Court Opinion

ID: 4132569
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:28:06.571234+00
Date Added: 2024-06-11T14:33:56.495689
License: Public Domain

AUE~TIN.TEXAR      78711

                             April 20, 1976

The Honorable Garrett Morris           Opinion No. H- Sll
Chairman
Public Utility Commission of           Re: Assessments of
     Texas                             utility companies under
P. 0. Box 12577                        the Public Utility Regu-
Austin, Texas 78711                    latory Act.
Dear Mr. Morris:
     You have requested our opinion concerning the construc-
tion of various sections of the Public Utility Regulatory
Act, article 1446c, V.T.C.S.
     Your first question is:

         Section,79 of Article XII of the Act
         states that all assessments are due on
         August 31 of each year. Does Section 79
         require payment of the assessment on
         August 31 of each year or may the Com-
         mission grant a grace period after the
         due date for payment of the assessment
         without penalty. Does the term "due"
         mean due and payable or accrue?
    The Act provides:
            Sec. 70. An assessment is hereby
         imposed upon each public utility within
         the commission’s jurisdiction serving
         the ultimate consumer equal to one-sixth
         of one percent of its gross receipts
         from rates charged the ultimate consumers
         in Texas for the purpose of defraying

                                   p.3416
The Honorable Garrett Morris - page 2        (H-811)

         the costs and expenses incurred in the
         administration of this Act. Thereafter
         the commission shall, subject to the
         approval of the Legislature, adjust this
         assessment to provide a level of income
         sufficient to fund commission operation.
            Sec. 79. All assessments shall be
         due on August 31 of each year. Any
         public utility may instead make quarterly
         payments due on August 31, November 30,
         February 28, and May 31 of each year.
         There shall be assessed as a penalty an
         additional fee of 10 percent of the
         amount due for any late payment. Fees
         delinquent for more than 30 days shall
         draw interest at the rate of six percent
         per annum on the assessment and penalty
         due.
     In our view the clear implication of section 79 is that
the assessments are to be paid on or before the dates listed.
Thus, the term "due" in section 79 means "due and payable"
and not merely "accrue." See Southern Pac. Co. v.-Maricopa
County, 107 P.2d 212 (Ariz.940).    Accorainz,%e     Commis-
sion may not grant a grace period after the due dates provided
in section 79 for payment of the assessment without penalty.
    Your second question is as follows:
         Section 79 of Article XII allows Utility
         Companies to elect to pay the assessment
         due in quarterly payments.
          .   .   .

                      lb)  May the Commission implement
                      a rule requiring the utility to elect
                      either quarterly payment or annual
                      payments for an entire assessment or
                      fiscal year?

                                  p.3417
The Honorable Garrett Morris - page 3 (H-811)

              (c) Does this provision allow a
              utility to pay the tax due August 31,
              1976, in quarterly payments during
              the following assessment or fiscal
              year?
               (d) May the Commission assess a
               penalty for late quarterly payments
               if the utility has made an election
               to make quarterly payments? When
               does a payment become late?
     We believe section 79 contemplates an election on the
part of the utility. Section 79 clearly provides that
quarterly payments are due on August 31, November 30, Febru-
ary 28, and May 31. While the utility may choose either
quarterly or yearly payments, the Commission must be in a
position to know which method is selected. Thus, we believe
the Act requires a formal election by the various utilities
under such regulations as the Commission promulgates. Such
regulations in our view may permit a utility to change
methods,on reasonable notice. Once a method is selected,
the Act clearly requires payment on or before the dates
listed. Any payment not paid on or before its due date
becomes late at the expiration of that day.
     You have also asked whether section 79 would require
quarterly payments to be made before or after the end of the
year on which the assessments are based. In our view the
Commission is not required to establish only an annual
accounting period on which to base assessments. We believe
in establishing a system of quarterly payments the Legisla-
ture gave the Public Utility Commission the authority to
establish reasonable regulations tied to the quarterly
payment schedule, Accordingly, while the annual payments
would be tied to an annual accounting period, those companies
which choose to pay quarterly may be requested by the Com-
mission to utilize a reporting period of less than a year.
Thus, the utilities choosing to make quarterly payments
could be subject to a different reporting period, not nec-
essarily the same as the reporting period utilized by those
companies paying the assessment annually.

                           p.3418
The Honorable Garrett Morris - page 4   (H-811)

     Your next question is:
          May the Commission under Article XII,
          implement by rule, a calculable period
          of time for the assessment which is
          different from the due date stated in
          Section 79 of the Act? When'aoes the
          assessment begin to accrue?

      Section 78 provides in part that "an assessment is
hereby imposed. . . .I'Since the act became effective Septem-
ber 1, 1975, the assessment was imposed beginning that date.
In other words, the assessment began to accrue on receipts
received on or after September 1, 1975. However, the Act
-does not specify a particular period upon which the assess-
ment is calculated. We believe the general authority of the
Commission is broad enough to enable the Commission to
determine the calculable period because such a determination is
necessary and proper to the fulfillment of its statutory
duties. See Terre11 v. Sparks, 135 S.W. 519 (Tex. Sup.
1911); Corzelius v. Railroad Commission, 182 S.W.2d 412
 (Tex. Civ. App. -- Austin 1944 no writ); sets. 16, 37.
We do not believe the Commissi& is required to use the due
dates as the final dates of the calculable periods, and it
would seem impractical to do so. See Clark v. International
Harvester Co., 115 S.W.2d 1022 (TX =A=.         -- Austin
1938, writ ref'd).
     You next ask:
          Section 78 requires the assessment to be
          levied on the rate charged to the ultimate
          consumer. Does the term "rate" apply
          only to services charged the ultimate
          consumer or does the term include any
          federal, state, or local taxes (including
          the assessment itself) charged the
          ultimate consumer? Does the term "rate"
          apply to all services including lease or
          sale charges or does it apply only to
          charges for utility service?

                              p.3419
The Honorable Garrett Morris - page 5    (H-811)

     Section 3(d) of the Act provides:
          The term "rate " when used in this Act,
          means.and inclhdes every compensation,
          tariff, charge, fare, toll, rental, and
          classification, or any of them demanded,
          observed, charged, or collected whether
          directly or indirectly by any public
          utility for any service, product, or
          commodity described in Subdivision (c)
          of this section, and any rules, regula-
          tions, practices, or contracts affecting
          any such compensation, tariff, charge,
          fare, toll, rental, or classification.
Thus, the term "rate" is given a rather broad definition.
It includes "every compensation. . .for any service, product,
or commodity described in [section 3(c)]. . . .(I "Rate" would
therefore include lease or sale charges involved in any
activity described in section 3(c). Of course, section 78
provides for an assessment on "gross receipts from rates
charged the ultimate consumers in Texas." Thus, the receipts
from any charges, including sale or lease charges, will be
assessable only if they are receipts from the ultimate
consumer of the service , product, or commodity involved.
For example, the sale of equipment from one public utility
to another will result in receipts assessable to the seller
only if the buyer utility is the ultimate consumer of the
equipment, and will not be so if the equipment is purchased
for resale or lease to a consumer other than the buyer
utility.
     Another part of this question concerns taxes collected
by utilities. In our opinion those taxes which are levied
on consumers and merely collected by utilities as agents for
the respective taxing authorities cannot be deemed "receipts"
of the utilities. Accordingly, these taxes are not assessable.
However, in our opinion, a public utility may not deduct
charges which represent taxes or assessments levied on the
utilities and passed on to its customers. Such charges
remain a part of the rates charged by the utility and are
receipts of the utility. Consequently, in our opinion,
those receipts must be assessed.

                            p.3420
The Honorable Garrett Morris - page 6   (H-811)

    Your final question is:
         Section 78 requires an assessment "upon
         each public utility within the Commission's
         jurisdiction." The Commission has
         various kinds of jurisdiction over
         various kinds of utilities in several
         different subject matter areas. May the
         Commission make assessment on any utility
         over which it exercises any type of
         jurisdiction, or may the Commission only
         levy the assessment on utilities over
         which it has rate making jurisdiction?
     The quoted language of section 78 is unqualified. Con-
sequently, the Commission need not exercise any particular
form of jurisdiction over a utility in order to assess the
utility. In our view, the term "Commission's jurisdiction"
may best be defined by reference to article III of the Act,
entitled "Jurisdiction." Therein the Commission is given
jurisdiction over various utilities. Sets. 17, 18. Section
19 provides for Railroad Commission jurisdiction over gas
utilities. In our opinion, the utilities dealt with in
sections 17 and 18 are within the 'Commission's jurisdiction"
under section 78; those dealt with in section 19 are not.
We note, however, that the assessment applies only to public
utilities which are defined in section 3(c) of the Act.
                      SUMMARY
            The dates provided in section 79 of
         the Public Utility Regulatory Act are
         the dates upon which payments of assess-
         ments are due. A payment becomes "late"
         at the expiration of its due date. A
         utility must elect to pay its assessment
         yearly or quarterly.
              The assessment began to accrue on,
         September 1, 1975. The Commission may
         select a calculable period for assess-
         ments which is different from the due
         dates contained in section 79.

                           p.3421
The Honorable Garrett Morris - page 7   (~-811)

                 The assessment is to be made on
            "receipts from rates charged the ultimate
            consumers in Texas," including all such
            charges which are not collected by a
            public utility as the agent of a taxing
            authority.
                 All public utilities subject to the
            Commission's jurisdiction under sections
            17 and 18 are subject to assessment.
                                 ery truly yours,

                                     oY/.j&$
                                     L. HILL
                                    rney General of Texas

APPROVED:

C. ROBERT HEATH, Chairman
Opinion Committee
jwb

                              p.3422