Court Opinion

ID: 4140976
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:05:24.469198+00
Date Added: 2024-06-11T14:49:13.001530
License: Public Domain

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     OFFICE   OF   THE   ATTORNEY    GENERAL    OF   TEXAS

                            AUSTIN

SionorableBcscotiOilos, Commlsaloner
Oeneral LomY Off100
Au8tin, Tarrc

                                                * pawlaent    OS the
                                         ths   subatanac of vtl1oh

                                         to 2@93,     inoh-
                                         Vlth lrvs k-
                                        ld Olrll Btat-
                          l follwing l  uboequmt amend-
                          ta 1333, l(3rd Logid.aturu,
                             Chapter 20, and ACtIS1935,
                          ii.gular Bea8lon* chapter 29.
                 rs'that Mr. Eull Youqbloed ovna
    these mlnlng alalma, alad that the pdnolplo
    mfnarala to ,bamined ara lead vlth a poasibll-
    lty of w.me lllver. The United Btake &Vern-
    ment has proposed to par l lubsldj OF pralu
    to lnoourage the mining of thee* sttitoglo
    hetals auah premium vould probably ti from
    2# to 4,iper poun$ on the prooemoal metclr.
HonorableBsscom Giles, CommLesioner,   P&e   2

          Furthemore, it apperrm that the laelter
     8aetlm.s pays the frel8ht on tho ehlpmant of
     ors to ths smsltar, but before making its net
     retums to the ovner or operator of the olalm,
     tbr smslter dmlucts vhatevor tzunsportatlon
     oosts have been p&l by it for ors shlpnonts.
          In oonneotlonwith tha faots hsrelnabovoset out,
you have roquostod the opinion of 'thisdepartmentvlth re-
spot to ths r0il0va    two questlonsr
           1. In oaqmting the #$ rqslty duo the
     Btato from ml.nlngalalm by virtue of Article
     5395, lWYl8ed Civil Statutes, 1925, as amend&
     should you lnoludo In hour aaloulationbased
     011smsater mturns the &ovemmsnt subsidy or
     pmlums paid to enoourege the sllnlngor thme
     stratoglc aletals4
            2. In casputlng the 6@ royalty due the
     State   frcmnolInlaga1alm.sby Yirtus or Artlole
      5395. FulYl8edClYll statutes,1925, as amuulsJd,
      rhaultt~ou inalude in your oalaulationbamd
      on smoltor returns the transportationooats
     '*id by the kiter for the shi~ent of the on
      from the pins to ths smelter. vhloh aoats ths
      smslkr deduots bsfon making hls net rstum
      to ths ouner of ths olslm?
          From Artlclo 53 5, Reviosd Civil Statutes, 1925,
as maendod by Acts 1934, e3ru Loglsletum '2nd U.S., page
51, ahpter 20, paxugnph 8~ Aots 1935, '4th kglslatum,
Reg. Sems., pngm 56, chapter 29. I 1, vo quots the follwing
portions tharoof vhioh are portlneat to the questions sub-
rlttedr
          .     . . In addition ta rental paponts,
     the wnk'of such claims shall pa7 a royalty
     of 6# of the value of,t& pmauatlon of tha
     mlnsnls upon such alalm as shorn by the net
     smoltor, . . . . rsturns orofthe gross sums
     lrlslng from the sale of ths ors or produots
     from the olalm and xwoelved by the ovner. . .m

         A subaldy has been dellned as e grant of funds fram 6
govennnent to D.private lndlvldunlor ampany to asalst
                                                              I’.;. ,

in the estebll&ttnt or support cf 8n enterprise deemed
advantagecueto the public. 6: Corpm Jurlsji~~rd;~O
Phrases, Permanent Edition, vclumc 40, psgc
Webstarls Rew Internatloml Dictionary, 2nd edition, ve
quoter
          “A oubsldy may be ulmyly G Gift.or con-
     sist In the psyment of . . . . funds to aid
     ln establlshlng or malnttlinlngo servlca or
     equipment larger or uore poverfr;lthnn the
     state of tr6d8 vould~vnrrunt . . . .'
           Under the pro~islons of Article 5:9fj,herein-
above sot out the stats of Toxns is entitled to e royal-
ty of 6&$ of 'the value of the production of the ml.nsrals
upon aaid clslm ss uhovn by the net smelttw returns.' The
amounts of aoneys to be paid by tlw Yoderal Govemsmnt as
set out ln the fuots herein la in the nature of a subsidy,
sn outrQht gift or gr6nt i.gCie Pedoral Oovbrnment, to
the claim ovner who mlnss the nlne~ls,   and 1s to be paid
on acoount of h:s,cooperation in the piers of the Govarn-
ment.in aid of the mini    of these strnteglametals. Durr
Drug Comp.%y ~8’.Aoms, 27 So. (2d) 90:, at p6ge 907 S 13.
Such sum bslng In the nature of s premlxss,a gift, a sub-
sltly,am not lnnaludableIn tiuccas~utatlonof the "value
0r ths pFodu0tion  0: the miners1 upon said clulm," snd the
State of Texas should'not share therein. Our nnaver to the
first question submitted herein ia, therefore, in the neg-
ative.
          The ssme quoted pro~lsion of Artlole 5335 pro-
vides also the basis upon vhloh to compute the royalty pay-
able to the Stats. It provides thst the State 1s entitled
to s’royalty of 6&Y of the value of the production of the
mlnersls upon said clslm as "ohovn by the net smelter . .
. . rilturns.* (Underscoringoura) .. The Etattod
heremsclose       that vhen the smelter pays the trsnspor-
tatlon costs for shlpolentof the oxw to the smalter, it
doduots these costs before making lts net return to the
olalm ovneti. It 1s our opinion thnt the tern 'net smel-
ter return" as set out in the rtatutes means that amount
returnable to the clnlm owner vhlch lo clesr of, or free
from, a31 ohsrgea,or deductions for transportationscosts,
Honorable Bcinom Oil-, Commlclsioner,
                                    page 4

paid by the emelter.  A oomputatlonor amcertalnmentof
i-oyaltydue the ?!tatobaaed on net welter returns vhlch
vould lncludo therein tranaportotloncorte.refomd to
henin, vould be erronooum ln one other respect; that la,
the resultantamouat vould be an ullovanae to the St+te
of a royalty larger in amount than 6& of the value or
the produotlon of the rinonla u?on acridolat am provided
for ln the maid statute. We, thereforeansvor the recond
lubrltted question ln the negative.

                                  Youm very truly
                              ATTOHREY OENERAL OF TXXAS

                                     Cheater X. Ollimon
                                              ADai t8Iit

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                                                       APPROVED
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