. 

THEATTORNEYGENERAYL 

OF TEXAS 

AUSTIN aa. TEXAS 

May 25, 1960 

Honorable Robert S, Calvert Opinion No. W-842 

Comptroller of Pub1 .ic Accounts 

Capitol Station Re: 

Austin, Texas 

Validity and interpretation of Article lg.01 

(2), H.B. 11, 3rd C.S., 

56th Legislature, levying 

an occupation tax on 

brokers and factors as 

applied to real estate 

Bear Mr. Calvert: brokers and salesmen. 

With your letter requesting our opinion upon the above 

question you enclosed a letter from the Texas Real Estate 

Association, Inc. It is apparent that you adopted the 

questions as phrased in this accompanying letter, as modified 

by a subsequent letter 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 salesman who 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 salesmen violative 

of Section 35, Article III of the Constitution of the State of Texas?" 

Since the third question bears directly upon the validity 

of the Article in question, it should be the first answered. 

Our conclusion is that the section, as applied to real estate 

brokers and factors, is not violative of Article III, Section 

35, Constitution of Texas. However, a brief discussion of the 

history of the provision is here in order. 

The occupation tax on brokers and factors previously 

existed as eubdlvision 7 of Article 7047, Revised Civil 

Statutes. In its original form, it was interpreted as taxing 

only brokers of stocks and bonds. See Attorney General's 
Honorable Robert 5. Calvert, Page 2 Opinion No. 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 present ArtiOle 19.01(2) of Title 122-A, 

under discussion, which we h&+&a set out: 

"Brokers and 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 

principally engaged in such business or 

not, there 8hall be collected Twelve Dollars 

($12) per year. A 'broker,' or 'factor,' 

for the purpose of this subsection, is 

every person, Who, for another and for a 

fee, commission or other valuable consideration, rents, buys, sells, or transfers, for 

actual spot or future delivery, or negotiates 

purchases or sales or transfers of stocks, 

bonds, bills of~.exchange, negotiable paper, 

promissory notes, bank notes, exchange, 

bullion, coin, money, real estate, lumber, 

coal, cotton, grain, horses, cattle, hogs, 

sheep, produce and merchandise of any kind; 

whether or not he receives and delivers 

possession thereof; provided that this 

subsection ahall,not apply 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 Subsection apply to or be construed 

to include persons selling property 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 definition of any 

other occupation and 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 occupation as defined 

by the other Subsections of this Article." 

It should be noted parenthetically that the amount of tax 

was raised from $10 (In the amended Art, 7047, Seci 7) to $12 

in the present Art. 19.01; also, the word "Chapter" was 

substituted for "Act" and the last word in the provision 

changed from "Act" to "Article". Otherwise the wording is 

identical, 

Soon after the enactment of the amendatory act of 1943 

purportedly extending the scope of this~tax, Attorney General's 
. 

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

Opinion No. O-5590, to Honorable Gee, H. Sheppard, Comptroller, 

declared such amendment invalid as applied to real estate 

brokers and factors in that it violated Art. III, Sec. 35, 

Constitution of Texas,' which provides: 

"NO bill, (except general appropriation 

bills, which may embrace the various 

subjects and accounts, for and on account 

of which moneys are appropriated) shall 

contain more 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 pertinent part of the caption of the 1943 Act read 

as follows: 

"An Act. 

.70479 as here 

.to amend Subsection 7 of Article 

tofore amended, so as to provide 

foran annual Occupation Tax of Ten Dollars 

(~;,"~e;~ro~~;a;;o;~ collected from 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 

construed as levying any tax on any new 

occupation or occupations or be construed 

as levying any increased and/or additional 

tax of any kind or character whatsoever upon 

mY 

P 

erson, firm, psrtne;shlp, association 

and or corporation;. . *: 

Since the body of the smendatory act purported to levy 

an occupation tax on real estate brokers and factors (which 

had not theretofore been levied), while its caption clearly 

evinced an intention not to tax any new occupation, Opinion 

No. O-5590 held the attempted levy invalid under 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 indicated earlier, our opinion is that it does overcome 

such objection. 

The caption to H. B. 11, 3rd C.S., 56th Deg., insofar as 

applicable here, reads as follows: 
Honorable Robert S. Calvert, Page 4 Opinion Ho. W-842 

"An Act revSsing and rearranging certain 

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 levying miscellaneous 

occupation taxes. As said in English & Scottish American 

Mortg, & Inv. Co., Ltd. v. Hardy, 93 Tex. 289, 55 S.W. 169 

900 I : : i 

l, .The object of the requirement that 

the'subject of an act should be stated in 

Its title is simply to direct,attentlon to 

the subject to be legislated upon, 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 article may 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 amendatory act 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 expression becomes 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 subject with which the 

legislature proposes to deal, and to such purpose its validity is not essential. The very 

object of the saendment may 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 attempting an amendment of it is void. It is doubtless true that 

the amendment of 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 therefore may have the force .of law from 
- - 

Honorable Robert 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 expression of 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 subject upon 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 question number one, real estate brokers 

are subject to the occupation tax under the above discussed 

Article 19.01(2). As pointed out above, "real estate" was one 

of those items added to the enumeration of occupations in the 

old Section 7 of Article 7047 by the smendatory act of 1943, 

which failed because of the title defect. It is clear that 

the same provision in the new Title 122A includes real estate 

brokers. 

As to your second question, real estate salesmen are 

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 occupations taxed 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 "employed on a salary basis or commission basis 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 operation of 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 salesmen are not 

exempt by this language. The result is the same regardless of 

whether such salesmen are compensated on a salary or commissiOn 

basis, A fact situation could conceivably arise where such a 

salesman would fall within one of the other exemption provisions 

in the subsection; however, we assume that your question primarily 

contemplated their status under that part of the proviso discussed. 
. . 

Honorable Robert S. Calvert, Page 6 Opinion No. WW-842 

Your first and second questions are, therefore, answered 

in the affirmative and your third question in the negative. 

SUMMARY 

Article 19.01(2), H.B. 11, 3rd C.S., 

56th Le 

General 7 

lslature (Title 122A-Taxatlonlevies an occupation tax upon 

real estate brokers and upon salesmen for 

real estate brokers. This subsection is 

not unconstitutional as applied to real 

estate brokers and salesmen, under Art. 

III, Sec. 35, Constitution of Texas. 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

JRI:om 

APPROVRD: 

OPINION COMMITTRR: 

W. V. Geppert, Chairman 

Marietta McGregor Payne 

Howard Maya 

Donald R. Benard, 

2. J. Turlington 

APPHOVED FOR THE ATTCRNRY GENERAL 

By: 'Leonard Passmore