As a result of the number of delinquent sales tax accounts and the difficulty in collecting them, the 63rd Legislature added Sec. N to Article 20.021, Taxation-General, V. T. C. S., reading, in part:

.(N) Bonds or Securities

(1) Every person who holds a sales tax permit under this Chapter as of January 1, 1974, and is delinquent in the payment of any taxes, penalties and/or .interest on January 1, 1974, and every applicant for a sales tax.permit on or after January 1, 1974, shall furnish to a cash bond, a bond from a’ surety company chartered or authorized in the State of Texas, certificates~ of deposits, certificates of Savings or U.S. Treasury bonds or, subject to the discretion and approval of the Comptroller, an assignment of negotiable stocks or bonds, or such other security as the Comptroller may deem sufficient the payment of taxes under this Chapter . . . . (emphasis added) .

Apparently many small businesses in Texas have been unable to purchase a bond or to furnish cash or other specified security as required

, *2 (H-37%) by the statute. As a result, some of these businesses have sought the assistance of surplus lines agents who offer to procure the necessary bonds from out-of-state insurance companies not licensed to do business in Texas.

You ask, whether and under what circumstances Article 20.021 (N) (1) permits the Comptroller to accept bonds written by unlicensed surety companies, and you specifically bring to our attention Article 1.14-2 of the Texas Insurance Code which deals with surplus lines insurance --insurance which cannot be obtained from duly licensed, regulated insurers conducting business in this state.

By the very terms of Article 1.14-2 surplus lines insurance is Authorized carriers are thoee insurance with an unauthorized insurer. licensed by the State Board of Insurance to do business in Texas. Article 1.14, Sec. 1, Insurance Code, V. T. C.S.

Therefore, it is our opinion, that the Comptroller of Public Accounts is not obligated to accept bonds written by unlicensed surety companies, but he may do so if he first determines that they provide sufficient security the payment of taxes.

SUMMARY An unlicensed surety company is not one authorized in the State of Texas under Article 20.021 (N) .(l), Taxation-General, V. T. C. S., so.88 to require to accept its bond in satisfaction of that statute, although he may accept it if he determines hit provides adequate security.

Very truly yours, L. HILL .Attorney General of Texas *3 (H-378) APPROVED:

AVID M. KENDALL, Chairman

Opinion Committee

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