OFFICE OF THE ATTORNEY GENERAL OF TEXA8 

AUSTIN 

Dear Kr. Bhepparbr 

genoy Hprlinee, IZIO. may smplo~ euoh oontraotors and snginesrs 

and enter into ruoh agrmment ritb then a~ It daema advisable, 

._,. - . ..__ ._ ~.. 
Hon. Wo. H. Sheppard, Page X 

ia thr name of the Defonrr Plant Corporation, ald paroham 

maohlnery ana rquipmmt nror8rar~ for the projrot, rubJeot 

to thr written approval or thr Derenrr Plant Oorporation. 

IB all or itr 6p8ratloer uearr l uoh oontraot, the 

morgreo 

I 

PlpwlSnrr, xno. rot8 aa l g o eror t the Dofoe8o Plant 

Oorporrt on, The DOrOB OOrpWatloe 16a8.8 rOtOr tehiol88, 

rhioh are ured b thr Ourgrnoy Plprliwr, Ino., aed orrtde 

ooetraotorr or tI 

ruoh pi 

8 Dei8e80 corporation $n the oonrtmotloe of 

the pub r lo highway8 Of the 8tato of T8x.a~. Othrr motor wllne8. Bone or the80 leaed retdolor arr a804 upon 

hlolea are leawl by oontraotorr from their mar8 aed 8ro 

used la the ooertruotlon work, but thr Mien88 Corporation 

rrlmbureer ruoh oontraotorr for the rentals paid br them, 

YOU NqU88t Our OplZllOB UpOB the iOmwing 

paertlonrt 

1. .X8 thr Dbfsnre Plant oorparatlon llablr 

to the Btatr ot Texar for th8 tar lmpored upon 

motor fu81 ured upon th8 pub110 hlghwryr or thlr 

State in rehioler leased br it and used by the 

ltmrgeno~ Pipeliner, Ino. and its other oontraotorr 

in the ooerttuotlon of it8 pipeliner? 

t. 18 thr lhergeno). Plp8llne8, Ino. llablo 

to thr Btate of T8xas for thb u8e tax Imposed upon 

motor rue1 seed upon the pub110 highway8 0r thir 

state le rehlolrr leame& by .the Dsf8e8e Plant corporation ae4 ored by the lmrgenor Plprllnsr, Ieo. 

urd thr Dotoe Plant Oorporstlon*r oontnoton in 

thr ooertruotlon of rpoh ~l~rllerr? 

31. Are the oontnotor8 llrblr to thr State 

of Toxas for thr ne.0 tar lapore& upon motor rue1 

u8e6 apoe the pabllo highway8 oi thlr Stat6 in 

tehioler lsaesb by them troa third persona and 

used la th8 oonrtruotlon ot th8 plpslleer for the 

Defense Plant Corporation, whgre suoh oorporation 

relmbur888 suoh oontraotor8 for rdntal8 pai& the 

owner8 of ruoh Tehlolrr? 

.- 562 
Roe. 000. H. Sheppard, Page 3 

ne enswer your rlrat queetlon, no. 

The D~fOXiBO Plant Corporation was organized under 

Seetim BObb, Title 15 U. 8. 0. A. The purpore (am rtated 

In thr AOt) want "In oraer to aid tha aorernment or the 

Welt06 State.8 ia it8 national det~ero progran . , .* 6eotioe 

610 ex roaaly prortded that auoh Oorporetion should bo exempt 

from a P 1 8eht8, Poe, storage, end purohaae terra impo88d by 

the United Hater, or by any state, County munio~pallty, or 

looel taring euthorlty. Real propert of ihe Corporation wan 

medo rubfeot to State, County, munloi 1, or looal taxation 

*to the 84m4 oxtent eooording to ite k clue am other net property In taxed,* 

A6iaO from this expre88 aongre88lonel exempting 

from taxation, we 6,re of the opinion that the Dersnee Plant 

Corporation would have the same 8xemption upon thr dootrine 

0r implied DOUBtitUtiOU4l’l~U4~t~ of the Federal GoverrnWnt 

end it8 inetrumentelitles from state taxation, )LoGullooh V. 

Caryland, 4 meet, 318, 4 U. 6. (L. Ed.) 679; 26 R.C.L. 95. 

The legal lnoiaenos of our motor fuel tar 18 upon 

the ultimate user or oonaumer or the motor fuel for the propulsion of motor vehiOl88 upon the highway8 or the state ot 

Texae, end not upon the seller or vendor of motor fuel: Artlole 7065b-z(e) v. A. c. s. seotlon e(a) protlaee: 

"Ko tax Oha11 bs lmpoeeb upon the mati, 

use, or dirtribution or any motor luel, the 

1lEpO81S@ or whloh would oonetitu *an UIllEWtul burden on interstate oomneroe ahd whioh q 

18 not rubjzot to be taxrd under the Cmtution of th 5% t f Texas and the Unltsa 

~teteBl' (~;h:8f8°0Ur8). 

fn Faders1 Land Be& Of Sifti& :'t?;ll v. Binmark Lumber 

co., 314 u. S. 95, fj6 L. Ea. 65, tbs court eala: 

"The Federal GoVerW&f le oiie:i3 delegated 

powers, end from that lt neoerearily fOllOW8 that 

any oon8tftuti0nal ererol8e or Its delegated power8 
564 

XOn. 0.0. I?. shoppmd, PIgO (1 

18 (OVeFll@4Bt41 , . . . It 4180 iO11OwB thd 

rh8a C)04n00 ooa8tltutloMlly orrat I oororation throa& whloh tha Fodrral Gmornmoat 

L stulll 8Ot8, the rOtiVitl.8 Of 8uOh OOrpOrrtioa era ~orrrrrmtal~ . . .* 

And La Pittma v. Uoma Owner8~ Loan Corporatloe 

308 0. 9. r1 84 t. u. 11, 60 S. ct. 15, lE4 A. L. R. lE&, 

the Court uidr 

“CO 

2 

MOB b48 XbOt 

l oorpora loa to h8Ui 

the porot to or~ato 

thr poriozaaaor OS 

~otwamatel funotioaa, but bra the 

teet the operebtonr Ohua validly aat Ii 

owor to proerird. ‘A 

pwar to onrtr~lnplie8 l p o wer to ~iteBWV@.' 

Wcullooh r:xerPlead, rupn (4 sheet. p. 4~4, 

4 L. M. 

11~ ecuaa d 

Thla power to promerr aeo~aaarhln thr range of thr l x p r epow0 rr 

OOBfO~Oud p o OOn ly r 88t0 saakr l U 14W8,wbieh 

ahall he aw*rrry ead promr ror orrrylag lnb 

l xmoutioa all pawn rented br the Conrtltutloe 

la thr Oorarnaeat or the United Staten. aonet. 

Art. 1 8.8. 8 

powor 40 protroi 

In thr exrrolw OS thlr 

ihi iawfal l otlrltler of lta 

Con@‘888 h48 th8 pt%Mr to "protidr iOr the OodvDoD 

bsfWU0 . . . di tha vBit.6 StatW.* COllBt, hart. 1, 8.0. 8, 

It in l ubaitt~d that thla tunotloe $a~ gownmoatal. The Fedora1 GOVlrnDsPt hAb OhO84n t0 $WiOm thlr fUBOtiO;B&i ;;;Bt 

prrtlellf through the miO?IB~ Plant CW'pOrEtiWh w 

pOrtlOB 8 l OtiViti@B WBt b0 r4gBrdOd 44 ~OTOPtWBt8l, tad 

antitbd to i&iUBity rr0t8 8teta texatloa. 

to tax 11 duo upon 4 8414 0r motor rba to the 

Derrnrr Flant Gorporetlon. The purohedsr Of mOtW fuel by 

thr tarr~r~oy Plprllner, Ieo. 18 ln 108 oepeolt 88 agoat tar 

thr mr0tt8s Plant C.orporetloa. Thr notor r401 I: 8 4oturllP pi6 
*- 

tw red ir thr property ottb Detinro Plant Corporation, 

Ph. trot thet it allow thir 6arollnr to bo ared la lamed 

rrhlolrr upon the hhhuayo ot the Stat, ot T~xar by tb 

zBor&onoy P1Qa1ixlb8, III@, and 1tr other Qontt~Otor$ La th 

Wnrtrrletion ot thrro ~lpoliaw doer not a&e it liable tar 

the a80 tax brorurr It lr rtlll dleahrrgl~ ltr Federal 

flln0t10na. 

He mawe* your seoond qwiotlon, no. sin00 tb was 

trrrgrnor klpelinrr, Ino. 1s rotlng 41 an went tor the 

DOten@@ Plrnt OOrporation ln all of it0 oporatlonr, u* are 

d the oplnlon that it ir sot llablr for tbr uno tar impor. 

tymgloc turl ared upon the gubllo highmy in the Gtatr 

Thb motor ,turl b&a-s to the Detonsr Corporation. 

It l\lrr&h.r tha llmergonoy Fiprlirer Ino. utd lta other oontraotorr with motor rohlolrr tar th.fr 08. in the oonrtruotlon 

or it0 plp4llnrr. Glnor the uoa of ruah notor trht8ler br 

such ooatraotorr 18 tar th0 8olr benoift or the XhiWm 'Flat 

Corporotioa, *hiOh ir rxproo8ly ereapted from the payuent of 

mctor Sue1 tams, and lr ongaged in tha alecharge 0r a frdrml 

tuDotlon, wb do not think that cuoh oontraotorr or0 liable tor 

the use tax. 

PIa are unable to a8ver pur third quertion bsosum 

we do not bavr rutfloicmt taotn upc%i uh~loh to base our opinion. 

It the leotur ice1 lr rup lha 

!. 

shoes@ oontractorr by the Duiwirr 

Flaarrt Oar oration unbar to ocmtraot, rnd no title to ruoh 

mo tc a r tuuP r l wr vortr in thorr oontraotorb, tha we oan not 100 

how the ooMzactora mad be limblo tar the payment of the motor 

ia*1 ta1. Cm thr otbsr head it therm oonthotorr twoharm tho 

rotor tuel and t16e it upon td hi#l!wrrr et TBma Ia rrhlolrr 

leaad from thir4 breonr then va boltire that uoh oontraotore would bo lirblr tar Ihr motor iwlr tar rr6wilrre o? 

whothor they two rolmbunod to? the rantalr paid for thsrr 

Trhloler or sot. PI ~111 be s$@d to &ire 7'00 l ROW detinitc, 

u11)u.r to thlr qurstion if you ail1 rupply II@ IPOM trots). 

Truding that the rbore fully anawl~r8 your :uotttlans, 

we are 

Your8 tory truly