&uet 10, 1955' 

Ron. VIIMM J. Xurxn~. -- Jr.. - 

Chaiiman 

kallroad Colpieaion of Texae 

Tribune BullaID&! 

Austin,- Opinion Ho; ~9-165 

Be: Application of Railroad CclllieslonQ~ 

traueportationxatee to the intrastate 

ahlpilent or &oda for t&e military 

DearNr.&rrayr brenohee of the mited Statee; 

Pour request for a ievlev of the app&ioabillt~ of the Railroad Commisslon'~ rate8 to intrastate ehipment of Soode for the United States is 

qu0t.h .pp‘m, M . fo*8: ._, _ .,. _. ~... __ ~I.. _ :. .z 

apOn request fmn the Railroad Camnl~alon of Tesae, 

thk &ttorneyQeneralof Texas issued three oplnione relatlngto the~tterofre@atedcarriere treneport~ehlpme&a of tiight.f& the United States Goverwint., or ite 

military In pertlculer, intraatete: in Taxee;at rate6 dif- 

~fensit fYcm the rates prescribed by the Ballmad Comnlsaion 

of TM, or aa might be appmwd by the molti. Them 

Oplnlons vere dite&Aprll'l& 19% (without nuaber);D&xmber 

lB,lg4C (CplnionIo. o-2954)andMay lo, 1~3(opinionEo. 

O-B).. Oneeop7 FhM,theae Cpinione ie golmedhere- 

,. with ior ycmr read7 rer-e.L I~ ---~ 

~eomo~ le of the op*1ou taatthC~olon'e tralleportatlon 

raten~are appllcabbla’to the intr~tate ahlpbent of goodo for the lilted 

Statee. (mllltuy)vhenthemovementle oonductadb~ Yndependmtoontznctorsi The authoritler rallynl upoz~ by t.+fcumr oplnloue of tble office 

have been dletln&ehed or overruled b7 anbaequent came; therefore, much 

opinions are overruled insofar a8 t&p oonfllottith t.3H.e opinion. 

The regulation of tranepo~tlou rate8 b7 the etatee ie a valid and 

aeceesary iunctlab~fo~,pmeerve andpmt+ot t& public interest. Stepheneon v:Blnfonl, 267 U.S. Q51( 1932); Steele P. Ceneralllllls, 329 U. S. 

433 (lPh7). '~ .~ -~ 

State regalH,ion~@ey not direotly interfue vi& the funotion of 

Sovemmentil operationa ~Qm~<a offloere aud @encler. Johneon V. 

xsryland, 254 u. 8. 51 (1920); Louweln V. mod& I2 S.U. 2d%m= 
Eon. YllllemJ. Murra7, Jr., pale 2 (S-165) 

App. 1929). Hovever, indepmdent contr~~tora rendering nervloes to the 

g o ver ment a r e no t l xoh egenclee conducting Sovermeutal functiona, aid 

the mere faotnon-diec&uina@xyregulatlom of the cmtraotor fndirectQ 

lncreaaee the burden unon the government no lonuerbrini@ auoh oontractGi a Boowr, 

oiu within an7 tipUeh<7 fnrm state re&tion. Penn Dairies ve. 

Xllk Control Caani~ion, 3l.8 U. S. 261 (1943); Alabama a 

314U.s.ttir.e Ltipolis B. Co. v. Llchtenbag, 176Md.~ 

383, 4 A. a 734 (;9m 

In the PennDairies ceee, the Supreme Court upheld a Pennejrlvanla 

milkprice fixing lav ae applied to the sale ofmilkto the UnnitedStatee. 

The court distinguiehed adencies performins Sovernmental funotfona, such 

aa the mail carrier In the Iouuein case, from the a&e of independent contraotora by stating onpage~follovs% 

“We ma7 ae.xfme al.80 that, in the abeence of Congresslonalconaent, there ie an inplied constitutional inmmit7 

of the nationalgovenmentfivmetate taratlonandirometate 

regulation of the perfozmence by federal offioere end aSen- 

.clee., of &overnmul talfunctlone. ohlo v. -lTmw, 173 u. 8. 

276; Johneon v. IU$and, 254V. S. 51; Hunt v. UnltedStatea, 

278 0. S. 96; Arlwma v. Callfornla, 283 U. 8. 423. But those 

who contraot to furnleh euppllea or render aervloes to the 

SoveiWent are not such agencies and bd mot perform governmentalfuiictione. Metcalf S Bids v. Mltohell. 269 0. S. 514;.524- 

5; Jmea V. Diavo C~Q%Ctf.XW CO.9 3C2 U: S.-u4, 145; BGkstaff Co. v.McKlnlee, 308U.s. 358, 362-63 andoaaee cited; 

Co. Vi Tax Comn'n., 283 U. 6. 291, 294; Helvei- 

‘. 303 . U. S. 376. 385-86; ad the 

cf. susquehanM 

ingv.MountainProdw.%raCorp 

mere factthatnon~rlmlnatorgtasationoi re&&v&nof the 

contraotor lmpoeee anfncreeaed eaonanlc burdenan the.#xernment 'la uo longer r8gaHed am brln@ng the eontraotca wIthin auy 

fmDlled - _ iisnunitrof theaovemnaentfr&atate Watimorre&ation. Alabama v. ?Ung &-Doozer, 314 U.-S; 1,-g, end oaeea cited; 

Baltlmore 6 Avmapolfa 8. Co. v. WChMberg, 176~~11’383, 4 A. 

Qd 734, 0: o., mitea statell t:Baltfmore a Annapolle B. co. 308 

TJ. 8. ‘-525.” 

_. 

The supreme Cburtalmheld that State fit6 ragulation~v~notticcmeietent vltb the Aott! of Congiere requiring crmpetltive bidding, naylng, in part, at prge 275, ae follownx 

" .An unexpressed purpose of Congrese to aet aeide etatutes 

oi ihe et&&~ regulat3ng their lutema affair6 la 'mt U&t4 

.tobe~fnferredandon&tnottobe luplledwhere the lagialative command, read fn the light of Its hietorp, rmaaina embisuOUB. Consideratlone which lead ua not to favor repeal of statutee by implication, United Statea v. Borden Co., 308 0. 8. 188, 
Eon. Wllllam J. wufiy, Jr., page 3 p-165) 

198-g; IlhltedStska V. Jeti=, 302 U. 9. 628, 631; Pwadaa v. IlatIonal~Clty Bank j 296, U. S. 497, 503-5, ah= 

be at baet ae pereuaelve vhen the queetlon lr oI1e of the 

nulJ.lflcatlon of at&e paver by Congreeelonal leginlatlon. 

!'Reuoe, Inthe aba&ce of come evldellee of en InflerlbleCongrea~Ia&lpol.lcy requI.rInggovermaentoontract.d to 

be awarded on the lwert bid despite nonCanpllence vIt,h 

etate regalations QtberuIre applIoable,ve cannoteaythat 

the PennaylvanIamllk i%gulation conflicta with Congreaslanal legislation or polIc7 and munt be eat aside merely becauee 

it lncreaees the prlcd of milk to the government. It vouq be 

tiomore thanepeculatlcmforun to say thatCongnasvould 

consider the govarmuen t'e pecaniary Interest ea a purchaser 

of mIilk more Important than the imtereet deserted by Penn@ylvanla in tie l tabIlizatIon of her milk eupply throw control 

of prloe. Courta ehould guard rgalnet resolving theme etipetIng wnelderatlone of pollc7 by imputing to Congress a decision 

which quite clearly It has not undertaken to make. Furthermore, ve should be olow to strike down legislation vhIch the 

atate wnoededl7 had paver to enact, becauae,of Its ass-ted 

burden on the fedezilgove=nt. For the state Ie poverleer 

to remove the ill effecta of our decision, vhile the national 

govermuent, vhIch hae the ultimate power, remains free to remove the burden." 

that 

Further, the f$upreme Court in the Penn DaIries'oplnlon reasoned 

Panhandle Oil Company v. Knox, 277 U. S. 218 (1928);apd like 

cases, had been overruled by Alabama v. King & Boozer, supza. 

In Paolflo Coast Dairies v. Department, 318 U. S. 285 (l&3), deoidcd on the acme da7 ae the Penn Dairies caee, the Supreme Court held that a 

California milk price regulation vae not appl.Icabls tothe~sale of milk 

contracted and wncmmated within a Federal enclave. The irorrrteaeoned 

that Congress had exolualve power over Federal enclave8 by reyon of Clause 

17, Section 0 of ArtIclaI of the Constitution of the United States. The 

facta of thatoaae arenotcontrolll~here because the contraotavIth the 

govement contemplate the movement of goods wholly upon the highways of 

Texas, except, In a few instances, where there Ia a nominal entry In or 

departure from a Federal enclave by the carrier. 

InHughes Transportation Co. v. United States, l21Fed. Sup. 212 

(19541, a KentucQ rate regulation vas held applicable to the movement of 

gwda for the Department of the Azm7 by an independent contractor. The 

Court of Clalma has renmnded the case for further findings of fact nlegated to the proper determination and interpretation of the Kentuck 
Han. lfilllu J. Nurray, Jr., page 4 (s-165) 

Mm. Thlr Ia the lateet exprvralon of the lav by a reden oourt. 

3he &rut&e ehlpmnt of goode bye en lndkpimdent oontmctor for 

t.be mllltary braiichee of the Vnlted Skater 3.6 eubJect to the rate regnl~- 

tion of the Railnmd ConmImIca. The authoritler nIled upon b7 the former opinlone 6f thl6 office have been distl.uguIehed or overruled by mubmsquent o-em) tbrefore, ouoh opinion em overruled lneofar M they conilIot with thin opinion. 

APPmmr Tours very truly, 

J. A.‘.kmIe, Jr. 

Rev1m.r 

~. Davla orant 

Revlever 

WI= b..‘Datia 

Reviewer 

Robert S. TI6tt.l 

nrnt AxJaldant 

John Ben Snepperd 

Attorney Osnerrl 

Anelstant Attome Dsneral