. 

THEATTORNEYGENEEAL 

OF TEXAS 

GERALD C. MANN 

April 25, 1939 

Honorable Geo. H. Sheppard 

Comptrollers of Public Accounts 

Austin, Texas 

Opinion No. o-162 

Dear Sir: 

Re: Is the sum of $10,471.95, 

representing gross receipts 

taxes accruing against a gas 

utility under Art. 6060,V~CS, 

during the State's fiscal 

year ending Aug. 31, 1938, and 

paid under protest during such 

year underArt. 7057b, VACS, 

but not transferred or placed 

in Gas Utilities Fund until 

the termination of protest 

suit during the fiscal year 

ending Aug. 31, 1939, subject 

to warrants drawn against such 

fund, under appropriations 

for the Attorney General's 

Department and Railroad Commission for the fiscal year 

ending August 31, 1939. 

We have for answer your inquiry of April 18, 1939, concerning your authority to issue warrants against certain moneys 

in the Gas Utilities Fund, created by Article 6060, as amended, 

Vernon's Annotated Civil Statutes, under appropriations for the 

Attorney General's Department and the Railroad Commission for the 

fiscal year ending August 31, 1939, when it appears that such 

moneys came into the Gas Utilities Fund under the following circumstances: 

During the fiscal year 1937-1938, ending August 31, 

the sum of $10,471.95 was paid under protest according to the 

1938, 

terms and provisions of Article 7057b, Vernon's Annotated Civil 

Statutes, by the Lone Star Gas Company, a "Gas Utility" as defined 

by Article 6050, Subdivision 2, Vernon's Civil Statutes. This 

payment represented the gross receipts tax of one-fourth of one 

percent of the gross income received by said company from all 

business done within the State of Texas during such period. This 

tax is levied by Article 6060, as amended, Vernon's Annotated Civil 

Statutes, which provides that the proceeds of such tax shall go 
. . 

Hon. Geo. H. Sheppard, April '25, 1939, Page 2, o-162 

to constitute the Gas Utilities Fund. A suit was duly and timely filed by such gas utility to recover the taxes so paid under 

protext, under Article 7057b, Vernon's Annotated Civil Statutes, 

but upon appeal to the Court of Civil Appeals for the Third 

Supreme Judicial District from an adverse judgment of the trial 

court, said cause was dismissed, and the taxes which had been 

thereby protested became, under Article 7057b, Vernon's Annotated Civil Statutes, subject to transfer into the fund in which 

they would have gone originally except for such protest and 

suit o But the date when this transer into the Gas Utilities 

Fund became possible was during the fiscal year ending August 

31, 1939. 

Article 6060, Revised Civil Statutes, 1925, as amended 

by Acts, Regular Sesslon, 42nd Legislature, Chapter 73, page 111, 

levies a gross receipts tax of one-fourth of one per cent of the 

gross income received by defined gas utilities, from all business 

done within the State, and provides that such taxes shall be paid 

into the State Treasury at Austin on a quarterly basis?, In a fund 

to be designated and known as the "Gas Utilities Fund. It is 

further provided that such Fund shall be used for enforcing the 

provisions of Articles 6050 to 6066, Inclusive, Vernon's Annotated 

Civil Statutes, known as the "Gas Utilities Act." 

Article 6066, as amended by Acts, Regular Session, 42nd 

Legislature, Chapter 190, page 319, limits enforcement expenditures out of such Gas Utilities Fund as follows: 

"The salary and expenses of the expert and his 

assistant and the salaries, wages, fees, and expenses 

of every other person employed or appointed by the 

Commission under the provisions of this subdivision, 

and all other expenses, costs, and charges, tncluding 

witness fees and mileage incurred by or'under authority 

of the Commission or a Commissioner In administering 

and enforcing the provisions of this subdivision or in 

exercising any power or authority hereunder, shall be 

paid out of the Gas Utilities Fund provided for by 

Article 6060, as amended by H.B. No. 547, Acts of the 

Regular Session of the 42nd Legislature, by the State 

Treasurer on warrants of the Comptroller on orders 

or vouchers approved by the Commission or Chairman 

thereof. The entire amount derived from the tax imposed 

by Article 6060, as ,amended, shall be used for the 

purposes of enforcing the provisions of ,the preceding 

Articles 6050, et seq. Any surplus remaining in this 

fund after paying all such salaries and expenses as 

may be contracted to be paid and incurred and such as 

may be reasonably estimated by the Commission for 

its use shall be paid over to the General Revenue Fund 
. - 

Hon. Geo. H. Sheppard, April 25, 1939, Page 3, O-162 

on September First of each year, beginnIng September 

1 1932. Provided, that not more than Seventy Thousand 

($70,000.00) Dollars shall ever be spent in any one 

Calendar year.” 

Chapter 504, p. 1362, General and Special Laws, Regular 

Session, 45th Legislature, being the departmental appropriation 

bill for the fFsca1 years ending August 31, 1938, and August 

1939, specifically appropriates out of the Gas Utilities Fund 

31, 

for each of such years, the sum of $18,250.00 to the Attorney 

General's Department for the enforcement of the Gas Utilities 

Act, (p. 1372), and the sum of $50,170.00 for salaries, expenses 

etc. of the Gas Utilities Division of the Railroad Commission, 

(P. 1474). 

It is our opinion, and you are accordingly advised, that 

when proper vouchers are presented to you by the Attorney General's Department and the Railroad Commission under the foregoing 

departmental appropriation bill for the fiscal year ending August 

31, 1939, you may lawfully issue warrants upon same, to be paid 

out of~ang moneys in the Gas Utilities Fund, created by Article 

6060, as amended Vernon's Annotated Civil Statutes including 

said sum of $10,471.95, transferred or to be transfhrred to said 

fund during the current fiscal year ending August 31, 1939. Our 

conclusion is grounded upon the proposition that all moneys which, 

under governing statutes, come Into the Gas Utilities Fund during 

any given fiscal year, may be used to pay warrants drawn against 

such Fund under appropriations for that particular fiscal year. 

But by your inquiry you make the point that the 

$10,471.95 in question represented taxes due and payable to the 

State under Article 6060, Vernon's Annotated Civil Statutes, 

during the fiscal year ended August 31, 1938, and consequently 

such specific sum of money is not chargeable with salaries and 

expenses incident to the enforcement of the Gas Utilities Act 

during the fiscal year ending August 31, 1939, and that warrants 

cannot be drawn against such fund for such salaries and expenses. 

This position would be tenable if the $10,471.95 involved in your inquiry had been actually paid Into the Gas Utilities 

Fund during the fiscal year ended August 31, 1938, but such is 

not the case here. The effect of the payment of this particular 

$10,471.95 under the protest provided by Article 7057b, Vernon's 

Annotated Civil Statutes, was to place such fund or sum of money 

in a Suspense Account in the State Treasury rather than into the 

Gas Utilities Fund. As long as this particular sum of money 

occupied this status of suspense, it belonged neither to the 

State of Texas claiming such tax, nor to the aggrieved gas utility, 

claiming, by written protest, that it did not owe such tax. An 

elaborate system of bookkeeping by the State Is set up by Section 
Hon. Geo. H. Sheppard, April 25, 1939, page 4, o-162 

3 of said Article 7057b, Vernon's Annotated Civil Statutes, for 

segregating such protested tax payments from either the General 

Fund or any of the Special Funds in the State Treasury. 

Perforce of these statutory provisions this particular 

sum of $10,471.95 would not come into the Gas Utilities Fund during the year such taxes were claimed to be due and payable, i. e. 

1938, and, in fact, would not be allocated to such Fund until 

8UCh time as It was finally determined, at the end of the litigation provided and required by Article 7057b, Vernon's Annotated 

Civil Statutes, that such moneys properly belonged to the State 

of Texas as a part of its lawful revenues. If, on the other hand, 

the protesting taxpayer should prevail in a suit brought within 

90 days, in the form and manner required by the Protest Statute, 

then such moneys or funds would never find their way into the Gas 

Utilities Fund but would be paid out of the Suspense Fund of the 

Treasury to such taxpayer, together with earned interest thereon. 

An appeal Is contemplated by the Protest Statute to ultimately 

determine the status of and title to such protested tax payments, 

as between the State and the taxpayer, and thltl could concefvably 

result in such tax paymen,ts being kept in the Suspense Account 

of the Treasury and out of the I;as Utilities Fund for several 

years s Surely it was not the Intent of the legislature that the 

Gas Utllltles Fund should be denied the advantage of gross 

receipts taxes levied by Article 6060, Vernon's Annotated Civil 

Statutes, merely because the protesting gas utility elects to 

put such fund into a state of suspense, pending a determination 

of it8 rights. If and when such tax payment is, by a court of 

competent jurisdiction, adjudged to be a part of the revenues of 

the State, there is nothing In the Protest Statute, or in any 

other statute which we have found, which would prevent such moneys 

being considered a part of the Gas Utilities Fund, subject to 

warrant drawn on that Fund, for necessary expenses incurred In 

the enforcement of the Gas Utilities Act during the same fiscal 

year In which 8UCh moneys were finally allocated to the Gas 

Utilities Fund. In fact, Section 4 of the Protest Statute provides that "if suit 18 not brought within ,the time and within 

the manner herein provided, or in the event it finally be determined in such suit that the sums of money so paid or any portion 

thereof. together with the pro rata interest earned thereon, belong to*the-State, then and-in that event, it shall be the duty 

of the State Treasurer to transfer such money from the susoense 

I of the State by placing the portion 

rf belonging to the State in such fund by the issuance of a 

depO8it warrant. ' (Emphasis ours) 

Under the foregoing, it became the plain statutory duty 

of the State Treasurer, when the gas utility in question abandoned 

its appeal in the Court of Civil Appeals, from a judgment ln favor 

of the State in the Di8tPiCt Court of Travis County, to forthwith 

transfer the sum of $10,&71.95 out of the Suspense Account Into 
. . - 

Hon. Geo. H . Sheppard, Aprll 25, 1939, Page 5, o-162 

the Gas Utilities Fund, where It would become subject to warrants 

drawn by you under appropriations for the year during which such 

sum of money came in.to said Gas Utilities Fund. 

It would foliow as a corollary from this conclusion that 

you would have no lawfu~l author~ity to issue warrants against any 

sum or sums of money placed in the Suspense Account of the Treasury by a protest payment of taxes under Article 7057b, Vernon's 

Annotated Civil Statutes, because such moneys are not in the Gas 

Utilities Fund or any other Fund subject to warrant, until the 

time of their transfer from this Suspense Account, in accordance 

with the terms of Set, +ion 4, Article 7057b, Vernon's Annotated 

Civil Statutes, hereinabove quoted. Consequently, the opinion 

directed to you under date of June 8, 1938, by a former Attorney 

General, holding to the contrary, is, of necessity, overruled. 

Yours very truly, 

ATTORNEY GENERAL OF TEXAS 

PMN :N :wc 

APPROVED 

a/Gerald C. Mann 

ATTORNEY GENERAL OF TEXAS 

. 

By a/Pat M. Neff, 

Pat M:Xeff , 

Asetstant 

Jr. 

Jr.