Honorable Joe Fultz
'County Attorney
 Grimes County
Anderson, Texas

Dear Sir:

                                   Opinion No. O-3849
                                   Re: Is Grimes County entitled
                                        to an exemption from the
                                        payment of the State tax
                                        of eight cents per gallon
                                        on the distillate it pur-
                                        Cha&?S?

          We are in receipt of your letter of August 2, 1941, in
which you request the opinion of this department upon the question
set out therein as follows:

          "Grimes County purchases quantities of distillate
     for use in its tractors. These tractors are used in
     the construction and maintenance of county lateral
     roads.

          "Is Grimes County entitled to an exemption from
     the payment of the State tax of eight cents (8{) per
     gallon on the Distillate it purchases?"

          The following portions of Article XVII of House Bill 8,
Acts of the Forty-seventh Legislature, 1941, are pertinent to your
inquiry.

          "Section 1. The following words, terms and
     phrases shall, for all purposes of this Article, be
     defined as follows:

            “X * *

          "(c) 'Other liquid fuels' shall mean any liquid
     petroleum products, or substitute therefor, having a
     flash point above one hundred and twelve (112) degrees
     Fahrenheit, according to the United States official
     closed testing cup method of the United States Bureau
     of Mines, including diesel fuel, kerosene, distillate,
Honorable Joe FultZ,-Page 2 (C-%49)



     condensate, or similar products that may be used as fuel
     to generate power for the propulsion of motor vehicles
     upon the highways of this State.

          w * * *

          "(i) 'Person' shall mean and include every individual,
     firm, association, joint stock company, syndicate, copart-
     nerehip, corporation (public, private, or municipal), trus-
     tee, agency, or receiver.



          "Section 14. (a) From and after the effective date
     of this Article, there shall be and is hereby levied and
     imposed an excise tax of four (4) cents per gallon, or
     fractional part thereof, on all users of liquefied gases,
     and eight (8) cents per gallon, or fractional part there-
     of, on all users of other liquid fuels, upon the use of
     such liquefied gases and other liquid fuels by any person
     within this State only when such liquefied gases and other
     liquid fuels are used in an internal combustion engine for
     the generation of power to propel motor vehicles upon the
     public highways of this State. The said tax shall be com-
     puted and paid to the State of Texas through the Comptrol-
     ler at the time and in the manner hereinafter provided."
     (Underlining ours)
          Prior to the enactment of House Bill 8, supra, the Motor
Fuel Tax Law was codified into Vernon's as Article 7065a-1, and
contained the following definition:

          "(e) 'Person' shall mean and include every individual,
     firm, association, joint stock company, syndicate, co-part-
     nership, corporation, trustee, agency or receiver."

          The above quoted portfon of the Motor Fuel Act was con-
strued by the Supreme Court of Texas in the case of State Y. City
of El Paso, 143 S.W. (2d) 366, in an opinion written by Justice
Critz. In that case the court discussed the question of whether
or not the Constitution of Texas prohibits the assessment of a
use tax on motor fuel against a municipal corporation, and stated
as follows:

          "A careful examination of our Constitution dis-
     closes that the only inhibitions, restrains, or exemp-
     tions contained therein with reference to munici,pal
     corporations are found in Section 1 of Article VIII
     and Section p of Article XI, Vernon's Annotated St.
     Const.
Honorable Joe Fultz, Page 3 (0-3849)



         "So far as pertinent here, Section 1 of Article
    VIII of our Constitution provides: 'Section 1. * * *
    All property in this State, whether owned by natural
    persons or corporation, other than municipal, shall
    be taxed in proportion to its value. * * * It may
    also impose occupation taxes, both upon natural per-
    sons and upon corporations, other than municipal
    * * x, It may also tax incomes of both natural per-
    sons and corporations other than municipal, * * *..I

          "Section 9 of Article XI of our Constitution
     reads as follows: 'Sec. y. The property of coun-
     ties, cities and towns, owned and held only for pub-
     lic purposes, such as public buildings and the sites
     therefor. Fire engines and the furniture thereof,
     and all property used, or intended for extinguishing
     fires, public grounds and all other property devoted
     exclusively to the use and benefit of the public shall
     be exempt from forced sale and from taxation, provided,
     nothing herein shall prevent the enforcement of the
     vendors lien, the mechanics or builders lien, or other
     liens now existing.'

          "An examination of the above-quoted constitutional
     provisions discloses that they operate to exempt muni-
     cipal corporations from only three classes of taxes.
     These are ad valorem taxes, occupation taxes, and in-
     come taxes. It is too plain to admit of debate that
     the taxes here sought to be recovered by the State are
     not ad valorem or income taxes. We are therefore left
     to determine only the question as to whether or not they
     are occupation taxes. Of course, if they are occupati,on
     taxes, the City is exempt under Section 1 of Article VIII
     of our Constitution, supra.

          "* * * It follows that the tax here sued for is
     manifestly a tax on using motor fuel in the operation
     of Eotor vehicles on the public highways of this State.
     Such tax is an indirect or excise tax. This being true,
     the constitutional exemption of municipal corporati~ons
     fron.occupation taxes cannot apply."

In requiring the City of El Paso to pay the use tax on the motor
fuel it used, the court stated as follows:

           11+ *.* We think the statutory definition of 'Per-
     son, 1 as contained in subdivision (e) of Article 7065a-1,
     covers all corporations or agencies which actually sell
     motor fuel in Texas. This being true, the statute also
Honorable Joe Fultz, Page 4 (O-3849)



     covers all corporations or agencies which use motor
     fue,lwhen there is absent an actual sale in this State."
     (Untierliningours)

          Apparently In line with the Supreme Court's construction
the Legislature defined the term "Person" in paragraph (I), Sec-
tion 1 of Article XVII, supra, to include public, private or muni-
cipal corporations.

          The Constitution of Texas seems to recognize that a county
is a municipal corporation. Section 3 of Article XI provides as
follows:

          "No county, city or other municipal corporation
     shall hereafter become a subscriber to the capital of
     any private corporation or association, or make any
     appropriation or donation to the same, or in anywise
     loan its credit; * * *" (Underlining ours)

           Article 1572 of the Revised Civil Statutes provides as
follows:

         "Each county which now exists or which may be
    hereafter established, shall be a body corporate and
    politic."

          The courts of many states have passed on the question
of whether or not a county is a municipal corporation. Some cases
hold a county to be a municipal corporation, others hold it to
be a public corporation, and still others hold it to be a quasi
public corporation.

          The decisions of the courts of this State are not clear
on this point but we believe that the weight of authori,tyis that
construilg the above quoted Consti,tutionalprovision and statute,
a county is either a public or municipal corporation.

          The Supreme Court of Texas in the case of Bexar County
vs. Lindsn, 220 S.W. 761, in referring to Secti.on51 of Arti,cle
III of the Constitution of Texas stated as follows:

         "The giving away of public money, its applica-
    tion to other than strictly governmental purposes, is
    what the provision is intended ,tomar-d against. The
    prohibition is a positive and absolute one except as
    to a distinctive class to whom the State is under a
    sacred obligation. Not only are individuals, associa-
    tions of individuals and private corporations within
    its spirit, but all kinds of public or political corpo-
    rations, as well, whether strictly municipal or not.
Honorable Joe Fultz, Page 5 (O-3849)



     It therefore applies to counties, whether considered
     as public corporations or only quasi corporations. The
     Similar restraints upon the use of public funds and the
     public credit applied to counties by these other provi-
     sions of the Constitution practically demonstrate this
     to be true."

          The San Antonio Court of Civil Appeals in the case of
Brite V. Atascosa County, 247 S. W. 878 in an opinion written by
Chief Justice Fly stated as follows:
          I,
           . . . The statute (Article 1365) expressly makes
     each county a body corporate and politic, and as such
     it undoubtedly had the power and authority to institute
     suits and defend against those brought against it. The
     Constitution of Texas recognizes counties as municipal
     corporations along with cities and towns. . . .II

          The Eastlsnd Court of Civil Appeals in the case of City
of Abilene V. State, 113 S. W. (2d) 631, stated as follows:

          "Counties, cities, and towns are municipal corpo-
     rations. Const. Art. 11. They are political subdivi-
     sions of the state. Id. Corporation of San Felipe de
     Austin Y. State of Texas. 111Tex. 108, 229 S.W. 845.
     * * *'I

          It is the opinion of this department that the definition
of the term "Person" in House Bill 8, supra, includes a county
so as to require a county that uses distillate in one of its motor
vehicles to pay the tax imposed by Article XVII, Section 14(a)
of said Rouse Bill 8.

APPROVED AUG 14, 1941                       Yours very truly

/s/ Robert E. Kepke                    ATTORNEY GENERAL OF TEXAS

ACTING ATTORNEY GENERAL OF TEXAS

                   APPROVED            By   /s/ Billy Goldberg
                   OPINION                      Billy Goldberg
                  COMMITTEE                          Assistant
                  BY /s/ G.W.S.
BG:eaw:lm            CHAlRMAN
