Dr. Geore Y. 00x

State Health Offloor Stab Board of-Heal+& AueJtln, exam
Dear sir: opinion Ho. o-4935 Rer Should deductions be me& from the salariee of employeea of the Saltwater Control offioe for Social Seonrliq* ~ purposesl

Your request for an opinion as to whether a stenographer and clerk employed in the Tyler field a?fice of the Governing CamnIttes far SaZtUater Control setup in e~pliance with an agr!33IItentbetween ths plaintiffs and the defendants In the case of the State of Term ve. Stzu Oilccmgany, 

## HO.46,%5-F in the District Court of Dallas County, Texas, 1.l6t.bJudloial District, is subject to Federal Social Security taxee, has be,m received.

The laquag 

### ofthe plan !3ubmittedpumlantto the agre~t setting up the governing ocmimittee ie ae follow:

"The plalnti.ff Stat.8 of Texas is represented by the AttornsJ General'e Department, the State Board of Health, the Board of Water Engineers and the State Game,Fish &Oyster Ccmulsslon. ;I These four departments will constitute a governing omittee tc3 supervise and.enforce the administration of the agreement op, b@iklf of the plaintiffi Dr. George U. Cm, State Health Of'f$jer; will serve aa chainnan of the committee, andhe shall have the respousiblllty of administering the plan umber the direction of thb ccamittee. All plane and reports required by this lnetrtwmt to be filed witi the plaintiff ehallbear an identification file Ho. AG385, and ehallbe forwarded to the State Health Officer, Austin, ~Texae.

Thefield office was eetabliehed at Tyler in caiplianoe with the provlsiona of the plan under the direction of a field engineer for the purpose of a&klnieterlng the plan. The general terms of the plsn agreed 

## uponare a8 follows:- -

Dr, George U. Cox, Page 2 (O-4935)

"(1) Toprovide adequate storage In pits 

### or other containwe, 80 construoted a8 to pmiveat maepageeuch a8 would reeult in the pollution of public watere.

“(2) Tooontraot with salt water holding oanpanies
or ooneervatiou dletriota, whioh have adequate and approved etorage faoilitier 

### for handling the ralt water p&duoed by the dlaoharglng wells, pro~lded there faailtier oonfo~ to the requirmentm’and objeotlres of thin lmtmaent; or "(3) To proride lnjeotlon well8 adequate 3noapacity to dlepoee of the ealtwater produoed on their reepeotive lea.sen andwith adequate lmpenlonm etoauge oapacl+g to hold the saltwater during necessary nhutdowne.

“(4) To employ my other method or oombiaation of methodmto effect the objeotlvee and intmmlmenteof this instrcment."

With this preliminary &et& andyear letter, which we quote below ae a baels of the facts, wehave reached the oonclurtion that this employee ie not subject to FederalSocialSeourlty tax. Wequoti your letter a8 followet

*I&e. Katherine Drumwright, nee Williams, haa been ermployed
ae etenographer and clerk in ae Tyler field office of Salt Water Control under the Governing Costimitteefor about 11 or l2konthe at a ealary of $112~50 permonth. During this time
no deductions have been madeframher salary for Social Security.

"The fund6 fran which her sal&ry ie paid are derived fram fees collected frcp oil operators, defendante in the above namedoause. !&em feea are paid into the treasury of the 116th District Court, Dallae County, Texas, at a rate of $1.50 per well that is produoing 5per oent or more of salt watero
"The budget of the field office is itied by the Governing Camnfttee on Salt Water Cent&-o1ccmsgosedof Dr. George Ii. Cox, State Health Officer, ae Chai-, andHonorable,Mrald C. Menu, Attorney General of Texas, b!r. C. 5. Clark, Chairman, State Board of Wster~Engineere, andMr.Willicun J. Tuoker, Executfve

### Secretary,

Oame,Fish,& Oyster Ccpmalesion. Whenthe budget fa fixed, It la tranemltted to tha Judge of the 1~6th District Court for approval, and if it is approved by himan Order ie directed to the Clerk of the court to pay the emountof the monthly budget to the engineer in charge of the field office.‘

. 1

Dr. George W. Cox, Page 3 (O-4935)

"l&en these funds are received by the engineer from the Clerk of the court he deposits &em in a local bank to his owucredit and draws checke a&nst the account for payment of salaries and other of-floe and operating expermes. * * *”
Every pereon le an mployer under Tltla 42&b-Title VIII, Vol. 40-42, U.S.C.A. of the Booial Security Aot with whloh we are here oouoerued, if he employa 0110or 

### moreemployeee, but it doe6 not follow that all eervloes performed for tie employer are subject to tar. Certain eervioes me epeolfically exempt mder the Social Security Act. lie need here be ooucerned with only or&eof theee exoeptlm, for tmlees this employee falb within the purview of this exoeption, her employment aud services 16subject to the Act> and, therefore, texable. Roue of the other exceptima expressed in tbe Act could possible have any applicatiou. This exceptiou ia ae follows:

%ervice performed in the employ of a state, a political subdivisiou thereof, or au imtmmentality of one or more statee or political subdivisions.” Title 429ub-section VIII, loll U.S.C.A., Vols. 40-42, page 239.

If the service of the stenographer aud clerk is performed in the employ of the state, or au ilLstrmentallty thereof, her aervioe is specifically exempt under the provisloua of the Act noted above andneed not be reported. She Is, in our opinion, an employee of au iustrumentality of the state; ncwnely~the Goveruiug Committee 011Salt Water Control ccmposed of the Attorney General08 Departamut, the State Board of Health, the Board of Water Engineers and the State Game,Fish &Oyster Comuissiou, a8 provided in the plau uader the headiug of ‘Governing Committee”

. You
are 

## Oonditutea, under the plau, Chairmu of the Cmmlttee aad ves,tea wi& the reeponelbiPfty of admirnfetering t&e plan under the dire&ion of the Cmuittee

. TheAttorney GeueralOs DepaPlxneutis established by the Constitution, endhiti office is, therefore, a constitutional office. TheState Board of Health, (Art. 4415A9Vernon% Revised Civil Statutes), the Board of Water Engineers, (Art, 7477$ 74.88, Vernon’s Revised Civil Statutes),
aa the State Game,Fish &Oyster &emuiasion, (Art. 4016-4018, Vernon’s Revised Civil Statutes), are oreated 

## andtheir duties aud activities are prescribed by statute. TheStateBoard of Health, theBoard of Water Engineers and the State Game,Fish &Qyater Cam~iesion are all appointed by the Governor and confirmed by the Senate, and you, ae State Heal% Officer, are, of eouree, appointed by amajority vote of the State Board of Health. TheAttorney General is the legal representative of the State in all litigation in whioh the state ia a party in eonnectlou with the admiuiatratim of the affaira of these atate departmenta, parties to the plau. We

## a0not aearnit necessary to
cover in detail the work and activities of ,theee various deparizuents to supportthe statemeut that they are imtrmeutallties of the state. Artiole 4444 of Vernon'sRevised Civil Statutee haa a direct bearing upon the work perforaedby the Eltate Board &Health and the Game,Fieh& OyeterCcvnmission in oonnection with pollutlou of public bodies of water. ItDr. George W. &IX, Pcge k (O-4935)

read6 aa foYPaopf3:

“Hopereon, 

### firma- e~rporatfm~ private or iumlofpal, ahalP pollute my water couree br other public b&y of water, by t&reving, caatirmgor depositing or cauelng to be thrown, oaet or depoeited any made petmUumt oil or atier like rubetdmoe tierein, or pollute anywater OQU~~C,,
or other public body of water fxxaawhich water la taken 

### for the u,eeeof farm Piveetoak, drinking end dc-meatic purpoeee, in this State> by the dieclharge, direotly or iriabeat3.yy, of any eewage or mlean water or unohua

Or pOtitbg matter or thing ~&IePeina, or iu euch prOXimity tiersto that it will 

### probably ma&, 6nd po3.lut.e the watem of au& water OQUEU~ or atier publtfc body of water fromwhfeh water ie taken, for said woes- Drab di&hefl, where waste oil finds ifs way f~to water course6 ox public bodies of water, &all be equipped with trap of mfYiefent oapcclty to arrest t&e flm of oil, InaoP~ a0 emeems the protection of ffah and oysters9 tie Gsme,FPsh &Oyster Ccmmfsaioner or hfs deputies, may have jurledfctlon in the enforceme& hereof. * * * Uponthe conviction of aanypercon for violating this paw, the court or judge themof in whfeh sppeheonviatkm is had, shall. issue a rrft of in$unction enjoining and restraining the person 01”eorporat.ion responsible for ew.&poPlIltIon.0 For Avi~I.aat%onof e-it& ,tijunotion, the said court an&the jwlge thereof ’ shal.1 have tie power of fine and impr~ieo~~~& as Par ~x3ntemptof court within the Lirnfts preserihe~ by 3mdin other oases, ma ttnfs re~~edyby ti~~tm;r;r~~~3. p~~f~$nasratfor vblati0n therecf shall. be ewmalcctPre0P tie fire Smposed. The state maPa QfHeaEthk&a:%& enrfraB:cthAQa3iOnE!-z thfs -~~%*-. artielea,

Wedonot quote thfs provfsion of the sta%uts upon the aesumption you are not fadifar with 02, but as an sid fn mpport of our conclusion. Thepreveotiou of poUwt$on 0f ~oumee of water supply such
as rivers, lakes, mr.c9.3~,reserooim 9etos ,9if3Q:Pvital fntereat to the public welf

’are andhealth of the s,&t.e ana, .sewf9,1be obeerved from. Arti,ole @&4, the eontzol au&preven~+Lonthereof is espeefally delegated to your department. Iti is true +ihatthe salmq OPthis3emp3lo~eeis not paid frmn state funds, but by .theoperatcra far.the fieLB upon a prorate baais, the details of which are ee,t acxt,in your Letter, But this, in OUTopfifom., in not a con.ta~ll.lf~~gfacstor, TheCommittee Esa feasible end convenfent Ins~exgtalfty to aceomp:%f& a p&lfe servfee, Boone derives any prfvcte OFpersonal benefft from ftdl cotiv8ities. The operatore exe;Ps:fse no contzol, whatsoever o+er the operat,fons Wfthe offfce
or its ermployees. TheFederal So&al Seawrity Beardhasmlaa ina ease in which the Licensed Carrrmfseionof 8,eEty, stationed. polfoe officers at
a place of amusement, fixing +&er3munerstian for the services of theDr. Oeorge W. Cox, Page 5 (o-4935)

offloem whhiehMB paid by the muaement ocmpany, that such policemen
are employeea of tlaeoity and are exempt under the Soolal Seourity Aot. TheyWBMsubjeot to the oontrol of the Pollee Departnmnt of the city not only aa rem the resulta to be acmaupliaheb, but also ae to tie detalle andmeam by which the reenlte were to be 8oocmpllahecL !Fhefact that euoh offloera were pai& by the amusamnt ormpanywa@held not euffiolent to oonatltuta thememployees of the company. (Opinion Sooial Security TaxDivision, Bureau of InternalRevenue, 327).

In a case involving the employment of utility inepeotors where the utilities are required under their franohise from the city to pay for the inspection of all their construction work, andwhere the inepeotors, thou&~paid by the utltpfty are appointed by the mayor and subjeot to the control of the city, it wa8held that such inepeetom were exempt under the statute9 (Opinion, Social Security Tax Division, Bureau of Internal Revenue9339) o

Inaoaae involving inJletnzotom teaching olaseea in industrial plants under the Ohio VooationaP Education System (Estebliahed under the Smith-Hughes Aot), the inatruuetom were fomer employeea of the ocnnpany andwere reoasmnernded by it but in this work they were held to be employed by the Board of Education andnot by the oanpany. TheBoard controlled their services endhad the Bole right to &fs&arge themif their services
were unsatfsfaetory, TheBoard ffxed the salary, although the oompany paid half of such salary, Theruling of the Social Seourity Board in this inetanoe wa8that the Board of Education wae an instrumentality of the State of Ohio.

There hae been little @dieial determination of this question, s hence wehave had to rely main3.yupon,rulinsngsof the Social Security Board a8you wfll note above. OnePaBe, however, hae:~QWuncier our observation, not b cdl mespecta pm?wlLeP%othe faota here under considaratian, but
we think with enough aualogy to be helpful. This ia the case of Cayne, Colleetir of Internal Revenue ~8~Brueh, in 

### re CuUen Hardware Corporation. 30Federal Supplement, paga 71ke TheCullen HardwareCorporation wae adjudged a bankrupt upon an tivoluutary petftion filed by ita creditors. Larkin M.Brushwas appointed by the Referee ti Bankruptcy truetee andhe duly qualified a8 such+ Mica Isabel1 E. Shea, a former employee of the Cullen Hardware Corporation, was by pernisafon of the Court, engaged in a clerical capacity to assist the truetee in 0olPeoting the aooounts. Her **wages**were paid out of funds belonging to the bankrupt estate in the hands of the trustee. The eolleotcr of Internall Revenue filed with the Referee in Bankruptcy a claim for taxes on aocount of the employment of Mrs. Shea. TheCourt ruled t&at the Clerk06 salary was exempt under the Social Security Act sirme the trustee waeex~instrumen~lity of the United States, the Clerk employed to help himwas likewiaeiexempt.TheScmlaBSeeurlty Tax Division, in Qpiaion Bo. 127, found in Unemnp~oyment

Ccmq3emsation&umf85ion Serviffie, Volume 3> Ilo. 2> April 15, 1939, page 2.224,ruled that the Lower CcJ.ora&oRiver Authority in tbia eta% is an innstrumenta;Pty of the State of Texas within the meauing of the exoeptiona expressed in the Section of the Act, eupra, that neither the Iower Colorado RSvar authority or i@ employee8 were eubjeot to the tax Imposed by ,thne Social Seourity Aot. True, the CoPomdo River Authbnority18create& by I).eeparate a& of the LegieLatnre, end the 0cmrpePPeation of the o%fi”ioeraati employeea ie paid fran State fundu, md ie mom 01LIBppLy an Inatnaeeutaalif;~ of the etatxi ~tbanthe Qavemlng Camittee, but nomore ded’inibly 0~0fn&rwnentaaPity of the state than the State Board 0 FLaaEth,the State Board of Water Engineers and the State &wne,Fdeh b Qyster @~snalesi,mn, Weare of tie opinion that this Goveruing Cmmfttee, aetirng within tke mope of the work of all three of tbeee instzuaental%t%ea of the state ia PtsebP none the Pees an fnetrumentality of the stats,

Imthe ir&~~ee wehave here “t$is etenogrqnher ami clerk is employed by the @-ittee ~&VU& i% Ezeoutive Searetary and dire&or, the resident engineer, whois m employee of the Stati Boar&of Health, Her salary is fixed by “thedIrector and tinbJect at al1 timea to the Coverning Camn&tb?emder the direc,ti,m of the Exeeutfve Dfreetor Bnd:could be dfsoharge~ br tie acmn&ttee or t&eExecutive Director at any time. In other WQP&~~

the f.hvsmXr~ @cllmnl.L:esaudExeeutfve Dereetcr have oomplete and absolute eontr~l ov.sr ,&la smp:Lo~ee, andher services fall within the exemption expressed ti!.,tkeSoe:ial Security Act, ff weare correct in our statement that thi.8 Gwern~g C~nnafttee is an fnLst.runentalitg of the state, audwe th4nakit 1.~~