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 that Astiole 141s 

I.8 Artdale 7089. !Cho formor Art%- 

retary of State or en7 other State 

oyoe, or an7 other perman, having 

l a a ea e to any fmuehise tax report filed a8 pro.- 

vi&d by lav, including My shareholder Who ir peraitted to examine the report 09 an7 corporation a8 

wovlded in SeatLon 2 hemot. 8hM.l make 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 the 
Eonorable Sidney Lathes, page 2 

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

Thou8ana 8h11brlE?8ba Bo by a f 

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 out8tendlng rtoak 

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 infwmatloa 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 report8 by unauthorired perrona. Illnae 80~1) of the lnformation required by 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, dI8clorure8 anb u8e8 of the report8 and OS any 

information acntalned therein, regardle88 of vhether or not 8UUh 

lnfornutlon is related to the t-ala1 aondltlon of the corporatlon, are forbidden by Artlale 7089; unauthorlred dl8aloaure8 

of' flnanaial information alone are made unlawful by Article 1418. 

The fact that the violation of Artlole 141e 18 expre88ly made 

a miwlenmanor while no penalty tr attaahed to a violation of 
xonaable 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 OtrmOhUiOn that 

they are aoextmulve or t&t the latter 18 rertriated by the 

sorlmr. Abaenoe of a sp0alila penalty may 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 indepenaent4 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 o nu no t @ ten l a o e88 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 c a on nlby e o b ta Ii imd J l Ulin$ the report8 and by ‘di#- 

alo8*’ a part of the information eontaiosa therein. IanoauLt 

and unproduotlve of 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 Artide 7089, yOUr 8WXId QtuStiQU i8 moered in the #firmatiVe. 

Esxt you *tire; 

*would the d~80108~ 0i th8 lrpue 0s OOCporationa 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 eAther Artiole 7089 or 

The filing of Srsncrhiw tax reports and the pati 

Of fl’~OhiSe taXe# @l’O Si?p8MtO al¶d di#tinOt aOt8 whlah IWed 

not coincide. Although Article 7089 requires the tlllng of 

franahlae tax reports brtveen January 1st and llarah 15th of 

eaah year, under the tem8 or Artial8 7084 the tax itself maa 

not bs p0ld Until my let. Yhsre th8 tu 3.8 @?bid #Ub#aQwnt 
iionorable Sidney latham, page 4 

to the filing of the report, obvlouJly it 18 impOS#ible for 

the report to refleat whether or not the taxer have been pala. 

Moreover, with the form of report currently eEployed by 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 asaertained whether payment ha8 aoaoBQanled the report, vhat 

amount, if any, ,&as been pia, or even vhether the mount of 

the tu as aomputed by the corporation is the true amount of 

the tu a-. 

It will be noticed fihnt Artlole8 7089 and 141e oonfer a privilege anl7 upon the 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%niOn that 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 k WUI pIbid. nothing raid hereill 18 to be 

aomtrued a s l uth o r lslna g diralo8urs 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 OorporatloA neet388~ily Vill, in OM 88XlSO, lnvolvo a di80~08~e or the name 

of l uah corporation. lie feel that this latter bi8alo8ure 

al80 18 authorized urd that OUl' pOSitiOn ti th18 re#peUt in 

no Way OoniliOtS with OUX' (BIuWer t0 your SeOand qUeStiO!l. ~'IIlLeS 

of oorporrtlons Sillng 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 thereini however, 

the name8 of oorporatlone fran&lae taxes aan be deter- 

-d without reierenee e 0 the report or to rush inforMtion. Iior, ve feel, a068 the fact that the tvo groups of 

11111008 normally vi11 be ldentloal (though not always, atice a 

oorporatlon lrury ill.6 a report without paying the tax pad, ltuprobably but 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 

eourae happens 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 aOrpOratlOA8 have pald their taxes, 

Ye SUlSt answer your ~UOStiOA in the 8ftlrruktlve. Hov*ver, ve 

are of the opinion that you may divulge the nanma 0s those 

aorporation8 which 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 corporation as 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 ea r eta rtreasurer y, or general -or, and 8hall give the 

mm8 and aadre88 0s eaah ofriaer aa dlreator." SlAoe the 

ABJ8eS.Of OffiCWrS and dlreotOr8 are l XpreS#ly m a pWt Of 

the information to be aontalrmd in franohlre tax reports, we 

feel that rush lniorm&lon meiy not be obtained from the zeports ULcr, divulged to unauthorioed peraoA8. 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 inaludea within 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 ' *offiaerr of the state," *offloera 'offiaer 0s this state’ and 8i1nilar 

expre0010A8. Llk0~188, ao8t of thew expre88loA8 have xwelved 

both statutory and judicial deflnitlOne. See 34 Tex. Jur. p. 

321, et seq. However, all of these definitloA8 hme been 

enunoieted efther expre88~y or impliadly with referenae to the 

context in whloh auah expreeslon8 have 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 lule aoextensive with 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 offlaer8 may be state orflUera though the%r Juri8dlotlon or powers are oonfinsa t0 the li.ISitS Of the aOUAty w et811 t0 OIU Of 

its politlaal 8ubdlvi8lonr. TM term is gerural17 USed %,A the COAStitUtiOA SiAd StcltUteS 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 immediately belong to ore of the three 

OOAStituQAt bWMhe8 Of th8 Stat, $OVWTl8l8nt. %&t 

it may reter to the eharaoter of the offloe rathm 

than to its territorial extent 0s vhethw the offloe 18 OMJ for whioh the Whole State 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 Was employed in &tiob 

7089 in the broad MASS mentlolled in the above quotation. 

It will be noticed that this ktiole biers to officers of 

the state *ahargea vith the enforoement of its ISus.* Slaae 

offioera 80 charged are co~flne6 neither to those whore powers 

are aoextenslve with the boundaries of the state POP to 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, under brtiale 708& iranchiss tex reports nay be examined, dfaalo8ed 01) u88d in the 
Hommable bidaey I&ham, page 7 

oourse of some judicial prooeedlnga _._ ._ -.. . 

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 suite may be inatltuted and prosecuted by 

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 

f 

overnmeat eanuot find praetloal juatlfioation. Conaequenty, ue are of the opinion that any offloer, be h is l eleotlon 

and authorfty state-wide or aoaflned to a dlatrlot, oounty, 

munlai9allty, or other polltloal or geographloal aubdlrIalon 

of this Mate may be lnoluded wlthln t&la portion of Artlole 

7089,pcrovlded he is aharged vlth the enforoement of any of the 

l&v* of this Btate. We ~8910~ the word “amy” advlaedly in the 

pr*oedS.ng aentenoe beaauae 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 to make 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 air statutes wit&In his ohargo. A deaonstratloa of l uo h 

relatlonshlp la, we feel, a necessary prerequL*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. We ahall, of Course, be 9 f eased 

at aay time to give you our oplnlon 8s to vhether any e~olfio 

oiflOer,or group of offlaera, la, with rea ot to imy given 

law, lnoluded within thla portion of Artla p" e7089. 

Trusting that the raregolng,fully anavers your Inquiries, we are 

Very truly yours 

ATTOR88Y GltUSlAL 09 TEXAS 

- A \ /K 

R . ban noahead 

. 

RDlI:db Aaalat8at