. ,



### G~ENERAL TTORNEY

TEXAS

PRICE DANIEL ATTORNEY

GENERAL.

December 22, 1952

Eon. Robert S. Calvert C&roller of Public Account6 Aurtin, Texas opinionNo. 

### v-1563

Re: Authority of the Comptroller to promulgate
a regulationallowing tax deductionsto offset estimatednon-highwayuse of special fuels in LPG Dear Sir: delivery trucks.

Your request for an opinion of this office reads:

"We desire the opinion of your office regarding the legality of a propo66dmethod of accounting for the tax imposedby Section 14,Article 

### 7065b, Vernon's Annotated Civil Statute6 upon the highway u6e of 'LiquefiedGas' (Butane-Propane)and 'Other Liquid Fuels' (DieselFuel), which became effective September 1, 1951. These two products are further defined in Section 1,of the lawas 'SpecialFuels'.

"The law imposesthe tax upon the USE, or the DELIVERY INTOA FURL TARE FOR USE, of such fuels in propelling a motor vehicle upon the public highway of Texas, and places the responsibility for reporting and paying over the taxes upon user-dealers.

"'User-dealer'ie defined in Section 1 of the Act as (1) any distributor,dealer or other'person selling

. and delivering special fuels in this State into the fuel

tank of any motor.v6hlcle for u6e inpropelling said motor vehicle upon the public highway of Texas; e e D and (2) shallalso mean and include any distributor, dealer or otherp6r6,onWhO shall acquire any special fuel tax free and USE IT OR DELIVER IT IRTOA FUEL TARE FOR USE to propelmotor vehicles operatedby said distributor, dealer or oth& #!crdon Upon the public highway of Texas.

"It is the second CssBifiCatiOn - the user-dealers who acquire liquHied.&sad useit or deliver it into.

Hon. Robert S. Calvert,page 2 

### (v-1563)

the fuel tanks of their own vehicles for use on the highway - with whom we are here concerned.

"Because of the expense and burden of installing separate fuel tanks on each delivery vehicle, these user-dealers,who delivertheir commercial cargos of IPGproducts by means of pressurepumps which are operatedby the same motor (and fed by the same fuel tank) which also propels the tank truck over the highway,have urged the Comptrollerto calculate - from a series of pump-off tests made on the various size and type vehicles operating inTexas - the overall average gallonagethat would be necessary to pump off quantities of 100 gallons,

### 250gallons, 500 gallons and 1000 gallons of the cargos and that the Comptrollerauthorize suchuser-dealers to deduct the average gallonagedetermined in such tests for each suchunit of delivery from their monthly tax remittancesto the State. They point to the second paragraph of Section 14(a) of the Act which provides 'itis the intent and object of this sectionthat the tax or taxes imposedherein on special fuels, as that term is defined, shallbe paid by persons using or consuming said special fuels to generatepower for the propulsion of motor vehicles upon the public highway of this State', and suggeststhat Section 23 of the Act, vests the Comptrollerwith sufficientregulatory powers to permit such tax accountingmethods.

"In furtherpursuance of the request,user-dealer members of the Texas Butane DealersAssociationhave made actual pump-off tests from 37 various types delivery tank vehicles, namely, International,GMC, Ford., Chevrolet, and Dodge trucks. The quantities consumed inpumping off 1000 gallons of the cargo in such tests ranged from 7/1Cth of a gallonused in one truck to 

### 2.62gallonsused in another truck. The average consumption in the differentmake trucks ranged from 1.01 gallons average in 

### 8 Chevroletsto 

### 1.56gallons average in 

### 5 Internationaltrucks, and about the samevariation
was reflected in differentvehicles of the samemake. Separate test6 from the same truck reflectedvarious amounts of consumptionunder similar conditions. From th66e tests it appears obvious that the establishing of any mean or average pump off allowance for all trucks,
or the establishing of any table of mean or average allowance6 for the different 6ize or make of trucks wouldHon. Robert S. Calvert,page 

### 3 (v-1563)

necessarilyhave to be based on estimate or guesswork.

"It is likewise obviousthat such user-dealers
are presently paying taxes on fuel consumed in such pumping operation6which would be exempt from taxation under the law if such fuel couldbe accurately measured, or couldbe supplied from separate fuel tanks, though the latter remedymay be economically inexpedient.

"In reviewing the requestwe are forced to the conclusionthat any regulationpromulgated to permit payment of the tax on an estimatedbasis because of individual cases of hardshipwould be inconsistent with the law which appears to be supportedto some extent by your OpinionNo. 

### o-2381, holding that the Comptrollerwill not be required to approve any refund claimbased upon a mere estimate or guesswork by the claimantas to the amount of motor fuel used. The Texae Butane DealersAssociation,however, has urged that the questionbe submitted to you.
'The opinion of your office is therefore respectfully requested as to whether or not Section 23 of the Motor Fuel Tax Law, above referred to, vests the Comptroller with sufficientauthority to promulgate a regulation that would legallypermit the deductions describedabove from tax remittances to covernonhighway use of fuel when such deductionsmust be based
on an estimate of the quantity so used. This department has made no departmental constructionconcerning this question other than above set out. There is no litigationpending that will determinethe answer to this question."

In answering the questionpresented,we have assumed that the use of the fuel described in your request is not for the propulsion of a motor vehicle on the public highways of this State and would, therefore, not be subject to the tax if delivered into a separate fuel tank.

Tax deductions or refundsare in the nature of an exemption and under the general rule must be strictly construed. 

### 51 Am. Jur. 502,Taxation, Sec. 495. It has been held that the right of a claimantto make an application for a tax refund is statutoryand that the procedure set out in the statuteauthorizing such refundmust be strictly compliedwith in order to entitle the claimantto that right. Att'y Cen. 0ps.

### v-1487 (1952);

### v-721 (1948);0-6363(1945); o-6195(1944);

Armstrong v.Hon. Robert S. Calvert,page 4 

### (v-1563)

Driscoll ConstructionCo-, 110 P.2d 

### 651 (colo.Sup.

### 1941).

Article 

### 7065b-23, V.C.S., provides in part:

"It is hereby made the duty of the Comptroller to collect, supervise,and enforce the collection of all taxes, penalties, costs, and interest due or that may become due under the provisions of this Article, and to that end the Comptroller is hereby vestedwith all the',power

and authority conferredby this Article. Said Comptroller shall alB0 have the power and-authority to promulgate rules and regulations,not inconsistent with this Article or the Constitutionsof this State or the United States, for the enforcement of the provisions of this Article and the collection of the
revenues levied hereunder."
Subdivision (a) of Article 7065b-14,V.C.S., provides in part:
"There is hereby levied and imposed an excise tax of Four Cents (4#)per gallon on all liquefied gas used, or delivered into a fuel tank for use, in propelling a motor vehicle upon the public highway of Texas, and Six Cents (64)per gallon on all other liquid fuels used, or delivered into a fuel tank for uBe inpropelling a motor vehicle upon the public highway of Texas, and every user-dealerwho sells and delivers liquefied @.B or other liquid fuels into
a fuel tank or tanks used to supply fuel for the propulsion of any licensedmotor vehicle or any other motor vehicle being operated or intended to be operatedupon the public highway of this State shall, at the time of such sale and delivery, collect the said tax at the rate or rates imposedupon the purchaser or recipient of said special fuels, in addition to his sellingprice, and shall report and pay to the State of Texas the tax so collected at the time and in the manner as hereinprovided. Every user-dealer shall likewise report and pay to the State of Texas, the tax at the rate or rates imposedhereinabove on each gallon of liquefied gas or other liquid fuels, hereinafter referred to as special fuels, acquired in any manner tax freeby saiduser-dealer and thereafter used, or delivered into a fuel tank for use, in propelling a motor vehicle upon the public highway of Texas.” (Emphasisadded throughout).Hon. Robert S. Calvert,page 5 (v-1563)

The rule with regard to the authority

### ofan agency to make rules or regulations is stated inVolume 1 ofTexas Jurisprudence Supplement at page 101:

"A settleddoctrine of ConstitutionalLaw forbids the delegation of legislativepowers unless express warrant therefor, in someparticular situation, is to be found in the constitution. Accordingly the Legislature cannot empower an agency to make laws. But rule-makingauthoritymay be conferred upon an agency, and this has oftenbeen done. Express authority to adopt rules and regulationsmay be given by the words of the statute. Implied authority exists, it seems,when the adoption of rules and regulations is necessary to accomplishthe purpose of the statute. So where a statuteexpressly authorizesan agency to regulate an industry it impliedly authorizes the adoption of regulationsto that end.

"When such authority, express or implied,has been conferredupon an agency, itmay make reasonable rules and regulations,proper and necesssary in the exercise of its powers. But they must be within the clear intent of the statute,and not in excess of the powers delegatedto the agency."

The tax refund section of the Motor Fuel Tax Law (Art. 706513-13)

containsan elaborate and detailed reporting and record provisionwhich was designedto prevent tax evasion and the filing of fraudulenttax refund claims. Section 13 applies only to "motor fuel" as that term is defined in Section 1 of the act and therefore does not include "special fuels".

Subdivision (I) of Article 7065b-14,V.C.S., provides that the owners of certain agriculturalvehicles may consume 

### q pecial fuels without qualifyingas a user-dealer and paying the tax. SubdiviBion (f) of the statute containsa creditprovi~ionvhere the user-dealerhas erroneouslyreported and paid
more tax than was due on account of either a mistake of fact
or law.

It is clear from the language of Subdivision (a) of Art.~Otj~bi&that the Legislature intended that liquefied gas .orother liquid fuels (special fuels)which are sold and delivered or delivered for use in a "fuel tank or tanks used to 6Upply fuel for the propulsion of any licensedmotor vehicle
or any other motor vehicle being operated or intendedto be operatedupon the public highway of this State" were to beHon. Robert S. Calvert,page 

### 6 (v-1563)

Subject to the tax. Since:~:there are no provisions for refunds or for deductions,the presumption arises that the special fuelsplaced in these fuel tanks were to be used in propelling a motor vehicle upon the public highway. To permit the taxpayer to make such deductions is, in effect, to allow a refund ~.'or an Offset to the taxes due and owing the State in the absence of statutoryauthority. In addition, it is our belief that itwould be impracticable,if not impoESibl6, for you to promulgaterules or regulationswhich would result in the special fuels referred to in your **reqU66t** being calculatedwith the required degree of certainty. Att'y en. o-p.



### o-2381(1940).

It is our opinion that you are without statutory authority to promulgate rules or regulationsallowingmotor fuel tax deductions on special fuels consumed or used for the generation of power other than for the propulsion of mot&r vehicles upon the public highways from the same truck fuel tank6 which also supplythe fuel for the propulsion of the truck upon the highways of this State.

SUMMARY

The Comptroller of Public Accounts has no etatutoryauthority to promulgate rules or regulations allowing tax deductions on special fuels consumed or used for the generation of power other than for the propulsion of motor vehicles upon the public highways from the same truck fuel tanks which also supply the fuel for the propulsion of the trucks upon the highways of this State. Art. 

### 7065b14, V.C.S.;

Att'y Gen. QB. v-1487 (1952);v-721 (1948); 

### O-6363(1945);

o-6195(1944);

o-2381(1940).

APPROVED:

W. V. Geppert Taxation Division
Mary 5. Wall Reviewing A66istant

Charles D. !&hews First Assistant Yours very truly,

PRICE DANIEL Attorney General

4f!irsA Assistant

FL:ms