8 aa iollowar
                *It    Ia hemby daolarad       to be the publio
         polloy o? thir .Stata that no addItIon61 wItate,
   .     banking InrtltutIon         or buainaas lh6ll b6 orgae-
         Ired or a6tabllahrd,         and it ah811 b6 ual6tiul
         for say paraoa, aaaooIatIon           oi par6on6, prrtnar-
         ahipa or truateea         aotinq under any oommoelav
         deolaratloe       of truat   to hareartar   orgaelre    or
         latablIah, begin or raaume thr operatlon~oi any
         te:“g       in6titutIon     or bu6lneaa xlthln thle
                     It ahall be the duty o? private          ledIvI&-
         uala ir ?Iraa engaging In the banking buaInaea
         to use after the e6me under whIoh the buaIneea
         la oontluotod,      tha word In paranthaaea      ‘whoor-
         poreted’,      nnd fstlura     to do 80 ahall aubjeot
Fionorabla Oharlay Loekhmt,      pago S


        tha ottaadar to a peneltyof one hundrad dol-
        lars to be aollaated ia the maeeer provItl8d
        la Art1010 491.’
We la   a umathat   the private baeklng InatItutIan  to vbloh you
;;f;;2Ta
       latabllehed          bafora lab¶ Artlale 841 rant into etie4t
          .
              TM18 16 provIdaa   for the lnoorporatioe   of varlooe
ktnaa o? banklng InatItutIona , areatea the o??Iaa o? Banking
CouIaaIonar   a? Taua an4 giver lald 0r?ioar  oertaln powers,
and regulates    the oparatloe o? bank6 In general.  Your letter
ahowa that the private banking ;natItutIon    you ark about la
onIeaorporated.     It balng unlnoorporated, ve era unable to
sea how lt oould be ‘orrated ue&ar Title 16." Tharafora the
lxeeptlon   areatad by 6aiQ Benate Bill 97 door not apply to ft.
              WI vi11 now take up four other quaatIoa.      &apt&r
9 ~ArtIolaa 642 to 849 Iaolua~va) of Iltla        16 o? the lW~*ed
Civil Statutra of Taxaa wee emoted by the Thirty-•lxth          Lag-
Ialatura    la 1917, and 16 provided for the organlratloe an6
operation 0r four bed leveataent oompaaIaa.         The ooapanIaa
orgualrail under raid ohaptar are oomoonl;l keoun as Rorrla
Plan Banks, although thnt      name is not urea In the body o? the
atatota,   but It is used In the herding of bald Chapter 9
(ArtIolaa     842 to 642 inaluaiva)   In the raoodlfioatioa   of the
Revised Civil Pltatutea of Texas aQaptad by the Thirty-ninth
LegIalature     in 1995.  We la a uu that r o tthave rafarmoe   to
the oorporatIoaa     organtrod under the tone o? raid Gh8pter
Q and known as Worrla Plan baeka.
           Chapter 9 o? iltla 16 reuinetl   unohragatlfrom
1917 until  1939, lnU during that tlma Artiole 546 in raid
ohnpter grant4   power6 to the oorporatlona   organlxed thera-
under in language 86 rollowe:
             *her   loan and Invaatnant ooapany, $a add:-
        tlon to the pokers oonfamd    upon oorgorat~oaa >r
        thr general oarporatloe law, ahall have the iollow-
        lng powera t

             ‘1.  To lend aone? and to aeauot Ieteraat there-
        ?or In aavaeoa at a rate not to exoead mix per oant per
Roaombla Qmrlev Lookhart, page 4


     annum, and In addition to require and noeIva
     uniform weekly or monthly inrtallmante      on Its
     oertI?Icataa   of Indebtednaae purohaaad by the
     borrower aImultaneoualy     with the raid loan trana-
     8otIon,   or othrmIse,    ana QledgBa with the oorp-
     oration am aaourlty    for the said loan, with or
     without an allawnnoe of Intareat on auoh inatal&-
     maata.
            l2.  To mall or negotiate bonda, notea, oartl-
     ?loatea OP Inveatmenb and ahoaea In motion for the
     payment of money at the time, llthar flxeb or un-
     oartaln,   and to reoelva paymenta thara?or In ln-
     atallmaata   or otherwise, with or without an allom-
     lnoe of ~nteraat upon auoh Ieatallmenta.

            ‘S.   To aharga tar a loan madr pursuant to
     thla artIala     one dollar far eaoh ftfty dollara or
     fraotlon    thereof loaned, for axpen8aa, Ieoluding
     my exaaInatIon      or InveatIgatIona? the oharrotar
     and alroumatanoea a? the borrower, oo-maker or
     lufaty,    and the drawing and taking aaknovladpent
     of naoeaaar      papers or other axpenraa inourred In
     raking the I our; no oharge lhnll be aolleoted     un-
     leaa a lean ahall have bean made a6 a reault of
     luoh lxaaleatIon     or Inv~atIgat~on.*
            Sn the oaae of Kaliakl v. Qaarett, 109 8.Y. (2d) 640,
(Writ or error   ratuaab) daoldrd by the Oourt of Civil Appeals
at 9m Antonio    In 1937, It warn hqlc?that oorporationaorgae-
Ired and operating under raid Chapter 9 of TItla 16, to-wit,
Xorrie  Plan banks are not oorporatlona   *with tinking and
diaoounting prlvIlegaa.’    That bslng true, they are not Btete
Banking CorporatIone.
          In 1939, by 6enate 3111 266 entItlad   lP o verofa
WorrIa PIan Banka Enlar ad,* the LegIalatura   ohurged para-
graph 2 of Artlole 546 f!above quoted) to raad se tollowar
            ‘2. To reeelva money on time drpoalta,          and
     to purohaae, mall, dIaoount, or negotiate         bonda,
     notea,   oarti?~oetaa    of iavartment and oho8aa In
     aotion for the payment of money at a time either fix-
     ed or unoertain,      and to receive   peymanta therefor    In
     ~nat~llmenta     or otharwtra, with or without an allou-
     anoa of Intareat      upon auoh lnrtallaenta.     To purchaaa
     atook In Federal DaDoeIt Inauranoe         Corporation.    Am
     amended Aota 1939, 46th Lag., p. 72, 6eo. l.*
  .’




Ronorablo Charlrl   Looahart,   &O   8


Seld Senate Bill 968 alro added a new artiole     known a8
Art1010 54Ra, rending 81 follower
            ‘All oarpomt~onr   now ohartared under the
     provlrlooe   of thl8 ohapter ney adopt the power8
     herein grantrd by fllleg    a oertillontr  to ruoh
     effeot with the Comaierlon of BankIng, provld-
     ld however, that the lnooroorE~tlon of oorpora-
     tlonr In the future under thlr ohapter rhall
     n&e appllontlon     to the State Banklng Board 8n4
     be governed by the prorlrlonr     of Chapter 2 oi
     thlr title.    Added Aote 1939, 46th Leg., p. 72,
     Sea; 2.*
              i)nNovember 7, 1939, thtr department held in At-
torney dmernl's Opinion Ho. O-1542 thnt         raid *8enate Bill
WI oon8tltutrr the oorporntlon8 oreated         under ahspoor 9,
rupra (Ch. 9 of Tit18 18) oomorate bodler with banking and
dl8oountlng     prlvll8ge8,   within the aranlng OS the Conrtl-
tutlon,   upon their oempllnnoe with the requlrementr of th8
a06 ltcreli,    the amendment8 thereto,   and thr oon8titution.a
YO 8till     adhere to that ODInion end the Fbn8on8 glren there-
ln, and w8 a r e    lnolo8lng a oopy of the 88.me.
             The rxemptlon oreated by the ~Botr Stamp Reoordlng
Tax amendm8nt, to-wit,      Senate Bill 97 by the Forty-rrt8nth
Legl8latur8,     applies to “note0 or other obllgatlon8     taken
by 0~ on behalf of S t Jn.nklu Qoraorrtlo~           of the State
of Texas oropted under  -sLF ltle lB.*   Are Mom18 Pl8n bank8
‘State    Banking Oorporat;on80a     Under the holding o? the
oa8e of Kallrkl t. Gosrrtt,       8upra, they wer8 not under the
statute    a8 it read st that tlm8, vhloh wa8 w         to th8
parecge of Senate Bill 260 (8ntltlrd        *PowoF Of Morrlr Plan
Banka Enlarged')      In 1939 but under the holding of Attorn8y
tinoral'8    Oplnlon lo. O- i 1142 raid Sonat 8111 268 a~dr them
State Banklng Corporatlonr %pon thelr oomplianor with the
rot lt88lf,     the anrndmrntr thereto,   and thr Conrtltutlon.'
           Our an8wer to your fir86 quertlon 18 that not88 lrsl
other obllgatlonr   taken by or on behalf OS prlvPt8 unlnoorpor-
ated banking lnetltutlonr~ate    not exempt from the tax lerled
by the Note Stan? Faoording Tax Aot a8 amend8d by'Smate       Btll
97, Forty-reventh   L8gi8lbtUr8.
       Honorable   aharl8~   Lookhart,   pwo   6



i,,:
  <               Our an8wer to your reoond quertlon $8 that not08
       and other obllgationr    taken br or on behalf of Rorrlr P&an
       Bnakr (Ire not exempt l? raid lnstltutlon    wa8 lnoorporatrd
       prior to the pnrrage of 98nat8 Bill 266 in 1939 and ha8 not
       rlnoe adopt84 the power8 granted by raid Billi but luah aote8
       and other obligatlonr    are exoaspt if raid lnrtltutlon  wa8 ln-
       oarporated rlnce the lffcctlve     date of raid 0enate Blll 266
       in 1939, or ha8 atlopted ln the manner prerorlbed by the rtat-
       ute the eddltlonal    poverr granted by raid Senate 2111 260.




I‘“~hm-/~
        FIRST ASSISTANT                        ,,@A
                                                 -            '-
         ATTOEiNEY GENERAL                            cool1   0. Rotloh
       CCRIJ8                                                 A88i8taat
i
