March 31. 1987
Mr. 0. P. (Bob) Bobbitt Opinion No. JM-664
Executive Director
Texas Department on Aging Rc: Whether a contract for the
P. 0. Box 12786 storage and delivery of U.S. Depart-
Austin, Texas 78711 ment of Agricultural Commodity foods
falls under the jurisdiction of the
Texas Railroad C6mmission
Dear Mr. Bobbitt:
You inform us that the Food Services Division of the Texas
Department of Human Services (DES) is the authorized distribution
agency for United States Department of Agriculture. (USDA) commodity
foods . The Department of Buman Services seeks to enter into con-
tracts, specifically with commercial food distribution companies. to
receive shipments of USDAcommodity foods into the state, to store and
manage inventories, and to deliver ~them at no charge to local agencies
for distribution. You ask whether the-receipt, storage, and handling
of USDA food by commercial food distribution companies under contract
provisions that require delivery vithout charge would fag1 under the
jurisdiction of the Texas Railroad Commission. Under the specific
facts that you have submitted. we conclude that such carriers are not
subject to the Railroad Comnission’s jurisdiction.
Article 911b. V.T.C.S., reposes in the Texas Railroad Commission
very broad authority to regulate intrastate motor carriers. Section
4(a) provides the following in pertinent part:
Sec. 4. (a) The Commission is hereby vested
with power and authority and it is hereby made its
duty to supemlse and regulate the transportation
of property for compensation or hire by motor
vehicle on any public highway in this State, to
fix, prescribe or approve the maximum or minimum
or maximum and minimum rates, fares and charges of
each motor carrier in accordance vith the specific
provisfons herein contained. to prescribe all
rules and regulations necessary for the government
of motor carriers, to prescribe rules and rcgula-
tionsfor the safety of operations of each of such
motor carriers, to require the filing of such
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Mr. 0. P. (Bob) Bobbitt - Paga 2
monthly, annual or other reports and other data
of motor carriers as the Commission may deem
necessary, to prescribe the schedules and services
of motor carriers operating as common carriers,
and to supervise and regulate motor carriers in
all matters. affecting the relationship between
such carriers and the shipping public whether
herein specifically mentioned or not. . . .
(Emphasis added).
“Motor carrier” is defined, In pertinent part, at section l(g) of
article 911b. V.T.C.S.:
(g) The term ‘motor carrier’ means any person,
firm, corporation, company, copartnership,
association or joint stock association. and their
lessees, receivers, or trustees appointed by any
court vhatsoever owning. controlling, managing.
operating, or causing to be operated any motor-
urooelled vehicle used in transporting - property _
for’ compensation or hire over any public highway
ins this state. where In the course of such
transportation a highway between two or mare
incorporated cities. towns or villages Is
traversed. . . . (Emphasis added).
Subsection l(h) provides- that
[t]he term ‘contract carrier’ means any motor
carrier as hereinabove defined transporting
property for compensation or hire over any highway
in this State other than as a c-on carrier.
(Emphasis added).
Article 911b, V.T.C.S., does not define “comon carrlerro but the
courts have:
‘Comon carrier’ designates a person engaged in
transporting people or things from place to place
for hire, and who holds himself out to the
public to do so for so long as he has room to
carry the cargo tendered to him. (First emphasis
added, second in original).
Railroad Commission of Texas V. United Parcel Service, Inc., 614
S.W.Zd 903, 910 (Tex. Civ. App. - Austin), aff’d. 629 S.W.Zd 33 (Tex.
1981).
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Hr. 0. P. (Bob) Bobbltt - Page 3
Article 911b. V.T.C.S.. provides relevant exceptions to the reach
of the act. Section la sets forth exceptions to the statutory
definitions of the phrases “motor carrier,” “contract carrier,” and
“transporting property for compensation or hire.” The section
provides in relevant part:
Sec. la. (1) Provided, hovever, that the term
‘notor Carrier’ and the term ‘Contract Carrier’ as
defined in the preceding Section shall not be held
to include:
(a) Any person having a regular, separate,
fixed , and established place of businass. other
than a transportation business, where goods,
wares, and merchandise are kept in stock and are
primarily and regularly bought from the public or
sold to the public or manufactured or processed
by such person in the ordinary course of the
mercantile, manufacturing, or processing business,
and who. merely incidental to the operation of
such business, transports over the highways of
this State such goods of which such person is the
bona fide owner by means of a motor vehicle of
vhich such person is the bona fide owner. . . .
(Emphasis added).
Section lb sets forth the following:
Sec. lb. Any person who transports goods,
wares, or merchandise under the circumstances set
forth in the foregoing Section la so as to be
excluded by the terms of said Section from the
definition of ‘motor carrier’ or ‘contract
carrier’ shall be deemed to be a private motor
vehicle owner; and such use of the highways by
such private motor vehicle owners. as herein
defined, shall be construed as use of the highways
for the general public and not the use of such
highways for the carrying on the business of
transporting property for compensation or hire.
You inform us that, by the phrase “commercial food distribution
companies ,” you refer, not to a common or Contract carrier. but rather
to a company that has an established place of business where food is
kept in stock and is primarily sold to the public In the ordinary
course of business, and vho, incidental to the operation of the
business, transports the goods that it owns by means of motor vehicles
that it owns. You wish to know whether such a carrier would be
subject to the jurisdiction of the Railroad Commission in an instance
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Hr. 0. P. (Bob) Bobbitt - Page A
in vhich the carrier enters into a contract for no compensation
to deliver goods that it does not o=, and in a way that is not
incidental to the operation of its business. We conclude that the
answer is “no.”
In a factual situation that is materially rimilar to the one that
you present, the courts concluded that the subject company did not
fall vithin the reach of the commission’s regulatory authority. In
State v. Wiergate Lumber Company, Inc., 582 S.W.Zd 258 (Tax. Civ. App.
- Beaumont 1979, writ ref’d n.r.e.), the state sought to enjoin under
article 911b. V.T.C.S., the operation of a manufacturer and seller of
lumber and lumber by-products. The trial court found. as matters of
fact, that the manufacturer had a regular and established place of
business, that such business was not a transportation business, that
the products delivered were manufactured in the ordinary course of
business, that the manufacturer transported the goods In a way that
was merely incidental to the operation of its business, that the
manufacturer was the owner of such goods when the goods were being
transported, and that the goods were transported by means of motor
vehicles that were owned by the manufacturer. The trial court
concluded that, as a matter of law, the manufacturer was neither a
“motor carrier” nor a “contract carrier” under the terms of section
la(l)(a) of article 911b, V.T.C.S. Eence, the manufacturer was not
subject to the jurisdiction of the commission. The appellate courts
affirmed the trial court’s holding.
Under se&ion la(l)(a) of article 911b. V.T.C.S.. if .the company
with which DHS seeks to contract is not, in the normal course of Its
business, a “consson carrier” or a “contract carrier,” the company
would be a “private motor vehicle owner” under the terms of section lb
of article 911b, V.T.C.S., and would not be subject to the juris-
diction of the Railroad Commission. DHS seeks to enter into a contract
for no compensation with such a company to deliver goods that it does
not own and in a way that is not incidental to the operation of its
business. So long as the contract entered into provides that there be
t&O compensation for transportation, the company vi11 not be
“transporting property for compensation or hire” and vi11 not thereby
become a “contract carrier” subject to the jurisdiction of the
Railroad Commission.
SUMMARY
By the very terms of section la(l)(a), article
911b. V.T.C.S.. any person vho has a regular and
established place of business that is not a trans-
portation business and who delivers, in a vay that
is merely incidental to the operation of its
business, goods that it owns ia motor vehicles that
it owns is neither a “common carrier” nor a
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p(r. 0. P. (Bob) Bobbitt - Page 5
“contract carrier .” Such a person is a “private
motor vehicle owner” under section lb of article
911b, V.T.C.S., and is uot subject to the juris-
diction of the Railroad Commission. As long as the
contract entered into between DIiS and the food
distribution company provides that there be no
compensation for transportation. the company vi11
not be “transporting property for compensatiozl or
hire.” and will thereby not become a “contract
carrier” subject to Railroad Commission juria-
diction.
Attorney General of Texas
JACK EIGBTOWER
First Assistant Attorney General
MARYKELLER
Executive Assistant Attorney General
JUDGEZOLLIE STBARLEY
Special Assistant Attorney General
RICR GILPIN
Chairman, Opinion Committee
Prepared by Jim Moellinger
Assistant Attorney General
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