The Honorable Cue D. Boykin         Opinion No. H-1012
Chairman
Texas Industrial Accident Board     Re: Whether governmental
Austin, Texas 78711                 bodies are exempt from tax
                                    imposed by article 8306,
                                    9 28 on workmen's compen-
                                    sation self-insurers.

Dear Mr. Boykin:

     You have requested our opinion concerning whether govern-
mental bodies are constitutionally exempt from the payment of
the gross premium tax imposed.by section 28 of article 8306,
V.T.C.S.

     Article 8309h, V.T.C.S., provides for workmen's compen-
sation for political subdivisions.   Section 2(a) permits such
subdivisions to become self-insurers.   Section 3(a) (1) in part
adopts section 28 of article 8306. Section 28 of article 8306
provides for a gross premium tax upon insurers and further
states:

          All self-insurers under any of the Workmen's
          Compensation Acts of the State of Texas
          shall report to the State Board of Insurance
          the total amount of their medical and indem-
          nity costs for the previous year and pay a
          like amount of tax as provided above on said
          total amount of medical and indemnity costs.

Moneys received pursuant to section 28 of article 8306 "shall
be used by the [Industrial Accident] Board for the purpose Of
paying costs of the administration of the law. . . ." The pro-
visions of section 28 as adopted by article 8309h clearly apply
to self-insuring political subdivisions.  You have asked if
such an application is ccnstitutional.

     In State v. City of El Paso, 143 S.W.Zd 366 (Tex. 19401,
the court upheld the application of a motor fuel tax to the
city of El Paso. After reviewing article 8, section 1, and




                               p. 4180
.   -



    The Honorable Cue D. Boykin - page 2   (H-1012)



    article 11, section 9 of the Texas Constitution,   the court
    stated:

              [Tjhe . . . constitutional provisions . . .
              operate to exempt municipal corporations
              from only three classes of taxes. These
              are ad valorem taxes, occupation taxes,
              and income taxes.

    Id. at 369. Corn-,     Lower Colorado River Authorit
    ical Bank & Trust Co.,>90 S.W.Zd 48 (Tex. 1945)-(&%$%
    constitutional a tax upon the property of the Authority) with
                                                             -,-
    State v. City of El Paso, supra. The view 'expressed by the
    City of El Paso court has been followed.
    v, San Antonio Independent School
     (Tex. Civ. App. -- El Paso
    130 (Jan. 5,
    NO. 2 v. City of
    -- Ft. Worth 1959, writ7emn.r.e.).

         The tax imposed by section 28 is clearly not an ad valorem
    or income tax. Nor may it be classified as an occupation tax,
    which "is levied for the exercise of the privilege of carrying
    on a business." Youle v. Calvert, 348 S.W.2d 5,34, 535 (Tex.
    Civ. App. -- Austin 1961, writ ref'd n.r.e.1; Brunk v. State,
    6 S.W.2d 353 (Tex. Crim. App. 1927). See also-Attorney
                                                 __         General
    Opinion WW-204 (1957). Accordingly, the Constitution does not
    protect governmental bodies from its application; in our opinion
    self-insuring political subdivisions are liable for the tax pro-
    vided in section 28 of article 8306.

                            SUMMARY
                            _-_-.--
              Political subdivisions which are self-
              insurers under article 8309h of the Work-
              men's Compensation laws are liable for
              the tax provided in section 28 of article
              8306.
                                  Very truly yours,




                                  Attorney General of Texas




                              p. 4181
-.



     The Honorable Cue D. Boykin - page 3 ~~-1012)



     APPROVED:




     DAVID M. KENDALL, First Adsistant




     C. ROBERT HEATH, Chairman
     Opinion Committee

     klw




                                 p. 4182
