February 20, 1950 

Hon. Jimmy P. Horany, Chairman 

Subcommittee on Revenue and Taxation 

Revenue and Taxation Committee 

House of Representatives 

51st Legislature 

Austin, Texas Opinion No. V-1909; 

..! 

Re: The adequacy of designated. 

provisions in House Bill No. 

Dear Sir: 7. 51st Leg., 1st~C.S.. 1950. 

Your request for an, opinion reads as follows: 

“The Committee desires a general ruling from 

your Department as to the. sufficiency and general adequacy of the term ‘gathering’ as defined in Subdivision 2 of Section 1. page 2 of this bill, and also.as to 

the adequacy of Section 2. page 4 in preventing the tax 

imposed by this bill from being passed on to the producer.” 

,Subdivision 2 of Section 1 of House Bill No. 7 reads as 

follows: 

“(2) ‘Gathering’ gas shall mean the first, taking 

or acquiring of custody, possession, title or control. 

in Texas, from the producer of gas produced in this 

State. after the severance of such gas from the earth, 

and after the passage of such gas through any separator, drip, trap or meter that may be located at or near 

the well, and prior to its admission into any transmission line for any purposes whatsoever .except those herein provided. Provided that in the case of gas containing 

gasoline or liquid hydrocarbons that are removed or extracted in commercial quantities at a plant by scrubbing, 

absorption, compression, or any, similar process, the 

term ‘gathering gas’ shall mean the first taking or the 

first retaining of possession of such gas for transmission through a pipe line after such gas has .passed through 

the outlet of such plant.” 

Section 2 of the Bili reads, in part: .’ 
Hon. Jimmy P. Horany, Page 2 (V-10’09) 

“Provided that the, tax herein levied being strictly a privilege tax for the privilege of engaging in such 

business of gathering gas produced in this State shall 

in no case be deducted from any payments due by gatherers to producers of gas.” 

It is fundamental that laws must be certain and definite in order to be valid. 3 

In State v. International and G. N. Ry. Co., 107 Tex. 349, 

179 S.W. 867 (1915), the Supreme Court said (at page 868): 

“The provisions of the acti in order for it to be 

enforceable, should be plain enough in meaning for 

those operating the industry affected by it to know and 

realize whether by engaging in an act of repair they 

would breach its terms. If the act meets and fulfills 

the requirements of this rule, it would be sufficiently 

definite in meaning to be operative. If it is not sufficiently plain in meaning for those engaged in the line 

of industry affected to so understand its terms and provisions, then the act would and should be held void for 

uncertainty, as it would be inexcusable for a government to fine or punish its citizens for an infraction of 

a law which in its terms could not be understood by 

them. But it is equally true that, if the act of the Legislature is as definite in meaning as the nature of the 

subject would allow, no more than this should be expected to meet the rule of certainty required; to hold otherwise would be to nullify the power of the .Legislature to 

legislate at all on a proper subject for its consideration.” 

The word “gathering” as used in House Bill No. 7 is defined in language that is specific and definite and its meaning can be 

clearly understood. 

Subject to constitutional restrictions the Legislature has 

the inherent power to determine the persons, property, and privileges to be taxed, the mode, form and extent of the tax, and the manner 

and means of enforcing the tax. 51 Am. Jur. 73, 85. 432, Taxation, 

Sets. 43, 55, 409. 

The Supreme Court of Alabama is upholding a provision 

in a sales tax statute requiring the retailer to add or “pass on” the 

amount of the tax to the sales price said: 

“The taxpayer, the seller, is charged with the 

mandatory duty to’ add the amount of the tax to his 

sales price, and to collect it from the purchaser along 
Hon. Jimmy P. Horany, Page 3,(V.-10.09) ,:. .~ 

with the sales +Pice. .‘Hi?has’,all then a&hority:to coi- so 

lect this added sum whiclrhe has to c.ollect,.his. sales 

price. The flaw intervenes”and adds the amount of’the 

sales. tax which th’s seller must pay to the state to the .’ 

price he niust collect from the purchaser.” Doby v. 

State Tax Commission, 234 Ala. 150. 174 So. L33. 237 

* (Emphasis adaed throughout.) 

‘. 

The Supreme Court of Illinois has upheld a statute providinn~that the’ retailer could not collect the retailer’s occunation 

tax from the purchaser. Thatxurt in People’s Drug Shop v;,tioysey, 384 111. 283, ~51 N.E.2d 144, 146 (1943) , said: 

- 

I 

(. 

* 

. a . that the tax imposed is upon retailers an& .i ~. 

not upon consumers, and that the sole duty of paymg 

the tax,rests upon the former. It follows necesSarily .‘. 

that plaintiff was without legal authority to collect fro&~ 

its customers: the defendant. -then challenged item& in’& 

invoices representing additional charges ftii retail&s 

occupation taX;” 

-. 

Section 2 of the Bill piovides that the gathering tax cannot be ‘passe8 on” to the producer. 

erer ” 

The implication is that the “gathmust either absorb the tax or “pass it on” to the transmission 

pipe line operator to be ultimately’assumed by then consumer: 

.It is our contilu&on that the terniinology of Subdivision 2 

of Sectioti~ l~and’~of Section 2 of the Bill is Sufficient to d&&mine the 

legislative intent and i$ adequate to accomplish the purl&e’s for which 

they were‘ included in the 5ill. The 1egislatiLe inter+, when ascertained, is the law. City of Wacb v. McGraw. 127 Tex. 268. 93 S.w.2d 717 

(1936); Lone Star Gas Co. v. State, 137 Tex. 279, 153 S.W.2d 681 (1941; 

leave to file petition for mandamus denied 315 U.S. .8, 1.9’42); Thompson 

v. United Gas Corp.. 190 S.W.2d~504 (Tex. Civ. App. 1945. eirw 

39 Tex. Jur. 166. Statu.tes. Sec. 90. 

This opinion IS limit&d to the specific ~question asked and 

is ziiot a Pulitig on the effecfiv~~&ss Or validrty of the Bill as’! who!&. 

~.:. ::. 

* SUMMARY : t 

Subdivision 2 of Section 1 and Section 2 of H.B. 

No. 7, Acts’ 51gt Legislature, 1st C;S.,- 1950;relative~ 

to a’gas gathering tax, are sufficiently definite to a&er- 

. ., 
Hon. Jimmy P. Hprany, Page 4 (V-1009) 

tain the legislative intent and are adequate to accom- 

.plish the purposes for which they were inserted in the 

Bali 

Yours very truly, 

PRIG E DANIEL 

Attorney General 

APPROVED: 

W. V. Geppert 

Taxation Division 

Assistant 

Charles D. Mathews 

Executive Assistant 

FL/mwb