Untitled Texas Attorney General Opinion

Arrxlrrs. TEXAS 78711 October 22, 1968 Honorable Robert S. Calvert Comptroller.of Public Accounts Austin, Texas Attention Mr. Kenneth I. Kimbro Opinion No. M- 293 Re: Whether the Comptrolleris au- thorized to furnish copies'of certain franchise tax reports r to the State SecuritiesComplis- sioner upon hi& request and'for his necessary informationand use in enforcing the securities laws of the s,tatewith which he :Dear&k. Calvert: is charged. Your recent letter requests an opinion as to whether the Comptroller1s~authorized to furnish cop,lesof,certain franchise tax reports to the State Securities Commissioner upon his request and for his necessary informationand use in enforcing the securities laws of the State, the enforce- ment of which Is hissduty. You sa he 'quotesas his authority for his request Article 581-2 5 , Vernon's Civil Statutes, which reads, in part, as follows: II In the course of an Investiga-, tion looIk& to the enforcementof this act, or in connectionwith,the application of a person or company for registrationor to qualify ,seeurities,the Commissioneror Deputy Commissionershall have free access to all records of the Board of Insurance Commissioners,including company examina- tion reports to the Board and reports of spe- cial Investigationsmade by personnel of the Board, as well as records and reports of and to any other departmentor agency of the state government 0 0 0" (Emphasisadded.) -1424- Hon. Robert S. Calvert, page 2 (M-295) In your request you quote, in part, from Article 12.10, Title 122A, Taxation-General,'Vernon's Civil Statutes, as ,follows: "Art. 12.10 Reports Confidential "Reportsmade under Articles 12.08 (or 12.08 and 12.09) shall be privilegedand ,notfor the inspectionof the general public, but a.,bona fide stockholderowning one (1) or more shares of the outstandingstock of any corporationmay t examine'such reports upon presentationof evi- dence of such ownership to the Secretary of 'G., State. No other examination,disclosureor use shall be permittsd of the reports except in the course of some judicial proceedings,inwhich the State or any'bona fide stockholderis,a party or in a suit by the State to cancel the permit or forfeit the charter of,such corpora- tion or to collect penalties for a violation of the laws of this State, or for information of any officer of this State charged,withthe enforcementof its laws, including the,Comptrol- ler of Public Accounts, the State Auditor and : ,theState,Tax Commissioner;provided that the Secretary of State may in hisdiscretion for good cause shown disclose ,toany interested.per- son the names of the officers and directors and agents for service and the principal office and place of business of any corporationfilinga franchise tax report." (Emphasisadded,) You also quote, :inpart, from Article 1.031, Title i22A, Taxation-General,Vernon's Ci,vil,Statutes, as follows: "Art. 1,031 Examination of Records "(1) For the purpose of carrying out the terms. of this Title the Comptroller or any authorized agent shall have the authority to examine at the principal or any other office in the United States of any person, firm, agent, or corpora- tion permitted to do business fn this State, all books, records and papers and also any of- ficers or employees thereof, under oath; and failure or refusal of any person, firm, agent, or corporation to permit such examinationshall, - 1425- Hon. Fobert S. Calvert, page 3 (M- 295) upon,certificationof ,suchrefusal by the Comptroller to the Secretary of State, imme- diately forfeit the charter or permit to do business in this State until such examination as Is required to be made is comnleted. The Comptroliershall not make publkor us.esgid 'informationderived in the course of said exami- p. &322, ch. .--*- -2 -.-, _ (Emphasis added.) You request,an interpretationof Article 12.10 of Title 122A, Taxation-General(formerlyArticle 7089, V.C.S.;oftTexas) as such law relates to Article 1.031 of Title 122A, supra. The immediatequestion, supra, is whether the Comptrolleris authoriz- ed ,tofurnish copies of certain franchiae,taxreports to the State SecuritiesCommjssioner. Decision of this question involves two considerations: (1) H.asArticle 1.031 repealed Articles 12.10 and 581- 281 andi (2) ,Ifnot, does Article 12.10 authorkze the Comptrol- ler of public Accounts to furnish copies of otherwiseconfiden- tial records to the Securities Commissioneras an officer of this state charged with the enforcementof its laws pursuant to Article 581-28? It is the opinion of this office that Article 1.031 does not relate to or conflict with Article 12.10 nor is there any repeal by implicationof the latter sta'tute. The 196V.;re- codificationstatute on this matter (Article 1.031) grants powers to the Comptrollerwhich are in the nature of,visitorial powers for audit$ng,purposesand is deemed a general statute, referring to all taxes under Title 122A, Taxation-General..The 1961 s'tatute(Article 12.10) is a specific statute and relates to the'confidentialnature of and use of records or ,reorts ,filedas franchise tax returns by,a corporationwithl%XEate C.omproller. It concernsonly franchise taxes and is permis- slve in that it merely allows the Comptrollerto furnish con- fidential information to other officers charged with the en- forcement of the state's laws. The caption of Article 1.031 -1426- Hon. Robert S. Calvert, page 4 (&295) . (Acts of the 60th Le Reg. Session, 1967, Chapter 449, ,Pg. 102~2)reefersto (5*, an Act concerning examinationof records by the Comptroller,fortax purposes,",.while Arti- cle 12.10 refers to reports made by the~corporatlon'itself. Since :a specific staxute will control over the generals 'provisions'ofanother statute, Article 12.10 will con~trol over Article 1.031 in this matter. 53 Tex.Jur.2d 232; Stat-~ utes, Sec. 161. As to the question of whether Article 12.10,permits the Se,curltiesCommissionerto obtain copies of'such re- ports, we must hold'that he Is an "Officer of this State ' charged with the enforcementof its laws," and as such, he. is entitled to request and receive any records,:including 'franchisetax reports, pursuant to Articles 381-28 and 12.10, which are specific statutes, and Article 1.031 must yield thereto. SUMMARY The'SecuritiesCommissioneris an "Officer of the State charged with the enforcement .,. of its laws,"'pursuantto Article:581-28, ~Vernon'sCivil Sta'tutes,,and with%n,the. ,",,, -,: ,., ,,,,, ,,,,. meaning of Article 12.,10,Title 122A, Tax- ationiGenera1,Vernon's Civil Statutes, and Is entitled to request of and receive fron the State Comptrollerof Public Accounts,of the State of 'Texascopies of franchise tax reports made by.corporationsto the said : Comptroller, ‘? ,y, 7. Ve truly yours> * P C. MARTIR ey General of Texas Prepared by Fisher A. Tyler Assistant Attorney General -1424- . . Hon. Robert S. Calvert, page 5 (M- 295) APPROVED: OPINION COUMITTEE Hawthorne Phillips, Chairman Kerns B. Taylor, Co-Clialrman James Broadhurst Roger Tyler Jim Swearingen John Banks A. J. Carubbi, Jr. ExecutiveAssistant i! -1428-