Untitled Texas Attorney General Opinion ( 1951 )

THEATTORNEY GENER&
OFTEXAS
PRICE DANIEL
ATTORNEY GENERAL
August 21,1951
Hon. George B. Butler, Chairman
Board of Insurance Commissioners
Austin, Texas Opinion No. V-1249
Re: Effect of House Bill 285,
Acts 52nd Leg., 1951, upon
rates applicable to gross
premium taxes to be col-
lected under the provisions
of Articles 7064, 7064a. and
Dear Mr. Butler: 4769,V.C.S.
You have requested the opinion of this office as to the
legal effect of House Bill 285, Acts 52nd Leg., 1951, upon the
rates applicable in the collection of gross premium taxes under
the provisions of Articles 7064, 7064a and 4769, Vernon’s Civil
Statutes, in the year 1952 and thereafter. You have also requested
an opinion as to whether certain conclusions reached by you from
your examination of House Bill 285 are correct. For the purpose
of brevity, the conclusions reached by you will be discussed seria-
tim .
Your first conclusion is that House Bill 285 will become
effective on September 1, 1951. This conclusion is correct in the
light of the clear and unmistakeable language of Section XXVII
of House Bill 285, which is as follows:
“The crowded condition of the calendar creates
an emergency and an imperative public necessity that
the constitutional rule requiring bills to be read on
three several days in each House be suspended, and
the same is hereby suspended, and this Act shall take
effect and be in’force from and after the first day of
September, A.D..1951.” [Emphasis added.]
House Bill 285 was passed by both Houses as aa emergency mea-
sure and was signed by the Governor on the 8th day of June,1951,
and absent the underlined portion thereof, w, would have be-
Hon. George ,B. Butler, ,Page 2, (V-1,249) ``
come effective and been in force from and after that date. How-
ever, the Legislature specifically provided that the Act should
become effective from and after September 1, 1951. See Attor-
ney General Opinion V-1246 (1951) to the Honorable Robert S.
Calvert, Comptroller of Public Accounts.
Your second conclusion is that Sections 1, 2,and 3 of
Article XVII of House Bill 3, Acts 50th Leg., 1st C.S., codified
respectively as Articles 70644, 7064a-1, and 47694, Vernon’s
Civil Statutes, are repealed by House Bill 285 in so far as each
of these articles levies an additional tax for the calendar year
1951 and therefore no tax is to be levied under Sections 1, 2,
and 3 of Article XVII of House Bill 3, supra, on premiums col-
lected during 1951, irrespective of whether they were collected
before or after September 1, 1951.
Section 1 of Article XVII, House Bill 3, Acts 51st Leg.,
1st C.S. 1950, added the following Article:
“Article 70649. In addition to all other taxes,
there is levied hereby an additional tax for the years
1950 and 1951, on every insurance corporation, Lloyd’s,
or reciprocals, and on any other organization or con-
cern upon which a tax is levied by Article 7064, Re-
vised Civil Statutes of Texas, 1925, as amended.
“The tax shall be paid at the same time, in the
same manner, and subject to all the same terms, con-
ditions, obligations and penalties as is provided for
the payment and collection of the tax levied in the
aforesaid Article 7064.
“The tax hereby levied for the year 1950, shall
be ten per cent (10%) of three-fourths (3/4) of the
amount of tax levied and due for the callendar.~year
1950 under the aforesaid Article 7064. The tax here-
by levied for 1951 shall be two-thirds (2/3) of ten per
cent (10%) of the amount of tax levied and due for the
calendar year 1951 under the aforesaid Article 7064.”
Sections 2 and 3 of Article XVII use similar language in enacting
Article 7064a-1 and Article 4769i.
However, Articles XV, XVIII, and XXI of House Bill 285,
Hon. George B. Butler, Page 3 (V-1249)
which respectively amend Article 7064, 7064a, and 4769, V.C.S.,
each contain a section which, as relates to Article 7064, reads
as follows:
“Section 2. Section 1 of Article XVII of House
Bill No. 3, Chapter 2, Acts of the First Galled Ses-
sion of the Fifty-first Legislature, (which is codi-
fied as Article 7064i. Vernon’s Annotated Civil
Statutes of Texas), is hereby repealed insofar, and
only insofatt as it levies a tax on premium receipts
for the year 1951.”
The identical language of this repealing clause, except as to
the specific references to the section numbers of House Bill 3
and the articles to be repealed, is contained in Section 2 of Arti-
cles XVIII and XXI of House Bill 285. This language, as quoted
above, clearly and unmistakeably repeals those provisions of
Sections 1, 2, and 3, Article XVII, House Bill 3, Acts 51st Leg.,
1st C.S., which levy a tax upon premium receipts for the year
1951, and hence your conclusion is correct.
Your third conclusion is that Articles 7064a and 4769,
V.C.S., now in effect, will control the premium taxes of the com-
panies affected, measured by the premiums collected during the
period January 1, 1951,to August 31, 1951, both inclusive. Your ,
fourth conclusion is that Articles 7064s: anti 4769, Vernon’s Civil
Statutes, as amended by House Bill No. 285, which amendments
will become effective September 1, 1951, will control the tax
levied against the companies affected, measured by the premiums
collected during the period September 1, 1951, to December 31,
1951, both inclusive.
Articles 7064~1 and 4769 tax respectively the gross pre-
miums received by domestic life, health, and accident companies
and foreign life, health, and accident companies. Article 7064a,
now, and as amended by House Bill 285, reads in part as follows:
u. . . Such taxes shall be for and on account of
business transacted within this State during the cal-
endar year ending December 31st, in which such pre-
miums were collected, or for that portion of the year
during which the insurance organization transacted
business in this State. . . .”
Hon. George B. Butler, Page 4 (V-1249)
The same provision also appears in Article 4769, now, and as
amended by House Bill 285.
In an opinion by the Attorney General dated December
3, 1936, addressed to Hon. R. L. Daniel, Chairman,of the Board
of Insurance Commissioners, (Book 374, p. 496) it was held that
an occupation tax levied for and on account of the business ‘trans-
acted during the year in which the premiums are collected upon
which the tax is computed can be levied only upon the basis of
the tax rate in effect at the time such business was transacted
and such premiums collected.‘. This holding was affirmed by let-
ter opinion of this office dated:August 14, 1949, addressed to Hon.
George B. Butler, Chairman, Board of Insurance Commissioners.
Inasmuch as the amendments to Articles 7064a and 4769, enacted
by House Bill 285, will not be effective until September 1, 1951,
your conclusions are correct that the rates provided in Articles
7064a and 4769, prior to the effective date of the amendment on
September 1, 1951, will control the premium taxes of the com-
panies affected, measured by the premiums collected during
the period January 1, 1951, to August 31, 195,1, both inclusive,
and that the rates provided in Articles 7064a and 4769, as amended
by House Bill 285, will control the premium taxes to be levied
against the companies affected, measured by the premiums col-
lected during the period September 1, 1951, to December 31,
1951, both inclusive.
Your fifth conclusion is that Article 7064, V,C.S., as
amended by House Bill 285, will control the tax to be paid by
the companies affected, measured by the premiums collected
during the entire peri.od January 1, 1951, to December 31,1951,
both inclusive. Article 7064, as amended, imposes an occupa- .
tion tax on all organizations transacting the business of fire,
marine, marine inland, accident, etc., insurance, other than
the business of life, personal accident, life and accident, and
health and accident insurance, and is an occupation tax payable
in advance for the privilege of transacting such insurance busi-
ness in this State for a period of one year commencing on March
1st of the year in which the tax is paid. The amount of the tax
is measured by and is based upon the amount of gross premiums
collected by the insurance organization during the preceding cal-
endar year but the tax is not for the privilege of having done
business in Texas duringthe period in which such premiums
were collected or a tax upon the premiums so collected. Kansas
City Life Ins. Co. v. Love, 101 Tex. 531, 109 S.W. 863j1908);
- .
Hon. George B. Butler, Page 5 (V-1249)
Attorney General’s Opinions, supra.
Under the Supreme Court’s holding in Kansas City Life
Ins. Co. v. Love, supra, the statutory tax rate in effect at the time
the tax is levied is applicable, irrespective of the tax rate in ef-
fect at the time the premiums were collected. Your conclusion
is correct inasmuch as the tax rate providebin Article 7064, as
amended by House Bill 285, will be in effect from January 1,1952,
to March 1, 1952, during which period the tax will be levied in
accordance with the provisions thereof, and the applicable rate
will be measured by the premiums collected during the entire
period January 1, 1951, to December 31, 1951, both inclusive, be-
ing the preceding year prescribed in the statute.
Your sixth conclusion is that the provision contained for
the first time in Section XV of House Bill 285 which provides that
“examination and valuation fe,es paid in such taxable year to or
for the use of the State of Texas by any insurance organization
hereby affected shall be allowed as a credit on the amount of pre-
mium taxes to be paid by any such insurance organization for such
taxable year. . . .‘I may be deducted by such companies provided
the examination and valuation fees were paid during the year 1951,
In the letter opinion of,this office to Hon. George B. Butler, dated,-
August 16, 1949, supra, in answer to a similar question as to simi-
lar provisions contained in Articles 7064a and 4769, Vernon’s
Civil Statutes, it was held that:
a.
. . . The credits allowable for examination and
valuation fees paid during the taxable year under the new
measures are governed by the same principle. Those
fees paid after the effective date of the Acts may be cred-
ited against those taxes accruing after the effective date
of the Acts. *’
This holding is reaffirmed.
SUMMARY
House Bill 285, Acts 52nd Leg., 1951 (The Gmni-
bus Tax Bill) is effective from and after September 1,
1951, and the tax rates therein provided by Articles
XV, XVIII and XXI are the rates to be applied in the
4,.
_a. Hon. George 8. Butler, Page 6 (V-1249) L
collection of gross premium taxes to be collected
under the provisions of Articles 7064, 7064a and
4769, Vernon’s Civil Statutes.
APPROVED: Yours very truly,
Everett Hutchinson? PRICE DANIEL
Executive Assistant Attornev General
Charles D. Mathews
First Assistant
Price Daniel C. K. Richards
Attorney General Assistant
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