             .      ,




                               TTORNEY            G~ENERAL

                                        TEXAS

PRICE  DANIEL
ATTORNEYGENERAL.


                                   December 22, 1952


            Eon. Robert S. Calvert
            C&roller    of Public Account6
            Aurtin, Texas                       opinion No. v-1563

                                                Re:   Authority of the Comp-
                                                      troller to promulgate
                                                      a regulation allowing
                                                      tax deductions to offset
                                                      estimated non-highway use
                                                      of special fuels in LPG
            Dear Sir:                                 delivery trucks.

                        Your request for an opinion of this office reads:

                      "We desire the opinion of your office regard-
                 ing the legality of a propo66d method of accounting
                 for the tax imposed by Section 14, Article 7065b,
                 Vernon's Annotated Civil Statute6 upon the highway
                 u6e of 'Liquefied Gas' (Butane-Propane) and 'Other
                 Liquid Fuels' (Diesel Fuel), which became effective
                 September 1, 1951. These two products are further
                 defined in Section 1,of the lawas 'Special Fuels'.

                        "The law imposes the tax upon the USE, or the
                   DELIVERY INTO A FURL TARE FOR USE, of such fuels in
                   propelling a motor vehicle upon the public highway
                   of Texas, and places the responsibility for report-
                   ing and paying over the taxes upon user-dealers.

                        "'User-dealer' ie defined in Section 1 of the Act
                   as (1) any distributor, dealer or other'person selling
        .          and delivering special fuels in this State into the fuel
                   tank of any motor.v6hlcle for u6e in propelling said
                   motor vehicle upon the public highway of Texas; e e D
                   and (2) shall also mean and include any distributor,
                   dealer or other p6r6,onWhO shall acquire any special
                   fuel tax free and USE IT OR DELIVER IT IRTO A FUEL TARE
                   FOR USE to propel motor vehicles operated by said dis-
                   tributor, dealer or oth& #!crdonUpon the public high-
                   way of Texas.

                        "It is the second CssBifiCatiOn - the user-dealers
                   who acquire liquHied.&sad     useit or deliver it into
                                                 .




Hon. Robert S. Calvert, page 2 (v-1563)



    the fuel tanks of their own vehicles for use on
    the highway - with whom we are here concerned.

         "Because of the expense and burden of in-
    stalling separate fuel tanks on each delivery
    vehicle, these user-dealers, who deliver their
    commercial cargos of IPG products by means of
    pressure pumps which are operated by the same
    motor (and fed by the same fuel tank) which al-
    so propels the tank truck over the highway, have
    urged the Comptroller to calculate - from a series
    of pump-off tests made on the various size and
    type vehicles operating in Texas - the overall
    average gallonage that would be necessary to pump
    off quantities of 100 gallons, 250 gallons, 500
    gallons and 1000 gallons of the cargos and that
    the Comptroller authorize such user-dealers to
    deduct the average gallonage determined in such tests
    for each such unit of delivery from their monthly tax
    remittances to the State.   They point to the second
    paragraph of Section 14(a) of the Act which provides
    'it is the intent and object of this section that the
    tax or taxes imposed herein on special fuels, as that
    term is defined, shall be paid by persons using or
    consuming said special fuels to generate power for the
    propulsion of motor vehicles upon the public highway
    of this State', and suggests that Section 23 of the
    Act, vests the Comptroller with sufficient regulatory
    powers to permit such tax accounting methods.

         "In further pursuance of the request, user-dealer
    members of the Texas Butane Dealers Association have
    made actual pump-off tests from 37 various types de-
    livery tank vehicles, namely, International, GMC, Ford.,
    Chevrolet, and Dodge trucks.   The quantities consumed
    in pumping off 1000 gallons of the cargo in such tests
    ranged from 7/1Cth of a gallon used in one truck to
    2.62 gallons used in another truck. The average con-
    sumption in the different make trucks ranged from 1.01
    gallons average in 8 Chevrolets to 1.56 gallons average
    in 5 International trucks, and about the same variation
    was reflected in different vehicles of the same make.
    Separate test6 from the same truck reflected various
    amounts of consumption under similar conditions. From
    th66e tests it appears obvious that the establishing of
    any mean or average pump off allowance for all trucks,
    or the establishing of any table of mean or average
    allowance6 for the different 6ize or make of trucks would
Hon. Robert S. Calvert, page 3 (v-1563)



     necessarily have to be based on estimate or guesswork.

          "It is likewise obvious that such user-dealers
     are presently paying taxes on fuel consumed in such
     pumping operation6 which would be exempt from taxa-
     tion under the law if such fuel could be accurately
     measured, or could be supplied from separate fuel
     tanks, though the latter remedy may be economically
     inexpedient.

         "In reviewing the request we are forced to the
    conclusion that any regulation promulgated to permit
    payment of the tax on an estimated basis because of
    individual cases of hardship would be inconsistent
    with the law which appears to be supported to some
    extent by your Opinion No. o-2381,holding that the
    Comptroller will not be required to approve any re-
    fund claim based upon a mere estimate or guesswork
    by the claimant as to the amount of motor fuel used.
    The Texae Butane Dealers Association, however, has
    urged that the question be submitted to you.

         'The opinion of your office is therefore respect-
    fully requested as to whether or not Section 23 of the
    Motor Fuel Tax Law, above referred to, vests the Comp-
    troller with sufficient authority to promulgate a
    regulation that would legally permit the deductions
    described above from tax remittances to cover non-
    highway use of fuel when such deductions must be based
    on an estimate of the quantity so used.   This depart-
    ment has made no departmental construction concerning
    this question other than above set out.   There is no
    litigation pending that will determine the answer to
    this question."

          In answering the question presented, we have assumed
that the use of the fuel described in your request is not for
the propulsion of a motor vehicle on the public highways of this
State and would, therefore, not be subject to the tax if deliver-
ed into a separate fuel tank.

          Tax deductions or refunds are in the nature of an exemp-
tion and under the general rule must be strictly construed. 51
Am. Jur. 502, Taxation, Sec. 495.   It has been held that the
right of a claimant to make an application for a tax refund is
statutory and that the procedure set out in the statute author-
izing such refund must be strictly complied with in order to
entitle the claimant to that right.   Att'y Cen. 0ps. v-1487
(1952); v-721 (1948);0-6363 (1945);o-6195 (1944);Armstrong v.
Hon. Robert S. Calvert, page 4 (v-1563)



Driscoll Construction Co-, 110 P.2d 651 (colo.Sup. 1941).

           Article 7065b-23,V.C.S., provides in part:

         "It is hereby made the duty of the Comptroller
    to collect, supervise, and enforce the collection of
    all taxes, penalties, costs, and interest due or that
    may become due under the provisions of this Article,
    and to that end the Comptroller is hereby vested with
    all the',powerand authority conferred by this Article.
    Said Comptroller shall alB0 have the power and-author-
    ity to promulgate rules and regulations, not inconsis-
    tent with this Article or the Constitutions of this
    State or the United States, for the enforcement of the
    provisions of this Article and the collection of the
    revenues levied hereunder."

           Subdivision (a) of Article 7065b-14, V.C.S., provides
in part:

          "There is hereby levied and imposed an excise tax
    of Four Cents (4#) per gallon on all liquefied gas
    used, or delivered into a fuel tank for use, in pro-
    pelling a motor vehicle upon the public highway of
    Texas, and Six Cents (64) per gallon on all other
    liquid fuels used, or delivered into a fuel tank for
    uBe in propelling a motor vehicle upon the public
    highway of Texas, and every user-dealer who sells
    and delivers liquefied @.B or other liquid fuels into
    a fuel tank or tanks used to supply fuel for the pro-
    pulsion of any licensed motor vehicle or any other
    motor vehicle being operated or intended to be
    operated upon the public highway of this State shall,
    at the time of such sale and delivery, collect the
    said tax at the rate or rates imposed upon the pur-
    chaser or recipient of said special fuels, in addition
    to his selling price, and shall report and pay to the
    State of Texas the tax so collected at the time and
    in the manner as herein provided.     Every user-dealer
    shall   likewise report and pay to the State of Texas,
    the tax at the rate or rates imposed hereinabove on
    each gallon of liquefied gas or other liquid fuels,
    hereinafter referred to as special fuels, acquired
    in any manner tax free by said user-dealer and there-
    after used, or delivered into a fuel tank for use, in
    propelling a motor vehicle upon the public highway
    of Texas.”    (Emphasis added throughout).
Hon. Robert S. Calvert, page 5 (v-1563)



          The rule with regard to the authority of an agency
to make rules or regulations is stated in Volume 1 of Texas
Jurisprudence Supplement at page 101:

          "A settled doctrine of Constitutional Law for-
     bids the delegation of legislative powers unless
     express warrant therefor, in some particular situa-
     tion, is to be found in the constitution.    Accor-
     dingly the Legislature cannot empower an agency to
     make laws.   But rule-making authority may be con-
     ferred upon an agency, and this has often been done.
     Express authority to adopt rules and regulations may
     be given by the words of the statute.   Implied au-
     thority exists, it seems, when the adoption of rules
     and regulations is necessary to accomplish the pur-
     pose of the statute.   So where a statute expressly
     authorizes an agency to regulate an industry it im-
     pliedly authorizes the adoption of regulations to that
     end.

          "When such authority, express or implied, has
     been conferred upon an agency, it may make reasonable
     rules and regulations, proper and necesssary in the
     exercise of its powers. But they must be within the
     clear intent of the statute, and not in excess of the
     powers delegated to the agency."

          The tax refund section of the Motor Fuel Tax Law (Art.
706513-13)contains an elaborate and detailed reporting and
record provision which was designed to prevent tax evasion and
the filing of fraudulent tax refund claims.   Section 13 applies
only to "motor fuel" as that term is defined in Section 1 of the
act and therefore does not include "special fuels".

          Subdivision (I) of Article 7065b-14, V.C.S., provides
that the owners of certain agricultural vehicles may consume
qpecial fuels without qualifying as a user-dealer and paying
the tax. SubdiviBion (f) of the statute contains a credit pro-
vi~ionvhere the user-dealer has erroneously reported and paid
more tax than was due on account of either a mistake of fact
or law.

           It is clear from the language of Subdivision (a) of
Art.~Otj~bi&that the Legislature intended that liquefied gas
.or other liquid fuels (special fuels) which are sold and de-
 livered or delivered for use in a "fuel tank or tanks used to
 6Upply fuel for the propulsion of any licensed motor vehicle
 or any other motor vehicle being operated or intended to be
 operated upon the public highway of this State" were to be
Hon. Robert S. Calvert, page 6 (v-1563)



Subject to the tax.   Since:~:there
                                  are no provisions for re-
funds or for deductions, the presumption arises that the
special fuels placed in these fuel tanks were to be used in
propelling a motor vehicle upon the public highway.   To
permit the taxpayer to make such deductions is, in effect,
to allow a refund ~.'or
                      an Offset to the taxes due and owing
the State in the absence of statutory authority.   In addition,
it is our belief that it would be impracticable, if not im-
poESibl6, for you to promulgate rules or regulations which
would result in the special fuels referred to in your reqU66t
being calculated with the required degree of certainty. Att'y
en. o-p.o-2381 (1940).

          It is our opinion that you are without statutory
authority to promulgate rules or regulations allowing motor
fuel tax deductions on special fuels consumed or used for the
generation of power other than for the propulsion of mot&r
vehicles upon the public highways from the same truck fuel
tank6 which also supply the fuel for the propulsion of the
truck upon the highways of this State.

                            SUMMARY

          The Comptroller of Public Accounts has no
     etatutory authority to promulgate rules or regu-
     lations allowing tax deductions on special fuels
     consumed or used for the generation of power other
     than for the propulsion of motor vehicles upon the
     public highways from the same truck fuel tanks which
     also supply the fuel for the propulsion of the trucks
     upon the highways of this State.   Art. 7065b14,
     V.C.S.;Att'y Gen. QB.   v-1487 (1952); v-721 (1948);
     O-6363 (1945);o-6195 (1944);o-2381 (1940).

APPROVED:                             Yours very truly,

                                       PRICE DANIEL
W. V. Geppert                         Attorney General
Taxation Division

Mary 5. Wall
Reviewing A66istant                   4f!irsA
                                         Assistant
Charles D. !&hews
First Assistant

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