.




           THEATTORNEYGENERAYL
                         OF      TEXAS

                        AUSTIN    aa. TEXAS


                         May 25, 1960

    Honorable Robert S, Calvert          Opinion No. W-842
    Comptrollerof Pub1.icAccounts
    Capitol Station                      Re: Validity and interpre-
    Austin, Texas                            tation of Article lg.01
                                             (2), H.B. 11, 3rd C.S.,
                                             56th Legislature,levying
                                             an occupation tax on
                                             brokers and factors as
                                             applied to real estate
    Bear Mr. Calvert:                        brokers and salesmen.
         With your letter requesting our opinion upon the above
    question you enclosed a letter from the Texas Real Estate
    Association,Inc. It is apparent that you adopted the
    questions as phrased in this accompanyingletter, as modified
    by a subsequentletter from you, as those which you wished
    to have this off.iceanswer.  They are as follows:
              "1) Are real estate brokers subject to
            this occupation tax receipt under Article
            19.01, Section (2) of Title 122-A, Taxation-
            General of the Revised Civil Statutes of
            Texas?
              "2) Is a real estate salesman who is
            employed on a salary or commissionby a
            broker subject to the tax as levied herein?
              “3)  Is this section as It applies to
            real estate brokers and salesmen violative
            of Section 35, Article III of the Constitu-
            tion of the State of Texas?"
         Since the third question bears directly upon the validity
    of the Article in question, it should be the first answered.
    Our conclusion is that the section, as applied to real estate
    brokers and factors, is not violative of Article III, Section
    35, Constitutionof Texas. However, a brief discussionof the
    history of the provision is here in order.
         The occupationtax on brokers and factors previously
    existed as eubdlvision7 of Article 7047, Revised Civil
    Statutes. In its original form, it was interpretedas taxing
    only brokers of stocks and bonds. See Attorney General's
Honorable Robert 5. Calvert, Page 2   Opinion No. W-842


Opinion No. O-4287. In 1943, the 48th-Legislature(p. 654,
oh. 372, 8 2) amended the *sectionto read substantiallythe
ssme as in the present ArtiOle 19.01(2) of Title 122-A,
under discussion,which we h&+&aset out:
          "Brokers and Factors. From every
        person, acting for himself or on behalf of
        another, engaged in the business or occupa-
        tion of a Broker or Factor, whether he is
        principally engaged in such business or
        not, there 8hall be collectedTwelve Dollars
        ($12) per year. A 'broker,' or 'factor,'
        for the purpose of this subsection,is
        every person, Who, for another and for a
        fee, commissionor other valuable considera-
        tion, rents, buys, sells, or transfers,for
        actual spot or future delivery, or negotiates
        purchases or sales or transfers of stocks,
        bonds, bills of~.exchange,negotiablepaper,
        promissorynotes, bank notes, exchange,
        bullion, coin, money, real estate, lumber,
        coal, cotton, grain, horses, cattle, hogs,
        sheep, produce and merchandiseof any kind;
        whether or not he receives and delivers
        possession thereof; provided that this
        subsection ahall,not apply to a salesman
        who Is employed on a salary or commlsslon
        basis by not more than one retailer, whole-
        saler, jobber, or manufacturer,nor shall
        this Subsection apply to or be construed
        to include persons selling property only
        as receiveras trustees in bankruptcy,
        executors, admlnlstrators,or persons selling
        under the order of any court, or any person
        who is Included within the definitionof any
        other occupationand is paying or subject to
        the payment of a tax under any other Sub-
        section of this Chapter; however, this ex-
        emption shall not apply to any Individual
        engaged in more than one occupationas defined
        by the other Subsectionsof this Article."
     It should be noted parentheticallythat the amount of tax
was raised from $10 (In the amended Art, 7047, Seci 7) to $12
in the present Art. 19.01; also, the word "Chapter"was
substitutedfor "Act" and the last word in the provision
changed from "Act" to "Article". Otherwise the wording is
identical,
     Soon after the enactment of the amendatory act of 1943
purportedly extending the scope of this~tax,Attorney General's
.




    Honorable Robert S. Calve&, Page 3    Opinion No. W-842


    Opinion No. O-5590, to Honorable Gee, H. Sheppard, Comptroller,
    declared such amendment invalid as applied to real estate
    brokers and factors in that it violated Art. III, Sec. 35,
    Constitutionof Texas,'which provides:
              "NO bill, (except general appropriation
            bills, which may embrace the various
            subjects and accounts, for and on account
            of which moneys are appropriated)shall
            contain more than one subject, which shall
            be expressed in its title. But if any
            subject shall be embraced in an Act, which
            shall not be expressed in the title, such
            act shall be void only as to so much
            thereof, as shall not be so expressed."
         The pertinent part of the caption of the 1943 Act read
    as follows:
               "An Act.   .to amend Subsection7 of Article
            .70479as heretofore amended, so as to provide
             foran annual OccupationTax of Ten Dollars
             (~;,"~e;~ro~~;a;;o;~ collected from every
                                 , defining same, including
            brokers and factors  of all classes, and
             exempting certain salesmen, and certain other
            persons;. . .providlngthat this Act or any
            portion of this Act shall not levy or be
             construed as levying any tax on any new
             occupation or occupationsor be construed
             as levying any increased and/or additional
             tax of any kind or character whatsoeverupon
             mY   erson, firm, psrtne;shlp,association
             andPor corporation;. . *:
         Since the body of the smendatoryact purported to levy
    an occupation tax on real estate brokers and factors (which
    had not theretoforebeen levied), while its caption clearly
    evinced an intention not to tax any new occupation,Opinion
    No. O-5590 held the attempted levy invalid under the above
    constitutionalprovision.
         The present question, therefore, is whether or not the
    republicationof this provision, in virtually the ssme form,
    in another act, overcomes the prior constitutionalobjection.
    As indicatedearlier, our opinion is that it does overcome
    such objection.
         The caption to H. B. 11, 3rd C.S., 56th Deg., insofar as
    applicable here, reads as follows:
Honorable Robert S. Calvert, Page 4   Opinion Ho.   W-842

          "An Act revSsing and rearrangingcertain
        Statutes of Ti%le 122 8Taxationtof the
        Revised Civil Statutes of Texas. . .lnto
        a new title $ewl,.ba
                          known as Title 122-A,
        'Taxation-Seder&' of the Revised Civil
        Statutes of Tex&a+$revising statutes
        levying. . miscellaneous occupation
        taxes. O e .'
     The title thereby gives notice that Ii.B. 11 will have
to do in part with revising statutes levying miscellaneous
occupation taxes. As said in English & Scottish American
Mortg, & Inv. Co., Ltd. v. Hardy, 93 Tex. 289, 55S.W. 169
  900I:                   :i
           l,   .The object of the requirementthat
         the'subjectof an act should be stated in
         Its title is simply to direct,attentlonto
         the subject to be legislated upon, Such
         subject is sufficlentlyli~dfca~ed::.when.rthe
         title gives the number of an article of the
         Code in which it is included, and the fact
         that a provision in such article may be
         unconstitutionaldoes not lessen the effect
         of the reference to It as notice that It is
         to be made the subject of further legislation.
         The amendatory act derives no force as law
         from any virtue in the act amended, but takes
         its effect from the new exercises of legisla-
         tive power. If such power is exerted, and the
         legislativewill expressed in~accordancewith
         the constitution,such expressionbecomes law
         without the aid of the statute referred to in
         the title, whether the latter is constitutional
         or not. The statute amended is referred to
         only to Indicate the subject with which the
         legislatureproposes to deal, and to such pur-
         pose its validity is not essential. The very
         object of the saendment may be to supply a
         constitutionalenactment in the place of one
         which was unconstitutional. It is sometimes
         said, broadly, that since an unconstitutional
         statute is void, it cannot be emended, and
         that hence another statute attempting an amend-
         ment of it is void. It is doubtless true that
         the amendment of an unconstitutionallaw does
         not impart efficacy to it, but it'by no means
         follows that the new statute is void. It may
         contain all the elements of a valid enactment,
         and thereforemay have the force.of law from
-   -




        Honorable Robert S. Calvert, Page 5   Opinion Wo. W-842


                its adoption. The mere fact that it
                attempts to smend an invalid statute
                cannot defeat It, when it is itself a
                complete expression of legislativewill,
                made in conformitywith constitutional
                requirement. While the invalid statute
                may have no force of its own, It may
                serve when properly referred to, to
                indicate the subject upon which the
                legislatureproposes to pass a valid
                law. L1. *It
            See also State v. Rice Properties, Inc., 163 S.W.2d 669
        (Tex.Civ.App.1942), err. refPd.
             In answer to your question number one, real estate brokers
        are subject to the occupation tax under the above discussed
        Article 19.01(2). As pointed out above, "real estate" was one
        of those items added to the enumerationof occupations in the
        old Section 7 of Article 7047 by the smendatory act of 1943,
        which failed because of the title defect. It is clear that
        the same provision in the new Title 122A includes real estate
        brokers.
             As to your second question, real estate salesmen are
        subject to the same tax. Your attention is directed to the
        first part of Art. 19.01(2) which reads "From ever% person,
        acting for himself or on behalf of another,. . . . . Salesmen
        pursuing any of the occupations taxed by the subsection,although
        acting on behalf of one or more brokers, are within the scope
        of this mandate, and must pay the tax unless exempted therefrom
        by the last proviso of the subsection,setting out certain
        exemptions. The first part of the proviso exempts any salesman
        who is "employedon a salary basis or commissionbasis by not
        more :han one retailer, wholesaler, jobber, or manufacturer
        * . a . The Legislature,in the exercise of its broad powers
        of classificationfor the purpose of taxation, has designated
        that salesmen for these four classes of emploWers shall be
        exempt from the operation of this tax. Texas Co. v. Stephens,
        100 Tex. 628, 103 S.W. 481 (1907); Hurt v. Cooper, 130 Tex. 433,
        110 S.W.2d 896 (1937). Real estate brokers could not be within
        any of these categories;therefore, their salesmen are not
        exempt by this language. The result is the same regardless of
        whether such salesmen are compensatedon a salary or commissiOn
        basis, A fact situation could conceivablyarise where such a
        salesman would fall within one of the other exemption provisions
        in the subsection;however, we assume that your question primarily
        contemplatedtheir status under that part of the proviso dis-
        cussed.
                                                                 .   .




Honorable Robert S. Calvert, Page 6    Opinion No. WW-842


       Your first and second questions are, therefore,answered
in   the affirmativeand your third question in the negative.

                      SUMMARY

               Article 19.01(2), H.B. 11, 3rd C.S.,
          56th Le lslature (Title 122A-Taxatlon-
          General7 levies an occupation tax upon
          real estate brokers and upon salesmen for
          real estate brokers. This subsection is
          not unconstitutionalas applied to real
          estate brokers and salesmen, under Art.
          III, Sec. 35, Constitutionof Texas.
                            Yours very truly,
                            WILL WILSON
                            Attorney General of Texas




JRI:om
APPROVRD:
OPINION COMMITTRR:
W. V. Geppert, Chairman
Marietta McGregor Payne
Howard Maya
Donald R. Benard,
2. J. Turlington
APPHOVED FOR THE ATTCRNRY GENERAL
By: 'LeonardPassmore
