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    Mr. Robert            ,S. Calvert                    Opinion     No. ~~-1280
    Comptroller             of Public    Accounts
    State         of    Texas                            Re:      Whether tax refund may
    Austin,            Texas                                      be made on special      fuel
                                                                  delivered     by the user
                                                                  thereof    into the fuel
                                                                  supply tank of a motor
                                                                  vehicle,    under the pro-
                                                                  visions    of Chap. 10 of
                                                                  Title    122A, Taxatlon-
    Dear    Mr.        Calverr;:                                  tieneral.

            You ask the            opinion   of   this   office     relative    to two questions
    concerning  refund of the State excise     tax imposed on Special
    Fuels by Chapter 10 of Title 122A, Taxation-General,        V.C.S., and
    which fuels have been delivered   by the user Into the fuel supply
    tank of a motor vehicle.    Your questions    are as follows:

                        “1.    Does Article   10.14(3).    . .preclude
                        payment of a tax refund on any part of a
                        delivery   of special   fuels   into the fuel
                        supply tank of a motor vehicle        for pro-
                        pulsion   on the highway which is used to
                        operate   stationary   air condit~ioning     units
                        installed    on said vehicle?       i

                        “2.    If you should hold that payment of a
                        tax refund as described            in Question    1, is not
                        precluded     by law, then the Invoice          required
                        by Article     lO.14(2)      to be Issued at the time
                        of appropriation         for use and not thereafter
                        ard a copy filed         as part of the claim,       could
                        not be issued until          after   the fuel had been
                        used since the quantity            used in such air
                        conditioners      would be computed from the per-
                        hour use factor.           In such case,    could the
                        Comptroller      accept,     as consistent     with the
                        law, an invoice       issued at the end of the
                        day or other operating           period   showing the
                        total   gallons     appropriated       and used in such
                        air conditioning        units when such invoice         is
                        filed   as a part of the refund claim?”


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Mr.   Robert    S.   Calvert,   Page -2                    Opinion   No. ~~-1280



     We answer your first          question       “Yes”.   This   answer   precludes
our answering your second          question.

         The facts which have given        rise     to your   questions    are
stated     by you as follows:

               “The San Antonio Transit       System, owned
               and operated    by the City of San Antonio,
               has asked for an opinion       as to whether or
               not It can compute the tax on special        fuels
               used In Its bus air conditioning       units for
               tax refund purposes      in which the fuel Is
               not physically    measured but is based on the
               quantities    shown to have been used each hour
               of operation    In tests   made on each type and
               model air conditioner      used.

                “The speclal,fuels       purchased  by the San
                Antonio Transit      System is predominantly
                for delivery     into the fuel supply tanks
                of its vehicles      for use on the highway.
                Article   10.11 classifies      such operation
                as a non-bonded      user required   by Article
                10.03(3)   to pay the tax to its supplier
               with the right granted by Article          10.14(l)
                to claim tax refund on the fuel used for
                any purposes     other than propelling     motor
               vehicles    on the highway (such as use in
  ’” ’      .“‘~‘a& conditioners).

               “Its air conditioning    units are operated
               while the vehicles    are being propelled   over
               the streets  with fuel supplied    from the same
               fuel tank used to propel the motor vehicles.
               The flow lines   to the air conditioners    are
               not equipped with meters or other measuring
               devices  to measure the fuel used in such units.

               “The San Antonio Transit         System proposes    to
               account    for the special     fuels   used in such
               air conditioners       on an hourly basis computed
               as follows:      some of the air conditioners
               would be tested      with measured special      fuels
               while operating.       . . to determine     the quan-
               tity used per hour of operation.            The hourly
               quantity     so determined    would be multiplied      by
               the aggregate     number of hours all of the air
               conditioning     units    operated    during the month
               to establish     the total    gallons   used and tax
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Mr. Robert           S. Calvert,        Page 3                          Opknlon No. WW-1280


                 refund      claims would           be filed     on the    total
                 gallons       shown."

        In 1959, at Its Third Called Session,          the ,56th Legislature
enacted the present       "Special Fuels   Tax Law" (sometimes      herein-
after    referred   to as this Law).     This Law is Chapter 10 of
House Bill      No. 11; this House Bill    constitutes     Cha ter 1 of the
Acts of this Third Called Session,         shown at page 1 1 7, et seq.,
of the Official      Acts of the Called Sessions        of the 56th Legis-
lature.      Chapter 10 of this House Bill      is codified     by Vernon
as Chapter 10 of Title       122A, Taxation-General.

       Article         10.14(3)        of    the   Special     Fuels   Tax Law reada      as
follows:

             "(3)    Any dealer or user who shall file
             claim for refund of the tax on any special
             fuel which has been delivered           into the
             fuel supply tank of a motor vehicle,               or
             who shall    file  any invoice     in a claim for
             tax refund upon which any date,            figure,
             signature    or other material       information
             is false   or Incorrect,     shall    forfeit      his
             right   to the entire    amount of the refund
             claim filed."      (Underscoring      added.)

We believe     that this Section     (3) controls      and prevails    over all
other provisions       of this Law relating       to refund of taxes on
special   fuels.     Further,    we believe    all of the refund provisions
relating    to special     fuels  must be strictly      construed   In that they
are in the nature of exemptions           from taxation.      City of Longview
v. Markham-McRee Memorial Hospital,            137 Tex. 178, 152 S W 2d
1112 (1941)      State v. City of El Paso, 135 Tex. 359, 141 S.W.2d
366 (1940),'4-,                                    Sec. 74.     Very clearly
the Special     Fuels Tax Law i& complete         In every respect    with
reference    to the authorization       for,   and the manner of making
claim for and payment of refunds            of the tax paid to the State
on all special      fuels.

      We observe           that    this       Law makes distinction          between:

      One:           Appropriation           for use of special         fuels      (see
                     Sections    (1)        and (2) of Article         10.14).

      Two:        Use of special fuels,   whether to propel motor
                  vehicles upon or off the public     highways,    or
                  for some other purpose   (see Articles    10.14(l),
                  10.05(2) and 10.12(3)).
Mr. Robert          S. Calvert,       Page 4                         Opinion      No. ~11-1280



         Three:        Delivery   into the fuel supply tanks of motor
                       vehicles.      (see Articles 10.03(5), 10.13(k)
                       and 10.14(3)).

         Article       10.03    of   this Law, which   levies         the   tax    on special
fuels,     In Section          (5)   states in part:

                   “Every user shall    report    and pay to this
                   Statethe tax,    at the rate      Imposed, on
                  each gallon    of special    fuels   delivered
                  by him into the fuel supply tanks of
                  motor vehicles,    unless    said tax has been
                  paid to a licensed     supplier.     . . .‘I

We do not believe       that the special      provisions      of Article    10.08
which authorize      the Comptroller,       in his discretion,       to use a
mileage basis    in determining       the amount of tax due to be appll-
cable to the fact situation          under consideration.         Further,    we
do not believe      that you are authorized        by Article      10.21 of the
Law to promulgate       rules    and regulations     relating    to the ellgl-
billty   of special     fuel for tax refund which would conflict              with
the clear mandatory provisions           of this Law which relate         to
special   fuel which has been delivered           into the fuel tanks of
motor vehicles.        (Articles    10.03(5),    10.13(Q)     and 10.14(3),
hereinabove    mentioned.)

      .We recognize    ;4hat Article    10.03(l)    levies    and imposes the
tax only upon the        e . .use of special       fuels   for the propulsion
of motor vehicles      upon the public      highways of this State.        . . .”
However, with reference       to refund of the tax paid upon special
fuels    which have been delivered       by the user into the fuel supply
tanks of motor vehicles,        we believe     that Section     (5) of this
same Art. 10.03,     construed     together    with Articles      10.13(b)  and
10.14(3)    make clear    that all such fuels       have been used for a
taxable    purpose.

                                        SUMMARY                 ‘,

                         Special     fuels  delivered by the user
                  thereof   into     the fuel supply tank of a
                  motor vehicle       are not subject  to refund
                  of the excise       tax paid on that fuel under
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Mr. Robert       S. Caluert,   Page 5                       Opinion    No. ~~-1280



             the provisions   of Article   10.03,       Title
             122A, Taxation-General,     V.C.S.
                                        Yours   very   truly,

                                        WILL WILSON
                                        Attorney General        of    Texas




                                                Assistant
WEA/rk

APPRCVED:

OPINION COMMITTEE:
W. V. Geppert, Chairman


Arthur Sandlin
Henry Braswell
Virgil Pulliam
John Reeves

REXIEW FOR TRE ATTORNEYGENERAL
By:  Houghton Brownlee, Jr.
