        OFFICE         OF THE          ATTORNEY    GENERAL   OF TEXA8

                                          AUSTIN




Dear   Kr.   Bhepparbr




genoy Hprlinee, IZIO.may smplo~ euoh oontraotors and snginesrs
and enter into ruoh agrmment ritb then a~ It daema advisable,




              ._,. - . ..__ ._   ~..
                                                                 .- 562




Hon. Wo. H. Sheppard, Page X


ia thr name of the Defonrr Plant Corporation,ald paroham
maohlnery ana rquipmmt   nror8rar~ for the projrot, rubJeot
to thr written approval or thr Derenrr Plant Oorporation.
           IB all or itr 6p8ratloer uearr luoh oontraot, the
morgreo PlpwlSnrr, xno. rot8 aa lg o et  ror the Dofoe8o Plant
OorporrtI on, The DOrOB    OOrpWatloe 16a8.8 rOtOr tehiol88,
rhioh are ured b thr Ourgrnoy Plprliwr, Ino., aed orrtde
ooetraotorr or tI8 Dei8e80 corporation $n the oonrtmotloe of
ruoh pi llne8. Bone or the80 leaed retdolor arr a804 upon
the pubrlo highway8 Of the 8tato of T8x.a~. Othrr motor w-
hlolea are leawl by oontraotorr from their mar8 aed 8ro
used la the ooertruotlonwork, but thr Mien88 Corporation
rrlmbureer ruoh oontraotorrfor the rentals paid br them,
         YOU NqU88t Our OplZllOBUpOB the iOmwing
paertlonrt
         1. .X8 thr Dbfsnre Plantoorparatlonllablr
     to the Btatr ot Texar for th8 tar lmpored upon
     motor fu81 ured upon th8 pub110 hlghwryr or thlr
     State in rehioler leased br it and used by the
     ltmrgeno~ Pipeliner, Ino. and its other oontraotorr
     in the ooerttuotlonof it8 pipeliner?
           t. 18 thr lhergeno).Plp8llne8, Ino. llablo
     to thr Btate of T8xas for thb u8e tax Imposed upon
     motor rue1 seed upon the pub110 highway8 0r thir
     state le rehlolrr leame& by .the Dsf8e8e Plant cor-
     poration ae4 ored by the lmrgenor Plprllnsr, Ieo.
     urd thr Dotoe Plant Oorporstlon*roontnoton in
     thr ooertruotlon of rpoh ~l~rllerr?
          31. Are the oontnotor8 llrblr to thr State
     of Toxas for thr ne.0tar lapore& upon motor rue1
     u8e6 apoe the pabllo highway8 oi thlr Stat6 in
     tehioler lsaesb by them troa third persona and
     used la th8 oonrtruotlonot th8 plpslleer for the
     Defense Plant Corporation,whgre suoh oorporation
     relmbur888 suoh oontraotor8for rdntal8 pai& the
     owner8 of ruoh Tehlolrr?
Roe. 000. H. Sheppard, Page 3


              ne enswer your rlrat queetlon, no.
           The D~fOXiBOPlant Corporation was organized under
Seetim BObb, Title 15 U. 8. 0. A. The purpore (am rtated
In thr AOt) want "In oraer to aid tha aorernment or the
Welt06 State.8ia it8 national det~ero progran . , .* 6eotioe
610 ex roaaly prortded that auoh Oorporetion should bo exempt
from a P1 8eht8, Poe, storage, end purohaae terra impo88d by
the United Hater, or by any state, County munio~pallty, or
looel taring euthorlty. Real propert of ihe Corporation wan
medo rubfeot to State, County, munloi 1, or looal taxation
*to the 84m4 oxtent eooording to ite k clue am other net pro-
perty In taxed,*
          A6iaO from this expre88 aongre88lonelexempting
from taxation, we 6,reof the opinion that the Dersnee Plant
Corporation would have the same 8xemption upon thr dootrine
0r implied DOUBtitUtiOU4l’l~U4~t~   of the Federal GoverrnWnt
end it8 inetrumentelitlesfrom state taxation, )LoGulloohV.
Caryland, 4 meet, 318, 4 U. 6. (L. Ed.) 679; 26 R.C.L. 95.
         The legal lnoiaenos of our motor fuel tar 18 upon
the ultimate user or oonaumer or the motor fuel for the pro-
pulsion of motor vehiOl88 upon the highway8 or the state ot
Texae, end not upon the seller or vendor of motor fuel: Art-
lole 7065b-z(e)v. A. c. s. seotlon e(a) protlaee:
            "Ko tax Oha11 bs lmpoeeb upon the mati,
       use, or dirtribution or any motor luel, the
       1lEpO81S@or whloh would oonetitu *an UIllEW-
                                       q ahd whioh
       tul burden on interstate oomneroe
       18 not rubjzot to be taxrd under the Cm-
       tution of th 5% t    f Texas and the Unltsa
       ~teteBl' (~;h:8f8°0Ur8).
              fn Faders1 Land Be&   Of Sifti&:'t?;ll
                                                  v. Binmark Lumber
co.,   314 u. S. 95, fj6 L. Ea. 65, tbs court eala:
            "The Federal GoVerW&f le oiie:i3delegated
       powers, end from that lt neoerearily fOllOW8 that
       any oon8tftuti0nalererol8e or Its delegated power8
                                                                           564



XOn.     0.0.   I?.   shoppmd,   PIgO   (1




         18 (OVeFll@4Bt41 , . . .    It 4180 iO11OwB thd
         rh8a C)04n00 ooa8tltutloMlly orrat        I oor-
           oration throa& whloh tha Fodrral Gmornmoat
         L stulll 8Ot8, the rOtiVitl.8    Of 8uOh OOrpOrr-
         tioa era ~orrrrrmtal~ . . .*
          And La Pittma v. Uoma Owner8~Loan Corporatloe
308 0. 9. r1 84 t. u. 11, 60 S. ct. 15, lE4 A. L. R. lE&,
the Court uidr
                “COMOB      b48 XbOt  the porot to or~ato
                2
         l oorpora loa  to h8Ui       thr poriozaaaor OS
         ~otwamatel funotioaa,but bra the owor to pro-
         teet  the operebtonr Ohua validly aat Iierird.     ‘A
         pwar to onrtr~lnplie8 l p o wer to ~iteBWV@.'
         Wcullooh r:xerPlead, rupn (4 sheet. p. 4~4,
         4 L. M.          Thla power to promerr aeo~aaar-
         11~ ecuaa d hln thr range of thr lx p r er       r
                                                        pow0
         OOBfO~Oup  d oO nOly r 88s
                                  t0aakr lU 14W8,wbieh
         ahall he aw*rrry ead promr ror orrrylag lnb
         lxmoutioa all pawn rented    br the Conrtltutloe
         la thr Oorarnaeat or the United Staten. aonet.
         Art. 1 8.8. 8            In thr exrrolw OS thlr
         powor 40 protroi ihi iawfal lotlrltler of lta




           Con@‘888  h48 th8 pt%Mr to "protidr iOr the OodvDoD
bsfWU0   . . . di tha vBit.6 StatW.*    COllBt, hart. 1, 8.0. 8,
It in lubaitt~d   that thla tunotloe $a~gownmoatal.      The Fed-
ora1 GOVlrnDsPt hAb OhO84n t0 $WiOm     thlr fUBOtiO;B&i ;;;Bt
prrtlellf through the miO?IB~ Plant CW'pOrEtiWh                        w
pOrtlOB 8lOtiViti@B WBt b0 r4gBrdOd    44 ~OTOPtWBt8l,           tad
antitbd to i&iUBity  rr0t8 8teta texatloa.

           to tax 11 duo upon 4 8414 0r motor rba to the
Derrnrr Flant Gorporetlon. The purohedsr Of mOtW fuel by
thr tarr~r~oy Plprllner,Ieo. 18 ln 108 oepeolt 88 agoat tar
thr mr0tt8s Plant C.orporetloa.Thr notor   r401 I:8 4oturllP pi6
*-




     tw red ir thr property      ottb    Detinro Plant Corporation,
     Ph. trot thet  it   allow thir 6arollnr to bo ared la lamed
     rrhlolrr upon the hhhuayo ot the Stat,       ot T~xar by tb
     zBor&onoy P1Qa1ixlb8,    III@,and 1tr other  Qontt~Otor$ La th
     Wnrtrrletion ot thrro ~lpoliaw doer not a&e it liable tar
     the a80 tax brorurr    It lr rtlll dleahrrgl~    ltr Federal
     flln0t10na.
            He mawe*       your seoond qwiotlon, no.         sin00   tb   was
     trrrgrnor     klpelinrr,      1s rotlng 41 an went
                                 Ino.                    tor the
     DOten@@     Plrnt   OOrporation  all of it0
                                         ln       oporatlonr,u* are
     d the oplnlon that it ir sot llablr for tbr uno tar impor.
     tymgloc       turl ared upon the gubllo highmy in the Gtatr
                   Thb motor ,turl b&a-s    to the Detonsr Corporation.
     It  l\lrr&h.r   tha llmergonoy Fiprlirer Ino. utd lta other oon-
     traotorr with motor rohlolrr tar th.fr 08. in the oonrtruotlon
     or it0    plp4llnrr. Glnor the uoa of ruah notor trht8ler br
     such ooatraotorr 18 tar th0 8olr benoift or the XhiWm 'Flat
     Corporotioa, *hiOh ir rxproo8ly ereapted from the payuent       of
     mctor Sue1 tams, and lr ongaged in tha alecharge 0r a frdrml
     tuDotlon, wb do not think that cuoh oontraotorr or0 liable tor
     the use     tax.
            PIaare unable to a8ver pur third            quertion bsosum
     we do not bavr rutfloicmttaotn upc%i uh~lohto base our opinion.
     It the leoturice1 lr rup lha shoes@oontractorr by the Duiwirr
     Flaarrt  Oar oration unbar !.
                                 to ocmtraot, rnd no title to ruoh
                P lwr
     mo tc a rtuur      vortr in thorr oontraotorb,tha we oan not 100
     how the ooMzactora mad be limblo tar the payment       of the motor
     ia*1 ta1.     Cm thr otbsr head it therm oonthotorr   twoharm tho
     rotor tuel and t16e it upon td hi#l!wrrret TBma Ia rrhlolrr
     leaad from thir4 breonr       then va boltire that uoh oontrao-
     tore would bo lirblr tar Ihr motor iwlr     tar rr6wilrre o?
     whothor they two rolmbunod to? the rantalr paid for thsrr
     Trhloler    or sot. PI ~111 be s$@d to &ire 7'00 l ROW detinitc,
     u11)u.r to thlr qurstion if you ail1 rupply II@IPOM trots).
               Truding    that   the    rbore fully anawl~r8your :uotttlans,
     we are
                                                     Your8    tory   truly
