Hon. Joe B. Fleming,    Chairman
Committee   on Revenue and Taxation
House of Representatives
Fifty-first Legislature
Austin, Texas                                   Opinion    No, V-822

                                                Re:     Constitutionality   of H. B.
                                                        534 providing for pay-
                                                        ment of certain metor
                                                        fuel taxes to cities.

Dear Sir:

            In your   letter   of March   30,   1949,   you state:

         “In accordance    with a motion adopted at a meeting
    of the Committee    on Revenue and Taxation, I hereby
    forward to you House Bill No. 534 and request an opin-
    ion as to its constitutionality.”

          House Bill 534 provides that each public transportation
company and each taxicab, company operating under franchise         or
permit from and in an incorporated     city shall report to the Comp-
troller each year the quantity of motor fuel upon which motor fuel
taxes have been paid for whfhh taxes no refunds are claimed.        The
Comptroller   is to calculate the amount of taxes paid by said com-
panies and set up an account for each city for the taxes paid by the
companies franchised,     licensed, and operating therein.   After allo-
cation to the Available   School Fund of one-fourth   of the net reve-
nues of the taxes and after deducting the one per cent allowed dis-
tributors upon the first sale, the Comptroller    is then to pay over
to each city the remaining portion of the taxes paid by the companies
operating therein.

          By Section 5 of the Act the cities are required to use such
funds “for the sole purpose of acquiring right of way, constructing.
maintaining and policing public roadways and for the administration
of such laws as may be prescribed      by the LegLslrture pertaining to
the supervision   of traffic and safety on such reads, p (I QD

         Motor fuel taxes paid by motor bus companfas regulated
by the Railroad Commission   are exprecely excluded from the op-
eration of House Bill 534<
Hon. Joe B. Fleming,     Page   2 (V-822)




            The Act further provides for penalties,      contains   a sever-
ability   clause, and declares an emergency.

          The provisions     of the Motor Fuel Tax Act are carried in
Article  7065-b.  Vernon’s    Civil Statutes.   The taxes are paid to the
State Treasurer     for the use and benefit of the State, and detailed
provision is made for their allocation,       Section 7-a of Article VIII
of the Constitution    of Texas, in so far as relevant herein, provides
as followst

          *Subject to legislative    appropriation,   allocation
     and direction,   all net revenues    remaining after pay-
     ment of all refunds . . . and expensea of collection de-
     rived from , , . taxes . . . on motor fuels and lubricants
     used to propel motor vehicles       over public roadways,
     shall be used for the sole purpose of acquiring rights-
     of-way, constructing,     maintaining,   and policing such
     public roadways,     and for the administration     of such laws
     as may be prescribed       by the Legislature   pertaining to
     the supervision    of traffic and safety on such roads , . .
     provided, however, that one-fourth        (l/4) of such net
     revenues from the motor fuel tax shall be allocated to
     the Available   School Fund . . .*

          We think it evident that the term “public roadways” as used
in the above quoted section was intended to include “city streets..
This section deals with tha taxes *on motor fuels and lubricants
used..to propel motor vehicles over public roadways . . ,” This un-
doubtedly includes the taxes paid on motor fuels used to propel mo-
tor vehicles over city streets.       When provision is made for expend-
ing the tax revenues the reference        is to “such public roadways”.
Thus it is apparent that “public roadways”         includes “city streets”
or else the taxes collected on motor fuels consumed by motor vehi-
cles operating excluaivoly       on city streets are not included within
this constitutional   provision.    We are therefore     of the opinion that
the provisions    of House Bill 534 are in accord with the provisions
of this section, and turn to a consideration       of the other sections   of
the Constitution which are here applicable,

           Absent the existence    of a *public calamity,”       Section 51 of
Article   III prohibits gratuitous donations or grants of public mon-
eys to municipal corporationsi       but the State may grant funds to be
used for governmental      purposes.    Road Dist, No. 4, Shelby County,
V, Allred,    123 Tex. 77, 68 S.W.2d I64 (1934)        Cities’do    not own
their streets and alleys in a proprietary       ca;acity.     City of Beau-
mont v, Gulf States Utilities Co., 163 S,W.Zd 426 (Ter. Civ. App.
1942, error ret. w.o.m.1.      “They are ‘the property of and for the
Hon. Joe B. Fleming,    Page   3 (V-822)




use of the state, which, through its Legislature,       has absolute con-
trol over same, which control it may or may not from time to time
delegate to local authorities.    ’ ’ West v. City of Waco, 116 Tex: 472,
478, 294 S.W. 832, 834 (1927).       The construction    of public highways
is a governmental      function properly belonging to the State, and it
therefore follows that the State may use the cities in the discharge
of this function without violating this section.      Jefferson County v.
Board of County and District Road Indebtedness,           143 Tex. 189, 182
  . .    908 [ 1 Y44).

          As previously    stated, the tares which are covered by House
Bill 534 will have been paid into the State Treasury.      Having deter-
mined that these State funds may be properly granted for the pur-
poses stated in House Bill 534, and assuming      that the framers  of the
Bill desire to make these funds available to cities during the com-
ing biennium, the next question is whether the bill satisfies    the fol-
lowing requirements     of Section 6 of Article VIII:

          “No money shall be drawn from the Treasury but
     in pursuance of specific appropriations made by law;
     nor shall any appropriation of money be made for a
     longer term than two years . . .”

           We have come to the conclusion     that the bill as drawn does
not satisfy these requirements.

           If the terms of House Bill 534 could be deemed an other-
wise adequate appropriation      of the funds therein allocated,   in so far
as such appropriation    purports to be for an iadefinite period of time
it is clearly at variance with the terms of the above quoted provi-
sion.   However, a violation of this provision does not invalidate the
entire Act.    Friedman v. American      Surety Co. of New York, 137 Tex.
149, 166, 174, 151 S.W.Zd 570 580 584 (1941).         The courts of this
State have upheld attempted cbntinuing appropriations         as valid for
the constitutional   two year period.    In-Atkins v. State Highway De-
partment, 201 S.W. 226 (Tex. Civ. App. 1918). an appropriating           sec-
tion. in manv resuects    similar to certain nrovisions     of House Bill
534, was heid valid for the two year period.        However, we think that
the following language of the Supreme Court in County of Dallas v.
McCombs,      135 Tex. 272, 276, 140 S.W.Zd 1109, nil       (1940), pre-
cludes our so holding in the instant case.       The court said:

           “Plaintiff in error contends that even if this appro-
     priation running for five years is in violation of the two
     years’ provision of Section 6 of Article VIII of our Con-
     stitution as applied to the five year period taken as a
     whole, still it is not in violation of such constitutional
                                                                                     .


Hon. Joe B. Fleming,      Page 4 (V-822)




     provision as applied to the first two yeara of the five
     year period,    It seems to b,e the law that where the Leg-
     islature has made ‘an appropriation      in unmistakable
     terms,’ which continues for a longer period th           tw
     years,   such appropriation   may be upheld for tttfirit
     two years, and would be inoperative      thereafter.     Pickle
     v, Finley, 91 Tex. 484, 44 S.W. 480, 482.       It will be
     noted that the rule of law announced in Pickle v. Finley,
     supra, contemplates     that that appropriation    shall be
     made ‘in unmistakable     terms.’   We interpret this to
     mean that if an appropriation     is made for more than
     two years, it can be enforced for the first two years if
     it appears that the Legislature     undoubtedly intended
     such appropriation    to operate for two years, regardless
     of whether or not it could de so thereafter.       We think
     that this rule cannot aid this appropriation,     because
     when all of the provisions    of this Act are considered      to-
     gether, we cannot say that the Legislature       would un-
     doubtedly have passed it to operate for two years only,
     instead of five years as provided by the Act,”        (Emphasis
     added by the court.)

            We are of the opinion that House Bill 534 has failed to make
 “an appropriation      in unmistakable    terms.”     Tke caption of the Act
provides that the taxes “shall be paid over by the State Comptroller
each year to each such city”: the body of the bill simply repeats this
mandate, adding the details summariaed             at the outset of this opin-
ion. Nor do we think,, should this bill become a law and its interpre-
tatio,n the subject of litigation,    that the courts would say that in view
of all, its provisions    the Legislature    would have undoubtedly passed
it to operate for two years only instead of for the indefinite period
of time for which it presently       provides.     We are further motivated
in our holding-by the fact that House Bill 534 may be very easily
changed to show an appropriation          in unmistakable     terms, limited to
the constitutional     two year period, in which case the caption should,
of course,    reflect sach Change. In reaching the conclusion           that House
Bill 534 does not make any valid appropriation,             we have taken the
direction that “the Comptroller        shall pay over” to the cities to mean
that he shall draw a warrant on the State Treasury              for the proper
amount due each city under the Act.           House Bill 534 nowhere attempts
to prevent deposit in the State Treasury          of the motor fuel taxes cov-
ered by the Act.      In any event, the character       of these public funds
would not thereby be changed, and Article            VIII, Section 6 would still
be controlling,
.



    Hon. Joe B. Fleming,   Page   5 (V-822)




              None of the provisions    of House Bill 534 are uncen-
        stitutional; but said Bill fails to make a present appro-
        priation of the tax funds for the purposes therein’stated
        since the requirements     of Section 6 of Article VIII of
        the Term Constitution have not been met.         County of Dal-
        las v, McCombs,     1.35 Tex. 272, 140 S.W.2d 1109.

                                               Very   truly yours

                                    A,TTORNEY         GENERAL       OF TEXAS



                                    By /?izLzzm
                                        Mrs.    Marietta McGrcgo
                                                  Assistant

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