.




                 THEATTORNEYGENEEAL

                               OF     TEXAS


    GERALD C. MANN


                                              April   25,   1939


       Honorable Geo. H. Sheppard
       Comptrollersof Public Accounts
       Austin, Texas
                                     Opinion No. o-162
       Dear Sir:
                                     Re: Is the sum of $10,471.95,
                                          representing gross receipts
                                          taxes accruing against a gas
                                          utility under Art. 6060,V~CS,
                                          during the State's fiscal
                                          year ending Aug. 31, 1938, and
                                          paid under protest during such
                                          year underArt. 7057b, VACS,
                                          but not transferred or placed
                                          in Gas Utilities Fund until
                                          the termination of protest
                                          suit during the fiscal year
                                          ending Aug. 31, 1939, subject
                                          to warrants drawn against such
                                          fund, under appropriations
                                          for the Attorney General's
                                          Department and Railroad Com-
                                          mission for the fiscal year
                                          ending August 31, 1939.
                We have for answer your inquiry of April 18, 1939, con-
       cerning your authority to issue warrants against certain moneys
       in the Gas Utilities Fund, created by Article 6060, as amended,
       Vernon's Annotated Civil Statutes, under appropriations for the
       Attorney General's Department and the Railroad Commission for the
       fiscal year ending August 31, 1939, when it appears that such
       moneys came into the Gas Utilities Fund under the following cir-
       cumstances:
                During the fiscal year 1937-1938, ending August 31, 1938,
       the sum of $10,471.95 was paid under protest according to the
       terms and provisions of Article 7057b, Vernon's Annotated Civil
       Statutes, by the Lone Star Gas Company, a "Gas Utility" as defined
       by Article 6050, Subdivision 2, Vernon's Civil Statutes. This
       payment represented the gross receipts tax of one-fourth of one
       percent of the gross income received by said company from all
       business done within the State of Texas during such period. This
       tax is levied by Article 6060, as amended, Vernon's Annotated Civil
       Statutes, which provides that the proceeds of such tax shall go
                                                                .    .




Hon. Geo. H. Sheppard, April '25, 1939, Page 2,    o-162



to constitute the Gas Utilities Fund. A suit was duly and time-
ly filed by such gas utility to recover the taxes so paid under
protext, under Article 7057b, Vernon's Annotated Civil Statutes,
but upon appeal to the Court of Civil Appeals for the Third
Supreme Judicial District from an adverse judgment of the trial
court, said cause was dismissed, and the taxes which had been
thereby protested became, under Article 7057b, Vernon's Anno-
tated Civil Statutes, subject to transfer into the fund in which
they would have gone originally except for such protest and
suit o But the date when this transer into the Gas Utilities
Fund became possible was during the fiscal year ending August
31,   1939.

         Article 6060, Revised Civil Statutes, 1925, as amended
by Acts, Regular Sesslon, 42nd Legislature, Chapter 73, page 111,
levies a gross receipts tax of one-fourth of one per cent of the
gross income received by defined gas utilities, from all business
done within the State, and provides that such taxes shall be paid
into the State Treasury at Austin on a quarterly basis?,In a fund
to be designated and known as the "Gas Utilities Fund.   It is
further provided that such Fund shall be used for enforcing the
provisions of Articles 6050 to 6066, Inclusive, Vernon's Annotated
Civil Statutes, known as the "Gas Utilities Act."
         Article 6066, as amended by Acts, Regular Session, 42nd
Legislature, Chapter 190, page 319, limits enforcement expendi-
tures out of such Gas Utilities Fund as follows:
           "The salary and expenses of the expert and his
      assistant and the salaries, wages, fees, and expenses
      of every other person employed or appointed by the
      Commission under the provisions of this subdivision,
      and all other expenses, costs, and charges, tncluding
      witness fees and mileage incurred by or'under authority
      of the Commission or a Commissioner In administering
      and enforcing the provisions of this subdivision or in
      exercising any power or authority hereunder, shall be
      paid out of the Gas Utilities Fund provided for by
      Article 6060, as amended by H.B. No. 547, Acts of the
      Regular Session of the 42nd Legislature, by the State
      Treasurer on warrants of the Comptroller on orders
      or vouchers approved by the Commission or Chairman
      thereof. The entire amount derived from the tax imposed
      by Article 6060, as ,amended, shall be used for the
      purposes of enforcing the provisions of ,thepreceding
      Articles 6050, et seq. Any surplus remaining in this
      fund after paying all such salaries and expenses as
      may be contracted to be paid and incurred and such as
      may be reasonably estimated by the Commission for
      its use shall be paid over to the General Revenue Fund
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        Hon. Geo. H. Sheppard, April   25,   1939,   Page   3,   O-162


            on September First of each year, beginnIng September
            1 1932. Provided, that not more than Seventy Thousand
            ($70,000.00) Dollars shall ever be spent in any one
            Calendar year.”
                 Chapter 504, p. 1362, General and Special Laws, Regular
        Session, 45th Legislature, being the departmental appropriation
        bill for the fFsca1 years ending August 31, 1938, and August 31,
        1939, specifically appropriates out of the Gas Utilities Fund
        for each of such years, the sum of $18,250.00 to the Attorney
        General's Department for the enforcement of the Gas Utilities
        Act, (p. 1372), and the sum of $50,170.00 for salaries, expenses
        etc. of the Gas Utilities Division of the Railroad Commission,
        (P. 1474).
                 It is our opinion, and you are accordingly advised, that
        when proper vouchers are presented to you by the Attorney Gen-
        eral's Department and the Railroad Commission under the foregoing
        departmental appropriation bill for the fiscal year ending August
        31, 1939, you may lawfully issue warrants upon same, to be paid
        out of~ang moneys in the Gas Utilities Fund, created by Article
        6060, as amended Vernon's Annotated Civil Statutes including
        said sum of $10,471.95, transferred or to be transfhrred to said
        fund during the current fiscal year ending August 31, 1939. Our
        conclusion is grounded upon the proposition that all moneys which,
        under governing statutes, come Into the Gas Utilities Fund during
        any given fiscal year, may be used to pay warrants drawn against
        such Fund under appropriations for that particular fiscal year.
                 But by your inquiry you make the point that the
        $10,471.95 in question represented taxes due and payable to the
        State under Article 6060, Vernon's Annotated Civil Statutes,
        during the fiscal year ended August 31, 1938, and consequently
        such specific sum of money is not chargeable with salaries and
        expenses incident to the enforcement of the Gas Utilities Act
        during the fiscal year ending August 31, 1939, and that warrants
        cannot be drawn against such fund for such salaries and expenses.
                 This position would be tenable if the $10,471.95 involv-
        ed in your inquiry had been actually paid Into the Gas Utilities
        Fund during the fiscal year ended August 31, 1938, but such is
        not the case here. The effect of the payment of this particular
        $10,471.95 under the protest provided by Article 7057b, Vernon's
        Annotated Civil Statutes, was to place such fund or sum of money
        in a Suspense Account in the State Treasury rather than into the
        Gas Utilities Fund. As long as this particular sum of money
        occupied this status of suspense, it belonged neither to the
        State of Texas claiming such tax, nor to the aggrieved gas utility,
        claiming, by written protest, that it did not owe such tax. An
        elaborate system of bookkeeping by the State Is set up by Section
Hon. Geo. H. Sheppard, April 25, 1939, page 4,    o-162



3 of said Article 7057b, Vernon's Annotated Civil Statutes, for
segregating such protested tax payments from either the General
Fund or any of the Special Funds in the State Treasury.
            Perforce of these statutory provisions this particular
sum of $10,471.95 would not come into the Gas Utilities Fund dur-
ing the year such taxes were claimed to be due and payable, i. e.
1938, and, in fact, would not be allocated to such Fund until
8UCh time as It was finally determined, at the end of the liti-
gation provided and required by Article 7057b, Vernon's Annotated
Civil Statutes, that such moneys properly belonged to the State
of Texas as a part of its lawful revenues. If, on the other hand,
the protesting taxpayer should prevail in a suit brought within
90 days, in the form and manner required by the Protest Statute,
then such moneys or funds would never find their way into the Gas
Utilities Fund but would be paid out of the Suspense Fund of the
Treasury to such taxpayer, together with earned interest thereon.
An appeal Is contemplated by the Protest Statute to ultimately
determine the status of and title to such protested tax payments,
as between the State and the taxpayer, and thltlcould concefvably
result in such tax paymen,tsbeing kept in the Suspense Account
of the Treasury and out of the I;asUtilities Fund for several
years s Surely it was not the Intent of the legislature that the
Gas Utllltles Fund should be denied the advantage of gross
receipts taxes levied by Article 6060, Vernon's Annotated Civil
Statutes, merely because the protesting gas utility elects to
put such fund into a state of suspense, pending a determination
of it8 rights. If and when such tax payment is, by a court of
competent jurisdiction, adjudged to be a part of the revenues of
the State, there is nothing In the Protest Statute, or in any
other statute which we have found, which would prevent such moneys
being considered a part of the Gas Utilities Fund, subject to
warrant drawn on that Fund, for necessary expenses incurred In
the enforcement of the Gas Utilities Act during the same fiscal
year In which 8UCh moneys were finally allocated to the Gas
Utilities Fund. In fact, Section 4 of the Protest Statute pro-
vides that "if suit 18 not brought within ,thetime and within
the manner herein provided, or in the event it finally be deter-
mined in such suit that the sums of money so paid or any portion
thereof. together with the pro rata interest earned thereon, be-
long to*the-State, then and-in that event, it shall be the duty
of the State Treasurer to transfer such money from the susoense
                            I of the State by placing the portion
        rf belonging to the State in such fund by the issuance of a
depO8it    warrant. ' (Emphasis ours)
         Under the foregoing, it became the plain statutory duty
of the State Treasurer, when the gas utility in question abandoned
its appeal in the Court of Civil Appeals, from a judgment ln favor
of the State in the Di8tPiCt Court of Travis County, to forthwith
transfer the sum of $10,&71.95 out of the Suspense Account Into
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         Hon. Geo. H . Sheppard, Aprll 25, 1939, Page 5,       o-162



         the Gas Utilities Fund, where It would become subject to warrants
         drawn by you under appropriations for the year during which such
         sum of money came in.tosaid Gas Utilities Fund.
                  It would foliow as a corollary from this conclusion that
         you would have no lawfu~lauthor~ityto issue warrants against any
         sum or sums of money placed in the Suspense Account of the Trea-
         sury by a protest payment of taxes under Article 7057b, Vernon's
         Annotated Civil Statutes, because such moneys are not in the Gas
         Utilities Fund or any other Fund subject to warrant, until the
         time of their transfer from this Suspense Account, in accordance
         with the terms of Set,+ion 4, Article 7057b, Vernon's Annotated
         Civil Statutes, hereinabove quoted. Consequently, the opinion
         directed to you under date of June 8, 1938, by a former Attorney
         General, holding to the contrary,  is, of necessity, overruled.
                                         Yours very   truly,
                                      ATTORNEYGENERAL OF TEXAS
                                               .

                                         By a/Pat M. Neff, Jr.
                                               Pat M:Xeff , Jr.
                                               Asetstant
         PMN:N :wc
         APPROVED
         a/Gerald C. Mann
         ATTORNEYGENERALOF TEXAS
