                                   &uet     10, 1955'

Ron. VIIMM J. Xurxn~.
                  -- Jr..
                        -
Chaiiman
kallroadColpieaion
                 of Texae
TribuneBullaID&!
Austin,-              OpinionHo; ~9-165
                      Be: Application of RailroadCclllieslonQ~
                          traueportationxatee to theintrastate
                          ahlpilentor &oda for t&emilitary
DearNr.&rrayr             brenoheeof the mited Statee;

    Pour requestfor a ievlevof the app&ioabillt~
                                               of theRailroadCom-
misslon'~rate8to intrastateehipmentof Soodefor theUnitedStatesis
qu0t.h .pp‘m, M .fo*8:      ._,_ .,.
                                   ~...
                                   _.
                                    __~I..
                                        _ :..z
         apOn requestfmn the Railroad Camnl~alonof Tesae,
    thk &ttorneyQeneralofTexas issuedthreeoplnione  relat-
     lngto the~tterofre@atedcarriere treneport~ehlp-
    me&a of tiight.f& the UnitedStatesGoverwint.,  or ite
    militaryIn pertlculer, intraatete:
                                    in Taxee;at rate6dif-
    ~fensitfYcm the ratesprescribed
                                  by the Ballmad Comnlsaion
     of   TM,   or aa   might be   appmwd     by the   molti.   Them
    Oplnlonsvere dite&Aprll'l& 19% (withoutnuaber);D&xmber
    lB,lg4C (CplnionIo.o-2954)andMay lo, 1~3(opinionEo.
    O-B)..    Oneeop7 FhM,theae  Cpinioneie golmedhere-
    with ior ycmrread7rer-e.L
   ,.                             I~ ---~
     ~eomo~     le of the op*1ou taatthC~olon'e     tralleportatlon
raten~areappllcabbla’tothe intr~tateahlpbentof goodofor the lilted
Statee. (mllltuy)vhenthemovementleoonductadb~Yndependmtoontznct-
orsi The authoritlerrallynl     by t.+fcumr oplnloue
                            upoz~                   of tbleoffice
have been dletln&ehed or overruledb7 anbaequentcame; therefore,much
opinionsare overruled insofara8 t&p oonfllottitht.3H.e
                                                     opinion.
     The regulationof tranepo~tlou rate8b7 the etateeie a validand
aeceesaryiunctlab~fo~,pmeerve and pmt+ot t& publicinterest.Stephen-
eon v:Blnfonl, 267 U.S. Q51( 1932);SteeleP. Ceneralllllls,
                                                         329U. S.
433 (lPh7). '~ .~ -~

     StateregalH,ion~@ey not direotlyinterfuevi& thefunotionof
 Sovemmentiloperationa ~Qm~&lta offloereaud @encler. JohneonV.
 xsryland,254 u. 8. 51 (1920);LouwelnV. mod& I2 S.U. 2d%m=
Eon. YllllemJ.Murra7,Jr.,pale2 (S-165)


App. 1929). Hovever,indepmdentcontr~~tora  renderingnervloesto the
g o ver ment
          a r eno t lxoh egenclee
                                conducting
                                         Sovermeutalfunctiona, aid
the mere faotnon-diec&uina@xyregulatlom   of the cmtraotor fndirectQ
lncreaaeethe burdenunon the government no lonuerbrini@auoh oontract-
oiu withinan7 tipUeh&lt7      fnrm statere&tion. Penn Dairiesve.
Xllk ControlCaani~ion,3l.8 U. S. 261 (1943); Alabamaa Gi a Boowr,
314U.s.ttir.e               Ltipolis B. Co. v. Llchtenbag,176Md.~
383, 4 A. a 734 (;9m
     In the PennDairiesceee,theSupremeCourtuphelda Pennejrlvanla
milkprice fixinglav ae appliedto the saleofmilkto the UnnitedStatee.
The courtdistinguiehed adenciesperformins
                                        Sovernmental funotfona,
                                                              such
aa the mail carrierIn the Iouueincase,from the a&e of independent
                                                                con-
traotoraby statingonpage~follovs%
            “Wema7 ae.xfme al.80
                               that, in the abeenceof Congres-
    slonalconaent,thereie an inpliedconstitutional       inmmit7
    of the nationalgovenmentfivmetatetaratlonandirometate
    regulation    of the perfozmence
                                   by federaloffioereend aSen-
    .clee.,  of &overnmultalfunctlone.ohlo v.-lTmw, 173 u. 8.
    276; Johneonv. IU$and, 254V. S. 51;Hunt v. UnltedStatea,
    278 0. S. 96; Arlwma v. Callfornla,    283 U. 8. 423. But those
    who contraotto furnleheupplleaor renderaervloesto the
    SoveiWentare not suchagenciesand bd mot performgovernmen-
     talfuiictione.   MetcalfS Bidsv. Mltohell.269 0. S. 514;.524-
     5;    Jmea V. DiavoC~Q%Ctf.XWCO.9 3C2 U: S.-u4, 145;BGk-
     staffCo. v.McKlnlee,308U.s. 358,362-63andoaaee cited;
     cf. susquehanMCo. Vi Tax Comn'n.,283 U. 6. 291, 294; Helvei-
     ingv.MountainProdw.%raCorp     303
                                    ‘..    U. S. 376. 385-86; ad the
    mere factthatnon~rlmlnatorgtasationoi re&&v&nof              the
     contraotorlmpoeeeanfncreeaedeaonanlcburdenan the.#xern-
     ment 'lauo longerr8gaHed am brln@ng the eontraotca     wIthinauy
     fmDlled
     - _       iisnunitrof theaovemnaentfr&atateWatimorre&a-
     tion.    Alabamav. ?Ung &-Doozer,  314 U.-S; 1,-g,end oaeeacited;
     Baltlmore6 Avmapolfa8. Co. v. WChMberg, 176~~11’383, 4 A.
     Qd 734, 0: o., mitea statell  t:Baltfmorea Annapolle   B. co. 308
     TJ. 8. ‘
            -525.”
            _.

     The supremeCburtalmheld that Statefit6 ragulation~v~notti-
 ccmeietentvltb the Aott! of Congiererequiring
                                             crmpetltive
                                                       bidding,nay-
 lng, in part,at prge 275,ae follownx
      "    .Anunexpressedpurposeof Congreseto aet aeideetatutes
      oi ihe et&&~ regulat3ng
                            theirlutema affair6 la'mt U&t4
     .tobe~fnferredandon&tnottobe luplledwherethe lagiala-
      tivecommand,read fn the lightof Itshietorp,rmaainaembisu-
      OUB. Consideratlonewhichleadua not to favorrepealof stat-
                         UnitedStateav. BordenCo., 308 0. 8. 188,
      utee by implication,
Eon. WllllamJ. wufiy, Jr., page 3 p-165)


      198-g;IlhltedStskaV. Jeti=,    302 U. 9. 628, 631; Pwa-
                         Bankj 296, U. S. 497, 503-5, ah=
      daa v. IlatIonal~Clty
      be at baet ae pereuaelvevhen the queetlonlr oI1eof the
      nulJ.lflcatlon
                   of at&e paverby Congreeelonal   leginlatlon.
            !'Reuoe,Inthe aba&ce of comeevldellee of en Infler-
      lbleCongrea~Ia&lpol.lcy   requI.rInggovermaentoontract.dto
      be awardedon the lwert bid despitenonCanpllence   vIt,h
      etateregalations   QtberuIreapplIoable,vecannoteaythat
      the PennaylvanIamllk  i%gulationconflictawith Congreaslan-
      al legislation  or polIc7and muntbe eat asidemerelybecauee
      it lncreaees  the prlcdof milk to the government.It vouq be
      tiomorethanepeculatlcmforunto say thatCongnasvould
      consider  the govarmuen
                            t'e pecaniaryInterestea a purchaser
      of mIilk more Importantthanthe imtereetdesertedby Penn@yl-
      vanla in tieltabIlizatIon  of her milk eupplythrow control
      of prloe. Courtaehouldguardrgalnetresolvingthemeetipet-
      Ing wnelderatloneof pollc7by imputingto Congressa decision
      which quiteclearlyIt has not undertaken   to make. Further-
      more,ve shouldbe olow to strikedown legislation   vhIch the
      atatewnoededl7had paver to enact,becauae,ofIts ass-ted
      burdenon the fedezilgove=nt. For the stateIe poverleer
      to removethe ill effectaof our decision,vhile the national
      govermuent, vhIchhae the ultimatepower,remainsfree to re-
      move the burden."
     Further,the f$upreme
                        Courtin the Penn DaIries'oplnlon
                                                       reasoned
thatPanhandleOil Companyv. Knox,277 U. S. 218 (1928);apdlike
cases,had been overruled
                       by Alabamav. King & Boozer,supza.
      In PaolfloCoastDairiesv. Department,  318 U. S. 285 (l&3), deoid-
cd on the acme da7 ae thePenn Dairiescaee,the SupremeCourtheld thata
California milk priceregulation                   to the~saleof milk
                                vae not appl.Icabls
contracted and wncmmated withina Federalenclave. The irorrrt reaeoned
thatCongresshad exolualve   poweroverFederalenclave8by reyon of Clause
17, Section0 of ArtIclaI of the Constitution of the UnitedStates. The
factaof thatoaaearenotcontrolll~here becausethe contraotavIththe
govement contemplate   the movementof goodswhollyupon the highwaysof
Texas,except,In a few instances,  wherethereIa a nominalentryIn or
departurefrom a Federalenclaveby the carrier.
       InHughes Transportation
                            Co. v. UnitedStates,l21Fed. Sup. 212
 (19541, a KentucQ rate regulation
                                 vas held applicableto themovementof
 gwda for the Department of theAzm7 by an independent
                                                    contractor.The
 Courtof Clalmahas renmndedthe casefor furtherfindingsof fact nle-
 gatedto the properdeterminationand interpretation
                                                 of the Kentuck
Han.lfillluJ. Nurray,Jr.,   page 4 (s-165)


Mm.   Thlr Ia the lateetexprvralon of the lavby a reden oourt.



    3he &rut&e    ehlpmnt of goodebyeen lndkpimdentoontmctorfor
t.bemllltarybraiichee
                    of the VnltedSkater3.6eubJectto the rate regnl~-
tionof the Railnmd ConmImIca. The authoritlernIled upon b7 the for-
mer opinlone6f thl6officehave been distl.uguIehed
                                               or overruled  by mub-
msquento-em) tbrefore, ouoh opinion em overruled lneofarM they con-
ilIotwith thin opinion.

APPmmr                              Tours very truly,

J. A.‘.kmIe,
          Jr.
Rev1m.r
     ~.
Davlaorant
Revlever

WI= b..‘Datia
Reviewer                               Anelstant Attome   Dsneral

RobertS. TI6tt.l
nrnt AxJaldant
JohnBen Snepperd
AttorneyOsnerrl
