Can a Texas bail bond board make license applicants post cash instead of property deeds for their security deposit?

Plain-English summary

To get a bail bondsman license in Texas, an applicant has to post a security deposit, money or property the board can reach if the bondsman fails to pay a bond forfeiture. The Smith County Bail Bond Board adopted a rule saying original applicants had to make that deposit in cash, a cashier's check, a certificate of deposit, or a cash equivalent, and could not satisfy it by executing deeds to real property in trust to the board. The county's criminal district attorney asked whether that rule was valid under the statute governing bail bond licensing, article 2372p-3.

The Attorney General said the rule was invalid. The statute, in section 6(f), gives the applicant two ways to make the deposit: under subsection (f)(1), deposit a cashier's check, certificate of deposit, cash, or cash equivalent in the required amount; or under subsection (f)(2), execute deeds in trust to the board for property appraised at the required value. That is the applicant's choice. The board's broad rulemaking power did not let it erase one of the two options the Legislature wrote into the law. Texas courts had already held that a bail bond board cannot impose requirements different from or additional to the act, including dictating the form or amount of the security deposit, because the statute leaves that determination (above the statutory minimum) to the applicant.

The opinion also answered a follow-up: even though the board must accept property deeds, it could not require that some percentage of the security be in cash. When an applicant executes deeds to property of sufficient value under subsection (f)(2), the board cannot make the applicant put up cash on top of that. Earlier opinions agreed that the board could not even accept a mix of cash and deeds to reach the minimum; the two methods are alternatives, not building blocks.

Currency note

This opinion was issued in 1992. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The Bail Bond Act formerly at article 2372p-3, V.T.C.S., was later repealed and recodified into the Occupations Code, and the deposit amounts and population thresholds have changed, so confirm the current statutes before relying on any figure here.

Background and statutory framework

Article 2372p-3, V.T.C.S., governed the licensing of bail bondsmen by county bail bond boards. Section 5(f)(2) directed the board to "issue licenses to those applicants who qualify under the terms of this Act." Section 6 set out the application, the board's inquiries, and a hearing. Subsection (a)(4) required the application to list any nonexempt real estate the applicant intended to convey in trust to the board, with a statement from each taxing unit that there were no outstanding tax liens and showing the property's net appraised value (subsection (a)(4)(B)). Subsection (a)(5) required the application to state the amount of cash, or the cash value of any certificate of deposit or cashier's check, the applicant intended to place on deposit with the county treasurer.

Subsection (e) of section 6 provided that, if satisfied with the application, the board would tentatively approve it "subject to the application being perfected by the filing of the security deposits required of licensees under this Act." Subsection (f) then gave the applicant, upon tentative approval, two alternatives: (1) deposit with the county treasurer a cashier's check, certificate of deposit, cash, or cash equivalent in the amount the applicant had indicated under subsection (a)(5) (but not less than $50,000, except $10,000 in counties under 250,000 population); or (2) execute in trust to the board deeds to the property listed under subsection (a)(4), valued by a qualified appraiser at not less than the same amounts, the property subject to sale to satisfy any final judgment forfeitures on the licensee's bonds.

The opinion read these provisions to give the applicant the choice between depositing cash (or its equivalent) under subsection (f)(1) and executing deeds to property under subsection (f)(2). The board could not restrict that statutory alternative by refusing to accept property deeds. While section 5(f)(1) gave the board broad authority to "exercise any powers incidental" to administering the act and to "prescribe and post any rules necessary to implement this Act," Texas courts had held that a board cannot impose requirements different from or additional to the act. Texas Fire & Casualty Co. v. Harris County Bail Bond Bd., 684 S.W.2d 177 (Tex. App.-Houston [14th Dist.] 1984, writ ref'd n.r.e.); Bexar County Bail Bond Bd. v. Deckard, 604 S.W.2d 214 (Tex. Civ. App.-San Antonio 1980, no writ); Attorney General Opinions JM-1057 (1989), JM-875 (1988).

In Deckard, the court held a bail bond board lacked authority to require applicants to deposit a letter of credit greater than the statutory minimum, finding the statute contained "no language granting power to make rules relating to the qualifications which must be met by applicants for licenses." 604 S.W.2d at 217. After Deckard, the article was substantially amended, and section 5(f)(1) carried the "prescribe and post any rules necessary to implement this Act" language at the time of Texas Fire & Casualty. Even so, that court reached the same result: above the statutory minimum, "the applicant is to determine the amount of the deposit," and a local rule that takes that responsibility from the applicant "impermissibly impose[s] additional and conflicting burdens on bail bond applicants." 684 S.W.2d at 179.

Applying that reasoning, the opinion concluded that by accepting only cash-form deposits and refusing property deeds, the board would impermissibly usurp a determination the statute leaves to the applicant. The attorney general opinions agreed: JM-875 read section 6(f) to require the applicant to either deposit cash in the minimum amount or execute deeds to property of that value, and held the board could not accept a combination of cash and deeds to make up the minimum; JM-1057 found the board could not license a person to act as bondsman in another county. So the board had no power to refuse property deeds executed in trust under section 6(f)(2), and where an applicant executes deeds to property of sufficient value, the board cannot also require a cash deposit.

Common questions

Could the Smith County board require bail bond applicants to post cash only?
No. The opinion concluded the board could not adopt a rule limiting the security deposit to cash, a cashier's check, a certificate of deposit, or a cash equivalent, because section 6(f) of article 2372p-3 also let applicants execute deeds to property in trust.

What were the two ways to make the security deposit?
Under section 6(f)(1), deposit a cashier's check, certificate of deposit, cash, or cash equivalent in the required amount; or under section 6(f)(2), execute deeds to property in trust to the board, with the property appraised at the required value. The choice belonged to the applicant.

Could the board require part of the deposit to be in cash?
No. The opinion concluded that when an applicant executes deeds to property of sufficient value, the board cannot additionally require a cash deposit, and that the board cannot accept a mix of cash and deeds to reach the minimum.

Why couldn't the board just add its own rule?
Because, as Texas courts had held, a bail bond board's rulemaking power did not let it impose requirements different from or additional to the act; the statute itself set the licensing requirements and left the deposit choice (above the minimum) to the applicant.

Citations

• V.T.C.S. article 2372p-3, §§ 5(f)(1), 5(f)(2), 6(a)(4), 6(a)(4)(B), 6(a)(5), 6(e), 6(f), 6(f)(1), 6(f)(2)
• Texas Fire & Casualty Co. v. Harris County Bail Bond Bd., 684 S.W.2d 177, 179 (Tex. App.-Houston [14th Dist.] 1984, writ ref'd n.r.e.)
• Bexar County Bail Bond Bd. v. Deckard, 604 S.W.2d 214, 217 (Tex. Civ. App.-San Antonio 1980, no writ)
• Austin v. Harris County Bail Bond Board, 756 S.W.2d 65, 67 (Tex. App.-Houston [1st Dist.] 1988, writ denied)
• Dallas County Bail Bond Bd. v. Stein, 771 S.W.2d 577, 580 (Tex. App.-Dallas 1989, writ denied)
• Tex. Att'y Gen. Ops. JM-1057 (1989), JM-875 (1988), JM-1012 (1989)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0108
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1992/dm0108.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

April 20, 1992

Honorable Jack Skeen, Jr.
Smith County Criminal District Attorney
County Courthouse
Tyler, Texas 75702

Opinion No. DM-108

Re: Whether rule 8.11(c) of the Rules and Regulations of the Smith County Bail Bond Board which prohibits an original bail bond applicant from executing deeds of trust in property as security for obligations incurred in the bonding business is invalid as inconsistent with article 2372p-3, V.T.C.S. (RQ-205)

Dear Mr. Skeen:

You ask about the validity of a rule adopted by the Smith County Bail Bond Board (hereinafter the board) under which original applicants for bail bond licenses must make the statutorily required security deposit in the form of a cashier's check, certificate of deposit, cash or cash equivalent, but may not execute deeds to real property in trust to the board in satisfaction of the security deposit requirement.

Article 2372p-3, V.T.C.S., governs the licensing of bail bondsmen by county bail bond boards. Section 5(f)(2) directs the board to "issue licenses to those applicants who qualify under the terms of this Act." Section 6 provides for the application for the license, the board's inquiries to determine the applicant's qualifications, and a board hearing on the application. Subsection (a)(4) of section 6 requires that the application include a "statement listing any nonexempt real estate owned by the applicant that the applicant intends to convey in trust to the board to secure payment of any obligations incurred by the applicant in the bonding business." The applicant must include in connection therewith a statement from each taxing unit assessing or collecting taxes on the property indicating that there are no outstanding tax liens on it and showing the net value of the property according to the current appraisal. V.T.C.S. art. 2372p-3, § 6(a)(4)(B). Also, subsection (a)(5) of section 6 requires that the application indicate "the amount of cash or cash value of any certificate of deposit or cashier's checks which the applicant intends to place on deposit with the county treasurer to secure payment of any obligations incurred by the applicant in the bonding business."

Subsection (e) of section 6 provides, in part, that if the board is satisfied with the application, it shall tentatively approve it "subject to the application being perfected by the filing of the security deposits required of licensees under this Act." Subsection (f) of section 6 provides in relevant part:

Upon notice from the board that the application has been tentatively approved, the applicant shall then:

(1) deposit with the county treasurer . . . a cashier's check, certificate of deposit, cash, or cash equivalent in the amount indicated by the applicant under Subdivision (5) of Subsection (a) of Section 6 . . . but in no event less than $50,000 except in counties with populations of less than 250,000 persons . . . the amount . . . shall be $10,000 . . . ; or

(2) execute in trust to the board deeds to the property listed by the applicant under Subdivision (4) of Subsection (a) of Section 6 . . . which property shall be valued in the amount indicated on an appraisal by a real estate appraiser who is a member in good standing of a nationally recognized professional appraiser society or trade organization that has an established code of ethics, educational program, and professional certification program, but in no event less than $50,000 valuation, except in counties with populations of less than 250,000 persons . . . , the amount . . . shall be $10,000, the condition of the trust being that the property may be sold to satisfy any final judgment forfeitures that may be made in bonds on which the licensee is surety . . . . (Emphasis added.)

In our opinion, the above-quoted provisions clearly contemplate that the applicant, in order to satisfy the security deposit requirement, has the option of either depositing a certificate of deposit, cashier's check, cash or a cash equivalent, in the requisite amount under subsection (f)(1), or executing deeds to property valued in the requisite amount in trust to the board under subsection (f)(2). We do not believe the board has the power to restrict the statutorily provided for alternative means through which the applicant may satisfy the security deposit requirement by refusing to accept deeds to property in trust executed to the board under subsection (f)(2) in satisfaction of the requirement.

Section 5(f)(1) gives the county bail bond board broad authority "[t]o exercise any powers incidental or necessary to the administration of this Act" and to "prescribe and post any rules necessary to implement this Act." However, Texas authorities have held that the board does not have the power to impose on applicants for bail bondsmen licenses requirements different from or additional to those of the act. See Texas Fire & Casualty Co. v. Harris County Bail Bond Bd., 684 S.W.2d 177 (Tex. App.-Houston [14th Dist.] 1984, writ ref'd n.r.e.); Bexar County Bail Bond Bd. v. Deckard, 604 S.W.2d 214 (Tex. Civ. App.-San Antonio 1980, no writ); Attorney General Opinions JM-1057 (1989); JM-875 (1988).

In Deckard, the court held that the bail bond board was without authority to require that applicants meet the security deposit requirement by depositing a letter of credit in an amount greater than the minimum required by the statute, stating that the statute contained "no language granting power to make rules relating to the qualifications which must be met by applicants for licenses." 604 S.W.2d at 217. It should be noted that at the time of the Deckard decision, article 2372p-3 expressly gave the board rule-making authority only with respect to "the making of bail bonds by bondsmen within the county." See Acts 1973, 63d Leg., ch. 550, at 1521 (former provisions of section 5(b) of article 2372p-3, V.T.C.S.).

However, in Texas Fire and Casualty Company, the court considered a board rule providing, as had the rule in Deckard, that an applicant must deposit in satisfaction of the security deposit requirement a letter of credit in an amount greater than the statutory minimum. Since Deckard, article 2372p-3 has been substantially amended. Acts 1981, 67th Leg., ch. 312 at 875. Section 5, subsection (f)(1) read at the time of Texas Fire and Casualty Company, as it does now, that the board had power "to prescribe and post any rules necessary to implement this Act." Nevertheless, Texas Fire and Casualty Company reached the same result as Deckard. The court stated that under the security deposit provisions, with the exception of the minimum amount set by the statute, "the applicant is to determine the amount of the deposit. The local rule takes this responsibility from the applicant and assumes it itself . . . . [and] thus impermissibly impose[s] additional and conflicting burdens on bail bond applicants." 684 S.W.2d at 179 (emphasis in original).[1]

Under the reasoning of Texas Fire and Casualty Company, the board would in our opinion - by providing that only cashier's checks, certificates of deposit, cash or cash equivalents were acceptable in satisfaction of the security deposit requirement, and not deeds to property - impermissibly usurp a determination which the statute leaves to the applicant. Section 6 in subsection (f)(1), (2) provides that the applicant may either deposit a cashier's check, certificate of deposit, cash or cash equivalent, or execute deeds in trust to the board.

Attorney general opinions on the board's authority are consistent with this conclusion. Attorney General Opinion JM-875 construed the provisions of section 6(f) to require an applicant to either deposit cash, etc., in the minimum amount or execute deeds to property of such value, and concluded that the board had no authority to depart from that requirement and accept as the security deposit a combination of cash and deeds to property in order to make up the minimum requisite amount. Attorney General Opinion JM-1057 found the board without authority to license a person to act as bondsman in another county or to control collection of a bond in another county.[2]

Again, section 5(f)(2) directs the board to "issue licenses to those applicants who qualify under the terms of this Act." In our opinion, the board does not have the power to refuse acceptance, in satisfaction of the security deposit requirement, of deeds to property executed in trust to the board in accordance with the provisions of section 6(f)(2).

You also ask whether, if the board must accept deeds to property executed in trust to the board for purposes of the security deposit requirement, it may nevertheless require "that a certain percentage of the allowable security be in the form of cashier's checks, certificates of deposit, or other cash equivalents." As discussed with reference to your first question, the board has no power to change the requirements of the act regarding the licensure of applicants. Section 6(f)(2) on its face permits an applicant to satisfy the security deposit requirement by executing deeds in trust to the board. Where the applicant executes such deeds to property valued in sufficient amounts, the board does not have the power to require that the applicant additionally deposit a cashier's check, certificate of deposit, cash or cash equivalent. (Also, as noted above, Attorney General Opinion JM-875 specifically concluded that the act did not contemplate the board's accepting a combination of cash, etc., and deeds to property to make up the requisite amount of security deposit.)

SUMMARY

A county bail bond board is without authority to provide that an applicant for a bail bondsman license must make the security deposit required by section 6(f) of article 2372p-3, V.T.C.S., in the form of a cashier's check, certificate of deposit, cash or cash equivalent, and that he may not satisfy the requirement by executing deeds to property in trust to the board in accordance with the provisions of section 6(f)(2).

DAN MORALES
Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by William Walker
Assistant Attorney General

[1] Compare Austin v. Harris County Bail Bond Board, 756 S.W.2d 65 (Tex. App.-Houston [1st Dist.] 1988, writ denied) (upholding a board's denial of an application based on applicant's violation of the act when previously licensed). Citing Deckard, the court stated that "the Board's ability to review an applicant's past record as a licensed bail bondsman does not impose an additional qualification, burden, condition, or restriction in excess of or inconsistent with the statutory provisions." 756 S.W.2d at 67.

[2] We note that Attorney General Opinion JM-1012 (1989), which found that the statute gave the board no authority to prohibit a bondsman's employment of persons convicted of certain crimes, was overruled by Dallas County Bail Bond Bd. v. Stein, 771 S.W.2d 577 (Tex. App.-Dallas 1989, writ denied). That court found that opinion's reliance on Deckard and Texas Fire and Casualty Company "misplaced. Since the Bail Bond Act expressly sets forth the requirements for a license, these courts correctly reasoned that the local boards lacked the authority to impose different or additional requirements. . . . [H]owever, the Bail Bond Act does not expressly set forth the eligibility requirements for employees of licensees. Thus, such analysis is inapplicable to the present case." 771 S.W.2d at 580.