                                                   GENERAL




 Hon. Gee. H6,Sheppard
 Comptroller of Fublic Accounts
 Aw tin, Texas

 Dear ~78r.
          Sheppard8                          Opinion No. 04068
                                             Re: Under the faet6 EUhnitted, i6
                                             the agent of an oil company a %otor
                                             oarriar" or "contract oar~ier6.liahle
                                             for th6.gross r606ipt6 tu provid6d in
                                             Article 7OGCb, R.C,S. of TEX~E?

            YOU present for the Opinion Of thi6 departmsolt tWo qUOEtiOX,E
 which appear atthe oonolusioa of your letter, whio~hwe quot6 in full a6
 fOl1OlI68

             “Articl6   7066b,   Sec.   (a) prolridEE~a6fOll~61'

:-~*V,&oh   individual6 partnership, company, assooiatl6a. or oorporatiofedoing
:'bue%&666a6 a "mator bu6 company" as defined in Chapter'270,~AoLobBoylar
 Seasion of the Fortieth     Legislature, as amended bythe Aot6 of 1922; -Et
 Called Se66ion of the For+first       Legislature, Chapter 78,'or a6 saotor
 oarrier" or "contract oerriers as defined in Chapter 277, Acts Regular
 Session.of     the Forty-seoond Legislature, over and by u6e of the pub110
 ~highwaysof this State, ,shallmake quvterly'on the first day of January,
 April,     July. and Ootobar of eaoh year, a report to the Comptroller, under
 oath, of the individual, partnership, company, assooiations~or oorporation ,'
 by its president treasurer; or Eeoretame, sharing th6 gro66,a6Ionntr6eOiW
 ed from intrastaEe business done within thie Stat6 in the payment of
 charges for transporting persons for oomR6ncrationand any freight 6r oo6n
 modify for hires or from other 6ouroe6 of rwsnu6      reoslv6d    fro61intraEtat.6
 busin66s within this Stat6 during the qUart6r     next pmo6ding*      Said i+irid- ,,
 ual, partnership, company, assooiation,,or corporation at the'&se Of
 making said reports, shall pay to the State TmaEUmr         an OOOUpatiOn  taX
 for the quarter beginning on said date aqua1 to trro,alid      tW-tenth6 (2.2)
 per oent Of said gross reOeiptS* as shown w said report. Provided, hw6v6r.
 carriers of persons or property who ar6 required to pay an intangible
 assets tsx under the laws of this State, are hereby exempted from the pro-
 vision6 of this Article of this Aat.*

 "IIIdefining Hotor Carrierand Contraot C-Wrier6 Soor la of Art. Sllb
 &6+X6:
       ?;On,COO. !I.Sheppard, page 2 (C-6068)



       "*Provided, however, that the term "Motor Carrier" and the term "Ccn-
       traot Ca,riera as defined in t&e preceding section shall notbeheld~   ,'.~'
       to   ineltder            su&sec,       (.s)    of   the   s-   se&ion   6+   &ticls   ... pm&d&~?~T~.‘i   ‘.- ::.,A.:?:.
       'Where merely incidental to a regular, separate, fixed gnd established
      business, other tban a transportation business, the transportation of
      employees, petroleum products, and incidental supplies used or sold in
      connection with tilewholesale or retail sale of such petroleum products
      fromthe refiner or place of production or place of storage to the place
      of storage or place of sale and distribution to the.ulti,mate.nousumers~
      in a motor vehicle owned and used exolusivaly by the marketer-or 'refiner,'
      or ouned in whole or in part and used exolusively by the bonarffde oon-
      gignee or agent of such single marketer orrefiner, as wellas :.shere
      merely incidental to~<areylari~~separate, fired and establiqhed ln16lnes6,
      other thana ,transportati% lxxtness, the transportation of petroleum,
      employ?es,,~ mater.ial~:supplies   , and equipment for use in the deparbents
   .i of lttdq~~~~leupl.~~s~e~~:'hy.~~~:~bons      fide consignee or agent as used
I.’   heroin   being  he2leby,defiaed:Pnd,,construed,  for the purpose of this Act,
      to mqan~a persc& Underoontr$ct%i.th a single         principal to distribute
      petroleum products in a limited territory and only for such single prin-
      cQx$,,:,..~.,,~..~.~
                         -:,;c.-~1;: ,.~Iy .! ,.~.?,
                                                   :   z-:::~~:, ;.
                                                                  _,,_.,.,in‘;'
            -
        c:L.,._I.,., .,*.  .,.  i :,                        .I.;
                                                               ~,.  .::. .... .i::.~,
                                                                                    ,- '.
      61 have a ease in mind where's party is agent of one of the majoniJ:hom-
      panics and said agent with his own truck hauls petroleum products from the
      oil ~061~~6      refinery to .hi+wh.olesal:e  lbulk st%ation,and th$ oil company
      pays &he agent for such hauls at the same rate as they would    ___ pay some .    other
     -~Eq?ntq$ct siotom.,~a@.qp~;:   finmakingthe~ba~sto     his',- bulk sxatlon or"
      reta$&etation;-&+motor          .oarrier.passesthrough orecontacts t6qo~ormore
      ih&pornted      t%vne*;~:.:;      .:.t,~     . ,~~ .; ~'~                         :
         -~,,,'
            .~
             ..;i.
                 .. .     ';
      slJn& the o,bn&a~t~w&h the oil.'company+.tbe         6gent is responsibl'e:for:
      the:p~duc:tBfFOrmthe time~~itis 1oaded~:onhis truck at the refinery until
      pold. ..?,,      .: '.I! : ,..     .' : ....
      7,~,
         :-: "I .,^~  ~. ..:
                           'j: :,       ,-                         '.            r,“- T':_
                                                                                        :
      "Please te1Lm.e &? the motor carrier>~isliable for,the~gross receipts tax
     .->
    :,.
      as .pr,rovjded;f&&n    &rt.',7;C66b.'




 ,.;~..aPor
 ~,.I    ~,ol~r;co~eniezlce~~you-~ill
                                    find.attaoh&eopy                                    of.contract form be-
    tween;the ;oi.l~mpanyand.:srpent~?
   L          ..!~. :~.;...‘-       r _~,y,.:,,<. ”        (
                 Supplementing your letter you submit certain da&consisting   of
       "~&olesale CESSION    Agent's Contract," riders to Cosmission Ap@s
       Con~trgct,~"Consi~eg~.~Agre.ement;,'~and
                                              whqrt.1~designated 48 "Sdnedtie A,"
       and letter attached thereto, in use by oertain oil companies coreringthe.




                                                                      ,
    -    -




Hon. Geo. H. Sheppard, page 3 (O-6068)   -..   :   I <.~



operations of their distributing agents, all of which are to be considered
in oonneotion with this opinion.
                   .'
           , hour problem is to determine whether or not the transportation of
the petroleum products~under the circumstances<revealed in your opinion request
is taxable under Article   7066b, R.C.S.6whioh.is a part of the Omnibus Tax ~11
passed by the 47th Legislature, .xhichis H.B~;6,,6h..184, which was approved
on May 1, $941, a@ beoame efr'ective.on.the-   samedate. :
                                          : :.;;     :     i,.
             This Article;.as it appears.~inV,RiC; Si reads as follows:
             (Herefollows a verbatum oopy0f: the Artiale:as given on
               pnge:.oneof this Opinion and:fs'omitted~here for.brevity)
                         .               _.,~.:~ '..,‘
             The above tax act refers to Ch. 277, Acts, Regular Session, 4&d
Legislature, Article:9llb, ~V.R.C.Sb,.for the:definition--Of"motor carriers
and "contract ~;rrie~":sibject~to~the~:tax~th~l?eby~lmried.   We quote said def-
inition from the stat&e referred to::      ,":-':~.: i:.   :
                                        _ -:~".. ~.:
"The term Qnotor:aarriar'.meansany person;,firms 00rporation,.company, oo-
partnership, ass6ciatd.on,orjoint~stock.assooiatesi~~.andd-their lessees, re-
oeivers ort.rustees appointed.by aqy.Courtafiatsower,.Bnning, controlling,
managing, operating:er ,cauaingto be operated anymotorpropelled vehicle
used in transportitig:properQ~.forcompensation:or hcre~.overany publia high-
way in this:!~tate;wherd~in:the 0ourseof sudh~-.transportation   a highway I&
tieen two or more.indorpprated::citi0s,towns .orvillages, is traversed;
provided thatthe ters~~~motoroarriert::aa:.ased.fn   this Act shall not include
and this Act.shall notapply, .L &motor vehicle&:operated:emolusively within
the inoorpoisted limits of cities or~towns.?;-~(Enphdsisours)

"The term 'contract carrier' mesns anymotoroarrier:as hereinabove defined
transporting proparty for compensation or hire'overany highway in this
State other than as a consnoncarrier."

            At the same~session of the.Leg~&burethat      passed the Omnibus
Tax Bill, of which the tax act here.under consideration is a part, but at a
subsequent date, the above.definition'o&a "motor carrier' and soontract
carrier" was amended eo as to exclude aertain~~type,s of transportation by
adding the subsedtionsas follows: .'~        .-_ .,;~_: f,i
                                           ; ( ~':,I.
                                                  .:..
                                                     '~
"Sec+i.onla (1) Provided,.howeTr&, that~'the~teivn~~!Mo~r Carrier' and the
term 'Contract Carrier* as defined fin the preceding sect&    shall not be
held to include:

"(a) Ary persnn'havin;;a re~ular,,sepnrate,~fixed, and established place of
buriness, other than a 'transportation~siness,;whBre,-goods, sares, and
merchandise are kept instock and are prir?arily-andregularly bought from
the public orsold to~the public ormsnufactured,or',prooessedbw: such person
in the ordinary course of the mercantile, manufacturing, or processing busi-
ness,ond who, merely incidental to the operation of such business, trans-
ports over the highways of this State such goods of which such person is
the bona fide owner by means of a motor vehicle of which such person is the
Hon. Gee. H. Sheppard,,pge 4 (O-6068)



bona fide owner; nor

"(b) Anv person transporting fum Implements, livestook, livestook feed-
stuffs, dairy produots, horticultinal products, floral products, aericul-
tural products, timber in its natural state, or wool and m&air of which
such person is the bona fide cwner on a vehicle of which he is the bona
fide owner to an from the irea of produotion and to and from the market
or place of storage thereof; provided, however, if such person (other +hpa
a transportation company) has in his possession under a bona fide consign-
ment contraotlivesfook~ wool, mohair, milk and cream, fresh fruits and
vegetables, or timberinlts natural state under oontraot as an incident
to a separate, fixed, and established~business conduoted by him the said
possession shall be deemed ownership under this Act.

      ere merely incidental~to a regular, separate, fixed, and established
L2!is.    other than a trans$ortation business, the transportation of emplcy-
ees, pet:oleum products; and incidental supplies used or,sold in connection
with the wholesale oreretail sale of such petroleum products fromtha refin-
cry or place of produotion or.plaoe of storage to the place of storage or
place of sale and dietriI.utioq~to-theultimate consumer, in a motor vehicle
owned and used exolusivelyby the,marketer or refiner, or wwned in whole er
in prt and used exclusively by the bona fide consignee or agent of such
marketer or refiner; as well as where merely incidental to a regular,
separate, fixed, and established business, other than a transportation bus-
iness, the transportation of petroleum~employess, material, supplies, and
equipment for use in.the departments ,of the petroleum business by the bona
fide owner thereof in a whiole &which     he is the bona fide owner; bona
fide consignee or agent as used herein being hereby defined and oonstrued,
for the purpose of this Aot, to mean a person under oontraotwith a single
principal to distriwte petroleum products in a limited territory and only
for such single principal) *

            Me must of neaessity, in considering the question presently be-
fore us, determine whether or not we should be governed by the definition
of "motor carrier" and'"contraot carrier' as it appears in the original Act
before it was amended by adding the .two foregoing subsections. The amend-
ment as passed finally by the Senate on May 14, 1941, and approved May 16,
1941, becani:~z'feativeninety days after July 3, 1941, date of adjournment.
This amanclm6~~~
               WLS, therefore, passed thirteen days after the Omnibus Tax
Bill was pass& and approved, and became effective on October 3, 1941,
following the effeotive date of the Omnibus Tax Bill on May 1, 1941.

            We have concluded that ne must be governed by the definition of
"motor carrier" and "contract carrier" contained in the original act speoif-
ically referred to in the taxing act. Xe believe the weight of authority,
and indeed the holding of the Supreme Court of this State, supports this
conclusion. Sutherland on Statutory Construotion, Vol. 2, page 648, is as
followsr
Hon. Gee. H. Sheppard, Rage 5 (O-6066)



"A statute of apeoific reference incorporatea..t&~.previsionsreferred ix.
from the statute as of.the~time of adoptionn~~eut,,eubsequent s,mendmer&s,
unless the legislature hasexpressly or by strong impltcation shcwn its
intention to inoorporqte subsequent amendmentswiththe statute. In the
absence of such intention subsequent amendment of;the‘.referredstatute
will have no effeoten the reference stptuteb-,-#.:.:."*

            Chief Juatioe~Curaton in the ~caee of:fcMer    v".Carlton (Su-
preme Court) 296 S-W. .lOTO, laid dcwn tbe~rule.'aa;feUuwss
                                            >;;y
                                               .-,:!:,,.'
                                                   ,':I...
                                                        : ',:
"Stat&es uhieh referto oth6r statutes and make $hemapplioable to the sub
Sect of legislation are.oalled .*referencestafuteq;t and.are a familiar amd
valid mode of legislation" The-general rule is that when a statute is adop
ted by a,speoifio descriptive zsPerence,ltihe:,ad?~~oa takes the statute as
it exists at that time;.and.,thesubsequent.~n~~tr.thereoP      would not'be
within the terms of the-adoptingact. " l '"w.:,: I .;': >I.~.
              .:
               ..,
            Hnving,thas~~bon~luded,'ne.rprss
                                           to the more&f&cult      question as
to whether or nctdn p9v~c~ent .theLegtdIatuve @&nded.that this tax be dm-
posed only -apo*,*motorcarriers" and ~~~ontrarrt~asrrie~?~~su~jeot to regula--
                          ssion under.~e,ie~ti~ns.~rid
                      L%m$i
tion by the ,Railroad,.C                                        by Chr 277, Aete
of the 42nd LegislatureN in,whioh the erigin&definihionssre feund" Ris Poe
constrained to the view that the Legislat~.diP.not.~iotend by this referenoe
to make the imposition of the tsx dependent upca whether or not such "motor
carrier" and~woontraat.carrier" as therein defrnsd mere subjeat to regulation
by the Railread'Cemmiasi'on~ There.is-no,Ie~s.sla~~ve~~~esaion in either a&
making the one .dependentupon the other; ~otie-:is.~a-~regn~atory
                                                               measure" the
other a taxing measure. The reference inthe tsxingaotto       the regulatory
act for a definition oP,"motcr carrier" and "contraat oarrier is the same as
if these definitions had-been incorporated in the taxing aot direct instead
of by reference. Had this been done, obrriouslyit oould not be logically
argued that sn amendment subsequently passed to the regulatory rot l&iting
the preexisting definition of "motor carrier" and "oontraot carrier" would
also operate to limit these same terms as defined in the taxing pot" As
stated above; the.aots oover different subjeots, one regnlat%e8;:%he~.W&er
taxation. They are not in pari materia" We think the real test is whether
or not such "motor oarrier" or "contract carrier," p defined in the taxing
act,,transports propepty for compensation or hire.over any public highway in
this State where the transportation is over a highway between two or more in-
corporated cities, towns, or villages"

            Liability for,the tax imposed by virtue of Article 7066b, eupra,
must first depend upon whether or not the "motor carrier" or "conlraot oar-
rier" transports for compensation or hire.. Your first question, read in
connection with the preceding statement made in your opinion request, that
the agent of one of the major oil companies with his ovntruak hauls petro-
leum products from the oil oompaqy~s refinery to his wholesale lmlk station,
and the oil company pays %&I agent for such hauls, at the same rate it would
pay some other coatraor motor carrier, presupposes that such aa agent is in
Hon. Gee. H. Sheppard, page S(O-6066)



effect transporting for compensation or hire. Such being the oases it is
our oonolusiou that the gross reoeipts received by such agent would be
subject to the tax imposed by virtue of this article of the statutes. More
clearly would such au agent, who hauls petroleum produots from the refinery
to other parties, othorn than his om concern, andreceives oompensatiou or
hire therefor, is engaged in ~U%SpQr~tiOn   as a "oontraot oarrier," and the
receipts received by him in such oprations would be subject to the tax im-
posed by virtue of this statute. If we are correot in oux asswption that
such transportation is oanpensatod for either direotly or indireotly by an
adjustment ia the prioe,oP the product so transported from the refinery to
the agent's bulk sales station, and where such agent transports for others
for aompensation or hire both operations would be subject to the gross
rsoeipts tax fixed w th2s article of the statutes.

             In othof words, en agent as designated in your letter, in the
 language of the foregoing definition of scontraot oarrier" or "motor car-
rier," is a "person, firm, or corporation"; suoh agent "owns, oontrols,
manages, operates or OWSM    to be operated a *motor propelled vehiole used
 in tramporting property for compensation or biro between twc.er more
~inoorporated cities, towns, or villages," as distinguished from exclusive
operation within oit+os or towns. We think such operation falls squarely
vithin the purview of the statutory definition, whether treated as a
 smotor oarriers or sobntraot carrier,! and henoe, as above stated, is sub
 jeot to thetas imposed by Artiole 7066b, supra.

            We think it fair to say, h-er,    that the question presented
by you is one of first impression, and it has notboen definitely passed
upon ly the courts of our State? but whatever doubt exists we feel compelled
to resolve itin favor of the tax.

                                            v&y truly yours

                                          ATTOBBEIIGElWHAL OF TEXAS


                                          Py /s/L,   P. Lollar

                                                   L. P; LolIar
                                                      Assistant


APP3Ovi3DSEP 22, 1944                               Approved
/d Grover Sellers                               opinion Comaittee
ATTORITEYGEiVERALOF TEXAS
