Honorable              Ro’aert     S. Calvert
Canptr          .;ller   of Public       Accounts                    Opinion        No.    WW-1169
Capitol         Station
Austin          11, Texas                                           Re:      Whether        the Compkoller                 has    the
                                                                             authority       to make          refunds       from
                                                                             the Suspense            Account          to certain
                                                                             persons        who paid          taxes     under      the
                                                                             provisions         of the unconstiktional
                                                                             “Severance          Beneficiary            Gas      Tax
                                                                             Act”      under     the various            fact
                                                                             situations        stated.


Dear       Mr.      Calvert:


        By recent           letter     you have           posed     certain      questions           regarding         refund
of protested             tax payments             under     the unconstilutional                Severance             Beneficiary
Gas       Tax     Act      (Article      22,Ol      et seq.,       Title     122A,     Taxation-General,                   Revised
Civil      Statutes         of Texas).            You advise         that the tax payments                   were     deposited
to the suspense               amount         as     “protested         items”         in conformance                with    the ,pro-
test      statute        (Article,     1.05,      Title    122A,      Taxation-General,                 Revised         Civil
Statutes         of Texas,         formerly          705713,      V.C,S.).      You       describe          four   different
factual         sieuations         pertaining        to the protested               payments;         we quote         from      your
letter:


          ill            “American           Smelting          and Refining          Company,           and
                  others,        properly         instituted       stiit within       uinety         (90)
                  days     after      date     of the protested              payments,        however
                  as     to some       subsequent          amendments               of the suit       the
                  Attorney         General        ~rrised      by a special          exception         the
                  isaue     that tke amendmenta                    had not been           properly
                  made,      rince      they      song@        to incorporate             by reference
                  certain        allegations         of the original           petitions       and of
                  prior     amendments.,              After       thC Severance            Beneficiary
                  Tax     was      declared        uacon&titutional,            American
Honorable        Robert        S. Calvert,              page        2    lww-1169)



            Smelting           and Refining                  Company,             and the         others        dis-
            missed          their      law        suits,      relying           on Attorney              General
            Opinion          No.     S-130,         dated       June        25,     1954,       and requested
            me     to refund           these        moneys              by virtue         of the provi-
            sions         of Article         4388,           Revised           Civil     Statutes         of Texas.
            All    the moneys               paid        under        protest           have      remained          in
            the    suspense            account.


     [21           “A       slightly        different          set       of facts        is involved            with
            respect          to some             of the money              paid        under      protest.             In
            these         cases,       the moneys               paid       under         protest         were     and
            are     still     held        in suspense,               and the suits               were      timely
            filed,but         the Attorney                 General          filed       special       exceptions
            to the petitions                and amended                   petitions,            taking     the posi-
            tion    that      suit     was        not filed          in the court               in Travis
            County          having         jurisdiction              of the amount                involved.
            These         cases,          too,     were       dismissed                and the taxpayers
            have      requested             me      to refund,             under         the provisions                of
            Article         4368,         their     moneys              held      in suspense.


                   “Under           the above              stated        facts,        I will     appreciate
            it if you will             advise           me    whether             or not I can           legally
            make          the refunds             from        the       suspense          account.


                   “If      your     answer             to the above              question          is in the
            affirmative,             I will        appreciate              your         opinion      based        on the
            following            facts.


     [31           “The          taxpayer          paid       the tax under               protest         and the
            moneys           were         placed        in the          suspense          account         by me,            as
            required             by the protest               statute.            The     petitions         and
            amended              petitions         were        timely          filed,     however,           several
            of the amended                  petitions           refer          to a lesser          amount             of tax
            than was             actually         paid       under        protest.            The    taxpayer               has
            accepted             judgment           based       on the amount                    of tax included
            in his        suit     and the amended                      petitions.            Please       advise            me
            whether           or not I have                the authority                to refund         the amount
            of tax not included                     in the amended                     petitions         and which
            is    still     in the suspense                   account.


     [41           “A       taxpayer             paid    the tax under                  protest      and the
Honorable      Robert          S. Calvert;            page         3    (WW-U69)



             money       placed         by me         in the           suspense          account,             as re-
             quired      by the protest                   statute.          The        suits      were         timely
             filed     but one        or more             of the amended                   petitions               were
             not filed         within     ninety            (90)        days      from          date      of pay-
             ment      of some          of the tax induded                       in the amended                        peti-
             tions.      The         taxpayer         has     accepted             judgment              after          ex-
             cluding        the amounts               in which           amended                petitions              were
             filed     after     ninety          (90)       days        from       date         of payment                   of
             the tax.          The     amounts             excluded          are        still     in the sus-
             pense      account.


                     “Please         advise          me     whether            or not I have               authority
             to refund          these     amounts             to the taxpayer.”


Article     4388      provides         in pertinent             part:


                     “The      State     Treasurer                 shall     receive             daily        from
             the head          of each        Department,                  each        of whom           is
             specifically             charged         with      the duty           of making              same
             daily,     a detailed            list    of all       persons             remitting,money
             the status          of which            is undetermined                    or which              is
             awaiting          the time        when         it can finally                be taken            into
             the Treasury,              together            with        the actual              remittances
             which      the Treasurer                   shall      cash          and place          in hiti
             vaults      or in legally               authorized             depository              banks,              if
             the necessity              arises        . . . . A deposit                   receipt          shall
             be issued          by the Comptroller                         fo?    the daily            total           of
             suchremittances                   from         each        Department;                and the
             Cashier         of the      Treasurer’s                   Department                 shall       keep
             a cashbook              to be called             ‘Suspense                Cash       Book,            ’
             in which          to enter        these        deposit         ,receipts,             and any
             others      issued         for     cash        received             for    which          no deposit
             warrants           can     be issued            or when             their,issuance                    is
             delayed.           As     soon      as the         status         of money            so placed
             with     the Treasurer                  on a Deposit                Receipt           is deter-
             mined,         it shall      be transferred                    from        the Suspense
             Account         by placing              the portion            of it belonging                   to the
             State     in the Treasury                    by the issuance                   of a Deposit
             Warrant,           and the part               found        not to belong               to the
             State      shall     be refunded.                , . . ”        (Empha~sis                supplied).
                                                                                                                            .           .




Honorable         Robert         S. Calvert,            page      4     (WW-1169)



                In regard          to Article          4388,        the Court         in Daniel             v. Richcreek,
118 S.W.Zd           935     (Civ.      App.,       1938)        stated        at page        s


                “The       Article       is explicit           in requiring             the       ‘trans-
       fer’      to be made              ‘as    soon     as’        which       necessarily             implies
       ‘not     before’          the     ‘status’        of the money              is      ‘determined.’
       Clearly         the word           ‘status’        includes            every       essential              fact
       to its    proper          disposition,           from          the viewpoint               of the     Treasurer,
       its    then     custodian.           If it should              belong     to the State,              it must
       be deposited              in the    Treasury             by means           of a       ‘Deposit
       Warrant.’            If it does          not belong            to the State,           it must            be     ‘re-
       funded’         by means           of a       ‘refund        warrant.’            Ascertainment
       of the        ‘status’          of the money             involves         determination                    of the
       proper        payee        of such          ‘Refund          Warrant.’            Ordinarily                ‘re-
       fund’      means          to pay back,            thus       implying          that the payment                      is
       to be made            to the party           from        whom        received.              Such      party
       was      the Racing             Commission,              concededly            now defunct.                    In-
       dependently            of this      fact,       we think,         contexually,               the pres-
       cribed         ‘refund’           means         to the palty            legally        entitled           to
       demand         and receive              it from        the Treasurer.”                      (Emphasis
       supplied).


       Attorney         General’s              Opinion      No.       V-143      had the following                      to say      with        re-
gard     to Article         4388       and the Richcreek                  case:


                “We     think      a proper            construction             of the foregoing
       provision           of Article          4388,     as     to the meaning                of      ‘the
       status        of the money’               is whether            it is State         money            or
       subject        to be refunded,               as it should            be if it does             not
       belong        to the State.             We      believe        a careful         examination
       of Daniel           v. Richcreek,             118 S.W.2d           936     [sic]           (Austin
       C.C.A.)          confirms          this      construction.”                (Emphasis
       supplied).


       Attorney         General’s              Opinion        No.     V-1204      held        that money                held      in suspense
may    be refunded            under       Article         4388        although        not actually                paid          under       protest,
if such      money         was     paid    under         compulsion             or duress.


       Attorney         General’s              Opinion        No.     WW-277          held         that if the Comptroller
should       determine           that a decedent               had been          domiciled             in California                rather,
          .           .




Honorable                 Robert     S. Calvert,                page     5     (WW-1169)



than in Texas,                   inheritance              taxes       collected          by The         State      of Texas            should      be
refunded             under        the provirions                 of Article          4388,        although          such       taxes      appar-
ently         were        not paid         under         protest,


         Opinion            No.    S-~130,        rendered             by this      office        on June         25,       1954,    furnishes
direct         authority           for     an affirmative                answer          to the questions                   here     presented.
The      question           there        posed          was     whether         a taxpayer              initially           pursuing      his
remedy           under        Article            ,7057b,       VXS.,          could       abandon          such        a suit       and   seek     to
have      tax payments                   refunded           by virtue           of Article          4388,       V.C.S.          In holding
that the Comptroller                        should         make         refund        of such        tax payments,                   the Opinion
stated:


                  “There           exirta         only      one        ‘Suspense          Account’           ad-
        ministered                 by the Treasury                    ,Department.                Tax    funds
        are      depodted             into        this     account        for     one       of two reasons:
         (1)    either        the funds             were        paid     under        the protest           statute
        and are            required          by law            to b,e placed            in suspense,              or
        (2)      the head           of the collecting                   department            cannot         deter-
        mine         the status            of funds            paid     without         protest         to the State.


                 “Article           ~4388 pe~rmite                ‘State      departments               to deposit
        collected            moneys              of undetermined                 status       into      the Sus-
        pense         Account,             Upon         the determination                   of the       status        of
        these        moneys           by the department                       head,      the portion             be-
        longing            to the State            is    deposited           into     the    Treasury             and
        the balance                is refunded             to the proper                party.”


        From          the facts            set    forth        inyour         letter,       it appears            that all          tax pay-
ments          described             (1)    are         held    in suspense,                (2)     were        involuntarily             paid
and      (3)     do not belong                   to the State.               Therefore,            in view        of the foregoing
authorities,               you     are advised                that    you are         not only          authorized,            but are       ob-
ligated        to make            refunds          of such           moneys         from      the Suspense                  Account       to the
parties         legally          entitled         thereto.



                                                                      SUMMARY


                 Under            the authority                of Article        4388,       V.C.S.,        the
                 Comptroller                of Public             Accounts          must          refund
                 moneys             paid     under         the unconstitutional                      “Sever-
                 ance        Beneficiary                 Gas      Tax    Act”         and held          in the
                                                                                      .




Honorable        Rdbert     S. Calvert,       page’ 6    (WW-1169)




               Suspense      Account      to the partiee     legally      entitled
               thereto.



                                                          ,Youks   very     truly,



                                                           WILL    WILSON
                                                           ATTORNEY           GENERAL     OF    TEXAS




                                                         ’ JACK      N. PRICE
                                                           Aeeistant       Attorney   General


JNP:nb


APPROVED:’


‘OPINION         COMMITTEE


W.     V.    Geppert,     Chairman


~Arthur       Sandlin
 John Reeves
W.     Ray    Scrugge
Grady        Chandler


 REVIEWED           FOR      THE      ATTORNEY          GENERAL
 BY:        Houghton      Brownlee,     Jr.
