OFFICE OF THE ATTORNEY GENERAL OF TEXA8
AUSTIN
Dear Kr. Bhepparbr
genoy Hprlinee, IZIO.may smplo~ euoh oontraotors and snginesrs
and enter into ruoh agrmment ritb then a~ It daema advisable,
._,. - . ..__ ._ ~..
.- 562
Hon. Wo. H. Sheppard, Page X
ia thr name of the Defonrr Plant Corporation,ald paroham
maohlnery ana rquipmmt nror8rar~ for the projrot, rubJeot
to thr written approval or thr Derenrr Plant Oorporation.
IB all or itr 6p8ratloer uearr luoh oontraot, the
morgreo PlpwlSnrr, xno. rot8 aa lg o et ror the Dofoe8o Plant
OorporrtI on, The DOrOB OOrpWatloe 16a8.8 rOtOr tehiol88,
rhioh are ured b thr Ourgrnoy Plprliwr, Ino., aed orrtde
ooetraotorr or tI8 Dei8e80 corporation $n the oonrtmotloe of
ruoh pi llne8. Bone or the80 leaed retdolor arr a804 upon
the pubrlo highway8 Of the 8tato of T8x.a~. Othrr motor w-
hlolea are leawl by oontraotorr from their mar8 aed 8ro
used la the ooertruotlonwork, but thr Mien88 Corporation
rrlmbureer ruoh oontraotorrfor the rentals paid br them,
YOU NqU88t Our OplZllOBUpOB the iOmwing
paertlonrt
1. .X8 thr Dbfsnre Plantoorparatlonllablr
to the Btatr ot Texar for th8 tar lmpored upon
motor fu81 ured upon th8 pub110 hlghwryr or thlr
State in rehioler leased br it and used by the
ltmrgeno~ Pipeliner, Ino. and its other oontraotorr
in the ooerttuotlonof it8 pipeliner?
t. 18 thr lhergeno).Plp8llne8, Ino. llablo
to thr Btate of T8xas for thb u8e tax Imposed upon
motor rue1 seed upon the pub110 highway8 0r thir
state le rehlolrr leame& by .the Dsf8e8e Plant cor-
poration ae4 ored by the lmrgenor Plprllnsr, Ieo.
urd thr Dotoe Plant Oorporstlon*roontnoton in
thr ooertruotlon of rpoh ~l~rllerr?
31. Are the oontnotor8 llrblr to thr State
of Toxas for thr ne.0tar lapore& upon motor rue1
u8e6 apoe the pabllo highway8 oi thlr Stat6 in
tehioler lsaesb by them troa third persona and
used la th8 oonrtruotlonot th8 plpslleer for the
Defense Plant Corporation,whgre suoh oorporation
relmbur888 suoh oontraotor8for rdntal8 pai& the
owner8 of ruoh Tehlolrr?
Roe. 000. H. Sheppard, Page 3
ne enswer your rlrat queetlon, no.
The D~fOXiBOPlant Corporation was organized under
Seetim BObb, Title 15 U. 8. 0. A. The purpore (am rtated
In thr AOt) want "In oraer to aid tha aorernment or the
Welt06 State.8ia it8 national det~ero progran . , .* 6eotioe
610 ex roaaly prortded that auoh Oorporetion should bo exempt
from a P1 8eht8, Poe, storage, end purohaae terra impo88d by
the United Hater, or by any state, County munio~pallty, or
looel taring euthorlty. Real propert of ihe Corporation wan
medo rubfeot to State, County, munloi 1, or looal taxation
*to the 84m4 oxtent eooording to ite k clue am other net pro-
perty In taxed,*
A6iaO from this expre88 aongre88lonelexempting
from taxation, we 6,reof the opinion that the Dersnee Plant
Corporation would have the same 8xemption upon thr dootrine
0r implied DOUBtitUtiOU4l’l~U4~t~ of the Federal GoverrnWnt
end it8 inetrumentelitlesfrom state taxation, )LoGulloohV.
Caryland, 4 meet, 318, 4 U. 6. (L. Ed.) 679; 26 R.C.L. 95.
The legal lnoiaenos of our motor fuel tar 18 upon
the ultimate user or oonaumer or the motor fuel for the pro-
pulsion of motor vehiOl88 upon the highway8 or the state ot
Texae, end not upon the seller or vendor of motor fuel: Art-
lole 7065b-z(e)v. A. c. s. seotlon e(a) protlaee:
"Ko tax Oha11 bs lmpoeeb upon the mati,
use, or dirtribution or any motor luel, the
1lEpO81S@or whloh would oonetitu *an UIllEW-
q ahd whioh
tul burden on interstate oomneroe
18 not rubjzot to be taxrd under the Cm-
tution of th 5% t f Texas and the Unltsa
~teteBl' (~;h:8f8°0Ur8).
fn Faders1 Land Be& Of Sifti&:'t?;ll
v. Binmark Lumber
co., 314 u. S. 95, fj6 L. Ea. 65, tbs court eala:
"The Federal GoVerW&f le oiie:i3delegated
powers, end from that lt neoerearily fOllOW8 that
any oon8tftuti0nalererol8e or Its delegated power8
564
XOn. 0.0. I?. shoppmd, PIgO (1
18 (OVeFll@4Bt41 , . . . It 4180 iO11OwB thd
rh8a C)04n00 ooa8tltutloMlly orrat I oor-
oration throa& whloh tha Fodrral Gmornmoat
L stulll 8Ot8, the rOtiVitl.8 Of 8uOh OOrpOrr-
tioa era ~orrrrrmtal~ . . .*
And La Pittma v. Uoma Owner8~Loan Corporatloe
308 0. 9. r1 84 t. u. 11, 60 S. ct. 15, lE4 A. L. R. lE&,
the Court uidr
“COMOB b48 XbOt the porot to or~ato
2
l oorpora loa to h8Ui thr poriozaaaor OS
~otwamatel funotioaa,but bra the owor to pro-
teet the operebtonr Ohua validly aat Iierird. ‘A
pwar to onrtr~lnplie8 l p o wer to ~iteBWV@.'
Wcullooh r:xerPlead, rupn (4 sheet. p. 4~4,
4 L. M. Thla power to promerr aeo~aaar-
11~ ecuaa d hln thr range of thr lx p r er r
pow0
OOBfO~Oup d oO nOly r 88s
t0aakr lU 14W8,wbieh
ahall he aw*rrry ead promr ror orrrylag lnb
lxmoutioa all pawn rented br the Conrtltutloe
la thr Oorarnaeat or the United Staten. aonet.
Art. 1 8.8. 8 In thr exrrolw OS thlr
powor 40 protroi ihi iawfal lotlrltler of lta
Con@‘888 h48 th8 pt%Mr to "protidr iOr the OodvDoD
bsfWU0 . . . di tha vBit.6 StatW.* COllBt, hart. 1, 8.0. 8,
It in lubaitt~d that thla tunotloe $a~gownmoatal. The Fed-
ora1 GOVlrnDsPt hAb OhO84n t0 $WiOm thlr fUBOtiO;B&i ;;;Bt
prrtlellf through the miO?IB~ Plant CW'pOrEtiWh w
pOrtlOB 8lOtiViti@B WBt b0 r4gBrdOd 44 ~OTOPtWBt8l, tad
antitbd to i&iUBity rr0t8 8teta texatloa.
to tax 11 duo upon 4 8414 0r motor rba to the
Derrnrr Flant Gorporetlon. The purohedsr Of mOtW fuel by
thr tarr~r~oy Plprllner,Ieo. 18 ln 108 oepeolt 88 agoat tar
thr mr0tt8s Plant C.orporetloa.Thr notor r401 I:8 4oturllP pi6
*-
tw red ir thr property ottb Detinro Plant Corporation,
Ph. trot thet it allow thir 6arollnr to bo ared la lamed
rrhlolrr upon the hhhuayo ot the Stat, ot T~xar by tb
zBor&onoy P1Qa1ixlb8, III@,and 1tr other Qontt~Otor$ La th
Wnrtrrletion ot thrro ~lpoliaw doer not a&e it liable tar
the a80 tax brorurr It lr rtlll dleahrrgl~ ltr Federal
flln0t10na.
He mawe* your seoond qwiotlon, no. sin00 tb was
trrrgrnor klpelinrr, 1s rotlng 41 an went
Ino. tor the
DOten@@ Plrnt OOrporation all of it0
ln oporatlonr,u* are
d the oplnlon that it ir sot llablr for tbr uno tar impor.
tymgloc turl ared upon the gubllo highmy in the Gtatr
Thb motor ,turl b&a-s to the Detonsr Corporation.
It l\lrr&h.r tha llmergonoy Fiprlirer Ino. utd lta other oon-
traotorr with motor rohlolrr tar th.fr 08. in the oonrtruotlon
or it0 plp4llnrr. Glnor the uoa of ruah notor trht8ler br
such ooatraotorr 18 tar th0 8olr benoift or the XhiWm 'Flat
Corporotioa, *hiOh ir rxproo8ly ereapted from the payuent of
mctor Sue1 tams, and lr ongaged in tha alecharge 0r a frdrml
tuDotlon, wb do not think that cuoh oontraotorr or0 liable tor
the use tax.
PIaare unable to a8ver pur third quertion bsosum
we do not bavr rutfloicmttaotn upc%i uh~lohto base our opinion.
It the leoturice1 lr rup lha shoes@oontractorr by the Duiwirr
Flaarrt Oar oration unbar !.
to ocmtraot, rnd no title to ruoh
P lwr
mo tc a rtuur vortr in thorr oontraotorb,tha we oan not 100
how the ooMzactora mad be limblo tar the payment of the motor
ia*1 ta1. Cm thr otbsr head it therm oonthotorr twoharm tho
rotor tuel and t16e it upon td hi#l!wrrret TBma Ia rrhlolrr
leaad from thir4 breonr then va boltire that uoh oontrao-
tore would bo lirblr tar Ihr motor iwlr tar rr6wilrre o?
whothor they two rolmbunod to? the rantalr paid for thsrr
Trhloler or sot. PI ~111 be s$@d to &ire 7'00 l ROW detinitc,
u11)u.r to thlr qurstion if you ail1 rupply II@IPOM trots).
Truding that the rbore fully anawl~r8your :uotttlans,
we are
Your8 tory truly