                            @ffice
                                 oftheBttornep
                                            QBeneral
                                         &date of Qexas
DAN MORALES
 ATTORSEY
       GENERAL                                   26,1993
                                             April

      Honorable Ben Campbell                      Opiion No. DM-216
      Chairman
      Committee on County Affhirs                 Re: Whether a school district’s purchases of
      Texas House of Representatives              gasoline for use by an independent contractor in
      P.O. Box 2910                               the provision of transportation services for the
      AustiqTexas 78768-2910                      school district are exempt from the gasoline
                                                  tax m-w

      DearRepr#lentativecam*:

             You have requested our opinion regarding the state tax “on the first sale or use of
     gasoline in this state.” Tax Code 8 153.101(a). The tax law provides an exemption from
     the taxation for tieI sold “to a public school district in this state for its exchtsive use.” Id.
     8 153.104(7).    You ask whether a Texas school district that contracts with a private
     transportation company to provide school bus service may avoid the state gasoline tax by
     diredy pudasing the beI to be used in the private buses in the provision of such service.

             ln Attorney Oeneral Option No. JM-1158 (1990), this office construed the
     statutory exception from taxation contained in section 153.104(7) to mean
               that gasoline purchased by a school district or by the agent of a
               school district for the exchrsive use of a school district wig be
               exemptfkmlthereachofthetax.              Gasolinepurchasedbyan
               independent contractor that performs services for a school district,
               however, will not be exempt from the. reach of the tax.

     Id.at1-2. We did not reach in that opinion the situation in which the school district
     purchases gasoline and provides it to an independent contractor who uses the gasoline in
     the performance of services for the school district. Such a situation would literally be a
     sale “to a public school district in this state,” Tax Code 4 153.104(7); but would it be a
     sale “for [the] exclusive use,” id.,
                                        of the school district?

             The Comptroller of Public Accounts has adopted the following regulation defining
     “exclusive use” as that phrase is used in subsection (7):
                     Definition. The term “exclusive use” by a school district means
               fire1 purchased by a school district and used only in motor vehicles or
               other equipment:
                    (A) owned and operated by the district; or



                                             p.    1138
Honorable Ben Campbell - Page 2        (DM-216)




                (B) dadicatedfixtheexclwkandsolepurposeofproidiq
           tmqorkGonsewicesfortheschooldistktbymaamsofacontract
           betweeatherchooldistrict~theownaoro~orofthemotor
           vehicles.
34 T.AC.  5 3.173(14). The comptrollds definition inch&s gasolina used ia vehicles
owaed~opaatedbyindepadmtcontractorssoloag~~~~(1)                              ispIuckcd
~h~~ool             district and (2) is used only fix providing transportation senks    for


       The comptroller adopted the above-quoted amdment       to section-3.173 of the
T~~~CodepursuMttoauthoritydelegatedbythelegislatuninseaion
111.002 of the Tax Code. The comptroller prdposed tha amendment, 16 Tcx. Reg. 5720
(Ml), and made it Enal, id.at6756,inaccordance        withtheAdminhhve Procube
and Texas R@ter Act, V.T.C.S. art. 6252-13a The comptroUer thus pro&Sated the



       The wmptrou~s wnstlucdon of aclusive we is reasonably consistent with the
purposcofthastatute.   Subsection(7)was~dedinaHouseUooramendmatto~
Bii 417 in the 71st J&&ture.   HJ. of Tax.. 71st Leg., at 2422 (1989). In proposing the
amendment, Represartative Culbcraon stated its purpose to be to “help school districts
o&t the costs of transportation under [S.B. 4171.” Debata on S.B. 417 on the Floor of
the House of Representatives, 71~1 Leg. (May 25, 1989) (tape racording available loom
House Committee Coordinator).

        WeklievethatacaatwoulddefatothecomptroltdsMnstruction~
there are no “clear and .conphg             rcasons~tocon&dethattheadministmtive
wnstructioniserronwus.        “Constn&onofastatutebytheagcncycha@~the
arecution~administrationthaeofbauthoritativeandshouldbcfollowedbythecourts
unless there. are ckar and compelling reasons that such cwstructioll is emoneoua”
Baseman v. Rice, 653 S.W.Zd 951,952 (Rx. App.-Amarillo 1983, writ refd nr.e.).

        We amciude that the school district exemption fkom the gasoline tax applies to
gasoline puchascd directly by a school district and used by independent contractors solely
for the provision of transportation services to the district.




                                       p.   1139
HonorableBenClTnpben      - Page 3       W-216)




                                  SUMMARY
                The school district exemption from the gasoline tax, Tax Code
           sectiw 153.104(7),rppliestogasoline~~directlybyaschool
           district and used by independent conwactom solely for the provision
           of trausportation services to the district.




                                                     DAN     MORALES
                                                     Attomey Oeneral of Texas

WILL PRYOR
Fist-Attomeyoeneml

MARYKELLER
Deputy Attorney General for Litigation

RENEAHlcKs
State Solicitor

MADELEINE B. JOHNSON
chair, opiioncommittee

PrqarcdbyJamesB.Pinson
At3aantAttomeyGeneral




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