                                     OFFICE             ofthe   ATTORNEY GENERAL
                                                          GREG          ABBOTT




                                                        January 17,2003



The Honorable John W. Segrest                                           Opinion No. GA-001 1
Criminal District Attorney
McLennan County                                                         Re: Whether a county bail bond board is
219 North 6th Street, Suite 200                                         authorized to adopt a rule providing for the release
Waco, Texas 76701                                                       of some of a license holder’s security when the
                                                                        license holder will continue to engage in the
                                                                        bonding business (RQ-0579-JC)


Dear Mr. Segrest:

         You ask whether a county bail bond board is authorized to adopt a rule providing for the
release of some of a license holder’s security when the license holder will continue to engage in the
bonding business.’ If a bail bond board may adopt such a rule, you also ask whether the rule may
provide for reasonable restrictions on the release of security, such as limits on the frequency of
requests and the amounts that may be released. We conclude that a county bail bond board is
authorized to adopt a rule providing for the release of some of a license holder’s security and that
the rule may impose restrictions on the release of security. The rule may not permit a license holder
to reduce the license holder’s security to an amount less than that required by section 1704.160 or
section 1704.203 of the Occupations Code. See TEX. Oct. CODE ANN. 89 1704.160, 1704.203
(Vernon 2003).

         In each county with a population of 110,000 or more, chapter 1704 of the Occupations Code
creates a bail bond board, see id. 8 1704.05 1, which is charged with licensing and regulating bail
bond sureties in the county, see id. 9 1704.101. With the exception of an attorney who acts as a
surety for a client, a person may not act as a bail bond surety in a county unless the person
has a license issued by the county bail bond board. See id. 9 5 1704.15 1 (licensing requirement),
1704.163(a) (“Except as provided by this section, a person not licensed under this chapter may
execute a bail bond or act as a surety for another person in any county in this state if the person: (1)
is licensed to practice law in this state; and (2) represents the other person in the criminal case for
which the bond was given.“).




        ‘See Letter fromHonorable  John W. Segrest, McLennan County Criminal District Attorney, to Honorable John
Cornyn, Texas Attorney General (July 18, 2002) (on file with Opinion Committee) [hereinafter Request Letter].




                                An Equal   Employment     Opportunity   Employer   Punted   on Recycled   Paper
The Honorable John W. Segrest        - Page 2         (GA-001 1)




          Your question involves the security a license holder must deposit with the county treasurer
to secure the bail bonds the license holder will execute in the county. Section 1704.160 provides that
once an individual’s or corporation’s application for a bail bond license has been conditionally
approved by the board, the applicant must provide security by either depositing a cashier’s check,
certificate of deposit, or cash with the county treasurer, or by executing in trust to the board deeds
to real property. See id. 5 1704.16O(a)( 1) ( security for an individual), (2) (security for a corporation).
An order conditionally approving an application becomes final on the date the applicant complies
with the security requirements of section 1704.160. See id. 3 1704.159(b).

         Significantly, a license holder must maintain the amount of security required by section
1704.160 during the time the person holds the license. See id. § 1704.160(i). A license holder’s
security may not be worth less than $50,000. See id. 5 1704.160(b), (d). If a final judgment on a
forfeiture of a bail bond is paid from the security deposited or executed by a license holder under
section 1704.160, the license holder “shall deposit or execute additional security in an amount
sufficient to comply with that section.” Id. § 1704.206.

         Under section 1704.203, the extent of a license holder’s authority to execute bonds depends
upon the value of the security the license holder has deposited with the county treasurer or executed
in trust to the board. For example, a license holder who holds a license originally issued before
September 1, 1999 “may not execute, and a person may not accept from the license holder, a bail
bond that, in the aggregate with other bail bonds executed by the license holder in that county, results
in a total amount that exceeds 10 times the value of the security deposited or executed by the license
holder under Section 1704.160.” Id. 5 1704.203(a). Subsection (f) provides different ratios for
license holders who obtained their licenses on or after September 1,1999. See id. 5 1704.203(f)(l)-
(4). A license holder, “at any time, may increase the limits prescribed by this section by depositing
or executing additional security.” Id. § 1704.203(d).

          Chapter 1704 does not provide a mechanism for a license holder to withdraw security except
when the license holder ceases to engage in the bonding business. Under section 1704.2 10, a license
holder may withdraw “the security deposited or executed under Section 1704.160, and the security
shall be returned to the license holder” if the license holder ceases to engage in the bonding business,
ceases to maintain the license, and presents a release by the board. See id. 9 1704.2 lO(a)( 1).
Additionally, a license holder is not entitled to withdraw the security unless “no judgment or bond
liability, actual or potential, is outstanding against the license holder.” Id. 5 1704.210(a)(2).
Furthermore, a license holder will not necessarily receive the full amount deposited or executed
under section 1704.160:

                         (b) The security returned to a license holder under Subsection
                 (a) is equal to the amount of security deposited or executed under
                 Section 1704.160 minus the amount of security:

                                   (1) depleted   under Section    1704.204(b)    to pay a
                 judgment;   and
The Honorable   John W. Segrest    - Page 3        (GA-001 1)




                               (2) necessary to secure any unexpired    obligation   on
                a bail bond executed by the license holder.

Id. 8 1704.210(b).

         You explain that your question involves the following situation: “[A] bail bondsman has
excess bonding authority, and wishes to obtain a release of the excess security rather than increase
his bonding to the extent of that authority.” Request Letter, supra note 1, at 1. By “excess bonding
authority,” you mean that the value of the bonds executed by the bondsman falls short of the amount
the bondsman could execute based on the amount of security the bondsman has deposited. The
bondsman may need the security for other purposes, such as tax liabilities, and asks the board to
release some of it. In light of this situation, you ask two questions:

                         Does a bail bond board have authority to pass a rule providing
                for or to otherwise authorize the release of security in excess of that
                needed to meet the ratio of security to the outstanding bond
                obligations of a bondsman where the bondsman is not ceasing to act
                as a bail bondsman, still maintains a license, and/or has outstanding
                bonds (even if at a level well below the bonding authority established
                by the ratio)?

                        If the answer to the first question is in the affirmative, must
                the bail bond board do so if requested by a bondsman, or may they
                enact rules that provide reasonable restrictions on release, such as
                limiting the frequency of requests and amounts of reduction?

Id. at 2-3.

         We conclude that a county bail bond board is authorized to adopt a rule providing for the
release of some of a license holder’s security. The rule may limit the conditions under which a board
will release security. The board rule may not authorize the release of security that would reduce the
license holder’s total security to an amount less than that required by section 1704.160 or to an
amount that would violate the applicable bond to security ratio established by section 1704.203.

         Chapter 1704 authorizes a countybail bond board to “exercise powers incidental or necessary
to the administration of this chapter”; to “supervise and regulate each phase of the bonding business
in the county”; and to “adopt and post rules necessary to implement this chapter.” TEX. Oct. CODE
ANN. 5 1704.101 (Vernon 2003). This authority is not unlimited, however. Courts have held that
a bail bond board may adopt only such rules as are authorized by and are consistent with statutory
authority, and may not adopt rules which impose additional burdens, conditions, or restrictions in
excess of or inconsistent with statutory provisions. See Garcia-Marroquin v. Nueces County Bail
Bond Bd., 1 S.W.3d 366, 372 (Tex. App.-Corpus Christi 1999, no pet.); Tex. Fire & Cas. Co. v.
Harris County Bail Bond Bd., 684 S.W.2d 177, 178 (Tex. App.-Houston            [ 14th Dist.] 1984, writ
refd n.r.e.); Bexar County Bail Bond Bd. v. Deckard, 604 S.W.2d 214, 216 (Tex. Civ. App.-San
Antonio 1980, no writ).
The Honorable John W. Segrest - Page 4               (GA-001 1)




        A rule allowing the release of security to a license holder who will continue to engage in the
bonding business falls within chapter 1704’s broad grant ofpower to a bail bond board to adopt rules
and to “supervise and regulate each phase of the bonding business in the county.” TEX. OCC. CODE
ANN. 8 1704.101(3) (Vernon 2003). Furthermore, nothing in chapter 1704 precludes a bail bond
board from adopting such a rule. Chapter 1704 does not expressly provide for the release of security
except when a license holder will cease to engage in the bonding business and cease to maintain the
license. See id. 5 1704.2 1O(a)( 1). We do not believe, however, that the express authority to release
security to a license holder who will cease to engage in the bonding business precludes a bail bond
board from adopting a rule permitting the release of some of a license holder’s security under other
circumstances.

         We note, however, that two provisions govern how much security a license holder must
maintain and thereby limit a bail bond board’s authority to adopt a rule providing for the release of
security. First, a license holder must maintain the amount of security required by section 1704.160
until the person ceases to maintain the license. See id. § 1704.160(i) (“A license holder must
maintain the amount of security required by this section during the time the person holds the
license.“); see also id. 8 9 1704.252( 15) (“After notice and hearing, a board may revoke or suspend
a license if the license holder . . . fails two or more times to maintain the amount of security required
by Section 1704.160 . . . .“), 1704.253(a) (“A board shall immediately suspend a license if the license
holder fails to maintain the amount of security required by Section 1704.160. A board is not
required to provide notice or a hearing before suspending a license under this subsection. A license
suspended under this subsection shall be immediately reinstated if the license holder deposits or
executes the amount of security required by Section 1704.160.“). Thus, a board rule may not
authorize the release of security that would reduce the license holder’s total security to an amount
less than that required by section 1704.160. Second, under the ratios established by section
 1704.203, a license holder’s authority to execute bonds (and a person’s authority to accept a bond
from a license holder) is limited by the amount of security the license holder has deposited or
executed under section 1704.160 and any amounts the license holder has added pursuant to section
 1704.203(d). See id. 5 1704.203(a), (f) (ra t ios ) ; see also id. 9 1704.203(d) (permitting license holder
to deposit or execute additional security). By implication, section 1704.203 limits the authority of
a bail bond board to adopt a rule that would reduce a license holder’s security to an amount whereby
the bonds executed by the license holder would exceed the applicable bond to security ratio
established by section 1704.203.

         In answer to your second question, a bail bond board that adopts a rule providing for the
release of security may impose “reasonable restrictions on release, such as limiting the frequency of
requests and amounts of reduction.” Request Letter, supra note 1, at 3. Chapter 1704 does not
provide a license holder who will continue to engage in the bonding business with any entitlement
to the release of security. Thus, reasonable restrictions on the release of security would not impose
on license holders additional burdens, conditions, or restrictions in excess of or inconsistent with
chapter 1704, and would be within the bail bond board’s power granted in chapter 1704 of the
Occupations Code.
The Honorable   John W. Segrest    - Page 5     (GA-001 1)




                                       SUMMARY

                         A county bail bond board is authorized to adopt a rule
                providing for the release of some of a license holder’s security.
                Such a rule may impose reasonable restrictions on the release of
                security. The rule may not permit a license holder to reduce the
                license holder’s security to an amount less than that required by
                section 1704.160 or section 1704.203 of the Occupations Code. See
                TEX. Oct. CODEANN. $9 1704.160,1704.203       (Vernon 2003).




BARRY R. MCBEE
First Assistant Attorney General

NANCY FULLER
Deputy Attorney General - General Counsel

RICK GILPIN
Deputy Chair, Opinion Committee

Mary R. Crouter
Assistant Attorney General, Opinion Committee
