.
THEATTORNEYGENERAYL
OF TEXAS
AUSTIN aa. TEXAS
May 25, 1960
Honorable Robert S, Calvert Opinion No. W-842
Comptrollerof Pub1.icAccounts
Capitol Station Re: Validity and interpre-
Austin, Texas tation of Article lg.01
(2), H.B. 11, 3rd C.S.,
56th Legislature,levying
an occupation tax on
brokers and factors as
applied to real estate
Bear Mr. Calvert: brokers and salesmen.
With your letter requesting our opinion upon the above
question you enclosed a letter from the Texas Real Estate
Association,Inc. It is apparent that you adopted the
questions as phrased in this accompanyingletter, as modified
by a subsequentletter from you, as those which you wished
to have this off.iceanswer. They are as follows:
"1) Are real estate brokers subject to
this occupation tax receipt under Article
19.01, Section (2) of Title 122-A, Taxation-
General of the Revised Civil Statutes of
Texas?
"2) Is a real estate salesman who is
employed on a salary or commissionby a
broker subject to the tax as levied herein?
“3) Is this section as It applies to
real estate brokers and salesmen violative
of Section 35, Article III of the Constitu-
tion of the State of Texas?"
Since the third question bears directly upon the validity
of the Article in question, it should be the first answered.
Our conclusion is that the section, as applied to real estate
brokers and factors, is not violative of Article III, Section
35, Constitutionof Texas. However, a brief discussionof the
history of the provision is here in order.
The occupationtax on brokers and factors previously
existed as eubdlvision7 of Article 7047, Revised Civil
Statutes. In its original form, it was interpretedas taxing
only brokers of stocks and bonds. See Attorney General's
Honorable Robert 5. Calvert, Page 2 Opinion No. W-842
Opinion No. O-4287. In 1943, the 48th-Legislature(p. 654,
oh. 372, 8 2) amended the *sectionto read substantiallythe
ssme as in the present ArtiOle 19.01(2) of Title 122-A,
under discussion,which we h&+&aset out:
"Brokers and Factors. From every
person, acting for himself or on behalf of
another, engaged in the business or occupa-
tion of a Broker or Factor, whether he is
principally engaged in such business or
not, there 8hall be collectedTwelve Dollars
($12) per year. A 'broker,' or 'factor,'
for the purpose of this subsection,is
every person, Who, for another and for a
fee, commissionor other valuable considera-
tion, rents, buys, sells, or transfers,for
actual spot or future delivery, or negotiates
purchases or sales or transfers of stocks,
bonds, bills of~.exchange,negotiablepaper,
promissorynotes, bank notes, exchange,
bullion, coin, money, real estate, lumber,
coal, cotton, grain, horses, cattle, hogs,
sheep, produce and merchandiseof any kind;
whether or not he receives and delivers
possession thereof; provided that this
subsection ahall,not apply to a salesman
who Is employed on a salary or commlsslon
basis by not more than one retailer, whole-
saler, jobber, or manufacturer,nor shall
this Subsection apply to or be construed
to include persons selling property only
as receiveras trustees in bankruptcy,
executors, admlnlstrators,or persons selling
under the order of any court, or any person
who is Included within the definitionof any
other occupationand is paying or subject to
the payment of a tax under any other Sub-
section of this Chapter; however, this ex-
emption shall not apply to any Individual
engaged in more than one occupationas defined
by the other Subsectionsof this Article."
It should be noted parentheticallythat the amount of tax
was raised from $10 (In the amended Art, 7047, Seci 7) to $12
in the present Art. 19.01; also, the word "Chapter"was
substitutedfor "Act" and the last word in the provision
changed from "Act" to "Article". Otherwise the wording is
identical,
Soon after the enactment of the amendatory act of 1943
purportedly extending the scope of this~tax,Attorney General's
.
Honorable Robert S. Calve&, Page 3 Opinion No. W-842
Opinion No. O-5590, to Honorable Gee, H. Sheppard, Comptroller,
declared such amendment invalid as applied to real estate
brokers and factors in that it violated Art. III, Sec. 35,
Constitutionof Texas,'which provides:
"NO bill, (except general appropriation
bills, which may embrace the various
subjects and accounts, for and on account
of which moneys are appropriated)shall
contain more than one subject, which shall
be expressed in its title. But if any
subject shall be embraced in an Act, which
shall not be expressed in the title, such
act shall be void only as to so much
thereof, as shall not be so expressed."
The pertinent part of the caption of the 1943 Act read
as follows:
"An Act. .to amend Subsection7 of Article
.70479as heretofore amended, so as to provide
foran annual OccupationTax of Ten Dollars
(~;,"~e;~ro~~;a;;o;~ collected from every
, defining same, including
brokers and factors of all classes, and
exempting certain salesmen, and certain other
persons;. . .providlngthat this Act or any
portion of this Act shall not levy or be
construed as levying any tax on any new
occupation or occupationsor be construed
as levying any increased and/or additional
tax of any kind or character whatsoeverupon
mY erson, firm, psrtne;shlp,association
andPor corporation;. . *:
Since the body of the smendatoryact purported to levy
an occupation tax on real estate brokers and factors (which
had not theretoforebeen levied), while its caption clearly
evinced an intention not to tax any new occupation,Opinion
No. O-5590 held the attempted levy invalid under the above
constitutionalprovision.
The present question, therefore, is whether or not the
republicationof this provision, in virtually the ssme form,
in another act, overcomes the prior constitutionalobjection.
As indicatedearlier, our opinion is that it does overcome
such objection.
The caption to H. B. 11, 3rd C.S., 56th Deg., insofar as
applicable here, reads as follows:
Honorable Robert S. Calvert, Page 4 Opinion Ho. W-842
"An Act revSsing and rearrangingcertain
Statutes of Ti%le 122 8Taxationtof the
Revised Civil Statutes of Texas. . .lnto
a new title $ewl,.ba
known as Title 122-A,
'Taxation-Seder&' of the Revised Civil
Statutes of Tex&a+$revising statutes
levying. . miscellaneous occupation
taxes. O e .'
The title thereby gives notice that Ii.B. 11 will have
to do in part with revising statutes levying miscellaneous
occupation taxes. As said in English & Scottish American
Mortg, & Inv. Co., Ltd. v. Hardy, 93 Tex. 289, 55S.W. 169
900I: :i
l, .The object of the requirementthat
the'subjectof an act should be stated in
Its title is simply to direct,attentlonto
the subject to be legislated upon, Such
subject is sufficlentlyli~dfca~ed::.when.rthe
title gives the number of an article of the
Code in which it is included, and the fact
that a provision in such article may be
unconstitutionaldoes not lessen the effect
of the reference to It as notice that It is
to be made the subject of further legislation.
The amendatory act derives no force as law
from any virtue in the act amended, but takes
its effect from the new exercises of legisla-
tive power. If such power is exerted, and the
legislativewill expressed in~accordancewith
the constitution,such expressionbecomes law
without the aid of the statute referred to in
the title, whether the latter is constitutional
or not. The statute amended is referred to
only to Indicate the subject with which the
legislatureproposes to deal, and to such pur-
pose its validity is not essential. The very
object of the saendment may be to supply a
constitutionalenactment in the place of one
which was unconstitutional. It is sometimes
said, broadly, that since an unconstitutional
statute is void, it cannot be emended, and
that hence another statute attempting an amend-
ment of it is void. It is doubtless true that
the amendment of an unconstitutionallaw does
not impart efficacy to it, but it'by no means
follows that the new statute is void. It may
contain all the elements of a valid enactment,
and thereforemay have the force.of law from
- -
Honorable Robert S. Calvert, Page 5 Opinion Wo. W-842
its adoption. The mere fact that it
attempts to smend an invalid statute
cannot defeat It, when it is itself a
complete expression of legislativewill,
made in conformitywith constitutional
requirement. While the invalid statute
may have no force of its own, It may
serve when properly referred to, to
indicate the subject upon which the
legislatureproposes to pass a valid
law. L1. *It
See also State v. Rice Properties, Inc., 163 S.W.2d 669
(Tex.Civ.App.1942), err. refPd.
In answer to your question number one, real estate brokers
are subject to the occupation tax under the above discussed
Article 19.01(2). As pointed out above, "real estate" was one
of those items added to the enumerationof occupations in the
old Section 7 of Article 7047 by the smendatory act of 1943,
which failed because of the title defect. It is clear that
the same provision in the new Title 122A includes real estate
brokers.
As to your second question, real estate salesmen are
subject to the same tax. Your attention is directed to the
first part of Art. 19.01(2) which reads "From ever% person,
acting for himself or on behalf of another,. . . . . Salesmen
pursuing any of the occupations taxed by the subsection,although
acting on behalf of one or more brokers, are within the scope
of this mandate, and must pay the tax unless exempted therefrom
by the last proviso of the subsection,setting out certain
exemptions. The first part of the proviso exempts any salesman
who is "employedon a salary basis or commissionbasis by not
more :han one retailer, wholesaler, jobber, or manufacturer
* . a . The Legislature,in the exercise of its broad powers
of classificationfor the purpose of taxation, has designated
that salesmen for these four classes of emploWers shall be
exempt from the operation of this tax. Texas Co. v. Stephens,
100 Tex. 628, 103 S.W. 481 (1907); Hurt v. Cooper, 130 Tex. 433,
110 S.W.2d 896 (1937). Real estate brokers could not be within
any of these categories;therefore, their salesmen are not
exempt by this language. The result is the same regardless of
whether such salesmen are compensatedon a salary or commissiOn
basis, A fact situation could conceivablyarise where such a
salesman would fall within one of the other exemption provisions
in the subsection;however, we assume that your question primarily
contemplatedtheir status under that part of the proviso dis-
cussed.
. .
Honorable Robert S. Calvert, Page 6 Opinion No. WW-842
Your first and second questions are, therefore,answered
in the affirmativeand your third question in the negative.
SUMMARY
Article 19.01(2), H.B. 11, 3rd C.S.,
56th Le lslature (Title 122A-Taxatlon-
General7 levies an occupation tax upon
real estate brokers and upon salesmen for
real estate brokers. This subsection is
not unconstitutionalas applied to real
estate brokers and salesmen, under Art.
III, Sec. 35, Constitutionof Texas.
Yours very truly,
WILL WILSON
Attorney General of Texas
JRI:om
APPROVRD:
OPINION COMMITTRR:
W. V. Geppert, Chairman
Marietta McGregor Payne
Howard Maya
Donald R. Benard,
2. J. Turlington
APPHOVED FOR THE ATTCRNRY GENERAL
By: 'LeonardPassmore