THEATTORNEY GENER& 

OFTEXAS 

PRICE DANIEL 

ATTORNEY GENERAL 

August 21,1951 

Hon. George B. Butler, Chairman 

Board of Insurance Commissioners 

Austin, Texas Opinion No. V-1249 

Re: Effect of House Bill 285, 

Acts 52nd Leg., 1951, upon 

rates applicable to gross 

premium taxes to be collected under the provisions 

Dear Mr. Butler: 

of Articles 7064, 7064a. and 

4769, V.C.S. 

You have requested the opinion of this office as to the 

legal effect of House Bill 285, Acts 52nd Leg., 1951, upon the 

rates applicable in the collection of gross premium taxes under 

the provisions of Articles 7064, 7064a and 4769, Vernon’s Civil 

Statutes, in the year 1952 and thereafter. You have also requested 

an opinion as to whether certain conclusions reached by you from 

your examination of House Bill 285 are correct. For the purpose 

of brevity, the conclusions reached by you will be discussed seriatim . 

Your first conclusion is that House Bill 285 will become 

effective on September 1, 1951. This conclusion is correct in the 

light of the clear and unmistakeable language of Section XXVII 

of House Bill 285, which is as follows: 

“The crowded condition of the calendar creates 

an emergency and an imperative public necessity that 

the constitutional rule requiring bills to be read on 

three several days in each House be suspended, and 

the same is hereby suspended, and this Act shall take 

effect and be in’force from and after the first day of 

September, A.D..1951.” [Emphasis added.] 

House Bill 285 was passed by both Houses as aa emergency measure and was signed by the Governor on the 8th day of June,1951, 

and absent the underlined portion thereof, w, would have be- 
Hon. George ,B. Butler, ,Page 2, (V-1,249) ~~ 

come effective and been in force from and after that date. However, the Legislature specifically provided that the Act should 

become effective from and after September 1, 1951. See Attorney General Opinion V-1246 (1951) to the Honorable Robert S. 

Calvert, Comptroller of Public Accounts. 

Your second conclusion is that Sections 1, 2,and 3 of 

Article XVII of House Bill 3, Acts 50th Leg., 1st C.S., codified 

respectively as Articles 70644, 7064a-1, and 47694, Vernon’s 

Civil Statutes, are repealed by House Bill 285 in so far as each 

of these articles levies an additional tax for the calendar year 

1951 and therefore no tax is to be levied under Sections 1, 2, 

and 3 of Article XVII of House Bill 3, supra, on premiums collected during 1951, irrespective of whether they were collected 

before or after September 1, 1951. 

Section 1 of Article XVII, House Bill 3, Acts 51st Leg., 

1st C.S. 1950, added the following Article: 

“Article 70649. In addition to all other taxes, 

there is levied hereby an additional tax for the years 

1950 and 1951, on every insurance corporation, Lloyd’s, 

or reciprocals, and on any other organization or concern upon which a tax is levied by Article 7064, Revised Civil Statutes of Texas, 1925, as amended. 

“The tax shall be paid at the same time, in the 

same manner, and subject to all the same terms, conditions, obligations and penalties as is provided for 

the payment and collection of the tax levied in the 

aforesaid Article 7064. 

“The tax hereby levied for the year 1950, shall 

be ten per cent (10%) of three-fourths (3/4) of the 

amount of tax levied and due for the callendar.~year 

1950 under the aforesaid Article 7064. The tax hereby levied for 1951 shall be two-thirds (2/3) of ten per 

cent (10%) of the amount of tax levied and due for the 

calendar year 1951 under the aforesaid Article 7064.” 

Sections 2 and 3 of Article XVII use similar language in enacting 

Article 7064a-1 and Article 4769i. 

However, Articles XV, XVIII, and XXI of House Bill 285, 
Hon. George B. Butler, Page 3 (V-1249) 

which respectively amend Article 7064, 7064a, and 4769, V.C.S., 

each contain a section which, as relates to Article 7064, reads 

as follows: 

“Section 2. Section 1 of Article XVII of House 

Bill No. 3, Chapter 2, Acts of the First Galled Session of the Fifty-first Legislature, (which is codified as Article 7064i. Vernon’s Annotated Civil 

Statutes of Texas), is hereby repealed insofar, and 

only insofatt as it levies a tax on premium receipts 

for the year 1951.” 

The identical language of this repealing clause, except as to 

the specific references to the section numbers of House Bill 3 

and the articles to be repealed, is contained in Section 2 of Articles XVIII and XXI of House Bill 285. This language, as quoted 

above, clearly and unmistakeably repeals those provisions of 

Sections 1, 2, and 3, Article XVII, House Bill 3, Acts 51st Leg., 

1st C.S., which levy a tax upon premium receipts for the year 

1951, and hence your conclusion is correct. 

Your third conclusion is that Articles 7064a and 4769, 

V.C.S., now in effect, will control the premium taxes of the companies affected, measured by the premiums collected during the 

period January 1, 1951,to August 31, 1951, both inclusive. Your , 

fourth conclusion is that Articles 7064s: anti 4769, Vernon’s Civil 

Statutes, as amended by House Bill No. 285, which amendments 

will become effective September 1, 1951, will control the tax 

levied against the companies affected, measured by the premiums 

collected during the period September 1, 1951, to December 31, 

1951, both inclusive. 

Articles 7064~1 and 4769 tax respectively the gross premiums received by domestic life, health, and accident companies 

and foreign life, health, and accident companies. Article 7064a, 

now, and as amended by House Bill 285, reads in part as follows: 

u 

. . . Such taxes shall be for and on account of 

business transacted within this State during the calendar year ending December 31st, in which such premiums were collected, or for that portion of the year 

during which the insurance organization transacted 

business in this State. . . .” 
Hon. George B. Butler, Page 4 (V-1249) 

The same provision also appears in Article 4769, now, and as 

amended by House Bill 285. 

In an opinion by the Attorney General dated December 

3, 1936, addressed to Hon. R. L. Daniel, Chairman,of the Board 

of Insurance Commissioners, (Book 374, p. 496) it was held that 

an occupation tax levied for and on account of the business ‘transacted during the year in which the premiums are collected upon 

which the tax is computed can be levied only upon the basis of 

the tax rate in effect at the time such business was transacted 

and such premiums collected.‘. This holding was affirmed by letter opinion of this office dated:August 14, 1949, addressed to Hon. 

George B. Butler, Chairman, Board of Insurance Commissioners. 

Inasmuch as the amendments to Articles 7064a and 4769, enacted 

by House Bill 285, will not be effective until September 1, 1951, 

your conclusions are correct that the rates provided in Articles 

7064a and 4769, prior to the effective date of the amendment on 

September 1, 1951, will control the premium taxes of the companies affected, measured by the premiums collected during 

the period January 1, 1951, to August 31, 195,1, both inclusive, 

and that the rates provided in Articles 7064a and 4769, as amended 

by House Bill 285, will control the premium taxes to be levied 

against the companies affected, measured by the premiums collected during the period September 1, 1951, to December 31, 

1951, both inclusive. 

Your fifth conclusion is that Article 7064, V,C.S., as 

amended by House Bill 285, will control the tax to be paid by 

the companies affected, measured by the premiums collected 

during the entire peri.od January 1, 1951, to December 31,1951, 

both inclusive. Article 7064, as amended, imposes an occupa- . 

tion tax on all organizations transacting the business of fire, 

marine, marine inland, accident, etc., insurance, other than 

the business of life, personal accident, life and accident, and 

health and accident insurance, and is an occupation tax payable 

in advance for the privilege of transacting such insurance business in this State for a period of one year commencing on March 

1st of the year in which the tax is paid. The amount of the tax 

is measured by and is based upon the amount of gross premiums 

collected by the insurance organization during the preceding calendar year but the tax is not for the privilege of having done 

business in Texas duringthe period in which such premiums 

were collected or a tax upon the premiums so collected. Kansas 

City Life Ins. Co. v. Love, 101 Tex. 531, 109 S.W. 863j1908); 
- . 

Hon. George B. Butler, Page 5 (V-1249) 

Attorney General’s Opinions, supra. 

Under the Supreme Court’s holding in Kansas City Life 

Ins. Co. v. Love, supra, the statutory tax rate in effect at the time 

the tax is levied is applicable, irrespective of the tax rate in effect at the time the premiums were collected. Your conclusion 

is correct inasmuch as the tax rate providebin Article 7064, as 

amended by House Bill 285, will be in effect from January 1,1952, 

to March 1, 1952, during which period the tax will be levied in 

accordance with the provisions thereof, and the applicable rate 

will be measured by the premiums collected during the entire 

period January 1, 1951, to December 31, 1951, both inclusive, being the preceding year prescribed in the statute. 

Your sixth conclusion is that the provision contained for 

the first time in Section XV of House Bill 285 which provides that 

“examination and valuation fe,es paid in such taxable year to or 

for the use of the State of Texas by any insurance organization 

hereby affected shall be allowed as a credit on the amount of premium taxes to be paid by any such insurance organization for such 

taxable year. . . .‘I may be deducted by such companies provided 

the examination and valuation fees were paid during the year 1951, 

In the letter opinion of,this office to Hon. George B. Butler, dated,- 

August 16, 1949, supra, in answer to a similar question as to similar provisions contained in Articles 7064a and 4769, Vernon’s 

Civil Statutes, it was held that: 

a. 

. . . The credits allowable for examination and 

valuation fees paid during the taxable year under the new 

measures are governed by the same principle. Those 

fees paid after the effective date of the Acts may be credited against those taxes accruing after the effective date 

of the Acts. *’ 

This holding is reaffirmed. 

SUMMARY 

House Bill 285, Acts 52nd Leg., 1951 (The Gmnibus Tax Bill) is effective from and after September 1, 

1951, and the tax rates therein provided by Articles 

XV, XVIII and XXI are the rates to be applied in the 
4,. 

_a. Hon. George 8. Butler, Page 6 (V-1249) L 

collection of gross premium taxes to be collected 

under the provisions of Articles 7064, 7064a and 

4769, Vernon’s Civil Statutes. 

APPROVED: Yours very truly, 

Everett Hutchinson? PRICE DANIEL 

Executive Assistant Attornev General 

Charles D. Mathews 

First Assistant 

Price Daniel 

Attorney General 

CKR:wb:mf 

C. K. Richards 

Assistant