                  TEZEATJL-ORNEY                              GENE-I.
                                         OFTEXAS




Hon. Robert     S. Calvert                         Opinion     No.     S-2 13
Comptroller
Capitol  Station                                   Re:       Construction     of Paragraph      (e)
Austin,   Texas                                              of Section 2 and Paragraph          (c)
                                                             of Sec’tion 2$ of Article      7047c-1,
                                                             V.C.S.,   as to proper    allocation
                                                             of funds after August      31, 1957.
                                                             to the State Available      School
                                                             Fund and to the Comptroller’s
Dear   Mr.     Calvert:                                      enforcement     fund.

                   You request    our opinion relative  to the proper    allocation
of funds derived   from the tax on cigarettes     after August   31, 1957.    After
quoting  Section 2 (e) and 2f (c) of Article   7047c-1,   Vernon’s    Civil  Statutes,
you ask the following   questions:

                          (1)     What is the allocation      to the State        Available   School
Fund   after    August          31. 1957?

                     (2) Do the sections            quoted     above     repeal      the provisions
of Section     30 of Article 7047c-l?

                  (3)   If your answer to the second question                          is in the nega-
tive, then upon what part of the tax is the two and one-half                           per cent appli-
cable after August    31, 1957?

                       Article   7047c-1  was originally      enacted  in 1935 and levied
a three cents tax on each package           of cigarettes.      Two and one-half    per cent
of the gross      revenue     was set aside   in a special    fund for enforcement     and
one-fourth      of the balance    went to the Available       School Fund and the other
three-fourths       to the Omnibus     Tax Fund.     The 51st Legislature       amended
Article    7047c-1     so as to levy an additional      one cent tax on each package
of cigarettes,      which was to expire      on August     31, 1957.   All of this one cent
additional     tax was allocated     to the State Hospitals      and Special   Schools
Building    Fund.     No part of this additional      one cent levy was set aside for
enforcement        purposes.

                          The 54th Legislature     by Chapter   404,              Article  1, Section    1,
amended    Section         2 of Article 7047c-1    without  changing               the four cent tax
levy.  It amended           subdivision  (e) thereof   so that same               now provides:
Hon.   Robert   S. Calve&       page    2, Opinion      No.   S-213




                      ““(e) From      the effective     date of this Act, the net
         revenue     derived     from the tax levied by this Section                 2 sha,ll
         be allocated      as follows:       One-fourth      (l/4)     shall be credit-
         ed to a special       fund known as the State Hospitals                 and Spe-
         cial Schools      Building     Fund heretofore          created     by the Leg-
         islature;    one-fourth      (l/4)   of the balance        of the net revenue
         shall be credited        to the State Available           School Fund;        and
         three-fourths        (3/4) shall be credited          to the Clearance          Fund
         established      by House Bill No. 8, Acts of the Forty-seventh
         Legislature,       1941, page 269, Chapter             184; provided,        how-
         ever,    that not in excess        of Five Million        Dollars     ($S,OOO,OOO)
         shall be credited        to the State Hospitals           and Special       Schools
         Building     Fund for the fiscal        year ending August             31, 1955,
         and not in excess         of Five Million       Dollars      ($5.000,000)        for
         ea.ch fiscal     year thereafter,       through     and including         the fis-
         cal year ending August           31, 1957, shall be credited               to such
         fund.     Any balance      in excess     of such Five Million            Dollars
         ($5,000,000)       in any fiscal     year    shall be transferred            to and
         become      a part of the State Hospital           Fund heretofore            cre-
         ated by the Legislature,           which    is a.nd shall be the same
         State Hospital        Fund as provided        for in House         Bill No. 3 of
         the First     Called    Session     of the Fifty-first         Legislature.

                   ‘“After August   31, 1957, all revenue    from taxes
         levied by this Section   except that allocated    to the State
         Available   School Fund shall be credited     to the General
         Revenue   Fund of the State.

                        ‘“This Section   shall supersede      the provisions      of
          the Section      2 contained   in subdivision     (b) of Section    1 of
          House     Bill No. 2, Chapter       1, Acts,  First   Called   Session,
          Fifty-first      Legislature.’

                  The 54th Legislature      also amended    Article   7047c-1   by
adding a new section    to be known as Section     2i which levies    an additional
tax of one cent on each package     of cigarettes.    Subdivision   (c) of said Sec-
tion 2; reads  as follows:

                       ““(c) From      the effective    date of this Act the net
          revenue     derived    from the tax levied         under this Section    2-i
          shall be credited        to the General      Fund of this State.     Pro-
          vided,   no portion      of the revenues      derived     under this Sec-
          tion 2-i    shall be set aside to any fund for the administra-
          tion and enforcement           of the cigarette     tax law of this State.
          Provided      further,    the net revenues       collected    under this
          Section    2-i may be credited          daily to the Clearance      Fund
          heretofore      referred     to in this Act and on the first day of
          each month following           the collection     of the net revenues
          derived    under this Section        2-i the said net revenues        shall
          be credited      to the General      Fund; it being specifically       under-
Hon.      Robert   S. Calvert,         page   3, Opinion   No.    S-213




            stood that no portion  of the said net revenues                    of this Sec-
            tion 2-i shall remain    or be distributed    under                the provi-
            sions governing   the said Clearance      Fund.“’

                       Section 30 of Article   7047c-1   has not been                   amended       since
its   enactment     in 1935 and reads,    in part, as follows:

                        “Sec. 30.   That two and one-half       per cent (2&)
            of the gross    amount    of taxes,  permit   and license    fees and
            other funds derived      under the provisions       of this Act shall
            be set aside    in a special    fund subject   to the use of the
            Comptroller      and so much of said fund as may be neces-
            sary shall be expended        in the administration     and enforce-
            ment of the provisions       of this Act . ~ . *

                        We will first         answer   each      of your    questions    and   then    state
our    reasons     therefor.   ’

Answer       to question      two:

                          The amendments        of Article        7047c-1     do not repeal       the pro-
visions      of Section     30 of said article.

                   In 1950 the Legislature      amended     Article    7047c-1   by adding
Section  30a. providing    for allocation   of two and one-half       per cent of three-
fourths  of the gross   revenue    for administration     and enforcement       of the Act
until August   31, 1957.    This amendment       superseded     Section   30 until August
31, 1957. but left it in effect after that date.

                      None of the amendments           expressly     repeal   Section    30 and
repeals    by implication     are never     favored.     A large    amount    of the State
revenue     is derived   from     the cigarette    tax and we do not believe         that the
Legislature     intended    this revenue      to become     impaired     by lack of funds to
administer     and enforce      the payment      of the tax.

Answer       to question      three:

                    Two and one-half   per cent of the gross   revenue    derived
from  the cigarette   tax levied in Section  2 of Article  7047c-1    is set aside
in a special  fund for enforcement    purposes   in accordance    with Section    30.

                     Under    the last amendment         a tax equal to five cents is lev-
ied against    each package      of cigarettes.      Section   30 expressly      states  that
two and one-half      per cent of the gross        amount    of taxes derived      under the
provisions     of the Act shall be set aside        in a special    fund for the administra-
tion and enforcement        of the Act.     This provision      standing   alone would     place
two and one-half      per cent of the whole five cents levy into this enforcement
fund.   However,     Section 2; which levies         a tax of one cent per package          ex-
pressly    states  that the net revenue       derived    from the tax levied       by Section
2i shall be credited      to the General      Fund and no portion        thereof    shall be
Hon.   Robert   S. Calve&          page   4, Opinion   No.   S-213




set aside  to any fund for enforcement.     This provision    in Section  2i be-
ing a special  provision  will control  over Section   30. which   is a general
provision.

Answer     to question      one:

                    Section 2 (e) after August    31, 1957, allocates    to the Skte
Available   School Fund one-fourth     of three-fourths    of the taxes    levied bt
said section,   after the two and one-half    per cent is placed     in the enforce-
ment fund.

                        Section    2 (e) only   makes  one allocation   to the State      Avail-
able   School   Fund.      This    allocation   is made in the following    language:

                    ““From the effective    date of this Act, the net
          revenue  derived   from   the tax levied by this Section  2
          shall be allocated   as follows:              .

                    ““One fourth    (l/4)    shall be credited    to a spe-
          cial fund known as the State Hospitals           and Special
          Scho,ols Building   Fund heretofore        created    by the Leg-
          islature; one-fourth    (l/4)     of the balance    of the net rev-
          enue shall be credited      to the State Available       School
          Fund; and three-fourths         (3/4) shall be credited     to the
          Clearance   Fund.    . 0 0 O”

                     The next paragraph       in said section   provides   that “After
August    31, 1957, all revenue     from    taxes levied  by this Section    except  that
allocated    to the State Available     School Fund shall be credited       to the Gen-
eral Revenue      Fund of the State.*      This language    can only mean one thing
and that is that all revenue      that is allocated    as stated above    to any fund or
funds other than the Available         School   Fund after August     31, 1957, shall be
credited    to the General  Fund.      To illustrate   we will give the following      ex-
ample:

                       $3,200.00    tax is collected    under Section       2. Two and one-
half per cent for enforcement           amounts    to $80.00.      leaving   $3,120.00      to be
allocated.     One-fourth      of the $3,120.00     presently     allocated     to hospitals
and special     schools    will go to the General       Revenue      Fund after August        31,
1957.     This one-fourth      amounts     to $780.00.     This leaves      a balance     of
$2,340.00.      One-fourth      of this $2,340.00     is allocated     to the State Availa.ble
School Fund.       Hence    $585.00    should be credited       to the Available       School
Fund.      The balance     amounting     to $1,755.00    is to be credited        to the General
Revenue      Fund.    Thus all net revenue       that was credited        to all funds other
than the Available       School    Fund under Section       2 prior    to August     31, 1957,
is allocated     to the General      Fund in accordance       with the amended         statute.
Hon.    Robert     S. Calvert.    page   5, Opinion     No.   S-213




                                         SUMMARY

                          The amendments      of Article       7047c-1,    V.C.S.,    do
          not repeal        the provisions   of Section       30 of said   article.

                      Two and one-half     per cent of the gross    revenue
          derived   from   the cigarette   tax levied  in Section 2 of Arti-
          cle 7047c-1,    V.C.S..   is set aside in a special   fund for en-
          forcement     purposes   in accordance    with Section   30.

                    Section   2 (e), after August    31, 1957, allocates     to
          the State Available    School Fund one-fourth       of three-fourths
          of the remaining    taxes   levied by said section,     after two and
          one-half  per cent is placed      in the enforcement     fund.

APPROVED:                                       Yours      very   truly,

Elbert   M.      Morrow                         JOHN BEN SHEPPERD
Reviewer                                        Attorney General

Mert   Starnes
Reviewer
                                                By cn/    /%,A.
L. W. Gray                                      W. V. Gkppert
Special Reviewer                                Assistant

Mary    K. Wall
Special   Reviewer

Davis    Grant
First    Assistant

John Ben Shepperd
Attorney General
