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 payment of certain metor fuel taxes to cities.
Dear Sir:
In**your** letter ofMarch 30, 1949, you state:

“In accordance with a motion adopted at a meeting ofthe Committee on Revenue and Taxation, Ihereby forward toyou House Bill No. 534 and request an opinion 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 Comptroller each year the quantity of motor fuel uponwhich motor fuel taxes have been paid for whfhh taxes no refunds are claimed. The Comptroller is to calculate the amount oftaxes paid by said companies and set upan account for each city for the taxes paid by the companies franchised, licensed, and operating therein. After allocation to the Available School Fund of one-fourth ofthe net revenues ofthe taxes and after deducting the one per cent allowed distributors upon the first sale, the Comptroller is then to pay over to each city the remaining portion ofthe taxes paid by the companies operating therein.

By Section 5 oftheAct the cities are required to use such funds “for the sole purpose ofacquiring right ofway, constructing. maintaining and policing public roadways and for the administration of such laws as may be prescribed by the LegLslrture pertaining to the supervision oftraffic and safety on such reads, p(IQD

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

The Act further provides for penalties, contains a severability clause, and declares an emergency.

The provisions ofthe 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 ofthe State, and detailed provision 

### is made for their allocation, Section 7-a ofArticle VIII ofthe Constitution ofTexas, in so far as relevant herein, provides as followst

*Subject to legislative appropriation, allocation and direction, all net revenues remaining after payment ofall refunds

. . .and expensea of collection derived from , , .taxes

. . .onmotor fuels and lubricants used to propel motor vehicles over public roadways, shall be used for the sole purpose ofacquiring rightsof-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 oftraffic and safety on such roads , . . provided, however, that one-fourth (l/4) ofsuch 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 inthe 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 undoubtedly includes the taxes paid on motor fuels used to propel motor vehicles over city streets. When provision is made for expending 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 vehicles operating excluaivoly on city streets are not included within this constitutional provision. We are therefore ofthe opinion that the provisions of House Bill 534 are inaccord with the provisions ofthis section, and turn to a consideration ofthe other sections of the Constitution which are here applicable,

Absent the existence ofa *public calamity,” Section 51 of Article IIIprohibits gratuitous donations or grants ofpublic moneys 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 ina proprietary ca;acity. City ofBeaumont v, Gulf States Utilities Co., 163 S,W.Zd 426 (Ter. Civ. App. 1942, error ret. w.o.m.1. “They are ‘the property ofand for theHon. Joe B. Fleming, Page 3 (V-822)

**use** ofthe state, which, through its Legislature, has absolute control over same, which control itmay or may not from time to time delegate to local authorities. ’’ West v. City ofWaco, 116 Tex: 472, 478, 294 S.W. 832, 834 (1927). The construction ofpublic highways is a governmental function properly belonging to the State, and it therefore follows that the State may use the cities inthe discharge ofthis function without violating this section. Jefferson County v. Board ofCounty and District Road Indebtedness, 143 Tex. 189, 182

. . 908 [1Y44).

As previously stated, the tares which are covered by House Bill 534 will have been paid into the State Treasury. Having determined that these State funds may be properly granted for the purposes stated in House Bill 534, and assuming that the framers ofthe Bill desire to make these funds available to cities during the coming biennium, the next question is whether the bill satisfies the following requirements ofSection 6ofArticle VIII:

“No money shall be drawn from the Treasury but in pursuance of specific appropriations made by law; nor shall any appropriation ofmoney 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.

Ifthe terms ofHouse Bill 534 could be deemed an otherwise adequate appropriation ofthe funds therein allocated, in so far as such appropriation purports to be for an iadefinite period oftime it is clearly at variance with the terms ofthe above quoted provision. However, a violation ofthis provision does not invalidate the entire Act. Friedman v. American Surety Co. ofNew York, 137 Tex. 149, 166, 174, 151 S.W.Zd 570 580 584 (1941). The courts ofthis State have upheld attempted cbntinuing appropriations as valid for the constitutional two year period. In-Atkins v. State Highway Department, 201 S.W. 226 (Tex. Civ. App. 1918). an appropriating section. inmanv resuects similar to certain nrovisions ofHouse Bill 534, was heid valid for the twoyear period. However, we think that the following language ofthe Supreme **Court** in County ofDallas v. McCombs, 135 Tex. 272, 276, 140 S.W.Zd 1109, nil (1940), precludes our so holding inthe instant case. The court said:

“Plaintiff in error contends that even ifthis appropriation running for five years is inviolation ofthe two years’ provision ofSection 6ofArticle VIII of our Constitution 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 ofthe five year period, It seems to b,ethe law that where the Legislature has made ‘an appropriation inunmistakable terms,’ which continues for a longer period th tw years, such appropriation may be upheld for tttfirit twoyears, and would be inoperative thereafter. Pickle v, Finley, 91 Tex. 484, 44 S.W. 480, 482. Itwill be noted that the rule oflaw announced in Pickle v. Finley, supra, contemplates that that appropriation shall be made ‘in unmistakable terms.’ We interpret this to mean that ifan appropriation is made for more than twoyears, it can be enforced for the first twoyears if it appears that the Legislature undoubtedly intended such appropriation to operate for two years, regardless ofwhether or not it could de so thereafter. We think that this rule cannot aid this appropriation, because when all ofthe provisions ofthis Act are considered together, we cannot say that the Legislature would undoubtedly have passed it to operate for two

### years only, instead offive years as provided by the Act,” (Emphasis added by the court.)
We are ofthe opinion that House Bill 534 has failed to make “an appropriation in unmistakable terms.” Tke caption oftheAct provides that the taxes “shall be paid over by the State Comptroller each year to each such city”: thebody ofthe bill simply repeats this mandate, adding the details summariaed at the outset ofthis opinion. Nor dowe think,, should this bill become a law and its interpretatio,n the subject oflitigation, that the courts would say that inview ofall, its provisions the Legislature would have undoubtedly passed it to operate for two years only instead offor 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 anappropriation in unmistakable terms, limited to the constitutional two year period, inwhich case the caption should, ofcourse, reflect sach Change. In reaching the conclusion that House Bill 534 does notmake any valid appropriation, we have taken the direction that “the Comptroller shall pay over” to the cities to mean that he shall draw awarrant onthe State Treasury for the proper amount due each city under theAct. House Bill 534 nowhere attempts to prevent deposit inthe State Treasury ofthe motor fuel taxes covered by the Act. Inany event, the character ofthese public funds would not thereby be changed, andArticle VIII, Section 6would still be controlling,.

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

None ofthe provisions ofHouse Bill 534 are uncenstitutional; **but** said Bill fails to make a present appropriation ofthe tax funds for the purposes therein’stated since the requirements ofSection 6ofArticle VIII of the Term Constitution have not been met. County ofDallas v, McCombs, 1.35Tex. 272, 140 S.W.2d 1109. Very truly yours A,TTORNEY GENERAL OF TEXAS

By /?izLzzm Mrs. Marietta McGrcgo

Assistant
MMC/mwb 

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ATTORNEYGENERAL