The Honorable Cue D. Boykin Opinion No. H-1012
Chairman
Texas Industrial Accident Board Re: Whether governmental
Austin, Texas 78711 bodies are exempt from tax
imposed by article 8306,
9 28 on workmen's compen-
sation self-insurers.
Dear Mr. Boykin:
You have requested our opinion concerning whether govern-
mental bodies are constitutionally exempt from the payment of
the gross premium tax imposed.by section 28 of article 8306,
V.T.C.S.
Article 8309h, V.T.C.S., provides for workmen's compen-
sation for political subdivisions. Section 2(a) permits such
subdivisions to become self-insurers. Section 3(a) (1) in part
adopts section 28 of article 8306. Section 28 of article 8306
provides for a gross premium tax upon insurers and further
states:
All self-insurers under any of the Workmen's
Compensation Acts of the State of Texas
shall report to the State Board of Insurance
the total amount of their medical and indem-
nity costs for the previous year and pay a
like amount of tax as provided above on said
total amount of medical and indemnity costs.
Moneys received pursuant to section 28 of article 8306 "shall
be used by the [Industrial Accident] Board for the purpose Of
paying costs of the administration of the law. . . ." The pro-
visions of section 28 as adopted by article 8309h clearly apply
to self-insuring political subdivisions. You have asked if
such an application is ccnstitutional.
In State v. City of El Paso, 143 S.W.Zd 366 (Tex. 19401,
the court upheld the application of a motor fuel tax to the
city of El Paso. After reviewing article 8, section 1, and
p. 4180
. -
The Honorable Cue D. Boykin - page 2 (H-1012)
article 11, section 9 of the Texas Constitution, the court
stated:
[Tjhe . . . constitutional provisions . . .
operate to exempt municipal corporations
from only three classes of taxes. These
are ad valorem taxes, occupation taxes,
and income taxes.
Id. at 369. Corn-, Lower Colorado River Authorit
ical Bank & Trust Co.,>90 S.W.Zd 48 (Tex. 1945)-(&%$%
constitutional a tax upon the property of the Authority) with
-,-
State v. City of El Paso, supra. The view 'expressed by the
City of El Paso court has been followed.
v, San Antonio Independent School
(Tex. Civ. App. -- El Paso
130 (Jan. 5,
NO. 2 v. City of
-- Ft. Worth 1959, writ7emn.r.e.).
The tax imposed by section 28 is clearly not an ad valorem
or income tax. Nor may it be classified as an occupation tax,
which "is levied for the exercise of the privilege of carrying
on a business." Youle v. Calvert, 348 S.W.2d 5,34, 535 (Tex.
Civ. App. -- Austin 1961, writ ref'd n.r.e.1; Brunk v. State,
6 S.W.2d 353 (Tex. Crim. App. 1927). See also-Attorney
__ General
Opinion WW-204 (1957). Accordingly, the Constitution does not
protect governmental bodies from its application; in our opinion
self-insuring political subdivisions are liable for the tax pro-
vided in section 28 of article 8306.
SUMMARY
_-_-.--
Political subdivisions which are self-
insurers under article 8309h of the Work-
men's Compensation laws are liable for
the tax provided in section 28 of article
8306.
Very truly yours,
Attorney General of Texas
p. 4181
-.
The Honorable Cue D. Boykin - page 3 ~~-1012)
APPROVED:
DAVID M. KENDALL, First Adsistant
C. ROBERT HEATH, Chairman
Opinion Committee
klw
p. 4182