Case Information
*1 OFFICEOFTHEATTORNEYGENERALOFTEXAS AUSTIN
Ronorabls cbmrley LmMkart
Stats Traaaurer
Austbx, Tl3xEs
Dear Sir:
68BWldd by 88Xl&8 84i 46th Lsgl816tUra. .%a
reoei9oU , raquestlng our qbinioa a8 to 'wðer aseoc iatlons EM scmrpt from the pa evied by Artidle ta Bill x0. t4, rc47*, Iis9lsad a9 b6th Leqlslnture. y of a tax or Texi (106) cents tar the rim Two matbed ecured by liens rk’s offioe, this stat&e then 1 not apply to instrunlcnt8, note3 n behalf of the flnltod Statea cr tr any amporate agemy or infdmztentality of the hste of Texee in oarrying out the exprewdd in any eat of the Oougreas 0r the Legfalature of the ,Pt&e of Texa&" “(a) Creation; dlreotore, The beard 1s htreby auth- or5,zsd aad bfraatod to oreate a eorporatlon to bs lrnow 8s the Home Owners* Luau Corporation, dich shall bs 81)' *2 non. Chcrley Lockhart, ?age .?
lnstrumentellty of the United It&es, which shell have to sue end to be sued in any murt of competent aut,bority jurisdlotlon, f'ederal or State, and w.ich ehali be under the direction of the Beard and operated by It under such by- ieva, rules, and .regulatlons ae It cay prescribe ror the aocampllshment of the purposes and intent of this section. The members of the ijoard shall constitute the &era or Directors of the Corporation and s!:all serve as such directors without additional cozponsation."
Subdlvialon !o) of Sr.ctlon 1483 provides that: "The bonds issued by the Corporation undnr this sub- seatlon shall be exempt, both as to principal and interest, from ail taxation (exuspt surtaxes, estate, inberltanoa, end gift taxes) new cr hereafter im;msed by the ialted States or a:~.y District, xerritory, dependency, or possession thereof', or by any Ltate, taxing authority. county, municipality, or local
The Corporation, Including its fr&hise, its eapltal, reserves and surplus, and ite losns and LIpoox.8, ehail lirewise be exempt from such taxation; except that any real property oi the Corporation shall be sub&at to taxation to tho same extent, according to its value, as otter real property.18 taxed. . .N
Tbe drganiaatlon of Federal Satin@and Loan Aseoolations is authorized by Subdi9ision (a) OS Section 1464, U.S.C.A., which reads as followa:
*(a) Gr,:anixation authorized. In order to proolde 10~61 mutual thrift Institutions in which people wy invest their funds an& in order to provide~for the l'inaneing of bomes,'the Bosrd is authorized, und(!r suoh rules and re- gulations .ss it xay prescribe, to provide for the organlma- tion, incorporation, examination, operation, and regulation of aasoaiatlons to be known as 'Federal &~in(;s and Loan &socIations,v and to issue charters tbarsror, givFng primary consideration to the best practices of looal mutual thrift end home-finanalng inetitutions in the United States-"
Subdlvislon (2) or said Section 1464 reads 88 tollowe: n(f) Aesoolaticns as members of 2ederel I!c~me Loan hank.
:ach such association, upon its incorporotlon, shall be- C<x,e automatically a member of' the Federal Home Loan Eank
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1:0n. Cherley Lockhart, Page 3
of the dlstrlat In which It is located, or if acnven- lanae s&all require and the Board approve, shall become e c!ember of a &'ederalHome Loan Bank of en adjoining distrlat. Zuch ecsociatlona shaii qualify for aueh wmbership In the manner provldod ih chaoter 11 of this title ziihrespect tc other members."
Subdlvlslon (h) of said ?cction reads 88 follows: "!h) hxemptIone~from taxation. Such associations, includln~ their franchises, capital, reserves, and sur- plus, and nbelr loans and Income, shall be axecpt from all taxation now or hereafter Imposed by the United .Ctstes * and all aharcs or auah asscciatlcns shall be exempt both as to their value and the income therefrom rroiv all taxation (exaept eurtaxes, estate, lnhsrltance, and gift taxes) now or hereafter Imposed by the United States; and no Gtate, Tsrrltorlal, County, ~municipal, or local taxing authority shall impopose any tax.on such aesoaiations or their franchise, aapital, reserves, surplus, loans, or inaome greater than that Imposed by such authority on other sImIlar local mutual or co- operative thrlrt and home rlnanclng instItufIoas.W
SubdIvIsIon (k) or said Section 1464'reads as hollows: Fetlerel Savings and Loan Assoaistlons, or “(k) Pcdsral Some loan Banks asflscal aSent of United States.
Shen designstad ior that purpose by the Secretary of the Treasury, any Federal savings and loan assoalatlon or member of any Federal Borne Loan ihank may be employed ad fiscal agent or the Government under such regulations as may be prescribed by said Secretary and sbal~ parform ail such reasonable duties ns fiscal agsnt of the Govern- ment'ea may be rqulrad of It. any Federal savlngs.end~ loan association or member of any Tadera Eome Loan Bank msy ect as agent ror any other Instrumentality of the United States when designated for that purpose by such InstrumentelIty of the United States. (June 13 1.855, c. 64, # 5, 48 Stat. 132; Apr. 27, 1934, c. 168, # 4 6, 6, ' 4s Ltd. 648, 646; bay 28, 1955, c. 150, 8 18, 49 Stat.
297.)
The Federal Home loan Bank Act la found beginning with SeatIon 1421, Chapter 11, Title 12, TJ.:.C.A. SubdIvIsIon (a) of *4 3n. Charlay Lockhart, Pade 4
ction 1426, U.C.C.A., makes provision for stock subscription for mbers 0r the Yedarel iir;ma ioan hank. Seat!on 1430, U. .T.. C. A., m&es provision for advanaes or loans by the Federal Eoma Loan hank to its members. ,eation 1433, U.5 .C.k.. provides certain broad axamptions iron taxation for the Tederel Eome Loan iSank, but it la not provided that.suct era=ptions shall be available to members of suab bank.
Subdivision 'g) of Leotlon 1464 authorizes the aeoretary of sreasury, in behalf of the United States, to subsaribe for pre- terrod shares in such association, end Congrass th;-,rein appropriated -100,000,000.00 to amble the Searetary or I'reaaury to subscribs to :tock in such association. L.eatIon 1465, U.S.C.A. read8 as follows:
"6 1465. inaouregament of saving end home flnanaing To enable the Board to encourage loon1 thrift and loeal hcme tinenclng end to promote, organize, and develop tha aeaoaiations herein provided for or simller asooaietione organized under local laws, there Is hereby authorized to ha appropriated, out of any monsy in tha Treasury not otaemise appropriated, the sum of $150,000, to be immedl- ately evailabla and remain available unt%l expended, sub- ject to the call or the Board, which sum, or so mch thereof as may be necessary, the Board is authoriead to use in It8 dtsaretlon ror tha aaoamplIs~nt of the purposes of this section viithout,rewd to the provisions of any other law governing the expanditura oi publia funds. For the pm- poses or thtis sectfon the baoratary or the Waasury Is authorized and diraated to allooeta and mske Xmmadiataly available to the Board, out of the funds appropriated pur- (g), the cum of $700,000. Such sum suant to section 1464 shall be In addition to tha funds appropriated pur6WAnt to this' section, end shall be In addition to the funds appro- priated pursuant to this seation, and aball be subjeot to the call of the Board end shall.remafn avsllable until expended. The sums appropriated and made evallabla pur- suent to this ssction shall be usad impartially in the promotion and development of loos1 thrift and homa-iinane- in& Institutions, whether State or Federally chartered.
(June 13, 1953, c. 64 6 6, 48 Stat. 134; Apr. 27, 1934, a. 168, 4 11, 48 f.tet. 641; ?&sy i%%, 19%. a. 160, 8 19, 49 aat. 287.)
The fact that Congress exprassly'clothadtbe Home Owncra* sn Corporation vAth the exemption iron any taxation except upon *5 rley iockhart, Page 3
property (Kectlon 1463 a) and extended the saute exemp- icderel Iioae Lonn hanks (Leation 1433) rud oxexpted redera -&it& and Loan rsscclatlons from taxation by the United Ytatetv; but provlCed that ".rLo btete, territorial, coubty, aunlclpal, or local taxing authority ehall l~?ose any tax on Such assoclatlons or their franohlse. capital, rtserveai surplus, loans or Income greater than that lm?oacd by such authority on other slltllar local sutual or oooptratlve thrift end home flnanolng lnstltutlona," (Zectlon 1464 a), in our opinion would leave the State Pree to col- J-m,- *.be tax in question iron! sederel Savings and Loan hrsoclatlons
>rtgage lnstrume~ts taken by it.
The question thus left tor our dateruination lo whether under the terms of the State statute lostrumenta taken by such ltlons are subject to the tax. The fact that Subdlvlelop (k) ;lon 1464, U.S.C.A., provide8 that such assoclatlone ua$be ,d as flaoal agenta of the Government and xay also atit aa for other lnstruuentalitles of the United Stattt3, when *ted to act In said capaolties by the proper authorities, m to oonolnde that the Congress of the United State8 did not ar .tbat such as6ooiatlons would. generally be lnstruuentalltle~ Ita ot the Uited States In the periormenee of their usual ms. This view is strengthened by the fact that the l&me 1 I.wp Corporation is expressly deolared .to'be ati instrument- >i the Cnlted States, and..without any llmltatlon being &wed 1, and by the dlftarenots made in the matter of exemptlone ixatlon.
Fhlle in your question you rpeak OS Federal Bulldlug and woelatlons, we aseume that you have reiertnoe to Federal I and Loan ksaoclatlone and answer your.questlon in the nega- This answer requires urn to overrule an opinion written June 10, ,p Honorable H. L. Hllllford, Asslatant Attorney General, to mtt S. &ages, Aseletant County Attorney of Galveston, Texas. Yours very truly
'.., A'i'TOEBXYY%ALOF TEXA3 Glenn R. Lewis APPROVED 0 Assistant OPINKm COMMn-rEE
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<Y GENERAL OF TEXAS