Untitled Texas Attorney General Opinion

Honorable Joe Fultz
'County Attorney
Grimes County
Anderson, Texas
Dear Sir:
Opinion No. O-3849
Re: Is Grimes County entitled
to an exemption from the
payment of the State tax
of eight cents per gallon
on the distillate it pur-
Cha&?S?
We are in receipt of your letter of August 2, 1941, in
which you request the opinion of this department upon the question
set out therein as follows:
"Grimes County purchases quantities of distillate
for use in its tractors. These tractors are used in
the construction and maintenance of county lateral
roads.
"Is Grimes County entitled to an exemption from
the payment of the State tax of eight cents (8{) per
gallon on the Distillate it purchases?"
The following portions of Article XVII of House Bill 8,
Acts of the Forty-seventh Legislature, 1941, are pertinent to your
inquiry.
"Section 1. The following words, terms and
phrases shall, for all purposes of this Article, be
defined as follows:
“X * *
"(c) 'Other liquid fuels' shall mean any liquid
petroleum products, or substitute therefor, having a
flash point above one hundred and twelve (112) degrees
Fahrenheit, according to the United States official
closed testing cup method of the United States Bureau
of Mines, including diesel fuel, kerosene, distillate,
Honorable Joe FultZ,-Page 2 (C-%49)
condensate, or similar products that may be used as fuel
to generate power for the propulsion of motor vehicles
upon the highways of this State.
w * * *
"(i) 'Person' shall mean and include every individual,
firm, association, joint stock company, syndicate, copart-
nerehip, corporation (public, private, or municipal), trus-
tee, agency, or receiver.
"Section 14. (a) From and after the effective date
of this Article, there shall be and is hereby levied and
imposed an excise tax of four (4) cents per gallon, or
fractional part thereof, on all users of liquefied gases,
and eight (8) cents per gallon, or fractional part there-
of, on all users of other liquid fuels, upon the use of
such liquefied gases and other liquid fuels by any person
within this State only when such liquefied gases and other
liquid fuels are used in an internal combustion engine for
the generation of power to propel motor vehicles upon the
public highways of this State. The said tax shall be com-
puted and paid to the State of Texas through the Comptrol-
ler at the time and in the manner hereinafter provided."
(Underlining ours)
Prior to the enactment of House Bill 8, supra, the Motor
Fuel Tax Law was codified into Vernon's as Article 7065a-1, and
contained the following definition:
"(e) 'Person' shall mean and include every individual,
firm, association, joint stock company, syndicate, co-part-
nership, corporation, trustee, agency or receiver."
The above quoted portfon of the Motor Fuel Act was con-
strued by the Supreme Court of Texas in the case of State Y. City
of El Paso, 143 S.W. (2d) 366, in an opinion written by Justice
Critz. In that case the court discussed the question of whether
or not the Constitution of Texas prohibits the assessment of a
use tax on motor fuel against a municipal corporation, and stated
as follows:
"A careful examination of our Constitution dis-
closes that the only inhibitions, restrains, or exemp-
tions contained therein with reference to munici,pal
corporations are found in Section 1 of Article VIII
and Section p of Article XI, Vernon's Annotated St.
Const.
Honorable Joe Fultz, Page 3 (0-3849)
"So far as pertinent here, Section 1 of Article
VIII of our Constitution provides: 'Section 1. * * *
All property in this State, whether owned by natural
persons or corporation, other than municipal, shall
be taxed in proportion to its value. * * * It may
also impose occupation taxes, both upon natural per-
sons and upon corporations, other than municipal
* * x, It may also tax incomes of both natural per-
sons and corporations other than municipal, * * *..I
"Section 9 of Article XI of our Constitution
reads as follows: 'Sec. y. The property of coun-
ties, cities and towns, owned and held only for pub-
lic purposes, such as public buildings and the sites
therefor. Fire engines and the furniture thereof,
and all property used, or intended for extinguishing
fires, public grounds and all other property devoted
exclusively to the use and benefit of the public shall
be exempt from forced sale and from taxation, provided,
nothing herein shall prevent the enforcement of the
vendors lien, the mechanics or builders lien, or other
liens now existing.'
"An examination of the above-quoted constitutional
provisions discloses that they operate to exempt muni-
cipal corporations from only three classes of taxes.
These are ad valorem taxes, occupation taxes, and in-
come taxes. It is too plain to admit of debate that
the taxes here sought to be recovered by the State are
not ad valorem or income taxes. We are therefore left
to determine only the question as to whether or not they
are occupation taxes. Of course, if they are occupati,on
taxes, the City is exempt under Section 1 of Article VIII
of our Constitution, supra.
"* * * It follows that the tax here sued for is
manifestly a tax on using motor fuel in the operation
of Eotor vehicles on the public highways of this State.
Such tax is an indirect or excise tax. This being true,
the constitutional exemption of municipal corporati~ons
fron.occupation taxes cannot apply."
In requiring the City of El Paso to pay the use tax on the motor
fuel it used, the court stated as follows:
11+ *.* We think the statutory definition of 'Per-
son, 1 as contained in subdivision (e) of Article 7065a-1,
covers all corporations or agencies which actually sell
motor fuel in Texas. This being true, the statute also
Honorable Joe Fultz, Page 4 (O-3849)
covers all corporations or agencies which use motor
fue,lwhen there is absent an actual sale in this State."
(Untierliningours)
Apparently In line with the Supreme Court's construction
the Legislature defined the term "Person" in paragraph (I), Sec-
tion 1 of Article XVII, supra, to include public, private or muni-
cipal corporations.
The Constitution of Texas seems to recognize that a county
is a municipal corporation. Section 3 of Article XI provides as
follows:
"No county, city or other municipal corporation
shall hereafter become a subscriber to the capital of
any private corporation or association, or make any
appropriation or donation to the same, or in anywise
loan its credit; * * *" (Underlining ours)
Article 1572 of the Revised Civil Statutes provides as
follows:
"Each county which now exists or which may be
hereafter established, shall be a body corporate and
politic."
The courts of many states have passed on the question
of whether or not a county is a municipal corporation. Some cases
hold a county to be a municipal corporation, others hold it to
be a public corporation, and still others hold it to be a quasi
public corporation.
The decisions of the courts of this State are not clear
on this point but we believe that the weight of authori,tyis that
construilg the above quoted Consti,tutionalprovision and statute,
a county is either a public or municipal corporation.
The Supreme Court of Texas in the case of Bexar County
vs. Lindsn, 220 S.W. 761, in referring to Secti.on51 of Arti,cle
III of the Constitution of Texas stated as follows:
"The giving away of public money, its applica-
tion to other than strictly governmental purposes, is
what the provision is intended ,tomar-d against. The
prohibition is a positive and absolute one except as
to a distinctive class to whom the State is under a
sacred obligation. Not only are individuals, associa-
tions of individuals and private corporations within
its spirit, but all kinds of public or political corpo-
rations, as well, whether strictly municipal or not.
Honorable Joe Fultz, Page 5 (O-3849)
It therefore applies to counties, whether considered
as public corporations or only quasi corporations. The
Similar restraints upon the use of public funds and the
public credit applied to counties by these other provi-
sions of the Constitution practically demonstrate this
to be true."
The San Antonio Court of Civil Appeals in the case of
Brite V. Atascosa County, 247 S.W. 878 in an opinion written by
Chief Justice Fly stated as follows:
I,
. . . The statute (Article 1365) expressly makes
each county a body corporate and politic, and as such
it undoubtedly had the power and authority to institute
suits and defend against those brought against it. The
Constitution of Texas recognizes counties as municipal
corporations along with cities and towns. . . .II
The Eastlsnd Court of Civil Appeals in the case of City
of Abilene V. State, 113 S. W. (2d) 631, stated as follows:
"Counties, cities, and towns are municipal corpo-
rations. Const. Art. 11. They are political subdivi-
sions of the state. Id. Corporation of San Felipe de
Austin Y. State of Texas. 111Tex. 108, 229 S.W. 845.
* * *'I
It is the opinion of this department that the definition
of the term "Person" in House Bill 8, supra, includes a county
so as to require a county that uses distillate in one of its motor
vehicles to pay the tax imposed by Article XVII, Section 14(a)
of said Rouse Bill 8.
APPROVED AUG 14, 1941 Yours very truly
/s/ Robert E. Kepke ATTORNEY GENERAL OF TEXAS
ACTING ATTORNEY GENERAL OF TEXAS
APPROVED By /s/ Billy Goldberg
OPINION Billy Goldberg
COMMITTEE Assistant
BY /s/ G.W.S.
BG:eaw:lm CHAlRMAN