Untitled Texas Attorney General Opinion ( 1952 )

. ,
TTORNEY G~ENERAL
TEXAS
PRICE DANIEL
ATTORNEYGENERAL.
December 22, 1952
Eon. Robert S. Calvert
C&roller of Public Account6
Aurtin, Texas opinion No. v-1563
Re: Authority of the Comp-
troller to promulgate
a regulation allowing
tax deductions to offset
estimated non-highway use
of special fuels in LPG
Dear Sir: delivery trucks.
Your request for an opinion of this office reads:
"We desire the opinion of your office regard-
ing the legality of a propo66d method of accounting
for the tax imposed by Section 14, Article 7065b,
Vernon's Annotated Civil Statute6 upon the highway
u6e of 'Liquefied Gas' (Butane-Propane) and 'Other
Liquid Fuels' (Diesel Fuel), which became effective
September 1, 1951. These two products are further
defined in Section 1,of the lawas 'Special Fuels'.
"The law imposes the tax upon the USE, or the
DELIVERY INTO A FURL TARE FOR USE, of such fuels in
propelling a motor vehicle upon the public highway
of Texas, and places the responsibility for report-
ing and paying over the taxes upon user-dealers.
"'User-dealer' ie defined in Section 1 of the Act
as (1) any distributor, dealer or other'person selling
. and delivering special fuels in this State into the fuel
tank of any motor.v6hlcle for u6e in propelling said
motor vehicle upon the public highway of Texas; e e D
and (2) shall also mean and include any distributor,
dealer or other p6r6,onWhO shall acquire any special
fuel tax free and USE IT OR DELIVER IT IRTO A FUEL TARE
FOR USE to propel motor vehicles operated by said dis-
tributor, dealer or oth& #!crdonUpon the public high-
way of Texas.
"It is the second CssBifiCatiOn - the user-dealers
who acquire liquHied.&sad useit or deliver it into
.
Hon. Robert S. Calvert, page 2 (v-1563)
the fuel tanks of their own vehicles for use on
the highway - with whom we are here concerned.
"Because of the expense and burden of in-
stalling separate fuel tanks on each delivery
vehicle, these user-dealers, who deliver their
commercial cargos of IPG products by means of
pressure pumps which are operated by the same
motor (and fed by the same fuel tank) which al-
so propels the tank truck over the highway, have
urged the Comptroller to calculate - from a series
of pump-off tests made on the various size and
type vehicles operating in Texas - the overall
average gallonage that would be necessary to pump
off quantities of 100 gallons, 250 gallons, 500
gallons and 1000 gallons of the cargos and that
the Comptroller authorize such user-dealers to
deduct the average gallonage determined in such tests
for each such unit of delivery from their monthly tax
remittances to the State. They point to the second
paragraph of Section 14(a) of the Act which provides
'it is the intent and object of this section that the
tax or taxes imposed herein on special fuels, as that
term is defined, shall be paid by persons using or
consuming said special fuels to generate power for the
propulsion of motor vehicles upon the public highway
of this State', and suggests that Section 23 of the
Act, vests the Comptroller with sufficient regulatory
powers to permit such tax accounting methods.
"In further pursuance of the request, user-dealer
members of the Texas Butane Dealers Association have
made actual pump-off tests from 37 various types de-
livery tank vehicles, namely, International, GMC, Ford.,
Chevrolet, and Dodge trucks. The quantities consumed
in pumping off 1000 gallons of the cargo in such tests
ranged from 7/1Cth of a gallon used in one truck to
2.62 gallons used in another truck. The average con-
sumption in the different make trucks ranged from 1.01
gallons average in 8 Chevrolets to 1.56 gallons average
in 5 International trucks, and about the same variation
was reflected in different vehicles of the same make.
Separate test6 from the same truck reflected various
amounts of consumption under similar conditions. From
th66e tests it appears obvious that the establishing of
any mean or average pump off allowance for all trucks,
or the establishing of any table of mean or average
allowance6 for the different 6ize or make of trucks would
Hon. Robert S. Calvert, page 3 (v-1563)
necessarily have to be based on estimate or guesswork.
"It is likewise obvious that such user-dealers
are presently paying taxes on fuel consumed in such
pumping operation6 which would be exempt from taxa-
tion under the law if such fuel could be accurately
measured, or could be supplied from separate fuel
tanks, though the latter remedy may be economically
inexpedient.
"In reviewing the request we are forced to the
conclusion that any regulation promulgated to permit
payment of the tax on an estimated basis because of
individual cases of hardship would be inconsistent
with the law which appears to be supported to some
extent by your Opinion No. o-2381,holding that the
Comptroller will not be required to approve any re-
fund claim based upon a mere estimate or guesswork
by the claimant as to the amount of motor fuel used.
The Texae Butane Dealers Association, however, has
urged that the question be submitted to you.
'The opinion of your office is therefore respect-
fully requested as to whether or not Section 23 of the
Motor Fuel Tax Law, above referred to, vests the Comp-
troller with sufficient authority to promulgate a
regulation that would legally permit the deductions
described above from tax remittances to cover non-
highway use of fuel when such deductions must be based
on an estimate of the quantity so used. This depart-
ment has made no departmental construction concerning
this question other than above set out. There is no
litigation pending that will determine the answer to
this question."
In answering the question presented, we have assumed
that the use of the fuel described in your request is not for
the propulsion of a motor vehicle on the public highways of this
State and would, therefore, not be subject to the tax if deliver-
ed into a separate fuel tank.
Tax deductions or refunds are in the nature of an exemp-
tion and under the general rule must be strictly construed. 51
Am. Jur. 502, Taxation, Sec. 495. It has been held that the
right of a claimant to make an application for a tax refund is
statutory and that the procedure set out in the statute author-
izing such refund must be strictly complied with in order to
entitle the claimant to that right. Att'y Cen. 0ps. v-1487
(1952); v-721 (1948);0-6363 (1945);o-6195 (1944);Armstrong v.
Hon. Robert S. Calvert, page 4 (v-1563)
Driscoll Construction Co-, 110 P.2d 651 (colo.Sup. 1941).
Article 7065b-23,V.C.S., provides in part:
"It is hereby made the duty of the Comptroller
to collect, supervise, and enforce the collection of
all taxes, penalties, costs, and interest due or that
may become due under the provisions of this Article,
and to that end the Comptroller is hereby vested with
all the',powerand authority conferred by this Article.
Said Comptroller shall alB0 have the power and-author-
ity to promulgate rules and regulations, not inconsis-
tent with this Article or the Constitutions of this
State or the United States, for the enforcement of the
provisions of this Article and the collection of the
revenues levied hereunder."
Subdivision (a) of Article 7065b-14, V.C.S., provides
in part:
"There is hereby levied and imposed an excise tax
of Four Cents (4#) per gallon on all liquefied gas
used, or delivered into a fuel tank for use, in pro-
pelling a motor vehicle upon the public highway of
Texas, and Six Cents (64) per gallon on all other
liquid fuels used, or delivered into a fuel tank for
uBe in propelling a motor vehicle upon the public
highway of Texas, and every user-dealer who sells
and delivers liquefied @.B or other liquid fuels into
a fuel tank or tanks used to supply fuel for the pro-
pulsion of any licensed motor vehicle or any other
motor vehicle being operated or intended to be
operated upon the public highway of this State shall,
at the time of such sale and delivery, collect the
said tax at the rate or rates imposed upon the pur-
chaser or recipient of said special fuels, in addition
to his selling price, and shall report and pay to the
State of Texas the tax so collected at the time and
in the manner as herein provided. Every user-dealer
shall likewise report and pay to the State of Texas,
the tax at the rate or rates imposed hereinabove on
each gallon of liquefied gas or other liquid fuels,
hereinafter referred to as special fuels, acquired
in any manner tax free by said user-dealer and there-
after used, or delivered into a fuel tank for use, in
propelling a motor vehicle upon the public highway
of Texas.” (Emphasis added throughout).
Hon. Robert S. Calvert, page 5 (v-1563)
The rule with regard to the authority of an agency
to make rules or regulations is stated in Volume 1 of Texas
Jurisprudence Supplement at page 101:
"A settled doctrine of Constitutional Law for-
bids the delegation of legislative powers unless
express warrant therefor, in some particular situa-
tion, is to be found in the constitution. Accor-
dingly the Legislature cannot empower an agency to
make laws. But rule-making authority may be con-
ferred upon an agency, and this has often been done.
Express authority to adopt rules and regulations may
be given by the words of the statute. Implied au-
thority exists, it seems, when the adoption of rules
and regulations is necessary to accomplish the pur-
pose of the statute. So where a statute expressly
authorizes an agency to regulate an industry it im-
pliedly authorizes the adoption of regulations to that
end.
"When such authority, express or implied, has
been conferred upon an agency, it may make reasonable
rules and regulations, proper and necesssary in the
exercise of its powers. But they must be within the
clear intent of the statute, and not in excess of the
powers delegated to the agency."
The tax refund section of the Motor Fuel Tax Law (Art.
706513-13)contains an elaborate and detailed reporting and
record provision which was designed to prevent tax evasion and
the filing of fraudulent tax refund claims. Section 13 applies
only to "motor fuel" as that term is defined in Section 1 of the
act and therefore does not include "special fuels".
Subdivision (I) of Article 7065b-14, V.C.S., provides
that the owners of certain agricultural vehicles may consume
qpecial fuels without qualifying as a user-dealer and paying
the tax. SubdiviBion (f) of the statute contains a credit pro-
vi~ionvhere the user-dealer has erroneously reported and paid
more tax than was due on account of either a mistake of fact
or law.
It is clear from the language of Subdivision (a) of
Art.~Otj~bi&that the Legislature intended that liquefied gas
.or other liquid fuels (special fuels) which are sold and de-
livered or delivered for use in a "fuel tank or tanks used to
6Upply fuel for the propulsion of any licensed motor vehicle
or any other motor vehicle being operated or intended to be
operated upon the public highway of this State" were to be
Hon. Robert S. Calvert, page 6 (v-1563)
Subject to the tax. Since:~:there
are no provisions for re-
funds or for deductions, the presumption arises that the
special fuels placed in these fuel tanks were to be used in
propelling a motor vehicle upon the public highway. To
permit the taxpayer to make such deductions is, in effect,
to allow a refund ~.'or
an Offset to the taxes due and owing
the State in the absence of statutory authority. In addition,
it is our belief that it would be impracticable, if not im-
poESibl6, for you to promulgate rules or regulations which
would result in the special fuels referred to in your reqU66t
being calculated with the required degree of certainty. Att'y
en. o-p.o-2381 (1940).
It is our opinion that you are without statutory
authority to promulgate rules or regulations allowing motor
fuel tax deductions on special fuels consumed or used for the
generation of power other than for the propulsion of mot&r
vehicles upon the public highways from the same truck fuel
tank6 which also supply the fuel for the propulsion of the
truck upon the highways of this State.
SUMMARY
The Comptroller of Public Accounts has no
etatutory authority to promulgate rules or regu-
lations allowing tax deductions on special fuels
consumed or used for the generation of power other
than for the propulsion of motor vehicles upon the
public highways from the same truck fuel tanks which
also supply the fuel for the propulsion of the trucks
upon the highways of this State. Art. 7065b14,
V.C.S.;Att'y Gen. QB. v-1487 (1952); v-721 (1948);
O-6363 (1945);o-6195 (1944);o-2381 (1940).
APPROVED: Yours very truly,
PRICE DANIEL
W. V. Geppert Attorney General
Taxation Division
Mary 5. Wall
Reviewing A66istant 4f!irsA
Assistant
Charles D. !&hews
First Assistant
FL:ms