The Honorable Cue D. Boykin Opinion No. H-1012 

Chairman 

Texas Industrial Accident Board Re: Whether governmental 

Austin, Texas 78711 bodies are exempt from tax 

imposed by article 8306, 

9 28 on workmen's compensation self-insurers. 

Dear Mr. Boykin: 

You have requested our opinion concerning whether governmental bodies are constitutionally exempt from the payment of 

the gross premium tax imposed.by section 28 of article 8306, 

V.T.C.S. 

Article 8309h, V.T.C.S., provides for workmen's compensation for political subdivisions. Section 2(a) permits such 

subdivisions to become self-insurers. Section 3(a) (1) in part 

adopts section 28 of article 8306. Section 28 of article 8306 

provides for a gross premium tax upon insurers and further 

states: 

All self-insurers under any of the Workmen's 

Compensation Acts of the State of Texas 

shall report to the State Board of Insurance 

the total amount of their medical and indemnity costs for the previous year and pay a 

like amount of tax as provided above on said 

total amount of medical and indemnity costs. 

Moneys received pursuant to section 28 of article 8306 "shall 

be used by the [Industrial Accident] Board for the purpose Of 

paying costs of the administration of the law. . . ." The provisions of section 28 as adopted by article 8309h clearly apply 

to self-insuring political subdivisions. You have asked if 

such an application is ccnstitutional. 

In State v. City of El Paso, 143 S.W.Zd 366 (Tex. 19401, 

the court upheld the application of a motor fuel tax to the 

city of El Paso. After reviewing article 8, section 1, and 

p. 4180 
. - 

The Honorable Cue D. Boykin - page 2 (H-1012) 

article 11, section 9 of the Texas Constitution, the court 

stated: 

[Tjhe . . . constitutional provisions . . . 

operate to exempt municipal corporations 

from only three classes of taxes. These 

are ad valorem taxes, occupation taxes, 

and income taxes. 

Id. at 369. 

ical Bank & Trust Co.,>90 S.W.Zd 48 (Tex. 1945)-(&%$% 

Corn-, Lower Colorado River Authorit 

constitutional a tax upon the property of the Authority) with 

-,- 

State v. City of El Paso, supra. The view 'expressed by the 

City of El Paso court has been followed. 

v, San Antonio Independent School 

(Tex. Civ. App. -- El Paso 

130 (Jan. 5, 

NO. 2 v. City of 

-- Ft. Worth 1959, writ7emn.r.e.). 

The tax imposed by section 28 is clearly not an ad valorem 

or income tax. Nor may it be classified as an occupation tax, 

which "is levied for the exercise of the privilege of carrying 

on a business." Youle v. Calvert, 348 S.W.2d 5,34, 535 (Tex. 

Civ. App. -- Austin 1961, writ ref'd n.r.e.1; Brunk v. State, 

6 S.W.2d 353 (Tex. Crim. App. 1927). See also-Attorney __ General 

Opinion WW-204 (1957). Accordingly, the Constitution does not 

protect governmental bodies from its application; in our opinion 

self-insuring political subdivisions are liable for the tax provided in section 28 of article 8306. 

_-_-.-- SUMMARY 

Political subdivisions which are selfinsurers under article 8309h of the Workmen's Compensation laws are liable for 

the tax provided in section 28 of article 

8306. 

Very truly yours, 

Attorney General of Texas 

p. 4181 
-. 

The Honorable Cue D. Boykin - page 3 ~~-1012) 

APPROVED: 

DAVID M. KENDALL, First Adsistant 

C. ROBERT HEATH, Chairman 

Opinion Committee 

klw 

p. 4182