Honorable Ben Atwell, Chairman

Revenue and Taxation Committee OpinionNo. C-424
House of Representatives Austin, Texas Re:

Dear RepresentativeAtwell: Constitutionalityof House Bill 8, 59th Legislature,Regular Session.
You have requested our opinion on the validity of House Bill 8 of the 59th Legislature. House Bill 8 amends Articles 9.14 and 10.03, Section (2) of Title 122A, Taxation-General,Revised Civil Statutes of Texas, 1925, as amended. The provisions of Article 9.14, as amended by House Bill 8, which are pertinent to your inquiry,read as follows: '!When motor fuel is used or consumed, or is to be used or consumed, for the propulsion of transitvehicles either owned or operated, or both, by a transit company, whichmeets the followingrequirements, the transit company shall be entitled to a refund of the taxes leviedherein; except that the one fourth of the taxes levied, which is allocated to the Available School Fund by the Constitutionof the State of Texas, shall not be refunded.

. . 011 Similarprovisions are contained in the amendment to Section (2) of Article 10.03. Under the above quoted amendments,none of the net revenues remaining after payment of all refunds allowed by law and expenses of collection,derived from the tax levied on a transit companymeeting the requirements contained in the amendment, are to be used for the purpose of acquiringrights-ofway, constructing,maintaining, and policing such public roadways, and the administration of such laws, and for thepayment of certainbonds or warrants. On the contrary,all the net revenues remaining after payment of the refunds allowed by law and expenses of collection,derived from the tax levied on transit companies meeting the requirements of the amendment, are to be allocated to the Available School Fund.
It iswell settled that tax monies raised ostensibly for one purpose cannot be expended for anotherpur ose. Carrollv. Williams, 109 Tex. 155, 202 S.W. 504 (19187. Thus, where taxHonorable Ben Atwell, Page 2 OpinionNo. C-424

revenues are constitutionallydirected to be spent for certain purposes, the Legislature cannot authorize expenditures for other purposes. Carrollv. Williams, supra; First State Sank & Trust Companyv. Starr County, 306 S.W.2d 246 (Tex.Civ.App.,19571. Section 7-a of ArticleVIII of the Constitutionof Texas provides as follows: "Subject to legislativeappropriation, allocation and direction,all net revenues remaining afterpayment of all refunds allowed by law and expenses of collection derived frommotor vehicle registration fees, and all taxes, exceptgross production and ad valorem taxes, onmotor fuels and lubricantsused to propelmotor vehicles overpublic roadways, shallbe used for the solepurpose of acquiring rights-of-way, constructing,maintaining, and policing suchpublic roadways, and for the administration of such laws as may beprescribed by the Legislature pertaining to the supervision of traffic and safety on such roads; and for the payment of theprincipal and interest on county and road district bonds or warrants voted or issuedprior to January 2, 1939, and declared eligibleprior to January 2, 1945, forpayment out of the County and Road District Highway Fund under existing law; that one-fourth (l/4 Provided,however, of such net revenue from themotor fuel tax shall be allocated to the Available School Fund; and, provlded, however, that the net revenue derived by counties frommotor vehicle registration fees shall never be less than themaximum amounts allowed to be retainedby each County and the percentage allowed to be retained by each Countyunder the laws in effect on January 1, 1945. Nothing contained herein shall be construedas authorizing the pledging of the State's credit for any purpose. It is noted that the above quoted constitutionalprovision requires that all net revenues remaining after the payment of all refunds allowed by law and expenses of collection,derived from taxes on motor fuels and lubricantsused to propel motor vehicles

-1997- ', sHonorable Hen Atwell, Page 3 OpinionNo. C-424

over public roadways, shall be used for the solepurpose of acquiring rights-of-way, constructing,maintaining, andpolicing such public roadways, and the administration of such laws, and for the payment of certain bonds or warrants. Following this constitutionaldirection, an exception to suchprovision Ismade in the following language:

fourth (l/4 of such net revenue from . . .provided, however, that onethe motor fuel tax shall be allocated to the Available School Fund;

. . .'
In State v. City of Austin, 160 Tex. 348, 331 S.W.2d 737 (1960),the Court stated:

t1

. . . Under theprovisions of ArticleVIII, Section 7-a, of the Constitution, revenues received from these sourcesw be used only for constructingDublic roadways and for other designated Furposes which are not material here.

. . . (Emphasisadded).
It is our opinion that House Bill 8 authorizesnet revenues frommotor fuel tax to be spent for purposes contrary to the provisions of Section 7-a of ArticleVIII of the Constitution of Texas and is thus lnvalld. The other controllingprovisions of the Bill are so dependent upon and so Inseparable from the allocationprovision of the Bill that the entire Bill in our opinionmust be declaredunconstitutional. School Trustees of Orange County v, District Trustees of Prairie View Common School Dist. No. 8 137 Tex. 125, 153 S.W.2d 434 ( Empire Gas & Fuel Co. v. State: 121 Tex. 138, 47 S.W.2d 265 (li$;!'

SUMMARY -------

House Bill 8 of the 59th Legislature authorizes an allocation of net revenues derived from motor fuel tax, contrary to the provisions of Section 7-a of ArticleVIII of the Constitution of Texas and is, therefore, ipvalid. Carrollv. Williams,

-1998-.I.

Honorable Ban Atwell, Page 4 OpinionNo. C-424

109 Tex. 155, 202 S.W. 504 (1918);First State Bank & Trust Companyv. Starr Counte, 306 S.W. 2d 246 (Tex.Clv.App.,1957).

Yours very truly,
WAGGONER CARR Attorney General

Assistant
WEA:dl
APPROVED: OPINION COMMITTEE
W. V. Geppert, Chairman John Reeves Roy Johnson Pat Bailey Paul Phy
APPROVED FOR THE ATTORNEY GENERAL BY: Stanton Stone

-1999,