EXAS

PRICE DANIEL ATTORNEYGENERAL AU~TXN SI.-IL%XAS

April 8; 1949

SenatorA. M. Aikin, Jr., Chairman &mete ~&ate Affairs Committee Irifty-first

Legislature Austin, Texas Opinion No. V-806

Be: The constitutionality of 9. B. 147 providing that coo eratives and fraterna associations

E or corporations

shall pay the same liden fees and taxes as other associations

or corporationsengaged in the some or similar business.

You have.

requeated tha opinion of the AttornsyQeneral wdWlve tom the constitutionality of Seaate Bill I& 147 with ~particular referenceas to whether or not it vjo.late,s Se&ion 33 of Article III of the Texas Constitution, which provides:
"All bills for raising revenue shall .originate

in ~the House of Representatives but. the Senatemay amend or reject them as other bills .”
Seuate Bill No, 147 reads in part as follows : “Section10 Every co-operativeor fraternal associationor ,corporationauthorised to do any business of any kind or ,mture whatsoever charteredby or having a~ pendt. OF ~mrtih.icate of authority to do business, or.

doing business, in the StateSenatorA. M, Aikin,~ Jr.~, Page 2 (V-806)

of Texas.,

shall~,be

s,ubject

to the payment of~the same license~~fees'and taxes as any other associationor.. corporation,

either dome.stic

orforeign, engaged in doing the same or simi1a.r

busines~s

in and under the laws of,,this

State. The license fees and taxes herein referred to shall include all fees and taxes,of any ~kind or description whatsosver,which are now or may hereafter be, impose.d,.

lev,ied.

or providedfor by and under the.

Co.ns&ution and laws of this State in behalf of the State or any political.subdivision thereof.
" *

. . "Section 4. The fact that there are many co-operative

and fraternalassociations or..corpo.rations..now engaged.

in various kinds of business in..Texas.and which pay no State orlocal taxes, and which are in direct competitions

with private.

individuals

and corporations,

engaged in the same or similar ~bu.siness

in this-State,and paying taxes fors.uch.privilege, and as a result such tax-exempt.

associationsor corporations are not.bearingtheirs

share,of the cost of government, creates an emergencyand an imperative~ public.necessity

that the constitutional.rule requiringbills ta be read on three several~daysin ea~ch House be suspended, and said.rule~

ishereby suspended,and that ~this

Act ~shall.,take:effect and be in force,fromand aft.er itspassage, and it is so enaoted." This bill if .enacted~,into law will unquea- ~tionablyraise-revenue. case ofDay.Land &Cattle However, since the early Companyv. State, 68 Tex. 526~. 41 S W 865 it has been settled that the provisIona o).~ecti& 33, Article III of our Constitution,, shouldbe..confined to bills.to levy taxes in the strict sense of,,the words,~and.

not to bills for ~..,.other

purposeswhich may incidentallycreate revenue.SenatorA. M, Aikin, Jr,, Page 3 (V-806)

The purpose of.SenateBill No. 147 is set forth in Section b,.thereof, wherein it states, "there are many co-operativeand, fraternalassociationsor corporations

now ,engagad

..in various kinds of business in Texas and.whichpay~na State or local taxes and which are fin

direct competition with private individuals landcorporationsengaged,inthe same or similar business in this State. and Davine taxes for such Driand as a result

i;ernal associationsorMcorporations'to be subject to the payment of the same license fees and taxes as any mother associationor corporatl,on doing the same or similarbusiness,and thus..bear

their share of the cast of gavernment, ~The.bill~.levies taxes in the strictsense of the words and shaving originatedin the.SenaW is inviolat~ion of Se.ction

33, Article III, Constitutionof Texas,

. . . ..I& Opinion,

No,.. V-860,~ dated March 31, 1949, the Attorney Generalheld that Senate Bill No. 376, relative to retaliatoryreserve and tax requirements on foreign insurances companies,,

was not a bill for raising revenue within the meaning of Article III, Section3,3of~.the

Texas Constitution, and can therefore originate in...the..,Senate, The primary purpose of Senate Bill Ko.:.376~~is to~.retaliate

against the laws of other .States...if~ any., which...put

a greater regulatory,andtax 'burden, oninsuranoe.companiesdomiciled inthis.State and.

doingbusinesain such other States, than waehare heretoforeput on insurancecompanies domiciled in such other St.at.es, and doing business in this .State. In~..carryingout its primarypurpose of retaliation.,

the bill may incidentally create revenueQ It 1.s

therefore clearly distinguishable from ..Senate

Bill No..ll+'?,~which~..has for its primary pur- .pose..the

levy.of,taxes,

in order that CO-O erat,ive or fraternalasso.ciatione or co,rporations~

wi E1 bear their shareeof the.

cost of government.SenatorA..M. Aikin, Jr., Page 4 (V-806)

SUMMARY

Senate Bill No. 147 providingthat cooperatives

and fraternalassociat1on.s .,or corporationsshall pay the same litense ~fees.and

~taxas as other associationssor corporations engaged in the same or similar.business is unconstitutional as it is a Bills

for.raisingrevenue originatinginthe Se,nate. Section 33, Article III,,.

.Constit,ution

f Texas.

Yours very truly,
ATTORNEY GENERAL OF TEXAS

APPROVED

Gi+ ?/b--JRST ASSISTANT ATTORNEY GENERAL DMG/lg