OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

376 have for aon 

Wth wherein you request 

@in aitsunmoc that we 

quotr at,, length 
~onodh Julian Eontgoniery, Fage 2 

by the City of San Angelo in the transporting 

of paahengers for cozpensation and hire is such 

use*aa would entitle the City of San Acgelo 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 modus operandi of application 

for required registration of a notor vehicle ,under Artlole 

6676a-2, provides es fOl.lOws: b 

0 owners of motor vehicles, trailers 

and se&~tkilers, which are the pro@erty of, 

anQ used 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 made at the time of registra- 

.tlon by a person who has the proFer authority 

that such vehicles are the property of and used 

.oxalusively in the service of tho United St%t8S 

Governcant, the State of Texas, or County or 

City or School. District thereor, 8% the case 

may be . . . .” 

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.the United States Gomrment, or the State 

Or Texes~, or any cOu.ntp,’ or’ Cftie8 thereof, 

ouch application shall have the approval of 

the State Highway Departn;ent. . . .” 

Further, we deem It advisable at this polnt ~to 

ret out the following constitutional en4 statUtOI?y provisions tisofar as they deal with the subject of exenptions and possibly appear applicable to our problem. 

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 aeelp to exeapt from taxation all t&e property held 

by a 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 and the furniture therecf, 

and all property used, or lntscded for ertinguishing fires , Fubllc grounds and all other 

property devoted exolusively to the use end 

‘benefit or the publla shall be exempt . . . 

frcfa taxation.w 

The’enuzeration oi these certain exempted articles 

in the section 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,, 63 Ter. 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 be exenpt 

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 Tan Fellse 

de Austin va. state, ill Tex. 102, 229 ~3. x. 845,. City of 

Abilrne~ va. State, ll3 3. 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 

be viewed Ln the light of the aonatitutional provisiona 

ret out above. 

Xn the cases wherein the courts of this %ate 

dealt with aituetiona whloh imolved or pertained to one 

or more 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.’ 

Id many oases it involves the ‘laborious problem o? borderltie c0hstruCttoKl. 

The leading oese of corporation or sea 7elipe 

de Austin 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 ror governttntal purpoaea. That is riot 

the langr;age of the Constitution. This oourt 

has never aUoCtad that narrow lhitatlon and 

the weight of authority is o?poaed to it. ruch 

public property or muuiaipalltles exempt rrorn 

taxation has, and can have, no goverhzantal 

US@. The test 1s whether it is devoted exolusivs~ly to a pub110 use.* Citing Galoeation 

Wharf Co. ~5. Calvestion, 63 Tex. 14, wherein 

city owned stock 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~nw is not taxable. .:ae 

Us0 the case or Daugherty vs. Thospaan, 71 Tar. 192. 

Rowever, it is our opinion ttat we woald 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 now aonrrontlng us. That aonstitutlocal proviso and that statute aFeal: of the word “tax”. 

‘Our situation involved not a *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 stm of money 

rhich appellant is rewired to pa,y under the. 

laws, Acts 35th Le(glelature, oh. 190 and 270, 

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 

operatlng his autombile on the pub110 highways or the atate.*’ 

In other words, the fee provided for 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, we reel that 

we axe not controlled in tha rendition or our opinion by 

any aonetitut:onal or statutory provisions ooaceming or 

~mtalnlng to wtaxeam nor the oase8 eonstrulng them. 

In Louwin Y. .zoctdy by’ the Cozdssion 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 Of the 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 And operate post, offioes, eta. . . .* 

The situation berore 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 80 stated, 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 we able 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 San Ant&f0 Independent School Distrlat 

-. 
Bonorable Julian Xontgomsrp. Fage 6 

y, rater Works aoard or Trustees, 123 9. X. (2d) 661, annoume 

as r0110ws a well 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, and are 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 potRer fa of a publia nature whereas the 

’ ‘aeoond or proprietary,~tuhction partakes or the nature 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 aptly said: 

0 

. zhsre tim state steps down troa her 

soterei&t~ and &&arks with individuals in 

buslnesi e&rgrisas, the saze considerations 

do not prevail. The state 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 owned vehiolss fros regletration 
Eonorable Julian xontgosery, iwigs 7 

fees ahoulb ba visaed In the llG,ht of the faoiliar principl, that a cmtutory gsnt or exacption is 20~0s pre- 

~tmed, rzu8t be 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 pertron v&o asserts 

l right to exer?tion sDeulC be :re<ulred to *juatlfy his 

claim by the ~clearest grant,” or t..he nexpreaa provisions 

of sol=0 law." 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 authority, but of COEEOI~ right ea well. They 

aust be strictly comtruad, and not ettonded 

beyond the eqrass re;uirers.mta of the laawage u8ed. . . .* 

The basis upon %WCh th5a rule mot atrlct eon8truotlcm 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 

apoxl to EuSt§ln, aa 4 requisite of civil gommiamt., are only favored fn legislation u-pm the 

theory that tho conceseion is due 4s a mid pro 

uo for the p~rfoxance 0r a service eeZZEKrZG 

‘~ ~puDl50 an? ‘which the state thereby is selleved r: *s-to iroE the necessity oi *rforEiing, BUST 03 +, vsrxs oi chxrity and education 

freelp ar.6 charitably bestowed. . . .~ ‘<-itbout 

,that ooncurrlcr, preraqulsi te, an exemption bs- 

,ooim~ es:~entlally a &‘t of pub150 funds, at 

the axpense or the toxpyer, and indefezsible 

both tmder our pab?io policy oi equal taxation 

and our conatltutional ~xiafsguard a@inst lb 

keg01 taxation.” 

Vie believe that the registrition fse involved 

Hera ir no aore tkaan 4 reasooable oocpenoetion for the use 

Of the 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 an excaptioa 

tt.Is fse necessarily Is aonducioe or 

_._ - . . . . procuotlve or lnequarlty In acntrmution co tre aomon 

burden of vital highway construation acd .mlntenance; and 

that the Levy. and collection of t.hIs fee would aot bye a 

dIreat burden upon an Icstr~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 then exsro~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~de or beyond govermehtal functions and their sxertlom; 

and that the City or San knSe10 in, In the adsinietratlon 

of the arfairs of these notor busses, the owner Or Its 

rysten in a proprietary rather than lma publia capaaity, 

aad therefore mst assum and bear the burdeas as well~aa 

the benerits derivative frorc 8uOh ownership. 

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 writhln the strict and 

ordinary ~aanlsg or tha ter3. To this, we tust inquire or 

vhat assurance there-~rizht be that t&Is will re!naln 80 in 

the future and who Is 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, do not 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 oxvied or 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, 48 Tel. Civ. App 

6, well atatea the rollowing principle8 

'The publIa highways Of the state, Including even the ekkeeete and alleys Mthin Incorporated towns and cities belong to the State, and 
gonoTable 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 imbued with clvlc govemental runatlons as to oome within the meaning of the phrase, -. . . 

ssed exclusively In the service or the ; . . city . . .*, 

and are therefore not exempt. To hold ,otherwiae would 

seem, .to violate the spirit of the AW end defy the Intention 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 Of Term) Is 

to be determined by thb proper admlnlstrative authorities 

oharged tith that duty, after investigation and ascertalnasnt or those tarts peculiar to this situation. 

Trusting that 

your qaestlon, we are 

the above eatlsractorlly answers 

Your* very truly