     OFFICE OFTIiEAlTORNEY GENERALOF-
                      AUrnN



Honorable Homer Leonard, Speaker
House OS ITepresentatlves
47th Legirlature
Austin,  Tesrae
Dear Sir:




             Your letter     0f’Ea
departoent    a request    r0
                                                 0 present. Leg-




                                                eeds of e dea-
                                           n8urEnoe preduln        -
                                        and return prrsmiums
                                        ireman’s Relief and
                                      y said Chapter 125 or
                                     Session of the 4S$h
                                     ng an tmergenoy.
                           oted bg the Legislature   of the

                       E AKi3NlCENTNO. 1
                  nd Home Bill 46, by striking out all
              the enaoting clause, and l~ertlng  in
               -ereot, the followlngr
           “‘Section 1, ‘Ikt Aot8 1931, 43th L&a-
      lature, gage 229, ohapter 125,. seation 2, be
      amndsd 80 aa to read hereafter   aa iollowst
                                                 ..
                                                                       ‘-.- - -
                                                                                  :
                                                                     .       .


     Honorable EIomerLeonard, Speaker, Page 2



          *Seotlon 2. For the purpose of providing per-
          mnent iundr and revenue Sor the Firemen’s l?e-
          llef n&d P&tfrment Fund hereby oreatsd, there
          Ie hereby levied and assessed against every In- ,
          suranoe oorporatlon,     L.loyd*a, or reolprooals,
         .and my other organleatloa or oonoern tramaot-
          ing the business OS tire insuranoe for rorlt
          within this &ate au ennual tax of two Pi?) per
          oentum upon its grosta tire Insuranae preniium
          reoelpte.    Xvery auoh, tire insurance earrler,
          at the time of illin& Ita annual stateaent,
          shall report to the hoard of Insuranoe &XrdS-
          aioners the groee fsount of fire Insuranoe prem-
          ium reoelved upon property looatsd In thie
          State durlas the preoedlng year, and the gross
          flre.Insurmoe     premium receipts,     uhere referred
          to In this law, shall be the total groso amount
         ,of prenlum ~eoslv~=A on eaoh and every kind of
          fire lnsurawe risk written, exoept preziu~18
          raeelred froze othor lioensed oompanles for re-
          lnmranoe, lees return prezluna and dioldends
          raid policyholders,     but there shall be no de-
          duotion for premium paid for relnauranoe. The
/         grossfire   insurance premium reoeipts,      as above
          defined, 8M.l      be rqcvted   and ehmn as tbc        .
i         praaium BoeI;7t.m, ststizl~ fire insura?oe prem-
          lum raoeipts separately imr. othsr ?reml~n re-
i.        ooipts 13 the rqort       to the lio%*d of 3suxnoe
           Cormisoloners by the Insurerme carriers,        upon
           the morn statetint                         otiloere
1
                                  0r tm   prinOi;.d.
          02 ouoh oazrlers.      Upon reotlpt by the Board of
           Insura?los Conmisslonero of the 8worn statements,
i          showing tha gxm fir3 insurannoe pranium re-
           oeipta of such oazIer8,      the F%mrd of Insuranoe
           Comminsionere shall oertlfy      to the State Tress-
f          urer the amount or Tmes due by each insuranoe
           oarrier,  +ioh tas shell be paid to +Ae State
           Treasurer, on or bsrore the ii~rst ot Earoh fol-
           lox&q and the ?r+aeqnr shall Issue Ma reoeigt
           to swh oazrler, which ohall be svidtnoe of the
           paymnt oi suoh +Ares. Ho suoh oarricr shall
           reoei-ra a ;Ic?nit to do ~uainess I.? IA&s ‘State
           until all such tares are paid.        This aot shall
           be oumulative of and in ad4ltIon to all other
           taringi statutes oi this State.       Sal4 tax, less
Honorable Homer Leonard,    Speaker,     Page 3



     the proportion theseor for        pub110 sahool pur-
     pose6, shall be set aside,        deposited into and
     transisrred  to and far the       uBe, benerlt, arxl
     purposes OS said Z’lreoen’o       Eelior nnd Retire-     ,
     Kent Irund and/or dllrbursed      therefrom as herein
     provided and dlreoted,
           nSsotlon 2. The faot that the general ln-
     auranoe oooupation tax laws, Artlole    7064 Texas
     Revised Civil Statutee,   as amended, have been
     amended oreater a neoesslty tor the amen&cent oi
     .iot 1937, 45th Leglalature,   pa&e 229, Chapter
     125, aeotion 2 so a8 to oonform thereto In plan
     for the sake or better administration,    and the
     iaot that there is now no efiectlve~ revenue for
     the support or the Plreaen*s Relief and Retire-
     mnt,Fund, oreate an emergenoy aad imperative
     pub110 neoeeslty that the Constitutional    .ule
     requiring all bills to !be read on three several
     days in eaoh House be suspended, and Suoti rule
     Is hereby suspended, and the llke Beoeseltp er-
     isting that the ConstitOtlonal    %zle that no law
     passed by the Legislature    shall t&e efieot’ until
     ninety day8 after adjournment of the se8SiOn at ., .
     whloh It was enacted be suspended, and suoh rule
     Is hereby suspended, and thl8 Aot shall take ef-
     teat from and after its passage, and It is so
     enaoted. *W
           House Bill 46 IS proposed au an aEnndncnt to Sao-
tion 2 oi the “Firemen’s Pension end Relief LaV,passed by
the Forty-fifth    Legislature   as Eouse Bill Xo. 2518 (oarrled
in Vernon’s Civil Statutes as Artlole        62430).    The original
Seotion 2 was held to be, lnvelld by the Austin Court of
Civil Appeals in tierloan tillenoe       Insuranoe Company v.
Eoard of Insurano8 Cotmleslonere,       126 S. ‘g. (2d) 741, writ
refused.    The ground of the deoislon was that prOviSiOn of
the original Seotlon 2 whlah prohibited the tax therein
levied from being taken Into oonslderatlon        in fixing the
rates to be obnrged for tire lnaureno8 by the oompanlss
involved.     This objeotionable   prOYiSiOB   la n@t found in
House B$ll 46.
Iloncrable’ Homer Leonard, Speaker, Page 4



            In passing upon the oonstIfutIonallty    of Souse
3111 46, It will be neoeaaary that the :oonotltutIonalIty
or h@lole    6243e be determined dnsofar as the validity     or
House 3111 46 may depend upon tht validity OS the law of
which it 9,511 If enacted oonstltute   a iart.    Eeoause of
the length of Artiole 8243e, we will aot attempt to copy
the provisions   thereof In this opinion.
            Tlx first   questton which arias8 In oonslderlng
the oonatltutIonallty     of house El11 46 appears on the race
of the bill,   to-wit?    ?&aythe Legislature levy an oooupa-
tloa tax on those engaged In a particular kind of business
for prorlt,   exoludlBg rrcm the operation of the tadng
st.atuts those engaged in the ak%e kind OS buslneae, but
not ror profit?      This IBool9ea the aonstitutlonal  roqulre-
nent of hrtlole 8, Seotlons 1 and 2, that taxation shall be
equal and uniform and that oooupation taxes shall be equal
and unlrora “upon the same class of subjeota within the
limits of the authority levying the tax:, , . .W
           Slnoe thI8 qutstina has been anewered in the arrir-
mcatlve by our Opinion i?o. O-3436, addressed to you under
date of C’aroh 1, 1941, v!e oil.1 undertake no rurther ais-
oussion of the question In this eplnlon.
            In this oonncotlon, bauvtvtr, it has been suggested
tbat   Xcwt  Fill 46 Is unconstitutional   because property own-
ers, and Insuranoe conctrna not operetlng ror profit, are
not subjeoted    to the tax, but receive the beneilts of the
proteotlon aooorded by the malntenanoe of fire-fighting
organlzatlonsr     This argument asserts the proposition    that
it I8 essoBtlal to the velldlty     of a tar that the proceeds
of the tax be expended ror the benerlts of those upon vihom
the tax Is levied, as v!ell ao the proposition     that olnssISl=
oation for purposes of taxation must embraoe all of those
who may benefit by the expenditure ct the tax money8 and
none who do not so btnstlt.      TBIs is a nlsoonceptlon.    h tar
Is not an asseasmeat of bentfi ta.     Where taxes lavled are
othervrise lawrul, the tamoyer oennot complain that the
benefit8 derived from the expenditure     of the funds era not
proportfontd    to tho burdens lmQosed upon him.. There need
b* no relation    between the ola5e of taxpayers and the pur-
pose to whloh the prooetda are applied.       Carmichael v. Southern
Coal and Coke Coqany,     301 U, S. 496, 81 L. Ed. 1245. The
     .
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     Honorable Homer Leonard,     Speaker, Page 5



         rule that olasaitloation  made by a statute must rest upon
         sOme ground or alrrerenos havine, a rair and eubetantlal
         relation to the objeot of leglelatlon   doea not require
         thht the clecsirioation  made by a taxing statute be r8lattd
         to the purpose ror which the prooeeds of the tax are to be
                  New York tipid Transit Corp. V. New York, 303 U. S.
         i;~tie   L. Ed. 1024.
                   It Is llktwlse   augessttd thet bectwt other State
         tarins   statuteslevy oooupation t6Xe8 Upon the aamtclass
      or subJecti covered by &US0 Bill 46, Iiowt Bill 46 is void
      a5 oon8titutiIQ     “double t6XatiOn”.     There is nothing In
      either the yederal or State Constitutions. forbidding Wdouble
      taxation” per 88.      Fort Smith Lumber Co. Y. Msansas tx rtl.
      Arbuokle,, 251 U. S. 532, 64 L. Ed. 390. Khat in oommonly
      reterred. to as “double taxatiorP, in the objeotlonable         ttntt,
      is int uelity Or taxation based upon arbitrary disorimina-
      tion. %a vim3 the pomr to 01685irY ror the pUrQO8t 0r taxing
      oooupations, the Le$lslaturt       likewise has the power to, tax
      one olase 0r subjtots and to deterzinc        the amount 0r tax to
      be exaottd of this olase oi subjtots.         So long as the t1fiS81-
      tloatlon    is not arbitrary and there is no dlsorimination         bt-
      twsen, the menbert of the olaee, it ie lmslaterlal that two
      taxes 0r ‘the sare oharaoter are ida upon +Uhemember8 or the
      olasa, inettad, as might be done, of one tax equal in *burden
    - to the burden erreoted by   . the total or the trio,
                   Article III, Seotlon 48, Art1016 VIII, Seot1on 3,
      ana Article    XVI, Section 6, 0r our State Constitution      pro-
      hibit the lcrylng 0r tax8       and the appropriation or th8
      prooeeda thereof iOr prlt&t6, a8 dl8tlnylshtd          rrom publla
      purpoees.     Artlole III, Seotlon 51, denies to the Legisla-
      ture the poxer to cake or authorize “any grant of pub110
      Eon81 to any lndivlaual,      association   0r individuals   munloi-
      pal or other oorporatlon what8oevtr. . .* Artiole tI1,
      Section 44, provide8 that no &rent of moneys shall be made
      to any individual except the 8a.f.8 8hal1 have beta provided
      ror by proexisting law.       %blle, admittedly, the State might
      provia     a system 0r pensions and dieability      beneiite ror it0
      employees without thereby violating the constitutional          pro-
      visions (Byrd v. City of Dallas, 116 Tex, 28), it is urged
      that firerren are not employee8 or the State, but or the munlcl-
      palititrr,   end that, therefore,     the law makes a grant or pub-
      110 money8 in violation      or tb above Articles of the Consti-
       tut ion.
Honorable Homer Leonerd, Speaker, Page 6



             -For the purpose8 of this opinion it may be eon-
.otaed that firemen are not State smployees and that the
 Aot dots not ffiake then suoh. Yit do not attempt the at-
 olslon 0r that question.      ~ee*erthtlt8s, it appear8 to US
 that the validity    of the law a8 aCain8t auoh objections
 to its conetitutionality     is sustained by the dtOi8ion  of
 our State,Suprent    Court in the case or Rriedman v.'&uerioan
 Surety Companyof Xew York, et al, handed down on April
9, 1041.

              In that oa88, the majority ot the oourt sustain-
ed the oonatitutionality        of the Texas Unemploymmtnt     Compea-
sation Law.      That  law  provide8   vinsuranca    or  compensation
ror the employees 0r 4 certain         Ola88 or employea*s during
involuntary unemployment." That law levies a tax upon en-
plOyer8.tithin      it8 teIZ8, t0 be paid t0 the COl3ili8SiOIl and
deposited In a eptoial fund which the statute permanently
fippropriatt8    tor ths purpose8 or the law.         nit btneeifts
provided by the hot are not payable to all pereons employed
by others, during periods of Involuntary unemployment, but,
generally speaking, only to employees of employer8 who em-
ploy eight or more eicploytes.         Certain olasses or employment
art excluded rrom the Act, among them employment by the State,
Its lnetrumtntalitits       and pOlitioa1 subdivision8;       agrioul-
tural lebor; employmnt in private hofies; employment on
vessels on the navegable viaterci of the united States, employ-
ment under certain rclativt8;         and employment In certain types
or reli&oua,      oharitablt,    8oientlfio,   literary,    tnd eduoa-
tlonal organizatione.         Payments to the employees under the
provlslons     of the law are without reference to the question
or need.
           The oourt eustained the constitutionality     or the
Texas Unemployment knpensation Lnw as qainst       tht follow-
ing oontqntions:
          1. That the exemptions rendered the Bet viola-
tive or Constitution rirtiolt I, Stotion 3, 6s a denial of
the equal proteotlon ot the laws.
             2. ‘ibat the law violated Constitution .4rtIolt I,
Stotion    16, prohibiting  the passage of any bill of attainder,
 ex p08t iaoto law, retroaotive      law, or iaw imPairin& the
 obligation   of OontraOts.
              3, That the law violbttd Artiole I, Sootion 17,
 respeatlng    the taking of private property ior publio use.
              4, That the-law violated   Artiole    I, Seotion 19,
                                               ..
 Honorable Homer Leonard, Speaker, Page 7



 the due process      clause   of the Tee8   Con8tltutiOn.
           3. That' the law levied a tax and appropriated
 the prOOttda thereof to other than WpublLo purpcsesn,. In
 violation of Xrtiole III, Section 48, Art1018 YIII, Sto-
 tlon 3, and Artiole XVI, Seotion 6.
                6. That the law granted publio Eontys to private
 lndlvlduals,      in vlolatlon OS Art1018 III, Seotion 51.
             7. That the law appropriates the proceeds oi t&o
 tax Drmanently, rather than ror not more then tvio years,
 in violation   of Art1016 VIII, Section 0, of tJi8 Texas Con-
 8titutlon.
              Y&are bound to apply the decisions or our State
  Supreme C6urt in the detemination      0r question8 presented
  to this department, and the opinion of the majority in the
  Friedman C68e appear8 to sustain ia principle the oonstitu-
  tionality   of tb Firemen*6 Pension and Tceliet Law. If any-
  t!?ln(;, the case of the Firerzen’s Tension Law Is the strcnger,
  for the service8,rendtred    by firemen are pub110 or govern-
  mental in charaoter, being an exerolse-of       the authority and
  duty 0r govtrnr;lent to prottot   the oitieens,   not only 68 re-
. epeote hi8 phyaloal Safety and well-being,       but in the enjoy-
  ment of his property.'    Article I, SRotion 3, of the Consti-
  tution preeervea the authority of the sovereign to grant ex-
  clusive publio emoluments in oonaidtration       of publio servloes.
  And If It be urged that the atrvioee are not rendered to the
  State, but to the municipality,     the answer is that the Prled-
  man ease sustains the &rant of moneys oolltottd        throw    the
  exertion of the power of taxation to persons who are employees
  o? private individuals    and concerns, and %&oat employment is
  not in the discharge oi a governclental fU.nOtlOn, on the
  ground that the. money6 are devoted to the relief       of unemploy-
  ment, a publio purpose, and that the cor.penaation       Is not a
  gratuity,   but earned by the servioes performed in private
  enterprise.    sr the relief   0r unemployment ie a pub110 pur-
  pose, oertainly the expenditure of moneys a8 an induoement
  to individual8 to render pub110 strviot       in the proteotion
  of life and property from the hazards of firs 8ervea a pub-
  lic iNQO8e.      If the renderIn of aervloe to private employers
  Eonorable Eomer Leonard, Speaker, Fage 0



  engaged in private business plaoes      the &rant of uneaploy-
  rcent benefit8 withcut constitutional      condemnation of
   ngratultle8n without the rendering     of aerrloe in a pub110
  employrient 8e*v68 the sa-~ purpose     with respeot to the
  *benefits provided by the Firemen's     Pension Law.
                 -The deoieion in the Friedman 0880 likewise ob-
     llsee u8 to rejsot the oontention that, ln appropriating
     the prooeeds of the tax permanently, the AOt violates Arti-
      01s VltlI Seotion 6, llmltlng the appropriation to tso
     year per i Od8. In the Friedman oase, the oourt, In SU8tain-
      1~ the Aot es an exertion of the taxing power of the State,
      ~OOgnlze8 and afflrIC8 that taxes Oen be levied only iOr
      pub110 purpoee8, but, nevertheless,    holds that the prOoeed8
     of the tax there involved ar6 "not the proporty oi tti
      State in any oapaolty, but. . . e trust fund to be held
     out of the State Treasury, , , . in the hand8 of the Stat8
    -.?‘reasurer as Trustee" for the benefit of those to whom the
      benefits provided by the Aot may be payable.      The fund ln-
      valved in the Firemen's Pension Law Is of the same oharaoter
      aa that Involved In the Friedman case and we a26 thereiore
      OGn8tralned to apply the dootrine of that ease to the la-
      stant sltuatlon.
      .'
                 In any event, however, 6s observed in the Ix$Mrcaa
. . 'case, the Invalidity,     if any, of the appropriation or the
      funds, for loor than tn.0 ye8r8, xould not invalidate 3CU8a
      Bill 46. It would not arleot the oolleotion      of the iuzd,
      but the authority to dleburse it, and may be cured by biennial
      reappropriation   of the fund for the purposes ior which the
      fund is created.
              It is ureed that the original .Aot (Eouse Bill 258,
   45th Legislature)   is invalid because containing more than
   on6 subjeot in the title,    in violation of Seotion 35, Artiole
   III, Texas Constitution.     Tiiis objeotion is without merit.
   The title ds oonoerned with but a sin&e subjeot,       tAe pro-
   viding of the oomprehenalve system of pension and disability
   benerits to rlrelten,--   and the provisions OS the tit.16 and
   or th6 ;ict ltaelr  a:6 all germane to thie single purpose.
   Zobblns V, Limestone County, 114 Tex. 345, 268 S. X. 915.
               The objeotion  that the Aot violates   tit1018 III,
   s6CtiOn   44, 0r our Constitution,  by providing   extra oompen-


      i                                           i
i?onoreble Zorar Leo.mrd, Speaker, Taae 3




jat.Ionarter :;ublloservloe kz pcrfcrzed % the persona ?or-
fgly": ?uch rcrvios, oust bo rejeotsd~on thq nuthority of
      . Llty OS Dallas, et al, 118 '3s. 2;.           I
            ';hlsdls.poses or 011 questions w?ilchooour to us
?olativd   to the aonrtitutlcnclify oi :io*ueoEl11 46 upon lta
face en4 a3 it I8 zig deyzd u.y0:1 the COEst~t!itfo~ollt~  Or
the Act OS w!:lcli it will ion en lctegral Fart.    In view oi
the mcesslty fcrrprc~pt ootJ.cn upon yclurx-q-zest,beoauoe
of 2x mar approaoh 0r :ho and or thi5 l~~lslotlro oesalon,
a-e tavc zot undertrken ia this crinton on exhaustive troat-
cent or, the subject, ilcrtam Ye atteiqtbd a Cl8ocsalon 0r
confIictln3 authorltlea In other jurisdlotions reqeoting
Iam or the im:e &enerul ohn=actor. It stifioez Co say that
A'6 kCVC  fiad thE b,stICrit Or tki   >riPtk? pretpbrsb   betor   th8
Court   of ~1'1~11q&e&8     In the
                                caee of imr'Zo:2nnlliunce In-
3UlUiCb ki!ZF@Xiy.f, :.'OrZ'i!
                           of Smmno3    Coxn,ise?o~~cr,above
Olt6C, se 5.avcsivea the rattc~r oarciti ccr.all6tat!.on,and
upon the authorltlea and reaeonlcs,nbcve cited and axpremed,
eza cr t,ks opinlc\nthat :!cum Cl11 46 Is constitutional.




     FIRST ASSISTAI
     A TTORNM GENE
