OFFICEOFTHEATTORNEYGENERALOF

### TEXAS **AUSTIN**

376have 

### for aon Wth wherein you request @in aitsunmoc that we quotr at,, length~onodh Julian Eontgoniery, Fage 2

by 

### the City of SanAngelo in the transporting of paahengers for cozpensation and hire is such use*aa would entitle the City of SanAcgelo to receive exen?t license plates without tke payment of registration fees under the articles above referred to.” Artiole 067Sa-3, Vernon’s Annotated Civil’statutes, efter setting out the modusoperandi of application for required registration of anotor vehicle ,underArtlole 6676a-2,provides es fOl.lOws: b

0 owners of motor vehicles, trailers andse&~tkilers, which are the pro@erty of, anQused exoluslvely in the service of **the** 

### United States Coverhxent, the state of Texas, or any County, City or School District thereof shall apply annually to regfster,all such vehicles, but shall not be require,d to pap the registration rees herein prescribea, provided

.~ .~thet erridavit Is madeat the time of registra- .tlon by a person whohas the proFer authority that such vehicles are the property of and used .oxalusively in the service of thoUnited St%t8S Governcant, the State of Texas, or County or City or School. District thereor, 8%the case maybe

. . . .” Artiole 6675a-Sas, provides that: *Before the Qellvery of license ‘plates to anyone engaged exclusively in the service of aad operating vehicles whioh are the property of.theUnited States Gomrment, or theState OrTexes~, or any cOu.ntp,’ or’Cftie8 thereof, ouch application shall have the approval of the State Highway Departn;ent.

. . .” Further, we deemIt advisable at this polnt ~to ret out the following constitutional en4 statUtOI?y provisions tisofar as they deal with the subject of exenp

### tions and possibly appear applicable to ourproblem.

Article 8, Section 1, Constitution of Texas, prorldes; in part, as follows:

. All property In this state. ‘

. . other ;h&*municipal, shall be taxed.

. . .=Eonombll~r Julian Eontgozery, fage 3

It ~111 be observed that Article 8, 

### 5sction 1, would aeelpto exeapt from taxation all t&e property held bya nuniclpsl corporation; 

### however, Artiole 11, Seation 9, providea:

l TM property of c~uaties, cities and towns, owred and held oally for jmblio purpores, rash as publio bulldl~ga acd the altea thereror. Fire engines andthe furniture therecf, and all property used, or lntscded 

### for ertinguishing fires , Fubllc 

### grounds andall 

### other property devoted exolusively to the use end

‘benefit or the publla shall be exempt

. . . frcfa taxation.w The’enuzeration oi these certain 

### exemptedarticles in thesection of the Conatltutlon quoted was designed to indicate thl aharaater ct thinm, and the wee to which they euat be appropriated a8

### a condition precedent to erezptptlon. See Calveston %hart Co. va. CalvestOn,, 63Ter. 14. Theretore, clearly there my be property omed by a mnicipal aorparation subjeat to taxation. (Id)

Betired Statutes, 1025, Artlole 7150, provides: .The rollowing promrty mhall 

### beexenpt from tam.tion, to-wit i *All property, whether real or personal, belonging exoluelvely to this State, or any political eubdiviaicn thereof

. . . .* Countlea, aities, and t&as are ~unioipal aorgorations. Constitution, Article 11. They are political subdlrlaions of the State. Id. Alto see Corp. of TanFellse de Austin va. state, ill Tex. 102, 229 ~3.x. 845,. City of 

### Abilrne~

va. 

### State,ll33.i?.(2d) 

### 632. Asaumlng that the Legislature tas the authority to enaot these statutory provisions greeting exeoptlona, it is perforce of the coaatitutfonal provision contained in Article a, Seotlon 2, -Hheretmder "The Legislature my, by gdceral laws, exeqt iron taxation public property used r0r publia purposes.* 

### 3ereroro, shy consideration OS these statutes enaoted by the Legislature pursuant to the power granted it in Article 8, i”ection 8, should, if possible,Eonorable Julbn Xoatgonery, Page 4

beviewed Lnthe light of the aonatitutional provisiona ret out above.

Xnthe cases wherein the courts of this %ate dealt with aituetiona whloh imolved or pertained to one 

### ormore or ths statutory and/or constitutional pzoviaions rsterred to above there has been corsiatent dffficulty snoouhtered la the 

### proper eecertaimzert of r&at conatltutea *public property* aad further Mat ia,a’*publio use.’ Idmanyoases it involves the ‘laborious problem o? borderltie c0hstruCttoKl.



### The leading 

### oeseof corporation or 

### sea7elipe deAustin 

### oa.State, 

### supra,advanoes the rollming as a helpful aid to possible solution; Fhillipa, C. J., speaking r0r the suprexs courts

“The test is not whether the property ir used 

### rorgovernttntal purpoaea. 

### Thatisriot the langr;age of the Constitution. This oourt has never aUoCtad that narrow lhitatlon and 

### theweight of authority is o?poaed to it. 

### ruch public property or muuiaipalltles exempt rrorn taxation has, and can have, nogoverhzantal US@. Thetest 1s whether it is devoted exolusivs~ly to a pub110use.* Citing Galoeation Wharf Co. ~5. Calvestion, 63Tex. 14, wherein city ownedstock in a wharr corporation waa. held exeqt iron taratlon under the,Constitution. Chier Justice Fhlllips oozzeating on that oase said:

*Xt would be dilfioult to rind anything vgovrrmental* in the pub110 use or a wbari.” 

### The San ?elipe de Austin ~830 hold thet lend 

### granted the zumiaipallty b? Xexlco and used by tkb lnhabitants thereof ea a ;ubllo R~~zx~nwis not taxable. .:ae **Us0** 

### thecase or Daugherty vs. Thospaan, 71 Tar. 192.

Rowever, it is our 

### opinionttat wewoald aot 

### be jUStAiled in looking to Article 11, Zeation 9, ot the Conlititutlon 

### nor Artlole 7153, Revised Civil Statutes, 1925,
ror a.solutizm of the issue nowaonrrontlng us. That aonstitutlocal proviso and that statute aFeal: of the word “tax”.
‘Oursituation involved 

### nota 

### *tax* but a Wrs&istra,tion* oT 

### l lioeme isa** in fhe case of atifns vs. State iiighvmp Ze-Eonorable Julian ~olltgoEery, Page 5

PrUent, 201 S. T;. 226, in uphold& the validity of the original act requlritig registration 0r riotor uehlcles, the court said:

%e

. . . oonclude that the stmof money rhich appellant is rewired to pa,yunder the. laws, Acts 35th Le(glelature, oh. 190 

### and270, as axe~dsd at Plrst Called:fEesslon, 35th Legislature, ah. 31, here involved is not,o tax

. . ., but a license ree r4r the privil0go or 

### operatlnghis autombile on the pub110highways or the atate.*’ In other words, the fee 

### providedfor in Artlale 667ba-1 et se@ I;artakw tiot or the nature or sn exaction .deslgned prlxarily ror revenue raising purposes: i.e., a tax, but Is a reasonable tipost levied and required to be *id as a oonditfon prsoedent to*the~privilege oi using fhe highways of this Xtats.. Consequently, wereel **that** weaxe not controlled in tha rendition or our opinion **by** anyaonetitut:onal or statutory provisions ooaceming or ~mtalnlng to wtaxeam

### northe oase8 eonstrulng them.

In 

### LouwinY..zoctdy by’

### theCozdssion or 

### Appeals, 12s 9. Vi. (2d) 929, the court held that a person owning and opexatlhg xotor vehicles under oontractwith ths fEedera Oovernzent ror the **pUrFOSfJ .0r**  transportlnr; the mall was rxexpt fror the payxect Ofthe ragiritrat~ion fess tax the tald vehicles under the term of the article, supra. Tha court so held because it found that the *practical eifesatoi the inpoeitlon or such an exaotfon’ as a regfetration fee would be to ?increasa the oost to the Enlted States Or axocution Or Lts poxer and duty (:eotion 8, oh. 7, Art. 1) to.eotabllsh Andoperate post, offioes, eta.

. . .*

The situationberore t,:e court in the iouwein sass may be distinguished fro;;,our ract situation in this IDBonert In the Louwein case the service or activity in-

‘rolved, as the court 80stated, was pursuant to a *duty or power* imposed upon the i?‘oderal Covernzent by exFresa provision of the United states Constitution. 5?vhere in the laws of this State are weable to find any provision or prorislona wkinq It the "power or duty* **or** a sunicf:al 

### 4orporation to ostabllsh, operate, or wintaln a.oystu of inotor bussea-

me caee or SanAnt&f0 Independent School Distrlat

-.Bonorable Julian Xontgomsrp. Fage 6

y, rater Works aoard or Trustees, 123 9. X. (2d) 661, annoume as r0110ws awell kmwh principal or law:

*A rtunicipel corporation IS Invested 

### with two klods ot powera or'functlons, ~overnzental and proprietary. Coveruzental fuactioos are exeroised in the ad&niotration ct the arraira which affect the publia generally, andare perfamed **by** virtue of povms coaterred upon the city as an agency or the. state. imprietary iuuctione pertain to buoinese arralra adzinistered iOr the special benefit Of the urban co=- Sunity mbraced within tha corporate boundaries.” The first potRerfa of a publia nature whereas the ’ ‘aeoond

### or proprietary,~tuhction partakes or 

### thenature or a private power.

Qt 

### the exercise 

### of its private powera, generally the eunicipal oorporation is treated 8s a private corporation or Individual and is ~aubjsct to alL t’ne obligations and is entitled to all the benefits or the private law.” gee

,.Ea~ufLlin tiunicipal corporation, Vol. 1, Ssa. 

### 564,, at

### p. 905. In the ann&ated, note in 3.8. i. R.~

### 1439at p. 144l;:tt la aptlysaid:

0

. zhsre tim state steps down troa 

### her soterei&t~ and &&arks with individuals in buslnesi e&rgrisas, the saze considerations do not prevail. Thestate does not enEage 13 suoh enterprisee 

### ror the benefit or the state as a state, but ror the banerft 0r individuals
. l . .- Burthot in

### the wim note it 

### ie observedr 

### When an 

### lncose or FrorltAe derived iron malolpally oxned property, not as an incident to its use as a rublie ag~noy, but 

### fro& its use prinarlly and principally ‘for the purpose or producing revenue, it casuot be said to be devoted to public use, and is, thererore subject 

### to taxation’.* (Citing xiwerous oases) KS.are inclined to think mat Article 6673a-3, lupra, exempting publicly 

### ownedvehiolss fros regletrationEonorable Julian xontgosery, iwigs **7**

fees ahoulb bavisaed In the llG,ht of the faoiliar principl, that a cmtutory gsnt or exacption is 20~0s pre- ~tmed,rzu8tbe clearlp conferred ln.;lain snd unnzblguous term, and **should bs**  strictly ccnstrued. The ;over of a rtate 

### to levy fees or tar&s is an lnhererit attr:bGte of Its sor3reigaty esd “essetitial to the perpetuity of it8 

### llLst5.tutloa- ." This being true, the pertronv&oasserts l right 

### to **exer?tion** sDeulC be:re<ulred to ***juatlfy his**  **claim by**  the ~clearest grant,” or t..he**nexpreaa** provisions of sol=0law." See **C.** S. 393, 334, and cited ~4848. **26** 8. C. L. 3113,Eeo. ~274.

Chici Zustiae Cureton, in the aase ot Jones **Y.** W;lae, 45 1. E. (2d), X0, 121 ?ez. 94, 74+. L. 8. 983, : a?%expt50m fro= taxation are regarded 

### not only as in **EeroZatfon of**  **sovereign au**  thority, **but of**  **COEEOI~**right eawell. They aust be strictly comtruad, and not ettonded beyond the eqrass re;uirers.mta of the laawage u8ed.

. . .* Thebasis upon %WChth5a rule motatrlct eon**8truotlcm** rests 5s ably ergmssed **by a**  **qaotatian in**  **7 Tetas**  **Law !&view**  **3x25:**

aEsezaptlons imm the burdens of tasation which the groat mssea of the people are called apoxlto EuSt§ln, aa 4 **requisite** of civil gommiamt., are only favored fn legislation u-pmthe theory that tho conceseion is due 4s a mid pro uofor the **p~rfoxance** 0r a service eeZZEKrZG

‘~~puDl50 an?‘which the state thereby is selleved r: *s-to iroE the necessity oi *rforEiing, BUST +,

03vsrxs oi chxrity and

### education freelp ar.6charitably bestowed.

. . .~‘<-itbout ,that ooncurrlcr, preraqulsi te, an exemption bs- ,ooim~es:~entlally a &‘t of pub150funds, at 

### theaxpense or the toxpyer, and **indefezsible** both tmder our pab?io policy oi equal taxation andour conatltutional ~xiafsguarda@inst lb keg01 taxation.” Viebelieve that the registrition fse **involved** Herair noaore tkaan4 reasooable oocpenoetion for the use Ofthe highwaya at t&is Srits; that **tha** funds derived thereriorp**are** expended ror ths purposn nf ooastTuotlon, matiten-~oaorable Julian



### mae, aod 

### repair fro? the payamt



### _. Of Of our highway systez; that anexcaptioa tt.Is fse necessarily Is aonducioe or _._ - .. .. procuotlve or lnequarlty In acntrmution co tre aomon burdenof vital highway construation acd .mlntenance; and that the Levy.and collection of t.hIs fee would aot byea dIreat burden upon anIcstr~eatallty of governxeutal adplinlatretion, but Is only a remote, If any, Influenae upon the sxeroise qf the runations or ~overnsent~.

It would appsar, turthar, that thenexsro~tions prorlded **i6r $.II** **hrtldle** 6676a-3‘ aru aired at the proteotlon of the ogeratlons or the @marnzent and the Ixmnltp there presarlbsd doos not extend 

### nor apply to **asythi&g** lying autsi~deor beyond govermehtal functions and their sxertlom; and that the City or SanknSe10 in, In the adsinietratlon of the arfairs of these notor busses, the 

### ownerOrIts rysten in a proprietary rather than lma publia capaaity, aadtherefore mst assum and bear the burdeas as well~aa 

### the benerits derivative frorc 8uOhownership.

It ~I11 be urged, perhaps, that the motor bnsaee are'operated~on a non-profit basis and therefore cannot be alaesed as'a Froprletary aotirlty writhlnthe strict and ordinary ~aanlsg or tha ter3. To this, wetust inquire or vhatassurance there-~rizht be that t&Is will 

### re!naln 80in 

### the future and whoIs to ordain ,the 

### point at which the 

### buslnese ceases ~,

to be non-prorttable and become 

### profitprodaoing. Further, 

### It my be coAended that them buaaes Ope&ite solely WithIn the ConfInes of the City and ooziaequently, donot travel upon the ~hfghways. artlala 6673a-l(a), Ver~oB's hnmtated Civil StatuteU, provides:

*Vublla Elghway' shall Include any road, Wreet, mar, thoroughfare or bridge in this, State not privately oxviedor controlled for the use or rehiolas over which the State haa legislative jurisdiction under its police 

### power.w The case of City of Taxarkana v. Southwestern Telephone k Telegraph Co., 106 S. vi. 915, 48Tel. Civ. App 6, well atatea the rollowing principle8

'The publIa highways Ofthe state, Includ

### ing even the ekkeeete and alleys Mthin 

### Incorpor**ated** towns and cities belong to the State, andgonoTable Sulian h?ontgomery, Rage 9

the eupreme power to regulate and control them Is lodged with the people through their reprerentatlves -- the Legislature.” In oonalusion, you are .advlsed that, In our opInion,munlci~lly okqed and operated motor busses, whose only alalm to exemption from the payment of the reglstratlon feea provided ior in Artiale 6675a-2, et seq. Is that they are elyaged In lntra-aitg:transportatlon or fares, are not sufficiently imbuedwith clvlc govemental runatlons as to oomewithin the meaning of the phrase, -. . . ssed exclusively In the service or the ; . . city

. . .*, andare therefore not exempt. Tohold ,otherwiae would seem,.toviolate the spirit of the AW end defy the Inten**tion** of the Legislature.

The Incidental question of whether these partlcslarmotor vehicles are to **be** claseed,‘ror the puqoaes or raglstratlon, as %Otor Bussee~ 

### or WFasseager Cars” under 

### the provisions 

### of Art1018 6675a-l.(Deilnltion OfTerm) Is to

### bedetermined by thb proper admlnlstrative authorities oharged tith that duty, after investigation and ascertalnasnt or those tarts peculiar to this situation.

Trusting that your qaestlon, weare the above eatlsractorlly answers



### Your*verytruly