                 Arrxlrrs. TEXAS   78711



                    October 22, 1968

Honorable Robert S. Calvert
Comptroller.of Public Accounts
Austin, Texas
Attention Mr. Kenneth I. Kimbro
                       Opinion No. M- 293
                       Re: Whether the Comptrolleris au-
                           thorized to furnish copies'of
                           certain franchise tax reports
      r                    to the State SecuritiesComplis-
                           sioner upon hi& request and'for
                           his necessary informationand
                           use in enforcing the securities
                           laws of the s,tatewith which he
:Dear&k. Calvert:          is charged.
       Your recent letter requests an opinion as to whether
the Comptroller1s~authorized to furnish cop,lesof,certain
franchise tax reports to the State Securities Commissioner
upon his request and for his necessary informationand use
in enforcing the securities laws of the State, the enforce-
ment of which Is hissduty.
       You sa he 'quotesas his authority for his request
Article 581-2 5 , Vernon's Civil Statutes, which reads, in
part, as follows:
            II
                  In the course of an Investiga-,
      tion looIk& to the enforcementof this act,
      or in connectionwith,the application of a
      person or company for registrationor to
      qualify ,seeurities,the Commissioneror
      Deputy Commissionershall have free access
      to all records of the Board of Insurance
      Commissioners,including company examina-
      tion reports to the Board and reports of spe-
      cial Investigationsmade by personnel of
      the Board, as well as records and reports
      of and to any other departmentor agency of
      the state government 0 0 0" (Emphasisadded.)

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    Hon.   Robert S. Calvert, page 2 (M-295)


           In your request you quote, in part, from Article
    12.10, Title 122A, Taxation-General,'Vernon's Civil Statutes,
    as ,follows:

           "Art. 12.10 Reports Confidential
           "Reportsmade under Articles 12.08 (or 12.08
           and 12.09) shall be privilegedand ,notfor the
           inspectionof the general public, but a.,bona
           fide stockholderowning one (1) or more shares
           of the outstandingstock of any corporationmay            t
           examine'such reports upon presentationof evi-
           dence of such ownership to the Secretary of
      'G., State. No other examination,disclosureor use
           shall be permittsd of the reports except in the
           course of some judicial proceedings,inwhich
           the State or any'bona fide stockholderis,a
           party or in a suit by the State to cancel the
           permit or forfeit the charter of,such corpora-
           tion or to collect penalties for a violation
           of the laws of this State, or for information
           of any officer of this State charged,withthe
           enforcementof its laws, including the,Comptrol-
           ler of Public Accounts, the State Auditor and
:          ,theState,Tax Commissioner;provided that the
           Secretary of State may in hisdiscretion for
           good cause shown disclose ,toany interested.per-
           son the names of the officers and directors and
           agents for service and the principal office and
           place of business of any corporationfilinga
           franchise tax report." (Emphasisadded,)
           You also quote, :inpart, from Article 1.031, Title
    i22A, Taxation-General,Vernon's Ci,vil,Statutes, as follows:
             "Art. 1,031 Examination of Records
             "(1) For the purpose of carrying out the terms.
             of this Title the Comptroller or any authorized
             agent shall have the authority to examine at the
             principal or any other office in the United
             States of any person, firm, agent, or corpora-
             tion permitted to do business fn this State,
             all books, records and papers and also any of-
             ficers or employees thereof, under oath; and
             failure or refusal of any person, firm, agent,
             or corporation to permit such examinationshall,



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Hon. Fobert S. Calvert, page 3 (M- 295)


       upon,certificationof ,suchrefusal by the
       Comptroller to the Secretary of State, imme-
       diately forfeit the charter or permit to do
       business in this State until such examination
       as Is required to be made is comnleted. The
       Comptroliershall not make publkor us.esgid
       'informationderived in the course of said exami-




       p.   &322,   ch.        .--*-   -2   -.-,   _   (Emphasis
       added.)
       You request,an interpretationof Article 12.10 of Title
122A, Taxation-General(formerlyArticle 7089, V.C.S.;oftTexas)
as such law relates to Article 1.031 of Title 122A, supra. The
immediatequestion, supra, is whether the Comptrolleris authoriz-
ed ,tofurnish copies of certain franchiae,taxreports to the
State SecuritiesCommjssioner.
       Decision of this question involves two considerations:
       (1) H.asArticle 1.031 repealed Articles 12.10 and 581-
281 andi (2) ,Ifnot, does Article 12.10 authorkze the Comptrol-
ler of public Accounts to furnish copies of otherwiseconfiden-
tial records to the Securities Commissioneras an officer of
this state charged with the enforcementof its laws pursuant
to Article 581-28?
       It is the opinion of this office that Article 1.031
does not relate to or conflict with Article 12.10 nor is there
any repeal by implicationof the latter sta'tute. The 196V.;re-
codificationstatute on this matter (Article 1.031) grants
powers to the Comptrollerwhich are in the nature of,visitorial
powers for audit$ng,purposesand is deemed a general statute,
referring to all taxes under Title 122A, Taxation-General..The
1961 s'tatute(Article 12.10) is a specific statute and relates
to the'confidentialnature of and use of records or ,reorts
,filedas franchise tax returns by,a corporationwithl%XEate
C.omproller. It concernsonly franchise taxes and is permis-
slve in that it merely allows the Comptrollerto furnish con-
fidential information to other officers charged with the en-
forcement of the state's laws. The caption of Article 1.031



                          -1426-
Hon. Robert S. Calvert, page 4 (&295)
                .


 (Acts of the 60th Le    Reg. Session, 1967, Chapter 449,
,Pg. 102~2)reefersto (5*,
                      an Act concerning examinationof
 records by the Comptroller,fortax purposes,",.while Arti-
 cle 12.10 refers to reports made by the~corporatlon'itself.
 Since :a specific staxute will control over the generals
'provisions'ofanother statute, Article 12.10 will con~trol
 over Article 1.031 in this matter. 53 Tex.Jur.2d 232; Stat-~
 utes, Sec. 161.
        As to the question of whether Article 12.10,permits
 the Se,curltiesCommissionerto obtain copies of'such re-
 ports, we must hold'that he Is an "Officer of this State     '
 charged with the enforcementof its laws," and as such, he.
 is entitled to request and receive any records,:including
'franchisetax reports, pursuant to Articles 381-28 and 12.10,
 which are specific statutes, and Article 1.031 must yield
 thereto.

                              SUMMARY
            The'SecuritiesCommissioneris an "Officer
             of the State charged with the enforcement
           .,.
             of its laws,"'pursuantto Article:581-28,
            ~Vernon'sCivil Sta'tutes,,and with%n,the.   ,",,,
                                                            -,:
                                                              ,.,
                                                                ,,,,,
                                                                   ,,,,.
             meaning of Article 12.,10,Title 122A, Tax-
             ationiGenera1,Vernon's Civil Statutes, and
             Is entitled to request of and receive fron
             the State Comptrollerof Public Accounts,of
             the State of 'Texascopies of franchise tax
             reports made by.corporationsto the said      :
             Comptroller,
     ‘?
  ,y, 7.
                                 Ve     truly yours>           *
                                P


                                           C. MARTIR
                                        ey General of Texas
Prepared by Fisher A. Tyler
Assistant Attorney General




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.      .




    Hon. Robert S. Calvert, page 5 (M- 295)


    APPROVED:
    OPINION COUMITTEE
    Hawthorne Phillips, Chairman
    Kerns B. Taylor, Co-Clialrman
    James Broadhurst
    Roger Tyler
    Jim Swearingen
    John Banks
    A. J. Carubbi, Jr.
    ExecutiveAssistant




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