OFFICE OF THE AITORNEY GENERAL OF TEXAS
AUSTIN

BonoFable SUlne~ I&hm Searetar~ of State Au&in, Foxas

Dear sir:

reportu br Artlposar a rorles

to be rertrictob by, the provirlons of

tales vere enaoted at the ~amo (Aatr 1931, 42nd Leg., p. ; aquage dearly revoalr their
es pl&n the faat thatAstiole 141s I.8 Artdale 7089. !Cho formor Art%-

retary of State or en7 other State oyoe, or an7 other perman, having
la aeae

to any fmuehise tax report filed a8 pro.- vi&d by lav, includingMy shareholderWho ir peraitted to examine the report 09 an7 corporationa8 wovlded in SeatLon 2 hemot. 8hM.lmake kxwvn in -by manner whatever not pm&&d by lav the &ouut
or aour of inaome. rrrofita. lofloeu,

eXDenU.ture8,
or any mrtiaulnrs theroof, or any other Lnformaklon DertainlnR to the firwclal aondittnn of theEonorable Sidney Lathes, page 2

ctX%mratlon 8et forth or dlr0lored In 8uah rmort,

8h11 brlE?8ba by a f Thou8ana Bo he not exaedlng One

8 (@,OOO.OO) or oanflneasnt in jail for not exaeedlng one year, or both.' (Rupha818 added)

The relevant portion of Article **7089** reads:

II Said report 8hall be deemed to be plvli&&**ad not for the iri8pdatIon of th8 gunera1 publlo,but a bona fide l toakholder ovnzlng
one per cent (l#) or more of the out8tendlngrtoak of any aorporatlon,may examine ruoh return8 upon pre8entatlon

## 0r evldenae of rueh Ovnerahlr, to the &#eretmy of 3tate. lo other exam&nation;dlraloowe, or we. ehall be mmitted pi raid remrt8 exarpt in the aour8e of wme ,judiaial proaeebtngr la rhlah the mate 18 a partymor Ia 

### a tiult by tiie st4te to aanael the permit or iorrelt the 

### eharter OS 8wh aorporetlon or to oolloat penaltier f'or
a violation oi the law8 of tU8 State, or ior in**fwmatloa** of say offlaer, of this State aharged Vlth the enroruemeat of it* &VB, lnaluding the Comptroller of Publla **Aaaouat8,** State **Auditor** and the 8tate Tax Commissioner.

. . ." (@+a818 added)

Thu8 vh.lle

Artiole 1410 make8 uIlhVful only the dlr0108ure of aertaln InforMtlon pert- to the Sinmblal aondition of the reporting corporation, Artlole 7089 8peaitlaally forbid8 any "examination,dlralowe or use" of fraaahl8r tax report8by unauthoriredperrona. Illnae80~1) of the lnformation requiredby Artlole 7089 to **be** lnoluded in rwh 

### report8 I8 unrelated to the finanolal QOnditlOn OS the aorporatlon and 8lnae uader&tlale **7089a** the Searetwy o? State m8y require the lnclu8lon In the report8 ol additional Information, both flnanclal and non-flnanaisJ, the re8peatlve field8 or Artiole8 7089 and 141s are ea8lly dl8oerned. Unauthorized examinatloia,dI8clorure8anb u8e8 of the report8 and OS any informationacntalned therein, regardle88 of vhether or not 8UUh lnfornutlon is related to the t-ala1 aondltlon of the corporatlon, are forbiddenby Artlale **7089;** unauthorlreddl8aloaure8 of' flnanaial informationalone are **made** unlawful by Article 1418. The fact that the violation of Artlole 141e 18 expre88lymade
**a miwlenmanor**  while no penalty **tr attaahed**  to a violation ofxonaable BIdna~Utham, pqp **3**

&tiele 7089 fn no vay over-ridma tka language of either or th#M &&iUbS, POr a008 it Ompd wih0r tb OtrmOhUiOnthat they are aoextmulve or t&t the latter 18 rertriatedby the sorlmr. **Abaenoe** of a sp0alila penaltymay oreate lmniunity fez the 

### doing of an 

### aat pmhlblted by **statute,** but it aannot oreate authority. C~e~UOUntly, frtW f'ir#t QuO0tiOIl

18 (1l1- OVered in the MgatiVe 82kd **VU are**  **re#pOtftily** adVised **th8t** *rtia& 7089 and Artiale **14le are**  **to bo**  **mxmtrwa indepenaent**  

### 4 and that the 80tr) problblted theroln **differ** to the extent **above Set**  **foCth.**

"Would th8 di80108UN Of th8 -8 ody Of OorpOratiOM fiu7&& trurohiae tax ZOpOrtS t0 pWl onunot @ten laoe88 to l u0h reports **by** the Natate be a vlolatlon OS tbu prov~10xu of either Artlolb 7089 or 141etn

**%%a ItmS**  **Of th0**  **repQFt$.Ug OwpOMtiOII**  **18 Or**  **OOUPSO,**
**a part**  **of the**  **lnf0rmatloa to**  **ba touad**  **in the**  franfdire **tax re-**  &3WtU, Uldthe~U Oi OW OMtiQM VhiOhhWe tiid awhreaorta 

## can

only be o btaimd

**Ii**

## Jl **Ulin$ the**  **report8 and**  by **‘ di#-**  **alo8*****’** a 

### part **of the**  information **eontaiosa** therein. **IanoauLt** and unproduotlveof evil though 8unh a ume aad dlraloaure mt **See8, MV~~th8bSS**  **Ye t-1**  **tbst SUiih**  OOlldUOt 18 OOQWeheaded by &tla.le 7089. Ocmrequentl~,with referenae to Arti**de 7089,**  **yOUr** 

### 8WXId **QtuStiQU i8**  moered in the #firmatiVe.

Esxt you 

### *tire; 

## *wouldthe **d~80108~ 0i**  **th8 lrpue**  **0s OOC**  **porationa that**  **have filed**  **rwh ro** **?-** rlth a 0tatemat OS vhotbar or no **t8, togethm**  all **fFqpOhi#~** taxer **due** had been paid by l uah uorporatlonr**be a**  ;f;i:$lon of the tiermu OS eAtherArtiole 7089 or

The filing of Srsncrhiw tax **reports and**  **the** pati
Of **fl ’** **~OhiSe taXe#**  **@l ’** **O Si?p8MtO**  **al¶d di#tinOt**  aOt8whlah IWed not coincide. Although Article 7089 requires the tlllng of franahlae tax reportsbrtveen January 1st and llarah15th of eaah year, **under** the tem8 or Artial8 **7084 the**  **tax** itself

## maa not bs p0ld Untilmy let. **Yhsre th8**  **tu 3.8** @?bid 

## #Ub#aQwntiionorable Sidney latham, page 4



### to the filing of the report, obvlouJly it 18 impOS#ible for the report to refleat whetheror not the taxer have been 

### pala. Moreover,with the form of report currentlyeEployedby your offioe, even vhere the tax is

## paid at the time the report 18 mede, no evidence of l uah payment PppefWS on the report. Although l

p4ae is provided in 8uch report for the oorporation to oompute its tax

## md to reveal the amount

## 0r the tax aaaording to its oolnputrtionr, nowhere on auah report can it be asaertainedwhether payment ha8 aoaoBQanled the report, vhat amount, if any, ,&asbeen

## pia, or even vhether the mount of the tu as aomputedby the corporation is the **true** amount of the tu 

### a-.

It will be noticed fihnt Artlole8 7089 and 141e oonfer a privilege anl7 

### uponthe report ind **upon the**  l.nforBatlon contain0a therein. The tact that taxer have or have not been 

### pala aan be **dotermlned** neither by azt"examinatj.on," a 'diealoaure"nor a Qne" of l uah reports. Conr~uently, we are OS the .op%niOnthat a revstition of awh fast i8 in no Way a vlolatlon of either of the Artialea i.A que8tionr lotdoe,however, that we are 8 aking only of a revelation of whether or not tih0 t4XeS have WUI pIbid. k nothing raidhereill18 to be aomtrued as lutho rlslng adiralo8urs of the amount of the t-8 y&d, ii such t-8 have bOen wholly paid, the uto=tS Of t4UeS paid urd dUt9,if 8uah t-8 

## brrVe **been** &Wtiall7 paid,
or the WUlltS oitue0 **due** or QllnqUent, ii Swht~s have not been paid.

It i8 appulent that WIy di8OlO8~e Of the faOt that tax08 have or heve not been peld by a given OorporatloAneet388~ilyVill, in OM 88XlSO, lnvolvo a di80~08~e 

### or the name of l uah corporation. liefeel that this latter bi8alo8ure al80 18 authorized urd that OUl' pOSitiOn ti th18 re#peUt in
no WayOoniliOtSwith OUX'(BIuWer t0 your SeOand qUeStiO!l. ~'IIlLeS of oorporrtlonsSillng reports o8nnot be diaalored

### beaause l uah Mm98 

### cm be a#OertaiMd 

### only by a prohibited we ana diaclosure of the report and the infoxmitlon thereinihowever, the name8 of oorporatlone fran&lae taxes aan be deter- -d without reierenee e 0 the report or to rush inforMtion. Iior, ve feel,

## a068the **fact** that the tvo groups of 11111008 normally vi11 be ldentloal (thoughnot always, atice a oorporatlon lrury

ill.6 a report without paying the tax pad, ltuprobablybut aonoeivably, aould pay the tnx without filing a report)mflltate a@n8t this conalu8ion. We see no re88on why the fact that lnforaretlon obtained from a non-privileged
eouraehappens to colnolde vlth that whloh aould be obtained from a privileged source should preclude recouroe to

## ana employment of the former.Honorable Sidney Idham, page 5

SiAma YOU QUOStiOA 18 OOWh8d in tW'E# Of diB&Oring the AR8IeS

Of eOrpOratiOM rbi0h hrVe riled th0 FqKh end of lcevealing vhether such aOrpOratlOA8have pald their taxes, 

### YeSUlStanswer your ~UOStiOA in the 8ftlrruktlve.Hov*ver, ve are of the opinion that you may divulge the nanma 0s those aorporation8which have p8ia their frMahl#e taxer and **nm7,** with reapeat to a given oorporation,dl#UlOse 8hether or not it ha8 paid 8uCh tax.

YOUC iOUt% QUOStiOA iAQUir88:

%Odd a di8UlO8LWe Of the ABRie Of **OffiOclFS** end dlreatora of any corporationas 8hown on l uoh report be a vlolatlaa of the term8 of either of **SUCh al** **’ tiU~S?** *

**Article** 7089 reptires, inter alla, that 'eaah report 8hall be sworn to by either the preSideAt, vlae pe~rldent, l earetary,

treasurer orgeneral **-or,** and 8hall give the mm8 and **aadre88** 

## 0s eaah ofriaer aa dlreator." SlAoe the ABJ8eS.Of



### OffiCWrS

anddlreotOr8 are l XpreS#lym a pWt Of the information to be aontalrmd in franohlre tax reports, we feel that rush lniorm&lon meiy not be obtained

## fromthe

## zeports ULcr,

divulged to unauthorioedperaoA8. GanieQuently, vlth r6fersnae to Artlole 7089, this question 18 answered in the affirmultiVe,

aAd **YOU** are re#peCt~ly AdViSed th8t SuOh hfOrmtiOII **may** not **be** di8~108ed.

**b%Stly YOU**  **aOk:**

**‘ lihat**  offiaerr are inaludeawithin the meknlng of the word8 'sng officer of this State charged vlth the eAforaea&mt of its **laWat** 88 rued in &tiale 7089?”

Our Constitution and statutes are replete vlth references to "state offleers Of the St&e gOVeF2USMt,I' *offiaerrof the state," *offloera 'offiaer

## 0s **this state** **’ and**  8i1nilar expre0010A8. Llk0~188, ao8t of thew expre88loA8have xwelved both **statutory** and judicialdeflnitlOne. See 34 Tex. Jur. p. 321, et seq. However, all of these definitloA8hme been enunoieted efther expre88~y or impliadlywith referenae to the context in whloh auah expreeslon8have been **elpployed.** T$ua, for example, our 0Ae statutory definition 0s the phrase orficer of this state,' COAtai.Aed in &tiole 369 of the **Penal**

## 43

Eomrable Sidney Utbaa, page 6

code, 18 expre88ly 

## iimiba to the USA 0s that q1r088i~n ia the C?OAtOXt Of the b@tidlO %mSSdiately preOediII& AS i8 #rid in 34 Tex. Jur. pp. 334-335;

"IA a popular sense 8 State offloer is one whose jUPi#diCtiOq,dUtie8 and funatianr luleaoextensivewith the Stat&j but in S larger ae~ae he 18 one who reoelvea his authority mder state laW8 rpd perfom8 same of **the** govemmentel ruA0ti0AS of the State. In this aen8e offlaer8may be state orflUera though the%r Juri8dlotlonor powers 

### areoon

### finsat0 the li.ISitSOf the aOUAty w et811 t0 OIU Of its politlaal 8ubdlvi8lonr. TM **term** is gerural17 USed %,Athe COAStitUtiOASiAdStcltUteS iA it8 PpUhr SefiSe a8 iwlUdb$ Old7 t&OS* Offi~WS whore dUtie8 urd fI&AOtiOM al'e OOUteMiVe 

### With the bouudorloa

## 0s the state, QF such geAera1 0s. 

### ricers as immediatelybelong to ore of the three OOAStituQAtbWMhe8 Of th8 Stat,

## $OVWTl8l8nt. %&t it may reter to the eharaoter 

### of the offloe rathm than to its territorialextent 0s vhethw the offloe 18 OMJ for whioh the WholeState Vote8 Op Ml'aly 8O8tb SUbdiViSiOn thereof, #k&ah S8 a dirtrlct cz countg.*
**Illustratlvr** 

## or **the** 

### broad**aa4** 0s l uah term are tha oases of JemQan v. Finley 90 Tex. 205, 38 S. Y. 24, urd 0-0~. v. Zaokry, 115 8. V. $67, 117 8. Y. 177, both of whlah hold that a# t0 the #Oh001 fond a UOMtiy 

### Offiaer 18 aA 

### 'OffiaeF Of thS State," and b pate baoey, 93 a). W. 538 (Cr.Am.), holding that a ahlef of police anb a poliae- are 'state OffieOrSD Or %@88i State OffiUerS.”

We feel that this @Mae Wasemployed in &tiob 7089 in the broad MASS mentlolledin the above quotation. It will be noticed that this ktiole biers to officers of the state *ahargeavith the enforoement of its ISus.* Slaae offioera 80 charged are co~flne6neither to those whore powers are aoextenslvewith the boundaries of the state POPto those who belong to one of the t&e@ brulrrhea of state governvwnt
or who are elected by the entim state, this added clauae is iadloatlve of the broad sense in which the phrase 'offiaera Of this State" Y88 USSd. Horeover, underbrtiale 708& iranchiss tex reportsnay be examined, dfaalo8ed 01) u88d in theHommable bidaey I&ham, page 7

oourse of some judicialprooeedlnga

_._ ._ -.. . in vhloh the State 

### la a a ._ _. **party or**  **Ilr a**  atit Dy tne 

### atate to wumea tna peraut or rorfelt the oharter of awh aorporatlon or to oolleat penalties for a violation of the laws of this State.” Sinoe some of these emaerated suitemay be inatltuted and prosecutedby county or dietriot offloera,and indeed, in some fnatanoea mat be brought by these offlclala,a restriction of the phrase “oifioera of this state” to offloera of the state

fovernmeat eanuot find praetloal juatlfioation. Conaequenty, ue are of the opinion that any offloer, **be** hisl eleotlon and authorfty state-wide or aoaflned to a dlatrlot, oounty, munlai9allty, or other polltloal or geographloal aubdlrIalon of this Mate may be lnoludedwlthln t&la portion of Artlole 7089,pcrovlded

he is ahargedvlth the enforoementof any of the l&v* of this Btate. We ~8910~ the word “amy” advlaedly in the pr*oedS.ngaentenoebeaauae ve feel that the mere iaot that one la an offioer of this btate oharged with the enforoement 0S ita 

### lame does not oonfer a oarto blanahe **authority** upon.hU UIth reopeat to the examination of franohlae tax reports. 

### Rather, we feel, 

### his prlvllege tomake rush an exaninatlon la **llalted bg**  the **requirqment** that **the** purpose **of** a*uoh **ma&-** nation be oeaaonably related to the enforoeakeat of the rt&tute airstatuteswit&In 

### his ohargo. A deaonstratloa of l uoh relatlonshlp la, we feel, a necessaryprerequL*lte to aa examlnatlon of 

### f’ranohlae tax reports by auah an offiolal.We fully reallee the generality of these statemeats,but PO feel that the task of making 

### a ooqlete and detailed list of l uah 

### oSil0era and 0S aomplllng an all lnolualve enumeratloa 

### of the varloua lava with whose eaforaement they mat be olaer ed 

### la both futile **md impoaalble.**  f We ahall, of Course,be 9 eased at aay time to give you our oplnlon 8s to vhether any e~olfio oiflOer,orgroup of offlaera, la, with rea ot to imy given law, lnoludedwithin thla portion ofArtla p" e 7089.
Trusting that the raregolng,fullyanavers your Inquiries,we are
Very truly

### yours

**ATTOR88Y**GltUSlAL09 TEXAS

- A \ /K

R

.ban noahead .

Aaalat8at RDlI:db