Case Information
*1 THE ATJTORNEYGENERAL OF I‘Ems
Honorable 0. P. Lockhart, Chalrman
Board of Insurance Commlssloners
Austin, Texas
Dear Sir: Opinion No. O-4374.
Re: Are the $1,220,000;00 reiienue bonds issued by the Agricultural and Mec'hanlcal College of Texas and similarrevenue bonds issued by other State colleges eligible as tax reducing "Texas securities" under the provlslons'of-the.Robert- son Law; Articles“4765-4769, as' amended; and as tax reduciiig Si3hp~ ities under Article as amend- ed, and are they ellglble as au- thorized securities under Article 4725, Vernon's Annotated Civil Statutes?.
Your letter requesting the opinion of this department on the above stated question reads as follows:
"Please advise whether the $1,220,000 -. of revenue bonds issued by the.Agrlcultural and Mechanical College of Texas'for the pur- pose of building dormitories, equipping power plants.and building and equipping laundry plants; and other slmilar~revenue bonds issu- ed by other State Colleges, such as John
Tarleton College at Stephenville (which is a branch of A & M College), Texas State'Col- lege for Women, D:enton; and Texas Tecbnoltigl- cal College at Lubbock, which revenue bonds are not secured.bg valid first ll~ens upon Texas real estate but only by pledged revenue of the Colleges by or the projects for which they were fssuea, are eligible as tax reduc- ing 'Texas securities' under the provisions of the Robertson law, Articles 4765-4769 as amended, and as tax reducing securities under Article 7064 as amended; and whether they are eligible as authorized securities under Article 4725."
Article 7064, Vernon's Annot&ted Civil Statutes, pro- vides in part:
"Every Insurance corporation, Lloyd's, or reciprocals, and any other organization or concern transacting the business of fire, marine, marine Inland, accident, credit,
title, livestock, fidelity, guaranty, surety, casualty, or any other kind or character of Insurance business other than the business of life Insurance, and other than fraternal benefit associations, within this State at the time of filing its annual statement,
shall report to the Board of Insurance Com- missioners the gross amount of premiums
receivedupon property located In this State or on risks located in this State during'
the preceding year, and each of such Fnsur- ante carriers shall pay an annual tax upon such gross premlum receipts as follows:
. . . If any such insurance carrier shall
have as much as otie fourth of its entire. assets; as shown by said sworn statement, ln- vested In any or all of the following secur- itles:'real estate in this State, bonds
of this State or of any county, Incorporated city or town of this State, or other property in this State in which by law such insurance carriers may Invest their funds, then the
annual tax of.anp such Insurance carriers
shall be one and one half (1 l/2) per cent of Its said gross premium receipts; . e . a((
Article 4769, Vernon's Annotated Civil Statutes, pro- vides In part:
"Each life Insurance compariy not organ- ized under the laws of this State, transact- ing business In this State, shall.axinually, on or before the Xst day of Mardh, make a
report to the Commissioner, which report shall be sworn to by either the president or vice president and secretary or treasurer of such company, w~hlch shall show the gross amount of premiums, collected during the year ending on December,31st, preceding, from citizens of this State upon policies of insurance.
Each such company shall pay annually a tax equal to four and sixty-five hundredths
(4.65) per cent of such gross premium receipts.
Honorable 0. P. Lockhart, page
When the report of the investment In Texas
securities, as defined by law, of any such companies as of December 31st of any year shall-show that it has Invested on said date as much as thirty (30) per cent of its total Texas reserves as defined by law, in promls- sorg notes or other obligations secured by mortgage, deed'of trust, or other lien on
Texas real estate and/or in loans to resi- dents-oFheld by such borrowers, the rate
of occupation tax shall be reduced to four and fi:e one hundredths (4.05) per cent;...
. . . . . .
Each of the above mentioned statutes provides for a further reduction in-'taxes where greater amounts cif~the'finds' '-- in6ntI6ned in said statutes are invested in the securities there- in named. 4725, Vernon's Annotated Ci+ill Statutes, sets ArMtile
forth the securities in which & life insurance company or&in- lzed'under the lawi of this State may~lnvest or loan Its se- curities. This statute provides in part:
~3, . . . . .-~or in the bonds and warrants of any 8ducatlonal Fnititutlon of the States of .Texas; or any ~nicipally~owned 'WateFsys- Grn or sew& systeti'when special i?evenu&s.'to me&t the principal and interest paym6nts as they iiCcrue upoti'such obligations shall have been' approptiiated, pledged or otherwise pro- vlded by tiuch municltality or educational ln- stitutlon; . . . . .
ArtIdle 4706, Vernon's Annotated Civil Stat&e&, sets fol"th or names the securitiesin which lnstirance comp@nl&;. . @ixcept'companl&s writing life, health and accident lxi%uraiice, inag invest their funds over and above their paid up capital stock.
In view of the foregolfig statutes you'ape advised thtit It.ls the 'oplnlon of thls'department that the above?nentiotied revenue bonds are~not,eligible as~tax reducing "Texas secur- itles"~unde? Article 4769 or Article supra, because ~' &uch bonds are n-et promissory notes or other obllgatlons'se- ?%Eed by-a.mortgage-; d&d of trust, or titherlien bn ~Texas I'sal e~st&te, etc., as set forthln Article 4769 as eligible tax reducing securities. The same can'be said FeltitFve to such-bonds wFth refer&c& td~Article 7064 as’ Buch‘bonas~do not come within the securities mentioned in sald article.
With reference to your question as to whether such bonds are eligible as authorized securities under Article 4725, Vernon's Annotated Civil Statutes, it is our opinion that such bonds are eligible 8s~ authorized securities under said article when the educational institution Issuing such bonds provides revenues to meet'the principal and Interest payments as they accrue upon such obligations by appropria- tion, pledge or otherwise provided by such- educational instl- tutlon as authorized by Article 4725, supra.
Trusting that the foregoing fully answers your ln- quiry, we are
Yours very truly ATTORNEYGENERAL OF TEXAS By s/Ardell Williams Araell-'Williams Assistant . .
AW:GO:wc
APPROTW) MAR
s/Grover Sellers
FIRST ASSISTANT
ATTORNEYGENEFUL . _.
Approved OplnFon Committee by s/BWB Chairman