. , 

TTORNEY G~ENERAL 

TEXAS 

PRICE DANIEL 

ATTORNEY GENERAL. 

December 22, 1952 

Eon. Robert S. Calvert 

C&roller of Public Account6 

Aurtin, Texas opinion No. v-1563 

Re: Authority of the Comptroller to promulgate 

a regulation allowing 

tax deductions to offset 

estimated non-highway use 

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 propo66d method of accounting 

for the tax imposed by Section 14, Article 7065b, 

Vernon's Annotated Civil Statute6 upon the highway 

u6e of 'Liquefied Gas' (Butane-Propane) and 'Other 

Liquid Fuels' (Diesel Fuel), which became effective 

September 1, 1951. These two products are further 

defined in Section 1,of the lawas 'Special Fuels'. 

"The law imposes the tax upon the USE, or the 

DELIVERY INTO A 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 in propelling said 

motor vehicle upon the public highway of Texas; e e D 

and (2) shall also mean and include any distributor, 

dealer or other p6r6,onWhO shall acquire any special 

fuel tax free and USE IT OR DELIVER IT IRTO A FUEL TARE 

FOR USE to propel motor vehicles operated by 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 deliver their 

commercial cargos of IPG products by means of 

pressure pumps which are operated by the same 

motor (and fed by the same fuel tank) which also propels the tank truck over the highway, have 

urged the Comptroller to calculate - from a series 

of pump-off tests made on the various size and 

type vehicles operating in Texas - the overall 

average gallonage that would be necessary to pump 

off quantities of 100 gallons, 250 gallons, 500 

gallons and 1000 gallons of the cargos and that 

the Comptroller authorize such user-dealers to 

deduct the average gallonage determined in such tests 

for each such unit of delivery from their monthly tax 

remittances to the State. They point to the second 

paragraph of Section 14(a) of the Act which provides 

'it is the intent and object of this section that the 

tax or taxes imposed herein on special fuels, as that 

term is defined, shall be paid by persons using or 

consuming said special fuels to generate power for the 

propulsion of motor vehicles upon the public highway 

of this State', and suggests that Section 23 of the 

Act, vests the Comptroller with sufficient regulatory 

powers to permit such tax accounting methods. 

"In further pursuance of the request, user-dealer 

members of the Texas Butane Dealers Association have 

made actual pump-off tests from 37 various types delivery tank vehicles, namely, International, GMC, Ford., 

Chevrolet, and Dodge trucks. The quantities consumed 

in pumping off 1000 gallons of the cargo in such tests 

ranged from 7/1Cth of a gallon used in one truck to 

2.62 gallons used in another truck. The average consumption in the different make trucks ranged from 1.01 

gallons average in 8 Chevrolets to 1.56 gallons average 

in 5 International trucks, and about the same variation 

was reflected in different vehicles of the same make. 

Separate test6 from the same truck reflected various 

amounts of consumption under 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 would 
Hon. Robert S. Calvert, page 3 (v-1563) 

necessarily have to be based on estimate or guesswork. 

"It is likewise obvious that such user-dealers 

are presently paying taxes on fuel consumed in such 

pumping operation6 which would be exempt from taxation under the law if such fuel could be accurately 

measured, or could be supplied from separate fuel 

tanks, though the latter remedy may be economically 

inexpedient. 

"In reviewing the request we are forced to the 

conclusion that any regulation promulgated to permit 

payment of the tax on an estimated basis because of 

individual cases of hardship would be inconsistent 

with the law which appears to be supported to some 

extent by your Opinion No. o-2381, holding that the 

Comptroller will not be required to approve any refund claim based upon a mere estimate or guesswork 

by the claimant as to the amount of motor fuel used. 

The Texae Butane Dealers Association, however, has 

urged that the question be 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 sufficient authority to promulgate a 

regulation that would legally permit the deductions 

described above from tax remittances to cover nonhighway use of fuel when such deductions must be based 

on an estimate of the quantity so used. This department has made no departmental construction concerning 

this question other than above set out. There is no 

litigation pending that will determine the answer to 

this question." 

In answering the question presented, 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 refunds are 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 claimant to make an application for a tax refund is 

statutory and that the procedure set out in the statute authorizing such refund must be strictly complied with in order to 

entitle the claimant to 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 Construction Co-, 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 vested with 

all the',power and authority conferred by this Article. 

Said Comptroller shall alB0 have the power and-authority to promulgate rules and regulations, not inconsistent with this Article or the Constitutions of 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 in propelling a motor vehicle upon the public 

highway of Texas, and every user-dealer who sells 

and delivers liquefied @.B or other liquid fuels into 

a fuel tank or tanks used to supply fuel for the propulsion of any licensed motor vehicle or any other 

motor vehicle being operated or intended to be 

operated upon the public highway of this State shall, 

at the time of such sale and delivery, collect the 

said tax at the rate or rates imposed upon the purchaser or recipient of said special fuels, in addition 

to his selling price, and shall report and pay to the 

State of Texas the tax so collected at the time and 

in the manner as herein provided. Every user-dealer 

shall likewise report and pay to the State of Texas, 

the tax at the rate or rates imposed hereinabove on 

each gallon of liquefied gas or other liquid fuels, 

hereinafter referred to as special fuels, acquired 

in any manner tax free by said user-dealer and thereafter used, or delivered into a fuel tank for use, in 

propelling a motor vehicle upon the public highway 

of Texas.” (Emphasis added throughout). 
Hon. Robert S. Calvert, page 5 (v-1563) 

The rule with regard to the authority of an agency 

to make rules or regulations is stated in Volume 1 of Texas 

Jurisprudence Supplement at page 101: 

"A settled doctrine of Constitutional Law forbids the delegation of legislative powers unless 

express warrant therefor, in some particular situation, is to be found in the constitution. Accordingly the Legislature cannot empower an agency to 

make laws. But rule-making authority may be conferred upon an agency, and this has often been done. 

Express authority to adopt rules and regulations may 

be given by the words of the statute. Implied authority exists, it seems, when the adoption of rules 

and regulations is necessary to accomplish the purpose of the statute. So where a statute expressly 

authorizes an agency to regulate an industry it impliedly authorizes the adoption of regulations to that 

end. 

"When such authority, express or implied, has 

been conferred upon an agency, it may 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 delegated to the agency." 

The tax refund section of the Motor Fuel Tax Law (Art. 

706513-13) contains an elaborate and detailed reporting and 

record provision which was designed to prevent tax evasion and 

the filing of fraudulent tax 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 agricultural vehicles may consume 

q pecial fuels without qualifying as a user-dealer and paying 

the tax. SubdiviBion (f) of the statute contains a credit provi~ionvhere the user-dealer has erroneously reported 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 

.or other 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 licensed motor vehicle 

or any other motor vehicle being operated or intended to be 

operated upon the public highway of this State" were to be 
Hon. 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 fuels placed 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 statutory authority. In addition, 

it is our belief that it would be impracticable, if not impoESibl6, for you to promulgate rules or regulations which 

would result in the special fuels referred to in your reqU66t 

being calculated with 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 regulations allowing motor 

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 supply the fuel for the propulsion of the 

truck upon the highways of this State. 

SUMMARY 

The Comptroller of Public Accounts has no 

etatutory authority 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