TEE ATFORNEY GENERAE. 

CDP TEXAS 

March 31. 1949 

Honorable G. C. Morris, Chairman 

Senate Insurance Committee 

5 1st Legislature 

Austin, Texas Opinion No. V- 800. 

Re: The constitutionality of 

Senate Bill 376, by Bullock, 

reiative to retaliatory reserve and tax requir.ements 

on foreign insurance companies, in view of the requirement that revenue bills 

originate in the House of 

Representatives. 

Dear Senator Morris: 

You request an opinion as to whether or not Senate 

Bill 376 violates that provision of the Constitution which requires 

revenue-raising bills to originate in the House. 

The portion of Senate Bill 376 under inquiry follows: 

‘Whenever. by any law or regulation in 

force without this State, any group of individuals, 

society, association or corporation of this State 

transacting the business of life insurance, personal accident insurance, ‘life and accident insurance. or health and accident insurance, or 

agent thereof. is required to make any deposit 

of securities thereunder for the protection of 

policy-holders or otherwise, or to make payment of taxes. fines, penalties, certificates of 

authority. valuation of policies, license fees, or 

otherwise, or any special burden is imposed upon any such insurance organization greater than 

is imposed by the laws or regulations of this 

State upon similar insurance organizations of 
Hon. G. C. Morris, Page 2 (V-800) 

any other state or country. or their agents, the 

said insur~ance organization of such states or 

countie~s shall be and they are hereby re,quired. 

as a condition precedent to their transacting 

business in this State, to make a like deposit 

for like purposes with the State Treasurer of 

this State and to pay to the officers or agency 

of this State designated by Texas law to receive 

such payment, and if there be no officer or 

agency so designated, then such payment shall 

be made to the said State Treasurer for taxes, 

fines, penalties, certificates of authority, valuation of policies, license fees, and otherwise, 

a charge or payment at a rate or basis ‘equal to 

the rate or basis of such charges and payments 

imposed or required by the laws or regulations 

of such other state or country upon such insurance organization of this State and the agents 

thereof and to perform any such special burden 

so imposed. Any such insurance organization 

of any other state or country refusing for thirty 

(30) days to make any such deposit or to make 

payment of such fees or taxes, or to perform 

such special burdens, as above required, shall 

have its certificate of authority revoked by the 

Board of Insurance Commissioners, provided 

that in the computation of any such deposit, payment, tax or fee liability no credit, diminution 

or exemption shall be allowed any such insurance organization of any other state or country 

in excess of a similar credit, diminution or exemption allowed similar Texas insurance organizations transacting the business of life insurance, personal accident insurance, life and 

accident insurance, or health and accident insurance.” 

Article III, Section 33, Constitution of Texas, provides: 

“All bills for raising revenue shall originate in the House of Representatives, but the 

Senate may amend or reject them as other bills.” 
Hon. G. C. Morris, Page 3 (V-800) 

It should be .noted that the above quoted constitutional 

article is similar to Article I. Section 7, Clause 1, of the United 

States Constitution, which reads: 

“All bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as 

on other Bills.” 

In connection with revenue bills, it is said in 59 C.J. 

531. Section 24: 

“As a general rule the constitutions provide that bills for raising revenue must originate 

in the house of representatives, or the lower 

house, as it is called. The precise meaning of 

the claulse ‘to raise revenue’ is to levy a tax as 

a means of collecting revenue, a provision for a 

direct tax against all the property in a state for 

governmental purposes, and should not be extended to include bills the incidental result of 

which may be to create revenue. .” 

said: 

In United States v. Norton (1876). 91 U.S. 569, the Court 

“The Constitution of the United States, 

article 1, sec. 7, provides that ‘All bills for 

raising revenue shall originate in the House of 

Representatives.’ 

“The construction of this limitation is 

practically well settled by the uniform action of 

Congress. According to that construction. it 

‘Has been confined to bills to levy taxes in the 

strict sense of the words, and has not been understood to extend to bills for other purposes, 

which incidentally create revenue.’ Story, Const. 

Sec. 880.” (Emphasis is added throughout this 

opinion). 

In Twin City National Bank v. Nebeker (1897), 167 U.S. 

196. it was held: 
250 

Hon. G. C. Morris, Page 4 (V-800) 

“It is sufficient in the present case to say 

that an act of Congress providing a national currency secured by a pledge of bonds of the United 

States. and which, in the furtherance of that object, 

and also to meet the expenses attending the, execution of the act. imposed a tax on the notes in cir.- 

culation of the banking associations organized under the statute. is clearly not a revenue bill which 

the Constitution declares must originate in the 

House of Representatives. Mr. Justice Story has 

well said that the practical construction of the Constitution and the history of the origin of the constitutional provision in question proves that revenue 

bills are those that levy taxes in the strict sense 

of the word, and are not bills for other purposes 

which may incidentally create revenue. 1 Story, 

Const. Sec. 880.” 

The earliest decision in Texas concerning Article III, 

Section 33, Constitution of Texas, was in Day Land and Cattle Co. 

v. State, 68 Tex. 526, 4 S.W. 865. in which Justice Stayton wrote: 

“It is further urged that the act of February 25. 1879. is invalid, because it originated in 

a bill introduced in the senate, which, it is claimed, 

was a bill to raise revenue. The Constitution provides that ‘all bills for raising revenue shall originate in the house of representatives.* (Constitution, art. 3. sec. 33) . . . . 

“To hold that such a bill was one for raising revenue would require the placing on the language of the Constitution a construction which such 

language has never received; a strained construction, which should never be placed on language contained in a Constitution or a statute. Similar language is found in the Constitution of the United States 

and, as said by Judge Story, ‘The history of the origin 

of the power already suggested abundantly proves 

that it has been confined to bills to levy taxes in the 

strict sense of the words, and has not been understood to extend to bills for other purposes which may 

incidentally create revenue:” 
Hon. G. C. Morris, Page 5 (V-800) 

The Court of Criminal Appeals in Gieb v. State (1893). 

3 Tex. Grim. 514. 21 S.W. 190, said: 

‘The act complained of is not a bill raising revenue, within the meaning of article 3 Section 33, of the constitution, which provides that 

‘all bills for raising revenue shall originate in the 

house of representatives.’ This provision of the 

constitution has reference to bills .raising revenue 

for such general purposes as the legislature is required or authorized to raise, and to cover such 

appropriations as are made by that body, . . .I 

In James v. Gulf Insurance Co. (1944). 179 S.W.2d 397, 

(Tex. Civ. App., reversed on other grounds, 143 Tex. 424, 185 S.W. 

2d 966), the court had under consideration Senate Bill 144, Acts 

1943, which provided for the transfer of portions of certain taxes, 

license fees, or assessments already levied, collected and deposited 

in certain special funds or accounts in the State Treasury under 

other existing statutes, to the General Revenue Fund. The act did 

not authorize the collection of any more revenue than the statutes 

levied or assessed. Justice Blair, citing Day Land & Cattle Co. v. 

State and Gieb v. State, supra, as well as others. said: 

‘But the primary purpose of Senate Bill 

144 was to provide for the disposition of surpluses in special funds and it is therefore not a 

bill ‘for raising revenue.’ To be such a bill under Sec. 33 of Art. 3, it must levy taxes, and 

does not include a bill for other purposes even 

though it may incidentally create revenue.” 

The Supreme Court of Colorado in Colorado National 

Life Assurance Co. v. Clayton (1913). 54 Colo. 256. 130 Pac. 330, 

had before it a case involving an act requiring all insurance companies doing business in the state to pay to the Commissioner of 

Insurance two per cent of the amount of premiums received. In 

holding that the act, which originated in the Senate,. was not a 

revenue measure within the constitutional provision requiring revenue measures to originate in the House, the Court said: 

“A bill designed to accomplish some welldefined purpose other than raising revenue is not 
252 

Hon. G. C. Morris, Page 6 (V-800) 

a revenue measure. Merely because, as an incident to its main purpose, it may contain provisions, the enforcement of which produces a revenue, does not make it a revenue measure. Revenue 

bills are those which have for their object the levying of taxes in the strict sense of the words. If 

the principal object is another purpose, the incidental production of revenue growing out of the enforcement of the act will not make it a bill for 

raising revenue. The primary object and purpose 

of this bill was to regulate insurance companies 

and the insurance business in the state.” (Emphasis ours.) 

Obviously, Senate Bill 376 on its face is a regulatory 

or retaliatory measure. and not one the main purpose of which is 

to levy a tax in the strict sense of the word. As we construe it, the 

bill has for its primary purpose the requirement of foreign insurance companies seeking to do business in Texas to conform with 

certain regulations and laws of this state, if like or similar regulations and laws of other states in which such foreign insurance 

companies are domiciled are imposed upon Texas insurance companies seeking to do business in such other states. Accordingly, 

it is our opinion that origination of the act in the Senate did not 

violate Article III, Section 33, Constitution of Texas. 

suh4M4RY 

Senate Bill 376 is not a revenue raising bill 

within the meaning of Article III, Section 33. of the 

Texas Constitution. It therefore may originate in 

the Senate of Texas. U.S. v. Norton, 91 U.S. 569; 

Twin City National Bank v. Nebeker. 167 U.S. 196; 

Day Land & Cattle Co. v. State, 68 Tex. 526. 4 S.W. 

865; Gieb v. State, 31 Tex. Grim. 514. 21 S.W. 190; 

Colorado National Life Assurance Co. v. Clayton, 

54 Colo. 256, 130 Pac. 330. 

Yours very truly. 

FIRST ASSISTANT 

ATTORNEYGENERAL 

ATTORNEYGENERALOFTEXAS 

JAA:gw:erc Assistant