                             March 31. 1987




Mr. 0. P. (Bob) Bobbitt                  Opinion No.    JM-664
Executive Director
Texas Department on Aging                Rc:   Whether a contract      for   the
P. 0. Box 12786                          storage  and delivery  of U.S. Depart-
Austin, Texas    78711                   ment of Agricultural   Commodity foods
                                         falls  under the jurisdiction   of the
                                         Texas Railroad C6mmission

Dear Mr. Bobbitt:

      You inform us that the Food Services                Division    of the Texas
Department of Human Services          (DES) is the authorized           distribution
agency for United States Department of Agriculture.                (USDA) commodity
foods .    The Department of Buman Services           seeks to enter into con-
tracts,    specifically    with commercial food distribution          companies.   to
receive shipments of USDAcommodity foods into the state,                to store  and
manage inventories,      and to deliver ~them at no charge to local agencies
for distribution.       You ask whether the-receipt,        storage,    and handling
of USDA food by commercial food distribution            companies under contract
provisions    that require delivery     vithout charge would fag1 under the
jurisdiction of the Texas Railroad           Commission.       Under the specific
facts that you have submitted. we conclude that such carriers                 are not
subject to the Railroad Comnission’s        jurisdiction.

     Article  911b. V.T.C.S.,   reposes in the Texas Railroad Commission
very broad authority   to regulate    intrastate    motor carriers. Section
4(a) provides the following   in pertinent    part:

                Sec. 4.     (a)   The Commission is hereby vested
           with power and authority and it is hereby made its
           duty to supemlse        and regulate    the transportation
           of property       for compensation      or  hire by motor
           vehicle    on any public highway in this State,            to
           fix,   prescribe     or approve the maximum or minimum
           or maximum and minimum rates, fares and charges of
           each motor carrier in accordance vith the specific
           provisfons     herein     contained.    to prescribe     all
           rules and regulations       necessary for the government
           of motor carriers,       to prescribe    rules and rcgula-
           tionsfor     the safety of operations       of each of such
           motor carriers,        to require     the filing    of such




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Mr. 0. P. (Bob) Bobbitt           - Paga 2




             monthly, annual or other reports           and other data
             of motor    carriers      as the Commission may deem
             necessary,    to prescribe    the schedules and services
             of motor carriers        operating   as common carriers,
             and to supervise        and regulate   motor   carriers    in
             all   matters. affecting       the relationship      between
             such carriers       and the shipping       public    whether
             herein     specifically      mentioned     or    not. . . .
             (Emphasis added).

“Motor    carrier”   is defined,           In pertinent    part,    at   section   l(g)   of
article    911b. V.T.C.S.:

                 (g)   The term ‘motor carrier’ means any person,
             firm,      corporation,           company,        copartnership,
             association     or joint      stock association.         and their
             lessees,    receivers,       or trustees       appointed by any
             court vhatsoever          owning.      controlling,      managing.
             operating,     or causing to be operated any motor-
             urooelled     vehicle      used in transporting - property _
             for’ compensation or hire over any public highway
             ins this     state.      where      In   the    course    of  such
             transportation        a highway between             two or mare
             incorporated        cities.        towns     or     villages     Is
             traversed.     . . . (Emphasis added).

Subsection    l(h)    provides-    that

             [t]he   term ‘contract    carrier’    means    any motor
             carrier    as   hereinabove     defined     transporting
             property for compensation or hire over any highway
             in this    State other than as a c-on            carrier.
             (Emphasis added).

Article     911b,    V.T.C.S.,      does    not   define   “comon    carrlerro     but    the
courts    have:

             ‘Comon carrier’     designates  a person engaged in
             transporting  people or things from place to place
             for   hire,  and who holds     himself     out to the
             public to do so for so long as he has room to
             carry the cargo tendered to him.       (First emphasis
             added, second in original).

Railroad  Commission of Texas V. United                    Parcel   Service,  Inc., 614
S.W.Zd 903, 910 (Tex. Civ. App. - Austin),                 aff’d.   629 S.W.Zd 33 (Tex.
1981).




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       Article  911b. V.T.C.S..   provides relevant exceptions      to the reach
of the act.        Section  la sets     forth  exceptions     to the statutory
definitions    of the phrases “motor carrier,”        “contract   carrier,”  and
“transporting     property    for   compensation    or hire.”      The section
provides in relevant part:

                Sec. la.  (1) Provided, hovever, that the term
            ‘notor Carrier’ and the term ‘Contract Carrier’ as
            defined in the preceding Section shall not be held
            to include:

                (a)   Any person having a regular,         separate,
            fixed , and established     place of businass.      other
            than a transportation        business,    where    goods,
            wares, and merchandise are kept in stock and are
            primarily and regularly     bought from the public or
            sold to the public     or manufactured or processed
            by such person     in the ordinary      course   of the
            mercantile,  manufacturing,    or processing   business,
            and who. merely incidental       to the operation       of
            such business,    transports    over the highways of
            this State such goods of which such person is the
            bona fide owner by means of a motor vehicle             of
            vhich such person is the bona fide owner. . . .
            (Emphasis added).

Section   lb sets   forth   the following:

               Sec.    lb.    Any person who transports        goods,
           wares, or merchandise under the circumstances           set
           forth    in the foregoing      Section   la so as to be
           excluded by the terms of said Section            from the
           definition       of    ‘motor  carrier’     or  ‘contract
           carrier’     shall be deemed to be a private         motor
           vehicle    owner; and such use of the highways by
           such private        motor vehicle     owners.  as herein
           defined,    shall be construed as use of the highways
           for the general public        and not the use of such
           highways for        the carrying    on the business      of
           transporting     property for compensation or hire.

       You inform us that, by the phrase “commercial food distribution
companies ,” you refer,      not to a common or Contract carrier.   but rather
to a company that has an established         place of business where food is
kept in stock and is primarily          sold to the public    In the ordinary
course    of business,     and vho, incidental     to the operation     of the
business,    transports   the goods that it owns by means of motor vehicles
that it owns.        You wish to know whether such a carrier          would be
subject    to the jurisdiction     of the Railroad Commission in an instance




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in   vhich the carrier  enters into              a contract   for no compensation
to deliver  goods that it does not               o=,   and in a way that is not
incidental  to the operation  of its             business.   We conclude that the
answer is “no.”

       In a factual situation        that is materially        rimilar to the one that
you present,       the courts concluded          that the subject       company did not
fall vithin       the reach of the commission’s            regulatory     authority.      In
State v. Wiergate Lumber Company, Inc., 582 S.W.Zd 258 (Tax. Civ. App.
- Beaumont 1979, writ ref’d n.r.e.),               the state sought to enjoin under
article    911b. V.T.C.S.,       the operation       of a manufacturer and seller         of
lumber and lumber by-products.             The trial      court found. as matters of
fact,    that the manufacturer had a regular and established                     place of
business,     that such business was not a transportation                 business,    that
the products        delivered    were manufactured in the ordinary              course of
business,      that the manufacturer        transported      the goods In a way that
was merely incidental           to the operation         of its business,        that the
manufacturer was the owner of such goods when the goods were being
transported,       and that the goods were transported               by means of motor
vehicles      that were owned by the manufacturer.                     The trial      court
concluded      that,    as a matter of law, the manufacturer was neither                    a
“motor carrier”         nor a “contract      carrier”     under the terms of section
la(l)(a)     of article      911b, V.T.C.S.         Eence, the manufacturer was not
subject    to the jurisdiction        of the commission.          The appellate      courts
affirmed the trial court’s          holding.

       Under se&ion     la(l)(a)     of article    911b. V.T.C.S..    if .the company
with which DHS seeks to contract            is not, in the normal course of Its
business,     a “consson carrier”       or a “contract      carrier,”    the company
would be a “private motor vehicle owner” under the terms of section                  lb
of   article    911b, V.T.C.S.,       and would not be subject         to the juris-
diction    of the Railroad Commission. DHS seeks to enter into a contract
for no compensation with such a company to deliver               goods that it does
not own and in a way that is not incidental               to the operation     of its
business.      So long as the contract        entered into provides that there be
t&O   compensation     for      transportation,       the  company vi11       not   be
“transporting     property for compensation or hire” and vi11 not thereby
become a “contract          carrier”     subject     to the jurisdiction      of  the
Railroad Commission.

                                      SUMMARY

                   By the very terms of section    la(l)(a),   article
             911b. V.T.C.S..      any person vho has a regular and
             established   place of business that is not a trans-
             portation   business and who delivers,      in a vay that
             is merely     incidental    to the operation      of    its
             business,   goods that it owns ia motor vehicles      that
             it   owns is     neither   a “common carrier”      nor a




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             “contract     carrier .”    Such a person is a “private
             motor vehicle       owner” under section     lb of article
             911b, V.T.C.S.,       and is uot subject     to the juris-
             diction    of the Railroad Commission.       As long as the
             contract     entered    into between DIiS and the food
             distribution      company provides      that   there be no
             compensation for transportation.          the company vi11
             not be “transporting        property  for compensatiozl or
             hire.”    and will     thereby not become a “contract
             carrier”     subject     to  Railroad    Commission juria-
             diction.




                                                  Attorney   General   of Texas

JACK EIGBTOWER
First Assistant Attorney      General

MARYKELLER
Executive Assistant     Attorney   General

JUDGEZOLLIE STBARLEY
Special Assistant Attorney      General

RICR GILPIN
Chairman, Opinion Committee

Prepared by Jim Moellinger
Assistant Attorney General




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