.



## THEATTORNEYGENERAYL

OF TEXAS

AUSTIN aa. TEXAS

May 25, 1960

HonorableRobert S, Calvert Opinion No. W-842 Comptrollerof Pub1 .icAccounts Capitol Station Re: Austin, Texas Validity and interpretation of Article lg.01 (2), H.B. 11, 3rd C.S., 56th Legislature,levying
an occupationtax on brokers and factors as applied to real estate Bear Mr. Calvert: brokers and salesmen.
With your letter requestingour opinion upon the above questionyou enclosed a letter from the Texas Real Estate Association,Inc. It is apparent that you adopted the questionsas phrased in this accompanyingletter, as modified by a subsequentletter from you, as those which you wished to have this off.ice answer. They are as follows:
"1) Are real estate brokers subject to this occupation tax receipt under Article 19.01, Section (2) of Title 122-A, TaxationGeneral of the Revised Civil Statutes of Texas?
"2) Is a real estate salesmanwho is employed on a salary or commission by a broker subject to the tax as levied herein?

“3) Is this section as It applies to real estate brokers and salesmenviolative of Section 35, Article III of the Constitution of the State of Texas?"
Since the third questionbears directlyupon the validity of the Article in question, it should be the first answered. Our conclusionis that the section,as applied to real estate brokers and factors, is not violative of Article III, Section 35, Constitutionof Texas. However, a brief discussionof the history of the provision is here in order.
The occupationtax on brokers and factors previously existed as eubdlvision7 of Article 7047, Revised Civil Statutes. In its original form, it was interpreted as taxing only brokers of stocks and bonds. See AttorneyGeneral'sHonorableRobert 5. Calvert,Page 2 OpinionNo. W-842

Opinion No. O-4287. In 1943, the 48th-Legislature(p. 654, oh. 372, 8 2) amended the *section to read substantially the ssme as in the presentArtiOle 19.01(2) of Title 122-A, under discussion,

which we h&+&a

set out:
"Brokersand Factors. From every person, acting for himself or on behalf of another, engaged in the business or occupation of a Broker or Factor, whether he is principallyengaged in such business or not, there 8hall be collectedTwelve Dollars ($12) per year. A 'broker,' or 'factor,' for the purpose of this subsection,is every person, Who, for another and for a fee, commissionor other valuable consideration, rents, buys, sells, or transfers,for actual spot or future delivery, or negotiates purchases or sales or transfersof stocks, bonds, bills of~.exchange, negotiablepaper, promissorynotes, bank notes, exchange, bullion, coin, money, real estate, lumber, coal, cotton,grain, horses, cattle,hogs, sheep, produce and merchandiseof any kind; whether or not he receives and delivers possessionthereof;provided that this subsectionahall,notapply to a salesman who Is employed on a salary or commlsslon basis by not more than one retailer,wholesaler, jobber, or manufacturer, nor shall this Subsectionapply to or be construed to includepersons sellingproperty only as receiveras trustees in bankruptcy, executors,admlnlstrators, or persons selling under the order of any court, or any person who is Included within the definitionof any other occupationand is paying or subject to the payment of a tax under any other Subsection of this Chapter;however, this exemption shall not apply to any Individual engaged in more than one occupationas defined by the other Subsectionsof this Article."

It should be noted parenthetically that the amount of tax was raised from $10 (In the amendedArt, 7047, Seci 7) to $12 in the present Art. 19.01; also, the word "Chapter" was substitutedfor "Act" and the last word in the provision changed from "Act" to "Article". Otherwise the wording is identical,

Soon after the enactment of the amendatoryact of 1943 purportedlyextending the scope of this~tax,Attorney General's.

HonorableRobert S. Calve&, Page 3 Opinion No. W-842

Opinion No. O-5590, to HonorableGee, H. Sheppard,Comptroller, declared such amendment invalid as applied to real estate brokers and factors in that it violatedArt. III, Sec. 35, Constitution

of Texas,'

which provides:

"NO bill, (exceptgeneral appropriation bills, which may embrace the various subjectsand accounts, for and on account of which moneys are appropriated)shall containmore than one subject,which shall be expressed in its title. But if any subject shall be embraced in an Act, which shall not be expressed in the title, such act shall be void only as to so much thereof,as shall not be so expressed."
The pertinentpart of the caption of the 1943 Act read as follows:

"An Act. .70479as here .to amend Subsection7 of Article

tofore amended, so as to provide foran annual OccupationTax of Ten Dollars (~;,"~e;~ro~~;a;;o;~ collectedfrom every

, defining same, including brokers and factors of all classes,and exempting certain salesmen,and certain other persons;.

. .providlng that this Act or any portion of this Act shall not levy or be construedas levying any tax on any new occupationor occupationsor be construed as levying any increasedand/or additional tax of any kind or characterwhatsoeverupon mY P erson, firm, psrtne;shlp,association and or corporation;.

. *:
Since the body of the smendatoryact purported to levy an occupation tax on real estate brokers and factors (which had not theretofore been levied),while its caption clearly evinced an intentionnot to tax any new occupation,Opinion No. O-5590 held the attempted levy invalidunder the above constitutional

provision.
The present question, therefore,is whether or not the republication

of this provision, in virtually the ssme form, in another act, overcomes the prior constitutional objection. As indicatedearlier, our opinion is that it does overcome such objection.
The caption to H. B. 11, 3rd C.S., 56th Deg., insofar as applicablehere, reads as follows:HonorableRobert S. Calvert, Page 4 Opinion Ho. 

## W-842

"An Act revSsing and rearrangingcertain Statutes of Ti%le 122 8Taxationt of the Revised Civil Statutes of Texas.

. .lnto
a new title $ewl,.ba

known as Title 122-A, 'Taxation-Seder&'of the Revised Civil Statutes of Tex&a+$ revising statutes levying.

. miscellaneous occupation taxes. O e .'
The title thereby gives notice that Ii. B. 11 will have to do in part with revising statutes levyingmiscellaneous occupation taxes. As said in English & ScottishAmerican Mortg, & Inv. Co., Ltd. v. Hardy, 93 Tex. 289, 

## 55S.W. 169 900I : :i

l, .The object of the requirementthat the'subjectof an act should be stated in Its title is simply to direct,attentlon to the subject to be legislatedupon, Such subject is sufficlentlyli~dfca~ed::.when.rthe title gives the number of an article of the Code in which it is included,and the fact that a provision in such articlemay be unconstitutional

does not lessen the effect of the reference to It as notice that It is to be made the subject of further legislation. The amendatoryact derives no force as law from any virtue in the act amended,but takes its effect from the new exercises of legislative power. If such power is exerted, and the legislative

will expressed in~accordance with the constitution,

such expressionbecomes law without the aid of the statute referred to in the title, whether the latter is constitutional
or not. The statute amended is referred to only to Indicate the subjectwith which the legislature

proposes to deal, and to such purpose its validity is not essential. The very object of the saendmentmay be to supply a constitutional

enactment in the place of one which was unconstitutional. It is sometimes said, broadly, that since an unconstitutional statute is void, it cannot be emended, and that hence another statute attemptingan amendment of it is void. It is doubtless true that the amendmentof an unconstitutional law does not impart efficacy to it, but it' by no means follows that the new statute is void. It may contain all the elements of a valid enactment, and thereforemay have the force .of law from- -

HonorableRobert S. Calvert, Page 5 Opinion Wo. W-842

its adoption. The mere fact that it attempts to smend an invalid statute cannot defeat It, when it is itself a complete expressionof legislative will, made in conformity with constitutional requirement. While the invalid statute may have no force of its own, It may serve when properly referred to, to indicate the subjectupon which the legislature

proposes to pass a valid law. L1

. *It

See also State v. Rice Properties,Inc., 163 S.W.2d 669 (Tex.Civ.App.

1942), err. refPd.

In answer to your questionnumber one, real estate brokers are subject to the occupationtax under the above discussed Article 19.01(2). As pointed out above, "real estate"was one of those items added to the enumerationof occupationsin the old Section 7 of Article 7047 by the smendatoryact of 1943, which failed because of the title defect. It is clear that the same provision in the new Title 122A includesreal estate brokers.

As to your second question,real estate salesmenare subject to the same tax. Your attention is directed to the first part of Art. 19.01(2)which reads "From ever% person, acting for himself or on behalf of another,.

. . . . Salesmen pursuing any of the occupationstaxed by the subsection, although acting on behalf of one or more brokers, are within the scope of this mandate, and must pay the tax unless exempted therefrom by the last proviso of the subsection,setting out certain exemptions. The first part of the proviso exempts any salesman who is "employedon a salary basis or commissionbasis by not more :han one retailer,wholesaler, jobber, or manufacturer *

. a
. The Legislature,in the exercise of its broad powers of classification

for the purpose of taxation,has designated that salesmen for these four classes of emploWers shall be exempt from the operationof this tax. Texas Co. v. Stephens, 100 Tex. 628, 103 S.W. 481 (1907);Hurt v. Cooper, 130 Tex. 433, 110 S.W.2d 896 (1937). Real estate brokers could not be within any of these categories;therefore,their salesmenare not exempt by this language. The result is the same regardlessof whether such salesmenare compensatedon a salary or commissiOn basis, A fact situation could conceivably arise where such a salesmanwould fall within one of the other exemptionprovisions in the subsection; however,we assume that your questionprimarily contemplatedtheir status under that part of the proviso discussed.. .

HonorableRobert S. Calvert, Page 6 Opinion No. WW-842

Your first and second questionsare, therefore,answered in the affirmativeand your third question in the negative.

SUMMARY

Article 19.01(2),H.B. 11, 3rd C.S., 56th Le General 7lslature (Title 122A-Taxatlonlevies an occupation tax upon real estate brokers and upon salesmen for real estate brokers. This subsectionis not unconstitutional as applied to real estate brokers and salesmen,under Art. III, Sec. 35, Constitution of Texas.

Yours very truly,

WILL WILSON AttorneyGeneral of Texas

JRI:om

APPROVRD:

OPINION COMMITTRR: W. V. Geppert, Chairman
MariettaMcGregor Payne Howard Maya Donald R. Benard, 2. J. Turlington

APPHOVEDFOR THE ATTCRNRY GENERAL By: 'LeonardPassmore