Case Information
*1 . . . . . .. _
OFFICE OF THE AlTORNEY GENERAL OF TEXAS
AUSTIN
QrmhLaC.MU(I( A-Old-
Honoxable T. la. Trlnblo
Tlrst Air8i8tant of Publlo Inmtruotion
St&q Superintendent Toar
Allatin,
Dear Slrr
wo have raoeivad a your TeQuostr 8n opinion from tale depar " . . . .
nt l gamlt f&i8 on8 as outlimed d aiat statt88 ao- Na aTrite at the 574,340 Total Cepltal Aooouats Lees real ost*to 160,000
Baalcing Rouse 23,730
Other Real &state 183,730 Total *2 fbnorable T. Y. 'I'rimbl6, Pt+ 2
hseeosed to Share R6ldera 390,610 312,b9O
8ti
Asss66ed Value Per Shr6 OU.7.92
gOnlnSonnatlon furni~he4 b~Mr.AldmJ6nk6, Bireotor of R666ar6h fir th6 klk6rdtr 6f T6x66 Ha- 6n.3 6 6p6oialirt in tax 6utt6r6,Xhthe~Ai6ziliO tlon61Bank oleima that th6 a68666rn6& 6horrlb be made up aeordfng.to tollori6g rtatomtl
aapital stook Cla88 A Prpmd 'gp&fJ
Gemman 5o:odo 8WRlU6
Uudlvld6d Profit8 149,335
Benerve k Retlr6mnt Ao-
oount prelerrad rtook llO.OoQ Tot6l Capital Aooount6 w3,‘3hO
te66 .CaRpittll i%Ook, 01866
A Pr6ferred k70.000 Aotual Value 6.f Stook (lOC$) f39,JbO
Le66 Real ic6tate
value or BANiSSTOGlC
Asaeesea or Tax Yelo, Shares; Value of l aoh 6hare 866.978
*you will not. tlmt thr aiti0rm00 betw66n u6 18 that we did not list in our 6t6t6ment, tb 01686 A pwferrrd atooL $235 000 at 6l.l, uhila aooordi& illtO~&IddiiOLl, he h6 to &!X. Jet&6 li6t.d th6 amkLag UP ths total 06&dt6& $235,000 a8 asset6 60- aour& and has deduotsd 06 it6l St66k cla66 A .prrC wh qh P i8 figumd at the ierred stook $l,-@,OOO, rata of two for 066 rstirablo ?al66.
l# . . . . (I
Honorabla T. Y. Trimbla, Page 3
At OUT T6qU86t iOr additional iniOlm4tiOn Wd hata reoelved from YOU the i&lo&z@ 6UpplePlsntel informtion:
wRaferrlng to lour advioe that you doalro oer- taln lnfonaation in ardor that detexdmtlon ry be to the prOROT 466W6&WRt Of WM b6Itk #to& padO 46 of the Amarillo Hatlonal Bank, end partioularly to that w6 gits you lnforrrtloa aoneom- rour repu66t i!ltJ the fOl&6ilrg IJW36tiNi6 -
‘1. Who 6tOOk 66 they h6V6 t6 title th. OWWf Ot the ~TCdOTl’d it?
Reoomtruotioo Blnanoa Corporation .16 the OUIM~ and h01b.r Of title to all outstandi~ ~ef0rx-d 6tOQk. ;2. &i66 the ow&er OS the preferred 6toUk elm l notelllthamortga&e agalll6tthe
preferred atOOk? Reo~mtruotlon -06 %r~OHAtiOllo1n- ec and holder of the preferred itook however, no note with mortgage axeout- ed held. We undershnd that the Reoon6traation
“3. PIM!XOO GOrpOT8tiOn own6 or bold6 th6 atook, 6x14 it 60 did th6 &WfalWd
R. F. a. loan the bank $23~,000 or $470,000 In oatihand~~othsr-~~valtrablo OOn6id6Tati Oil?
R6oonst&aotion flnanoe Oorporatlon pm-- oharedpreierred atook inbankaad pai& in OSSh. th6 6~61 Of $500,000. B66k h66 mada payment to R. F. O., of $30,000 in oaah, thi6 pamnt 16aring the oUt6t6nd- ing retirable value of preferred OtWk (amount dtie R.P.Q.,) the sum of $470,000. UpOn the 4bOYa a66UlfQttOIl, What (LO66 the “4. oontraot with the Rooonetfuotion ?laaitoo
Corporation provide relative to date of retirement and/or the amount Bprpltu *4 fIonorabl6 T. M. Trimble, We
and undivided jWOfit6 that should be 6et 46lde 6aoh year ?OT t&6 T6tir6IMMt Of the68 preferred atooka?
phe retirement of prefwred etoak @hall be sabup aoh mar on a baa16 of twa and onrhal? (2$$) wry oent# aid amount to be set over in a ?n6d ?or the retlrsnmt prererrad atook. This 2&$ atuat oom6 out of earn&a for that year. aooruad * . . . .”
Attaohed t0 ,$OUr NQU66t 16 4 MW6Q4~T OuigRw o? a pObli8bell report o?-the oondition o? the Amrllla lm- tlonal Bank at oloae of bu6hioss Deoember 31, 19k.l. #6 QuOtO imm the pWtinent pert thexvo? a6 ?Z41lO66t
*aAF~TAL'~AaaCutiTS "Oapltal Stook; A preSsrred, total par
(a) Ulnas 235,000&C, retlrable .talros 70,000.00: (Rat6 0r tuti- lb dcmds on retlrable rdloe ia 3%) (01 Uij&un &ok, tot&par (265,ooo.oo 500,00&00 *&U’~lU~ 50,000.00 Wnbiv5Aed ~Ofit6 X49,335.42 ~666~vt6 Iana retlramnt aoootmt for
Rirfekred at&Ok)
"TOTAL LXABILITIES AI'JD OAPITOL ACCOUHTS 14.160.304.74" The applioable t6Xi6& 6tatut68 Of thi6 State an Artlolee 7165 7166, &r*i68d Old1 statute6 O? TILBI, 1925.
Seotlon 5ld a? Tltia 12 (Bank8 and Bapklng), of the U. S. 0. A., prOVid66;
I . . . .
%Otwlthatandlng any other prooi6ion of law or any prlvllo::e or oonssnt to tax expwsa4 or *5 .
Honorable T. M. Trimble, kg6 5
implledly granted thereby, the shares of pxwfsrred stook of national banking e6sooietloaa, and the shares o? proserred atoak, oepltel not.66 and dr bentW66 o? State banks end tru6t oompen 86, ao- 1 qulred before or after %-a& 20, 1936 by Reoonstruo- tlon Flnenoe Corporntlon, and the dfvidsnda in- terest derived therMram by the Reoonstruotion ?I- nenoa Corporation, shall not 60 long a6 Reoonstruo- tlon Fineno Corporation 6hail continue to own the llems, be subject t0 any taxation by the United Statea, by any Territory, dspend6noy, or posssaaion thereof, o? Oolumbla, or by enp Stats, oounty, or the Distrlot munlolpelity or local taxi% aathorlty, whsthor IAU- posed, levle 4 , assessed on, before or aft6r Earah 20, 19%, end whether for e past, prtreent or future taxing psrlod. . , .* T&e prinolpel dl??ioulty In dstennIn!ng your p~po-
sit&on erlsae baoauss of the mennsr ln whioh the benk oarrlae the Clese A Preferred St&ok upon it6 b00ks. J.t 6hW6 that olaes of stook to have a pr value of $235,ooO.OO end yet the taots presented show that the Class A Preferred 3t0ok ha6 a retireble value of $470,000.00 whloh la the prinolpal remln- lng unpaid anount of tho original lot% to tkti bank by the Ro- oonstruotlon Flnenoe Corporation. In afidJ.tion to the $235,000.00 per velue of the steak ths bank appear6 to have set up a re- tlremsnt retaerve o? $llO,OOO.OO end an "undivided profits" fund of $149,335.42 out of whlab it may elsot to pey the addi- tional mount total 0r $125,000.00 sum Or $470,000.00 to pay repreeentlng the value of ths stock ownat by the Reoonstructlon Flnanoe Corp0retion and th6 amount remfilning unpeld of the orlglnel abllgetion o? $500 000.00 borrow& by the be& ?SOJE ths Reoonstruotlon Plnanoe E orporetion.
The ?eota 6hOW that the'Reoonstruotion Blriuwo Cor- poration owns the title to the ales61 A Preferred Stook end that it ha8 po.MeSsiOn Of 66Em. Under the axpreaa p1~016lOns of said Seotlon 516 o? Tit16 12, U. s. 0. A., aupre, all stock .purohased and owned by the Reoonotruotlon Pinan Corporetion, to anid statute, is 6xsnpt irom *any temtlon by . . . pursuant munlotpellty or 10061 taxing authority. ." %z zE'ihi?%i%i of 6x Perte frrensford 19lO %I$ &k i938 199 A. 119 117 Kb. 40 1249; Ed. Steto Tex'Com. : Belilmore gel 84 L. Benk i Flrkt Netlonel 60 S Ct. 94: V, stet’e lb:, ConmlLsloa, 1939: 92 Pea. (2 987, 43 N. IL 307, *6 Honorable T. M. Trlmbls, Page 6
oertiorarl denied, 1940, 60 23. Ct. 173, 308 0. S. 515, 8i, L. Ed. 4391 and Herohante liationai Bank of LGobile Q. U. S., 1941, 37 Fed. sup. 931, 93 ot. 01. 705.
The law Is, themfora, olear. The tmr ana rull. ialue of the Prererred Stoak aannot be taxed by the Amarillo Independent Clohool Dietriot.
Shares of bank stook aro to be assessed as other *true and full val.wm. There is no personal property at the exaluslve method for determIning that value. Any mthod may be employad whlah In Its nature Is reasonably oaloulated to stablIsh slob value. It may be mhan by tha market ralm of the stock; by payment or dlvldands ror suah period or tIms at euoh rate as to reasonably JustMy ralm or by an ao- oounting of the banks net oapltal assets to ar va at tha .valuo x4 baok or the shares. In short any method reasonably aalaulatad to reaoh a aorreat oonoltmion as to value Is surrlal0d ror the taxIdng author1 ties. The laws of this state plaaa the duty or determInIng the value suoh stook within the diaorotloa or the 10441 aseesalng .authorItIes. The Legislature ha8 reet- ed in boards of equalIz&tlon, as oonsti tuted by etatute, the 601s dlsoretlon In the valuation and the equalization of valuaa of property subjeot to ad valorem taxation. Their aotion Is olothed with the presumption that It has been made rightfully on the basis of aotual raluo and the aourta will daaline to disturb auah assessments uuleea shown to be arbitrary and grossly exoeeslve or fraudulent based upon a tundamentally wrong prlnolple or method. 40 Tex. Jur. 158. Furthar than this the oourts have not gone nor aan this dspartmant in stat- ing the rule.
Eroept a4 to the appllaable law, we are unable to advise you oonoernlw the aorreat formula or method, of the two eubmltted by you, to be used In maklag the assessment of the atook or thr A~~lllo national Bank. You aan, however rollow the law whloh wa have glren to you In this OPlnIOn in making your aaseasmant.
Trusting that this opinion will be of soma bansilt to you, we are
Yours very truly ATTOlW3Y OENEF#L OF TEXAS A& ,,+&Lk.Lq
Harold SdoOraaken Izac : mp a*.mru