Court Opinion

ID: 4134367
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:49:20.764446+00
Date Added: 2024-06-11T14:22:32.392390
License: Public Domain

The Honorable Robert S. Calvert   Opinion No. M-300
Comptroller of Public Accounts
Austin, Texas                     Re:   Constitutionality
                                        of deletion of Sub-
                                        Sections (l), (2),
                                        and (3) from Texas
                                        Taxation-General
                                        Art. 20.01(T) by
                                        Texas Acts 60th
                                        Legislature, 1st
                                        Called Session, 1968,
                                        Chapter 2, Section 12
Dear Mr. Calvert:                       at 9.
       you have requested our opinion concerning the,consti-
tutionality of the deletion of Sub-Sections (1)   2), and
(3) from Texas Taxation-General Article 20.01(T) therein-
after referred to as the original act) by,Texas Acts 60th
Legislature, 1st Called Session, 1968, Chapter 2, Section 12
at 9 (hereinafter referred to as the amendment). It Is the
opinion of this office that the amendment, as it relates to
the exclusion of Sub-Sections (l), (2), and (3) without'
proper notice in the title is invalid.
       Section T) of Article 20.01, Texas Taxation-General,
prior to the 19b8 amendment provided:
            "Contractor or Repairman. 'Contractor'
       or 'Repairman' shall mean any person who per-
       forms any repair services upon tangible per-
       sonal property or who performs any improvement
       upon real estate, and who, as a necessary and
       incidental part of performing such services,
       incorporates tangible personal property belong-
       ing to him into the property being so repaired
       or improved. Contractor or repairman shall be
       considered to be the consumer of such tangible
       personal property furnished by him and incorpor-
       ated Into the property of his customer, for all
       of the purposes of this Chapter.

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The Honorable Robert S% Calvert, Page 2    of- 300)

     c  The numbered sub-sections deleted from the.
1968 amendment read as follows:7
            "(1) The above provision shall  apply
       only If the contract between the person
       performing the services and the person
       receiving them contains a lump sum price
       covering both the performance of the ser-
       vices and the furnishing of the necessary
       incidental material.
            "(2) If the contract between the
       person providing the services and the
       person receiving them contains separate
       amounts applicable to the performance of
       the services and the furnishing of the
       materlal then the above Section shall not
       apply, and the person furnishing the
       materials shall be liable for the limited
       sales tax upon the agreed price of~the
       materials as thus set forth In the.contract.
       Provided, however, that the agreed price of.
       the materials shall not be less than the
       actual cost of such materials to the person
       so providing them.
            "(3). In any case where the persbn
       so providing such materials has paid the
       limited sales tax to his supplier when
       purchasing the tangible personal property,
       he shall be entitled to credit the tax so
       paid to his supplier against any tax im-
       posed by this Chapter with respect to his
       subsequent sale of that tangible personal
       property.'
       The 1968 Amendment reads as follows:
                 "Sec. 12. Section (T) of
       Article 20.01, Chapter 20, Title 122A,
       Taxation-General. Revised Civil Statutes of
       Texas, 1925, as amended, Is amended to read
       as follows:
                 "20,01(T) Contractor or Repairman.
       'Contractor or Repairman' shall mean any
       person who performs any repair services upon

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The Honorable Robert S. Calvert, Page 3   (M-300)

      tangible personal property or who performs
      any improvement upon real estate and who,
      as a necessary and incidental part of per-
      forming such services, incorporates tanglble
      personal property belonging to him into the
      property being so repaired or improved.
      Contractor or repairman shall be considered
      to be the consumer of such tangible personal
      property furnished by him and incorporated
      into the property of his customer, for all
      the purposes of this Chapter.
            "There are exempted from the computation
       of the amount of taxes imposed by this Chapter,
       the receipts from the sale, lease or rental of
       any tangible personal.property to, or the
       storage, use or other consumption of tangible
       personal property by any contractor for the
       performance of a contract for the improvement
       of realty for an exempt or anization as
       defined in Section 20.04(F7 of this Chapter
       or otherwise exempt from the taxes imposed
       by this Chapter to,the extent of the value of
       the tangible personal property so used and/or
       consumed in the performance of such contract.
       Any such contractor may purchase; rent or
       lease all materials, supplies, equipment and
       other items incorporated into the,project or
       any such item used and/or consumed by the
       contractor in performing said contract by
       issuing to the retailer from whom the materials,
       supplies, equipment or other Items were pur-
       chased, rented or leased an exemption certifi-
      cate in lieu of any tax imposed by this Chapter."
       Considerable doubt has been raised as to exactly what
the intent of the legislature was in amending Article 20.01(T);
that is, whether Section 12 of the Session Laws completely
replaced the original act or whether It merely added an
additional provision. Without a proper record or historical
note having been developed by the committee which passed
upon this section as well as the whole amendment, this
office is constrained to conclude that the true intention
of the Legislature was ambiguous. However, it Is well
settled that a statute will be c,onstruedin such a manner

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The Honorable Robert S. Calvert, Page 4   (M-300)

as to make all of its components effective and operative.
See, e.g., Inde
124 Tex. 281 7
16 Tex. 382 [18
be regarded as merely an additional provision since
repeals by implication are not favored and laws relating
to the same subjects should be considered as though
incorporated in-the same act. Gordon v. Lake,
163 Tex. 392, 356 S.W.2d 153 (1962).

       However, this leaves the enigma of the deletion
of sub-sections one, two, and three from the original
act. This deletion is of prime concern for among other
things, it removes the previously existing exclusion
afforded to parties who segregate the materials from
the services performed in their contracts. Of course,
such an action is within the province of the legislature
so long as ample notice is given in the title pursuant
to Texas Constitution, Article III, Section 35:
           "No bill, (except general approprl-
      ation bills, which may embrace the various
      subjects and accounts, for and on account     .
      of which moneys are appropriated) shall
      contain more than one subject, which shall
      be expressed in its title. Rut if any
      subject shall be embraced in an act, which
      shall not be expressed in the title, such
      act shall be void only as to so much
      thereof, as shall not be so expressed."
The Title of the amendment states:
           “An Act raising revenue for the
      operation of state government; amending
      Chapter 20, Title 122A, Taxation-General,
      Revised Civil Statutes of Texas, 1925,
      as amended, to Increase the limited sales,
      excise and use tax, provide certain exempt-
      ions; and provide for the exclusion of
      certain transoortation charnes from the
      tax base unde; certain conditions; making
      temporary saving provisions for certain
      written contracts and bids; making the
      necessary conforming amendments to the

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The Honorable Robert S. Calvert, Page 5    (M-300)

       Local Sales, Excise and Use Tax Act
       (Article 1066c, Vernon's Texas Civil
       Statutes); amending Chapter 6, Title 122A,
       Taxation-General, Revised Civil Statutes
       of Texas, 1925, as amended, to increase
       the sales and use tax on motor vehicles
       and to amend the definition of retail sale;
       amending Chapter 12, Title 122A, Taxation-
       General, Revised Civil Statutes of Texas,
       1925, as amended, to increase the corporate
       franchise taxes; providing an effzctive
       date; and declaring an emergency.    (Emphasis
       added.)
Even though the title of the amendment may refer to the
new exemptive language added to Article 20,01(T) by the
use of the words. 'provide certain exemptions"; the title
is fatally defective to the extent it fails to mention
the deletion of sub-sections one, two, and three from
the original act, which are not termed exemptions but
are separate exclusions from the coverage of the law.
We find the following pertinent statement of the law to
be as follows:
            "DJ    title that expresses a
       purpose to change a prior law by add-
       ing or extending a provision or con-
       ferring a right-does
                       --   not warrant an
       amendment that omits . . . a provsion
       of the ori inal act or destFo s a
       --
       ~-w;;o;J?           TFbEhasis
                 foo no e de e ed.) 53 Tex.Jur.2d
       Statutes, Section 61 at 112; see, e.g.,

       Furthermore, the title to an amendment must more
strictly conform to the body than to the title of an
original act (Praetorians v. State, 184 S.W.2d 299, aff'd.
143 Tex. 596, T56-S.W.2d 971 (1944) ), notwithstanding
the rule that a liberal construction will be indulned ~to
uphold the title of a legislative act. Harris Co&y    Fresh
Water Supply District No. 55 v. Carr, 37’2 S.W.2d 523 525
‘(Tex.Sup. Ct. 1963). The purposes of Article 3 Section 35
of the Constitution of Texas have been well stated as follows:

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The Honorable Robert S. Calvert, Page 6   (M-300)

             "The purpose of the title-subject
       provision of Texas Constitution Article 3,.
       Se~ction35 f Is threefold: First, it Is
       designed to prevent log-rolling legislation,
              to prevent the writing of several
       %i&ts     having no connection with each
       other in one bill for the purpose of combln-
       ing various interests in support of the whole.
       Second, it prevents surprise or fraud upon
       legislators by means of provisions in bills
       of which the titles give no intimation, and
       which might therefore be overlooked and
       carelessly and unintentionally adopted.
       Third, it permits the people to be fairly
       apprised of the subjects of legislation
       under consideration, so that they may have
       an opportunity of being heard, if they so
       desire." Texas Constitution. Article 3.
       Section 35, interpretive commentary at-609
              . see Shannon v. Rogers, 159 Tex. 29,
       $i5h     2d 817              enschmidt v.
       International & G. N.'R Company, 100 Tex. 532,
       ]
Today these purposes especially pertaining to the
s~econdfold,are even more important with the increased
volume of bills that Is handled by the legislature.
"Obviously this purpose is not accomplished, if the caption,
for lack of sufficient provision therein or by the mlslead-
ina character of its orovlsions does not convex to the
reader the necessary information." Schlichting v Texas
State Board of Medical Examiners, 158 Tex. 279 310 S .W .2d
   , 5bl (1958). When a title to an smendment'describes
part of thenamendment's purpose, but fails to describe
another which substantially changes the original version,
our courts have characterized the action as surreptitious
in nature and in violation of the Constitution. See,
      Consolidated Underwriters v. Kirby Lumber Company,
      f(Tex.-Comm'n.;
Holman v. C;wden & Sutherlan%T'i58 S.h. 571 (Tex. civ.
App. 1913, error ref'd).
       In Holman, supra, the court was confronted with an
analogous mm      involving the Thirty-second Legislature
amending the act of a previous legislature and excluding
from the application of the amendment three counties, one of

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The Honorable Robert S. Calvert, Page 7     (M- 300)

which was included in the previous act and was not
mentioned in the title of the amendment as an excluded
county as the two other counties had been. The court at
page 573 of its opinion, held that "so much of the act
of the Thirty-second Legislature as excludes Matagorda
County from the operation of the stock law referred to is
inoperative and void, for the reasons indicated,'and that
therefore Matagorda County remains where the act of the
Thirty-first Legislature places it."
       Therefore, we must necessarily conclude that by
the Sixtieth Legislature failing to include in the title
of the amendment the notice that sections one, two, and
three of the original act were to be deleted, in derogation
of Article III, Section 35 of the Constitution of Texas,
those sections still stand as they did prior to the amend-
ment. Consequently, Texas Comptroller of Public Account's
Ruling Nun?berg5-C.O9A is incorrect to the extent that it
interprets Article 20.01(T) as not including sub-sections
one,,two, and three.
                      SUMMARY
            Texas Acts 60th Legislature, 1st
       Called Session, 1968, Chapter 2, Section 12
       did not eliminate Sub-Sections (1),.(2),~and
       (3) of the original act, Texas Taxation-
       General Art. 20.01(T).
                                          s very truly,

                                          rney.General of Texas
Prepared by Alvin Louis Zimmerman
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Hawthorne Phillips, Chairman
Kerns Taylor, Co-Chairman
Charles Aycock
Ralph Rash
John Grace
Alfred Walker
A. J. Carubbi, Jr.
Executive Assistant

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