                     THEATTORNEY                        GENER&
                                   OFTEXAS

PRICE  DANIEL
ATTORNEY GENERAL

                                   August   21,1951



       Hon. George B. Butler, Chairman
       Board of Insurance Commissioners
       Austin, Texas                    Opinion           No. V-1249

                                              Re:     Effect of House Bill 285,
                                                      Acts 52nd Leg., 1951, upon
                                                      rates applicable to gross
                                                      premium taxes to be col-
                                                      lected under the provisions
                                                      of Articles  7064, 7064a. and
       Dear    Mr.   Butler:                          4769,V.C.S.

                  You have requested the opinion of this office as to the
       legal effect of House Bill 285, Acts 52nd Leg., 1951, upon the
       rates applicable in the collection   of gross premium taxes under
       the provisions  of Articles  7064, 7064a and 4769, Vernon’s    Civil
       Statutes, in the year 1952 and thereafter.    You have also requested
       an opinion as to whether certain conclusions     reached by you from
       your examination of House Bill 285 are correct.       For the purpose
       of brevity, the conclusions   reached by you will be discussed   seria-
       tim .

                 Your first conclusion is that House Bill 285 will become
       effective on September   1, 1951.  This conclusion  is correct in the
       light of the clear and unmistakeable   language of Section XXVII
       of House Bill 285, which is as follows:

                    “The crowded condition of the calendar creates
              an emergency     and an imperative   public necessity  that
              the constitutional   rule requiring bills to be read on
              three several days in each House be suspended,        and
              the same is hereby suspended,      and this Act shall take
              effect and be in’force from and after the first day of
              September,    A.D..1951.”   [Emphasis    added.]

       House Bill 285 was passed by both Houses as aa emergency    mea-
       sure and was signed by the Governor on the 8th day of June,1951,
       and absent the underlined portion thereof, w,   would have be-
Hon. George    ,B. Butler,   ,Page 2, (V-1,249)     ~~



come effective and been in force from and after that date. How-
ever, the Legislature specifically   provided that the Act should
become effective from and after September      1, 1951. See Attor-
ney General Opinion V-1246     (1951) to the Honorable Robert   S.
Calvert, Comptroller  of Public Accounts.

           Your second conclusion is that Sections 1, 2,and 3 of
Article XVII of House Bill 3, Acts 50th Leg., 1st C.S., codified
respectively   as Articles 70644, 7064a-1,   and 47694, Vernon’s
Civil Statutes, are repealed by House Bill 285 in so far as each
of these articles levies an additional tax for the calendar year
1951 and therefore no tax is to be levied under Sections 1, 2,
and 3 of Article XVII of House Bill 3, supra, on premiums      col-
lected during 1951, irrespective    of whether they were collected
before or after September    1, 1951.

           Section 1 of Article XVII, House Bill          3, Acts   51st Leg.,
1st C.S.   1950, added the following Article:

          “Article   70649.  In addition to all other taxes,
     there is levied hereby an additional tax for the years
     1950 and 1951, on every insurance corporation,        Lloyd’s,
     or reciprocals,    and on any other organization    or con-
     cern upon which a tax is levied by Article      7064, Re-
     vised Civil Statutes of Texas, 1925, as amended.

          “The tax shall be paid at the same time, in the
    same manner, and subject to all the same terms,        con-
    ditions, obligations   and penalties as is provided for
    the payment and collection    of the tax levied in the
    aforesaid Article    7064.

         “The tax hereby levied for the year 1950, shall
    be ten per cent (10%) of three-fourths   (3/4) of the
    amount of tax levied and due for the callendar.~year
    1950 under the aforesaid  Article 7064.    The tax here-
    by levied for 1951 shall be two-thirds  (2/3) of ten per
    cent (10%) of the amount of tax levied and due for the
    calendar year 1951 under the aforesaid     Article 7064.”

Sections 2 and 3 of Article XVII use similar             language   in enacting
Article 7064a-1  and Article 4769i.

           However,   Articles    XV,   XVIII,    and XXI of House     Bill 285,
Hon. George    B. Butler,   Page   3 (V-1249)



which respectively   amend Article 7064,        7064a, and 4769,   V.C.S.,
each contain a section which, as relates        to Article 7064,   reads
as follows:

          “Section 2. Section 1 of Article XVII of House
     Bill No. 3, Chapter 2, Acts of the First Galled Ses-
     sion of the Fifty-first  Legislature, (which is codi-
     fied as Article  7064i. Vernon’s Annotated Civil
     Statutes of Texas), is hereby repealed insofar, and
     only insofatt as it levies a tax on premium receipts
     for the year 1951.”

The identical language of this repealing clause, except as to
the specific references  to the section numbers of House Bill 3
and the articles to be repealed,  is contained in Section 2 of Arti-
cles XVIII and XXI of House Bill 285.      This language, as quoted
above, clearly and unmistakeably     repeals those provisions  of
Sections 1, 2, and 3, Article XVII, House Bill 3, Acts 51st Leg.,
1st C.S., which levy a tax upon premium receipts for the year
1951, and hence your conclusion    is correct.

          Your third conclusion      is that Articles    7064a and 4769,
V.C.S.,  now in effect, will control the premium taxes of the com-
panies affected, measured     by the premiums        collected during the
period January 1, 1951,to August 31, 1951, both inclusive.           Your     ,
fourth conclusion   is that Articles     7064s: anti 4769, Vernon’s   Civil
Statutes, as amended by House Bill No. 285, which amendments
will become effective September         1, 1951, will control the tax
levied against the companies      affected, measured       by the premiums
collected during the period September          1, 1951, to December    31,
1951, both inclusive.

          Articles 7064~1 and 4769 tax respectively the gross pre-
miums received by domestic life, health, and accident companies
and foreign life, health, and accident companies.   Article 7064a,
now, and as amended by House Bill 285, reads in part as follows:

          u. . . Such taxes shall be for and on account of
     business transacted     within this State during the cal-
     endar year ending December        31st, in which such pre-
     miums were collected,      or for that portion of the year
     during which the insurance organization       transacted
     business   in this State.  . . .”
Hon. George    B. Butler,   Page   4 (V-1249)



The same provision also appears         in Article   4769,   now, and as
amended by House Bill 285.

          In an opinion by the Attorney General dated December
3, 1936, addressed    to Hon. R. L. Daniel, Chairman,of          the Board
of Insurance Commissioners,          (Book 374, p. 496) it was held that
an occupation tax levied for and on account of the business ‘trans-
acted during the year in which the premiums            are collected upon
which the tax is computed can be levied only upon the basis of
the tax rate in effect at the time such business was transacted
and such premiums      collected.‘.   This holding was affirmed by let-
ter opinion of this office dated:August        14, 1949, addressed    to Hon.
George B. Butler, Chairman,         Board of Insurance Commissioners.
Inasmuch as the amendments          to Articles   7064a and 4769, enacted
by House Bill 285, will not be effective until September           1, 1951,
your conclusions    are correct that the rates provided in Articles
7064a and 4769, prior to the effective date of the amendment on
September    1, 1951, will control the premium taxes of the com-
panies affected, measured      by the premiums        collected during
the period January 1, 1951, to August 31, 195,1, both inclusive,
and that the rates provided in Articles         7064a and 4769, as amended
by House Bill 285, will control the premium taxes to be levied
against the companies     affected, measured        by the premiums     col-
lected during the period September         1, 1951, to December      31,
1951, both inclusive.

          Your fifth conclusion     is that Article 7064, V,C.S.,      as
amended by House Bill 285, will control the tax to be paid by
the companies     affected, measured by the premiums          collected
during the entire peri.od January 1, 1951, to December            31,1951,
both inclusive.     Article 7064, as amended, imposes an occupa-            .
tion tax on all organizations    transacting    the business of fire,
marine, marine inland, accident, etc., insurance,          other than
the business    of life, personal accident, life and accident, and
health and accident insurance,       and is an occupation tax payable
in advance for the privilege     of transacting    such insurance busi-
ness in this State for a period of one year commencing            on March
1st of the year in which the tax is paid.       The amount of the tax
is measured by and is based upon the amount of gross premiums
collected by the insurance organization        during the preceding cal-
endar year but the tax is not for the privilege        of having done
business  in Texas duringthe      period in which such premiums
were collected     or a tax upon the premiums       so collected.    Kansas
City Life Ins. Co. v. Love, 101 Tex. 531, 109 S.W. 863j1908);
-   .




        Hon. George     B. Butler,   Page   5   (V-1249)



        Attorney   General’s   Opinions,    supra.

                  Under the Supreme Court’s holding in Kansas City Life
        Ins. Co. v. Love, supra, the statutory tax rate in effect at the time
        the tax is levied is applicable,  irrespective    of the tax rate in ef-
        fect at the time the premiums     were collected.      Your conclusion
        is correct inasmuch as the tax rate providebin          Article 7064, as
        amended by House Bill 285, will be in effect from January 1,1952,
        to March 1, 1952, during which period the tax will be levied in
        accordance    with the provisions  thereof, and the applicable rate
        will be measured    by the premiums     collected during the entire
        period January 1, 1951, to December        31, 1951, both inclusive,   be-
        ing the preceding year prescribed      in the statute.

                   Your sixth conclusion is that the provision contained for
        the first time in Section XV of House Bill 285 which provides that
        “examination   and valuation fe,es paid in such taxable year to or
        for the use of the State of Texas by any insurance organization
        hereby affected shall be allowed as a credit on the amount of pre-
        mium taxes to be paid by any such insurance organization      for such
        taxable year.   . . .‘I may be deducted by such companies provided
        the examination    and valuation fees were paid during the year 1951,
        In the letter opinion of,this office to Hon. George B. Butler, dated,-
        August 16, 1949, supra, in answer to a similar question as to simi-
        lar provisions   contained in Articles  7064a and 4769, Vernon’s
        Civil Statutes, it was held that:

                   a.
                    . . . The credits allowable for examination   and
             valuation fees paid during the taxable year under the new
             measures     are governed by the same principle.   Those
             fees paid after the effective date of the Acts may be cred-
             ited against those taxes accruing after the effective date
             of the Acts. *’

        This holding    is reaffirmed.



                                         SUMMARY


                  House Bill 285, Acts 52nd Leg., 1951 (The Gmni-
             bus Tax Bill) is effective from and after September  1,
             1951, and the tax rates therein provided by Articles
             XV, XVIII and XXI are the rates to be applied in the
4,.
      _a.   Hon. George   8.   Butler,   Page   6   (V-1249)   L



                collection of gross premium taxes to be collected
                under the provisions   of Articles 7064, 7064a and
                4769, Vernon’s   Civil Statutes.

            APPROVED:                                     Yours    very truly,

            Everett Hutchinson?                            PRICE DANIEL
            Executive Assistant                           Attornev General

            Charles D. Mathews
            First Assistant

            Price Daniel                                       C. K. Richards
            Attorney General                                         Assistant

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