             OFFICE      OF THE ATTORNEY GENERAL            OF TEXAS
                                   AUSTIN
 GROVER SELLERS
 ATTORNEY GENERAL


govorabls n. A. Javllvon,Celmlmsianor,
ntste n+artwnt of Bllrkhlg
Austin, Tuaa
pssr   Mr.   damlsonr                  0pialm no. 0-aa81
                                       Ro: Wb8tber




                                                           IwJgb the t.tl.ra1
       ImeLoanBamk                                          ntirawt       pro-
       grw rhloh erl                                       aore and    vmplo7evs
       if the rariou                                        batb8olYieaatl~
       boon UtenQotl                                       u8 benefita et tbo
       plan to be at                                       d uplefscbo Of


                                            a nednal anwal       prrim,
                                          d by tbo  rploteeo and off%-
                                           tdafi6n and part to be psld
                                       pore all vvder a vpveial trumt
                                 rem    adopted      by duly dedgwtml
                                   . It39 l
                                          1lvo prrrided in the
                                 pralum r7 be pm16 aoreria(l: the
                               the offiaere snQ smplo~ees vhioh
                           a mtber Iargo vutla7 of fwdn or sost
       08 tbs p8rt of avmv of our lmsoalatlono. Speslfie~l-
       17 in 8 amber df QUHS eomputatloaoP the prwlm
       that would bs due In order te vntvblivhbenefits cvw-
       wing  prier s4tnlcrsr~gre~tas *we ~~90eOOOd0to
       $40,000.00.
              .It     becoaes pertinent    for Us to deternine        rhethsr
       or not       guoh an inrootwnte     if   it    bo am Sarvvtavnt,1s
       permittedh7 wr lavv and it           w 80~0 direotion as to m
       lpprcpricte       entry   on the books of the 8smcaiatian cover-
                                                                           359

povvrsbleFf=1. Jan1140r1
                      - Page 2




    lag    tbs   WtlaJ   of   nlnds.   The anbjeet matter
                                                     3s et
    suah lmportanoe and          in the lC;gre@ata intolrem
                                                       #b-
    mtnntlal   amm oi money thst we are eonstralmea $e
    lttaeh hereto II baeklet rhtab aentaim    the mfee
    and reffulationm applicable ta the retirument    rrm4
    of the Faderal Rome L4av Rank aatca as well an the
    by-laws vh¶sb hsre bean &Wptsd by- tbe trustearn     of
    tbe fWd.
            'Your rtttmtlon Iv dineted         te   aeatioll   88 4? #I4
    building and lenn laws and apeoltiorl?7ta that por-
    tion of the seotioa whiah reeds be tolYovvI

                g'kWery avvoalatlonell@ble to bewme a
           member of a Federal Ilo# Loan Ilank under the
           groHdana    of the A4t ef (kqreea kn~vv as tbe
            Fader81 iMa      11oab uank Aatr lppreved JuY7 W,
           1922, am amnued ana an me7 hereefterbe enesul-
           aal.la autbarlaed to do 411 tblag4 a4 a7 Be w-
           qutred or permitt        under u2d Aet, or auy amend-
           ment therote,     ia or%sr W obtain, oeatlnue,or
           temlnate rmeh MPBermbipI an% to lem          4¶1 the
           dvt*ea, obll&atiensr revwvaelbllltfruvnd flds~l-
           itlee lnQ bee01114   entitled to all of tbe bemaflte
           pr~~laed iQ aid Aetr aa uclat14de~3 8a ew
           hereafter be meadatY-"
          ,If the quotmd aeetloa ebould 144% legal aUpp0rt
    to the aat at an aemoaiatlon on mubaeribin@ for pw-
    tlalpatlenin the retiremsat      fund alaathe pnymelbt af
    aeaemrly    saouate  to qu*llQ tbetetin%er e then we ehOt0%
    like rdrice    as to the entry that ehrnld be made by the
    neuei8tiW an am OffSOt t0 tb4 044 Of tb4 fU4d4 tram-
    aitted to the trtmtae8 Sn behs~ltof the evplojee4 of
    the lemmlatlm,      tor mush emtry vi11 bear ti lspf vlg-
    nlfleenae under stber meatlenmat the law vhlcrb have ta
    de vlth r4aewea# umllvided proflts avl qwratlnlt       4x-
    pan840*

          lTt It vhmld Tel3 ow tkat    pmrt¶olptlos   in ~leb s
    pSan ns herein refarre%    to is lawful under that portion
    of fieotion 38 hereinsbore    qnota%* roe?% it foYY ov thr t
    the hnard ot dlrectorn    ronld be autborlsed   to oharge
    their romwe    ar Wl%iti%S% plWfit    lWtIS8t, pre8UdIl(t
    thmt the *ante Is in exdoea of the amount required     b7
    1sv aorerlva the vast of mash pvrtiolpatlem or would
    jt    folYM that the tUktUm of th4 Wav4a8tfOU ia #UCh
    that    the eharpe or ontry nn~Y% hare to he nabs,i$@nat
    f@nornbleII.A. Jomlean - page B




        the eperatln~ -ame     leoouat? You vi11 no doubt
        reaognlae sonslderableirpartraae to this pbar of
        aur InqulrJ for if it abould be bald that the ooet
        of pxrtlelpetloala the plan met be aanvtruedl v an
        opereflng expenveI thev it light follav that a nm-
        bar of o urleaoa~atlonm aould not partloipste la tbe
        plan ror the abxorptlovol vuvb an apemae dnrlab: a
        alx or tvelre mtbs period rl@t be #&I& lo te lltb er
        amve a reilustlonin tbelr (Utldend rate  or craw4 the
        aemolatiom to oenalude aat to ~rtlelpte    in the pm-
         ?F-•
                   "Tbur In snmaryr we are inquiring atito vhatber
        or   net     i State abartered UTjIbg4 aad lean anmQeiathm
        08x1psrtlolpak la the retlrammt plon   af tba U’odml
        ilaw Loan Bank Syatom and If ea vbethet or mot tba
        soot of ~rtlsipetien muet be abergod te tb8 aeaoaia-
         tion’m opentIn       erpenme leeemt or a7    It be eba*
         to th e
               lesaeiati~a'e tmdiTided prefit       or weewe   8b
        @aunt pIWTi48d eveb 8eaouate are       In lxeeee at mte
        premedbed by lrv lnQ tbe lberse ma rde         will net 10-
        dam6 tha        to munte   Wee   tb88 la prewribed b7 law.*

              Yen baTa eerreetly 4tetaU t&e parfluent p@rtlOne of
    8eotlaa 91, Artlale (Ibla, of the krleed aTi1 8htatee (Vernea'
    Cedliiastlor),thu cane belag eanklrnd la Lkb&lrleiw 8 tbereaf.
              Ihs Retirament Rmd mentlaaed b7 7an appear0 te be
    areated and adminlrtered unQer a aealaretlaaof tlw&   *blab la
    xv unlnwrponted lawvlatlon , aompamatl of sertaln nsmetlloderal
    Ew~LoanBank*~    butvitb 4 plPTidOmfar   tba l4mleeleu efatber
    Bow Low Ba8ke 8meeMiag to the lgremnt 6

                ¶¶I¶@ dee1autian OP tcuetr loaordiag to the printed
    g r o a p a etns
                 loeampnayln~ your inqul~7, sontelas the pmtiden:.
     Vbemsv tbe eetxbllvbmentat tbe uld Retl:reatemtton4 of tbe
    Fa&~rat llwe Loan IBaulrbjete& and the rules *ad reguPIatieme
    la aormeetlantharcn3tb hate boon duly    lppr@Ted BT the Pe&enl
    IhO   Lean Bank A&mlnlvfratfan~gvhlah we interpret tv mew the
    urr~ertsklng haa been duly SppraT4d by t?m Fedsrvl Fkmv bean Bnnk
    Boar% of tbv vtatuts. tU.s.C*A.   Title l*, 8eo* 1437)
                   It In the opinion of this depsrtment tbet the    qme,$ed
    portion  of 6eatlon .Tphoreinabere vet out 8a(lvsatharixe State-
    @hertared nrlags ad    low lmsoaletions   to pwti6ipote In the
    RotlrvmentPlan at the Federal llomeLean Bank Byntea b1p611belag
    4Ilgible an8 beaeemin~ a momber of s Pedsral  Home LOW Bank4




t
                                                               ”
                                                                    361


newerable   He A. J&non      - pa,g~ 4




            T h is lnrerm   par   flr mti8qairye

          We apoak nm with rempeat to your meoond laqu*ry.
fhlr lntalret~a question ot bookkeeplsK prlmarlly, perhaps,
but nmerthelems a qw8tlon of law , a0 you lndioate, la prob-
ably imo1rsB.

              It im the eplnloa et thlm departmettt that the de-
dw&lonn frea the rlarlom a? apleyeoo lheuld~ of eourae.
be earrled In the leaeuntm am an eperatlag expeamo~ ier in-
dlmput8blJ it Is a part at malarleo proper. Llkewlme, we
tbialrtbo oentributlonoof the apleyor nbould be oarried am
0pratlnR exporr~~~~ mob itw im in the nature et a mlary,
&tee It lm a part ot the emoYant?tfor tbe mnlee,          a8eb
eelrtrllmtion,    along rlth the doduotion ?rem ulary,   going te
enIreup the fund. It la wrmly a deforrod fttrtltar wra-
tlon for tbe amplo7ee's menloe.
            The oplnlen la Byrd 7. Qltf of DmlYam, 0 1. V. (8)
WBR,   mupp6rtm thlm reamobing~ In @tat opiaion it la uldt
              "Thor0 la ttoreamea why a olty say net *
       gagm ltm mewanta     and 0mpIoyoem upon 8th~ tema
       o f p a y m elnt
                     oaeptah?o  ta beth prtloa. The plm
       autborlmed by the Matute wtttaplates       in '10-l
       offoat tbmt a# wwpmartlon t&o ltiieer~ and e
       ple7eoa naamd mha3l~reeol~otho rlarlea lgued
       upon to bo paid perlodlaally and &al1 be en-
       titled to ~rtSofpto      tn the fund prevldod far
       pen*lous lcoordlttgto the rtatutoryplan. The
       Yaw pertaInin* to maob ample-at lm neoemmarily
       8 pm-t of the eontmet of ~loymont       and lo read
       loto the eoatraat aa ialIt as thaq#! it had beon
       lstua?1~ lnoorpawatedtherein 0 l l e When an
                                         l

       ottlow or eapleyu ooaln6 Within the mtatute 1s
       mplojed and ovldenoem hle amsent to the pendon
       lbhame, he thowapan bmm a blnd%a# oontrast ritb
       his exaployep for the ltimlatod    ularY and llko-
       wlme fo be 'entitled to partlelpati'la the had
       upon the term6 premsrlbetl~
            .l%e right te partlolpte in web irraa1s
       theretoro not a gratuity or donatlon In any menae.
       It la au RUOR a prrt of the lgreed eompenmtlon a8
       1~ the aonthlr otlpend.'
jpmorable     ti.A. Janleon - page !!




         Tbo fund lnrol+sd in that 6ame was a cltr pnalon
find,   and   dmllar In Ituralefieot t,a the one unfler con-
              ret-y
~ideration.
              Trusting   that   what we hrts   maltlis euifieient   mower
to your ~nquirlor~we are




                                                     A nwi s&.&at
