Untitled Texas Attorney General Opinion

828

OFFICE OF THE ATT’ORNEY GENERAL OF TEXAS
AUSTIN

Bonorablr 0.0. H. Sheppard
Comptroller o? Yubllo iooounta
Awlin, Taxa@

thl8 Loputment
an4 ?mkgrowd of the oon-
ana the partin~t portion8

aoputaent in tho d-
nt or the hotor he1 Tu
a, with partlouler rerrrenoo
r fuel dlatributar in the
on, I dwlre your lntrrprotclbion

1 an6 baa Corpan~, l D*lmr a r e Corpora-
orttorr at Tuba, okla&oma, has l bulk
d0~ge put 8t I t0tEid or 0 pip0 lb0 +0146fna ima
a rotlnery ln Grwaflold, oklahow, to a
iilohlto County, Toxas, rronivhloh tho Be1p”% :a Gar
Compony wkor sale or xmtor furl. Thhr ooopany hold@ a
rotor furl distributor’8permit a8 dofined in tho &&or
 829

Zion.coo. fi. Sheppard, page 2

fuel tax lawa or the State at Texas, aeoured by bond
ln the amount of 32b,CQO.00,as required by Zav. There
ia no oritiolam to tbla praotfca of tho company In
amking aaloa of aotor fual.
'This o-any alao make8 raler ot rotor toe1 at
GrandrlolA Oklahoma, upon vhioh the Texaa,tax or
(Ifper go& Ia colleotod. The ooaipaw 8aksa
monthly roporta of a oortain &umber of them aaloa
88a e
lt +8ndr i0la0u0h068,
, to tha Coitzptrollu~a
orri00 uui pay8 the tax thereon aocordlng to auob
raportr riled. Thea, raporta ahov that the atotor
fuel purahraod at Gr8natiol6, 0lilahoas~, vaa to per-
sona VbO tranaport tha 8-0 to point8 In Tom18 ror
aalo, dl8t~lbutlon of W8. Tha prohaaua of tho
motor ruol bought at Gramltlel4, Gklahoaa, do not
qualify as a blstrlbutor of motor fuel under the
Tare8 lav 8tiaa0 not pay tha tax 88 auah.
"Boil 011 sad Gaa Comgan~ also make8 ~&lea fmrp
a rerlnarf near edttoro, Okhh~w, undar the aaato
0~aiti0n8 and clrsouwtanosa88 the7 Bak6 rro8
Crandfleld, Ok&bow.
Yilaton of oaae leadIn& tc tbia lnwlrrr During
t&a Year 193( thla doDatQaont exDoflanoed mush dir-
tiouity 10 the aattw-of tti ova&w thrcu&h imports
Pram okloluma In the rlolnlty or ;ichlta Talla, Chlldraaa,
aad other points along the border, duo to tbo prlrtlogoa
grantea by Oklohoan--• almple aaolaration of Into&ion
to,oxport permitted dIatrlbotora.orrefiner8 to make
adoa in thdt 'tat@ tax treo. Thla attraataa buainesa
in Teraa to Grandlield, Oklahoma, tourtoon alla8 ire8
tbi State line, where the Boll 011 and Gaa Conapanr
opustad a roflnery. Our aupanlaora waro~ busy attompt-
in& to oollact tax on import8 ea.8 rsault of thlr, and
le~aral doalsrr rho warm in the heblt of buyIn motor
tuol troa the hell (riland Goa Co-y in their ovn
trucks ror tranaportatloato Toxaa, ror roaale,
adopted a plan of &myl.n&the Texas tu to tbo Bell Cl1
and car compan;lrather than quellr~ a a l distr ib u to r
in Teraa. The Bsll 011 and Gus Cou~pany romlttad auoh
fund8 so roaelred to ieraa. l!b.la deportwnt objaated
to the Ball 011 a~6 Gas Conpony acoopted &ho tex in
this namer and propored that they cualim aa a distri-
butor 1x1tbla btate by poatIn& a bona. Thl8 propoaol
vaa reoelred with rarer and a persit lBa8grantrd upon
 830

Eon. ho. B. Sheppard, paCi 3

the condition Wet tbb 5.11 Oil and Car Company oolleet
the roxriatax on all sales deolarad for Texas degtlm-
tlona.
18 oertaln tbet tbl8 arrangemeEt saved aonaidara-
‘It
ble tax for iexas, an4 vorkeff vlth a ralr &ogres of
aatlar8otlon. The Bell Cl1 antIGas Co~;penyaubaequant-
1s ocmatruoted a 9100 line from the rallnery in Wand-
ii&l&, Oklahoma, to IIpoint aaroaa the ctete line
in Texas, a dlatance or approxlmatelften nllea rron
tbo line, where a bulk atorsga vaa ereatad to serve
ouatowrr . This bulk plant la In operation but the
cOq18rry ala0 contlauea to make 88108 froa the refinery
in Oklahoma en Texas aalae.
In January, 1939, the Boll 011 and Gas Company
arranged ror the output of motor rue1 through e aub-
aldiar~ corporation-ovneaplant at h&core, Cklahoma,
vhlcb la 41 miles interior ?ropGthe 'israeborder, and
the sme plan o: nd~lng aeles in Texas vaa pursue6
from that point aa rrom Grandrlsld, Zklahonui. In con-
neation vith thrde sales a ~nlfeat conformlnctto the
Texas IAV Is In use.
*It la oonceded that the bei1 Gil and Ma Company,
a Delavaro Corporation,harin@ hoza oriloea In Tulsa,
Oklaboam, and harlnc authority on file mlth the Socre-
tary ot htate in this Jtste to do buelaeaa in Texe8,
are holders of a wtor fuel dlatributor'rpermit as
derined in Lectlon 2 (c) of the statute recited, se-
cured by bond in the zaxlmua amount requlrad in the
statute, and that this oor~retlon is tbt owner of
certain property la silohltaCounty, Texas; namely,
rogreaaure plant, bulk storage snd plpo line terminal,
snd storage tank@.
“It la furthtr oonoeded that the 3011 Oil and Gee
Coepeny hoe rauilttedto tb,b 4at.b of,Texas, the tar
0r r0or oonta par gallon on the amount of motor rue1
reported as scld rrom these outlate: naakaly, Crand-
rleld, CklahOno Arbors, Oklahoma, and the tereinal
*torag In Aiohita County, Tezaa.
wit should be nottd that t&t proVl8lOn8 or Leo-
tfon lb (61, protidine r0r pbnaltp ror aorteln rlola-
tlone, oould not he epplird to ruch rlolatlona ooo1-
ndtted outside oi the State of Texas.
 831

Eon. Gao. 21. Sheppard, pago 4

"It is also noted that tha reoorda require4 to be
kept in this Ltate are not erallablr, and that the
usual aupenialon given refloe~lea by thlr departeent
in tbs z.attcrof oheodqg sales frequently en4 obeok-
lag truck loadlugs at docka 0.'plants oan notbe
ooEpll~& ria.
"h ragulatlon of the Coaptroller*a cspartrant,
otteotlve Unroh Sl, 1940, attempted to relstrlbutor*rhzll man u16 lnaludo cvory
psrsoa in this dstr who refinea, mfuiufaotures,pro-
duoos, 61 ends or aompounds motor iuoi, or in tny other
6anrr aOyuIrs8 or poaessses 50tor fuel and mako6 first
 835

Eon. Ccc. 2. ~hepjati, ~a$. 6

lele of the seze in thle statei ad it aball aleo ln-
1
o&de orem pdreon 13 tbls s.taterho ehlps, traneporte
or lngort8 any edatorfoal into this date acd maker
the riret sale of sac4 in this btate.“\Lndareoorirsg,
cure3
u8 have giotea hereinaBove, In oxte380, tke oontrolliog
portion8 or tke istor ha1 ?u
Law in order to better direct
p%r 6ttention to the contlnuoue and coneIeter?t ~88 of tern8 an4
phmeee 6e8igned to gire the Yotor iPa1 far iar, it8 operation
4na adelnletratlon, a nkollr intrart8t8 efrrot and oporatlon.
The pbr8808 *iL t&i8 kt6t6,” .in iUa8,? 8Od other UpreB8iOn8
of purely lntreturltorlal e:?eot reterrlng to 'flrrt ealeea ot
aotor tuel, and dclng bueinete a8 a “diatribut&’ permeate the
entire aat.
LTI?C,titboutruoh a olear ~e~lslatlvr Intent to oonforn
t&8 Cpr.rPtiOIi
Of th8 i~otOrhe1 T81 isaW to the li8iitB Of thie
Jt8te) would be tke lTtoot, by optration of 18~.
such A8
etated at 39 Tex. Jur. 50:
“Tarrltorlalilxtentof C;psrntlo~.--A statute 8an
have no erfeot beyml the territorial jurisQlotloaof
tLe laglslotlveauthsrlty, except by ooalt7. Thus
it 18 lettlsdthat a statute aut!torieily the rsoovary
OS a penalty, at the suit at a prltatcr imlirlaual,
her 20 extrsterrltorial8tte8t and omnot be Sam the
B a a 1 8o f l suit in anothor stats. Etid in tkr abearer
0r au erpre8s prorl8ior.(or ispllo~tion arl8inp,rmm
ttie torze of a statute) to tkr contrar;J,it will be
js48unad that the Legislatureaid 2ot latent that th8
lot lhuald operate beyond the territorial llmlte of it8
jUri8aiOtiOn.

-h loeal aat operates only within the partloular
part or the le~lolat~v8.jurir6lotlon to whloh It 18
applicable. 4-d it kae beep obemed tk6t an act
aeallnF with the eale of intcxlaatingll\;uoroperate8
only in tkoee portlone of the Stat8 ir lrklch the 61810
of ll.;uorie :.otprohibited br law.-
Bearlq in ntnd the ltatutor]r dofinitic-n of wdifitributorR
68 OCe V&O, lscng Other thlng8, *lmport8 any rotor fueL l&o
trie State art31~6keethe flrrt eale ot s(Li?;e
ia this :tate,' &ad
the statutory a8finitiOn of ":lret 88l8* a8 seanlnf the “first
Bale, dletrib\;tlor or uee in thl8 :tate of c&or fuel . . . lm-
port46 lute or in a nyc tk er canner produced In, lopulred, par-
settrod or br.xght Into thie Ctate," acidr_urthtr8inarui or the
 . .
836

Eon. Ceo. E. Sheppard, p&w 9

olear leglslatlva purpose to 8oorua 8 actor iuel tax Qpon tha
rirst.8ale in 'iexe8,**it being intmaea to &pore thr tax at
it8 80uroa in Toxeo, or 88 8oon thareaftor as such motor fuel
may be rabjeot to bo:ng taxed,* oan it be Sal& that a 8818 and
delirery into thr tank truck8 of various doelore fmpg.Tarns by
hell Cl1 and Gas Coepny at Grandtl8l.dand Ardnore, Qklahoaa,
oon8tltutee raid Bell Gil and Gee Company 8 adi8tributor~ and
8uoh 88188 @Yiret ealee,* all a# doilned above. tietblnk not.
It i8 tee person8 end d8ahra *ho purohaee this motor fuel
from f)8U. Gil and C88 Coqmny, Import same Into Tern8 In th8ir
tank traokl, aad make e l:lrst 8ale" in Texa8, a8 &eiIned, rho
ar8 'di8trIbutor8'rather then the b811 Cl1 end Gar Compny.
U800*, euoh penooe 8nd pumhaeere 8r8 prrforce tha etatutor
abol8 c-iuoted, retlulredto obtain a dletrlButor*8 permit snd
iully oomply xlth the statutory ior?ealltIer ror making 'flrtd
lale8" of laotorfuel In this State and reporting and r8uIttl~
taxe8 aooruIng thsreon.
At the tlm oi the dalivery and sale oi the motor fuel
at the two points laeotlonedin Oklahoma no tax be 8ooruen¶ and
yet the hell C.11and Ga8 Company, aotlng purely as a volunteer
in the preaieee, antiolpatcrathe posbible aoorrul of euoh tar
in lexae by oolleotlng In Oklahonu and reulttlug Into 38~~8
euoh oontempl.ateQ tax acorual. This antlofpatoryand extra-
territorial lotlon I8 not oontaraplatad by anything which 198can
find In the X&or Fuel Tar &av, and. ii allowed to oontlnuo,
would se8ult ln the anooraloue situation 0r 8 r02-0ign corpora-
tlon or oonoern aotioe as colleotor ?OT the State of Texa8 r%th-
out said itate hari.cgthe bsnsiit of a lltn on it8 pmpertler
in Cklshoma or a right to resort to statutory surety tind for
protsotloa of Its retecaer. In this ooMeotlon it b8koorae u8
to ear, however, that tha reoora or hell 011 and Gas Comptuq
is absolutely unl6peaohabler8gardlng the report and remIttmoe8
of tho L.tate’8 revocue8 in the past and no arltloleei1s here
int8KidQafor 8uoh oomany. But other ease8 night arise ii thl8
pmotioe 18 eountecanoedwhrreln the State would not be dealt
rltb a8 fair&y es they have bsen by &ll QIl and Gas Company,
under thle node of operation.
The permit held By Bell Cl1 and &a8 Coqan$, under our
oonetruotion or the hotor Zurl Tar ia*, oovers and authori%~r
only 88188 of motor fuel fmm ths bulk plant In Wichita County,
Tex*e, u&U doe8 not, under any oonaeptlon of the statute gorsrn-
lng its lesuanor and parpose, reaoh aamee the ;iedhlver to
cover and protect ealee of sotor rue1 wholly oon8uannatehelthln
iseth refore answer your first cold
t.%cA" ",'Ue"BW%~Le negatlre .
hon. ceo. Ii. Gheppsird,paem 10

Anawsrl~~ your third \;usatlon,wa advise that you hava
authorit to issue to tall Cl1 end Gas Company a Pzotorfuel
dlstrlbutor’s permit, upon proper application theretor,
acoompaniod by sunsty bond conditionedecd in the mount re-
qulred gy statute, deaplta the faot that it hea been brought
toyour knowledge that add company la aelllng motor fuel bayoPd
the llnita of the 4at.a of ‘bxaa. It 18 of DO eonoem to thi8
Stat. that business is conduoted in other states by a parson,
firm, or oorpor8tlon holding a zotor fuel dlatributorrapemlt
under the ~exsa iqtcr Fuel Law, and such faot ~111 not defeat
the rldht of bell Cl1 and Oar Company to do bualneaa ln Texas,
upon complying with the statutes iFovcming auoh buslneaa. Ot
course, this ailower la llmlted end oondltloned by our answer
to the two r’oregolnequeutlona.
Your fourth quaatlon tura8 upon your authority, as
CozmptrollerOS Pub110 Xccounta, unaer 5eotlon 14 or the Uotor
Fuel Tax Law, to losue regulations reatrlotlnp:aaloa coal116
under the purview of ths cotor ?url T&s Law to those aalsa
conauamted within the dtate of Pexca. Laid Laotian 14 provlde8:
“The Colnptrollershall have the powar and it aball
be his duty from time to t&de, to adopt, publlah and
enforce reasonable rulaa and rmgulatlons not inoon-
airteat herewith for the purpose of aarrylng out the pro-
vlaiona of this Aot. +ta 1933, 43rd Leg., p. 76, ah. 44,
8 14.”

If tha above qeatlon la lx&ended to lnr,ulralnto your
authority, under the quoted rule-nurkl~power conferred upon
you, to pmmlgata and laaua rules nnd reguletlona pursuant to
and in oonforsity alth cur holding herein &n oounsotio,oviith
your first and aeoond i;ueatlona,then we advise that you M-
doubtadly have auoh pouter. A ragulatlon retuelng to longsr
rsoognlxe the practice oi Bell 011 and Gas Coapesy, or other
dlstributorr h o lding l psrtzltin Texas, to collact, report and
reititto you tax86 on aalea cifmat~2 OWL a% yr2iiA~%uymzb Yn*
lltiitaof ‘rexas,and reGulring persons end dealers making auoh
purotaaea and importleg the Eot.orfuel into iexaa for a “firat
aala ,* as detiaed, to cjualliy1x1all re8paota as *dletrlbutor6,*
under the Lotor Fuel Tax Law, would not be lnoonalatentwith but
rather ln strlot osSormity to tiieplain terms and rsqulrementa
lf the net.
. .* ’
838

eon. Get. ‘i. Sheppard. oaee 11

Trusting tSe ~oregoln~ fully anauora your aevoral
ln~ulrl~a, 90 era

BY

COMMII-I’PX