OFFICE OFTIiEAlTORNEY GENERALOF-
AUrnN
Honorable Homer Leonard, Speaker
House OS ITepresentatlves
47th Legirlature
Austin, Tesrae
Dear Sir:
Your letter 0f’Ea
departoent a request r0
0 present. Leg-
eeds of e dea-
n8urEnoe preduln -
and return prrsmiums
ireman’s Relief and
y said Chapter 125 or
Session of the 4S$h
ng an tmergenoy.
oted bg the Legislature of the
E AKi3NlCENTNO. 1
nd Home Bill 46, by striking out all
the enaoting clause, and l~ertlng in
-ereot, the followlngr
“‘Section 1, ‘Ikt Aot8 1931, 43th L&a-
lature, gage 229, ohapter 125,. seation 2, be
amndsd 80 aa to read hereafter aa iollowst
..
‘-.- - -
:
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Honorable EIomerLeonard, Speaker, Page 2
*Seotlon 2. For the purpose of providing per-
mnent iundr and revenue Sor the Firemen’s l?e-
llef n&d P&tfrment Fund hereby oreatsd, there
Ie hereby levied and assessed against every In- ,
suranoe oorporatlon, L.loyd*a, or reolprooals,
.and my other organleatloa or oonoern tramaot-
ing the business OS tire insuranoe for rorlt
within this &ate au ennual tax of two Pi?) per
oentum upon its grosta tire Insuranae preniium
reoelpte. Xvery auoh, tire insurance earrler,
at the time of illin& Ita annual stateaent,
shall report to the hoard of Insuranoe &XrdS-
aioners the groee fsount of fire Insuranoe prem-
ium reoelved upon property looatsd In thie
State durlas the preoedlng year, and the gross
flre.Insurmoe premium receipts, uhere referred
to In this law, shall be the total groso amount
,of prenlum ~eoslv~=A on eaoh and every kind of
fire lnsurawe risk written, exoept preziu~18
raeelred froze othor lioensed oompanles for re-
lnmranoe, lees return prezluna and dioldends
raid policyholders, but there shall be no de-
duotion for premium paid for relnauranoe. The
/ grossfire insurance premium reoeipts, as above
defined, 8M.l be rqcvted and ehmn as tbc .
i praaium BoeI;7t.m, ststizl~ fire insura?oe prem-
lum raoeipts separately imr. othsr ?reml~n re-
i. ooipts 13 the rqort to the lio%*d of 3suxnoe
Cormisoloners by the Insurerme carriers, upon
the morn statetint otiloere
1
0r tm prinOi;.d.
02 ouoh oazrlers. Upon reotlpt by the Board of
Insura?los Conmisslonero of the 8worn statements,
i showing tha gxm fir3 insurannoe pranium re-
oeipta of such oazIer8, the F%mrd of Insuranoe
Comminsionere shall oertlfy to the State Tress-
f urer the amount or Tmes due by each insuranoe
oarrier, +ioh tas shell be paid to +Ae State
Treasurer, on or bsrore the ii~rst ot Earoh fol-
lox&q and the ?r+aeqnr shall Issue Ma reoeigt
to swh oazrler, which ohall be svidtnoe of the
paymnt oi suoh +Ares. Ho suoh oarricr shall
reoei-ra a ;Ic?nit to do ~uainess I.? IA&s ‘State
until all such tares are paid. This aot shall
be oumulative of and in ad4ltIon to all other
taringi statutes oi this State. Sal4 tax, less
Honorable Homer Leonard, Speaker, Page 3
the proportion theseor for pub110 sahool pur-
pose6, shall be set aside, deposited into and
transisrred to and far the uBe, benerlt, arxl
purposes OS said Z’lreoen’o Eelior nnd Retire- ,
Kent Irund and/or dllrbursed therefrom as herein
provided and dlreoted,
nSsotlon 2. The faot that the general ln-
auranoe oooupation tax laws, Artlole 7064 Texas
Revised Civil Statutee, as amended, have been
amended oreater a neoesslty tor the amen¢ oi
.iot 1937, 45th Leglalature, pa&e 229, Chapter
125, aeotion 2 so a8 to oonform thereto In plan
for the sake or better administration, and the
iaot that there is now no efiectlve~ revenue for
the support or the Plreaen*s Relief and Retire-
mnt,Fund, oreate an emergenoy aad imperative
pub110 neoeeslty that the Constitutional .ule
requiring all bills to !be read on three several
days in eaoh House be suspended, and Suoti rule
Is hereby suspended, and the llke Beoeseltp er-
isting that the ConstitOtlonal %zle that no law
passed by the Legislature shall t&e efieot’ until
ninety day8 after adjournment of the se8SiOn at ., .
whloh It was enacted be suspended, and suoh rule
Is hereby suspended, and thl8 Aot shall take ef-
teat from and after its passage, and It is so
enaoted. *W
House Bill 46 IS proposed au an aEnndncnt to Sao-
tion 2 oi the “Firemen’s Pension end Relief LaV,passed by
the Forty-fifth Legislature as Eouse Bill Xo. 2518 (oarrled
in Vernon’s Civil Statutes as Artlole 62430). The original
Seotion 2 was held to be, lnvelld by the Austin Court of
Civil Appeals in tierloan tillenoe Insuranoe Company v.
Eoard of Insurano8 Cotmleslonere, 126 S. ‘g. (2d) 741, writ
refused. The ground of the deoislon was that prOviSiOn of
the original Seotlon 2 whlah prohibited the tax therein
levied from being taken Into oonslderatlon in fixing the
rates to be obnrged for tire lnaureno8 by the oompanlss
involved. This objeotionable prOYiSiOB la n@t found in
House B$ll 46.
Iloncrable’ Homer Leonard, Speaker, Page 4
In passing upon the oonstIfutIonallty of Souse
3111 46, It will be neoeaaary that the :oonotltutIonalIty
or h@lole 6243e be determined dnsofar as the validity or
House 3111 46 may depend upon tht validity OS the law of
which it 9,511 If enacted oonstltute a iart. Eeoause of
the length of Artiole 8243e, we will aot attempt to copy
the provisions thereof In this opinion.
Tlx first questton which arias8 In oonslderlng
the oonatltutIonallty of house El11 46 appears on the race
of the bill, to-wit? ?&aythe Legislature levy an oooupa-
tloa tax on those engaged In a particular kind of business
for prorlt, exoludlBg rrcm the operation of the tadng
st.atuts those engaged in the ak%e kind OS buslneae, but
not ror profit? This IBool9ea the aonstitutlonal roqulre-
nent of hrtlole 8, Seotlons 1 and 2, that taxation shall be
equal and uniform and that oooupation taxes shall be equal
and unlrora “upon the same class of subjeota within the
limits of the authority levying the tax:, , . .W
Slnoe thI8 qutstina has been anewered in the arrir-
mcatlve by our Opinion i?o. O-3436, addressed to you under
date of C’aroh 1, 1941, v!e oil.1 undertake no rurther ais-
oussion of the question In this eplnlon.
In this oonncotlon, bauvtvtr, it has been suggested
tbat Xcwt Fill 46 Is unconstitutional because property own-
ers, and Insuranoe conctrna not operetlng ror profit, are
not subjeoted to the tax, but receive the beneilts of the
proteotlon aooorded by the malntenanoe of fire-fighting
organlzatlonsr This argument asserts the proposition that
it I8 essoBtlal to the velldlty of a tar that the proceeds
of the tax be expended ror the benerlts of those upon vihom
the tax Is levied, as v!ell ao the proposition that olnssISl=
oation for purposes of taxation must embraoe all of those
who may benefit by the expenditure ct the tax money8 and
none who do not so btnstlt. TBIs is a nlsoonceptlon. h tar
Is not an asseasmeat of bentfi ta. Where taxes lavled are
othervrise lawrul, the tamoyer oennot complain that the
benefit8 derived from the expenditure of the funds era not
proportfontd to tho burdens lmQosed upon him.. There need
b* no relation between the ola5e of taxpayers and the pur-
pose to whloh the prooetda are applied. Carmichael v. Southern
Coal and Coke Coqany, 301 U, S. 496, 81 L. Ed. 1245. The
.
;
Honorable Homer Leonard, Speaker, Page 5
rule that olasaitloation made by a statute must rest upon
sOme ground or alrrerenos havine, a rair and eubetantlal
relation to the objeot of leglelatlon doea not require
thht the clecsirioation made by a taxing statute be r8lattd
to the purpose ror which the prooeeds of the tax are to be
New York tipid Transit Corp. V. New York, 303 U. S.
i;~tie L. Ed. 1024.
It Is llktwlse augessttd thet bectwt other State
tarins statuteslevy oooupation t6Xe8 Upon the aamtclass
or subJecti covered by &US0 Bill 46, Iiowt Bill 46 is void
a5 oon8titutiIQ “double t6XatiOn”. There is nothing In
either the yederal or State Constitutions. forbidding Wdouble
taxation” per 88. Fort Smith Lumber Co. Y. Msansas tx rtl.
Arbuokle,, 251 U. S. 532, 64 L. Ed. 390. Khat in oommonly
reterred. to as “double taxatiorP, in the objeotlonable ttntt,
is int uelity Or taxation based upon arbitrary disorimina-
tion. %a vim3 the pomr to 01685irY ror the pUrQO8t 0r taxing
oooupations, the Le$lslaturt likewise has the power to, tax
one olase 0r subjtots and to deterzinc the amount 0r tax to
be exaottd of this olase oi subjtots. So long as the t1fiS81-
tloatlon is not arbitrary and there is no dlsorimination bt-
twsen, the menbert of the olaee, it ie lmslaterlal that two
taxes 0r ‘the sare oharaoter are ida upon +Uhemember8 or the
olasa, inettad, as might be done, of one tax equal in *burden
- to the burden erreoted by . the total or the trio,
Article III, Seotlon 48, Art1016 VIII, Seot1on 3,
ana Article XVI, Section 6, 0r our State Constitution pro-
hibit the lcrylng 0r tax8 and the appropriation or th8
prooeeda thereof iOr prlt&t6, a8 dl8tlnylshtd rrom publla
purpoees. Artlole III, Seotlon 51, denies to the Legisla-
ture the poxer to cake or authorize “any grant of pub110
Eon81 to any lndivlaual, association 0r individuals munloi-
pal or other oorporatlon what8oevtr. . .* Artiole tI1,
Section 44, provide8 that no &rent of moneys shall be made
to any individual except the 8a.f.8 8hal1 have beta provided
ror by proexisting law. %blle, admittedly, the State might
provia a system 0r pensions and dieability beneiite ror it0
employees without thereby violating the constitutional pro-
visions (Byrd v. City of Dallas, 116 Tex, 28), it is urged
that firerren are not employee8 or the State, but or the munlcl-
palititrr, end that, therefore, the law makes a grant or pub-
110 money8 in violation or tb above Articles of the Consti-
tut ion.
Honorable Homer Leonerd, Speaker, Page 6
-For the purpose8 of this opinion it may be eon-
.otaed that firemen are not State smployees and that the
Aot dots not ffiake then suoh. Yit do not attempt the at-
olslon 0r that question. ~ee*erthtlt8s, it appear8 to US
that the validity of the law a8 aCain8t auoh objections
to its conetitutionality is sustained by the dtOi8ion of
our State,Suprent Court in the case or Rriedman v.'&uerioan
Surety Companyof Xew York, et al, handed down on April
9, 1041.
In that oa88, the majority ot the oourt sustain-
ed the oonatitutionality of the Texas Unemploymmtnt Compea-
sation Law. That law provide8 vinsuranca or compensation
ror the employees 0r 4 certain Ola88 or employea*s during
involuntary unemployment." That law levies a tax upon en-
plOyer8.tithin it8 teIZ8, t0 be paid t0 the COl3ili8SiOIl and
deposited In a eptoial fund which the statute permanently
fippropriatt8 tor ths purpose8 or the law. nit btneeifts
provided by the hot are not payable to all pereons employed
by others, during periods of Involuntary unemployment, but,
generally speaking, only to employees of employer8 who em-
ploy eight or more eicploytes. Certain olasses or employment
art excluded rrom the Act, among them employment by the State,
Its lnetrumtntalitits and pOlitioa1 subdivision8; agrioul-
tural lebor; employmnt in private hofies; employment on
vessels on the navegable viaterci of the united States, employ-
ment under certain rclativt8; and employment In certain types
or reli&oua, oharitablt, 8oientlfio, literary, tnd eduoa-
tlonal organizatione. Payments to the employees under the
provlslons of the law are without reference to the question
or need.
The oourt eustained the constitutionality or the
Texas Unemployment knpensation Lnw as qainst tht follow-
ing oontqntions:
1. That the exemptions rendered the Bet viola-
tive or Constitution rirtiolt I, Stotion 3, 6s a denial of
the equal proteotlon ot the laws.
2. ‘ibat the law violated Constitution .4rtIolt I,
Stotion 16, prohibiting the passage of any bill of attainder,
ex p08t iaoto law, retroaotive law, or iaw imPairin& the
obligation of OontraOts.
3, That the law violbttd Artiole I, Sootion 17,
respeatlng the taking of private property ior publio use.
4, That the-law violated Artiole I, Seotion 19,
..
Honorable Homer Leonard, Speaker, Page 7
the due process clause of the Tee8 Con8tltutiOn.
3. That' the law levied a tax and appropriated
the prOOttda thereof to other than WpublLo purpcsesn,. In
violation of Xrtiole III, Section 48, Art1018 YIII, Sto-
tlon 3, and Artiole XVI, Seotion 6.
6. That the law granted publio Eontys to private
lndlvlduals, in vlolatlon OS Art1018 III, Seotion 51.
7. That the law appropriates the proceeds oi t&o
tax Drmanently, rather than ror not more then tvio years,
in violation of Art1016 VIII, Section 0, of tJi8 Texas Con-
8titutlon.
Y&are bound to apply the decisions or our State
Supreme C6urt in the detemination 0r question8 presented
to this department, and the opinion of the majority in the
Friedman C68e appear8 to sustain ia principle the oonstitu-
tionality of tb Firemen*6 Pension and Tceliet Law. If any-
t!?ln(;, the case of the Firerzen’s Tension Law Is the strcnger,
for the service8,rendtred by firemen are pub110 or govern-
mental in charaoter, being an exerolse-of the authority and
duty 0r govtrnr;lent to prottot the oitieens, not only 68 re-
. epeote hi8 phyaloal Safety and well-being, but in the enjoy-
ment of his property.' Article I, SRotion 3, of the Consti-
tution preeervea the authority of the sovereign to grant ex-
clusive publio emoluments in oonaidtration of publio servloes.
And If It be urged that the atrvioee are not rendered to the
State, but to the municipality, the answer is that the Prled-
man ease sustains the &rant of moneys oolltottd throw the
exertion of the power of taxation to persons who are employees
o? private individuals and concerns, and %&oat employment is
not in the discharge oi a governclental fU.nOtlOn, on the
ground that the. money6 are devoted to the relief of unemploy-
ment, a publio purpose, and that the cor.penaation Is not a
gratuity, but earned by the servioes performed in private
enterprise. sr the relief 0r unemployment ie a pub110 pur-
pose, oertainly the expenditure of moneys a8 an induoement
to individual8 to render pub110 strviot in the proteotion
of life and property from the hazards of firs 8ervea a pub-
lic iNQO8e. If the renderIn of aervloe to private employers
Eonorable Eomer Leonard, Speaker, Fage 0
engaged in private business plaoes the &rant of uneaploy-
rcent benefit8 withcut constitutional condemnation of
ngratultle8n without the rendering of aerrloe in a pub110
employrient 8e*v68 the sa-~ purpose with respeot to the
*benefits provided by the Firemen's Pension Law.
-The deoieion in the Friedman 0880 likewise ob-
llsee u8 to rejsot the oontention that, ln appropriating
the prooeeds of the tax permanently, the AOt violates Arti-
01s VltlI Seotion 6, llmltlng the appropriation to tso
year per i Od8. In the Friedman oase, the oourt, In SU8tain-
1~ the Aot es an exertion of the taxing power of the State,
~OOgnlze8 and afflrIC8 that taxes Oen be levied only iOr
pub110 purpoee8, but, nevertheless, holds that the prOoeed8
of the tax there involved ar6 "not the proporty oi tti
State in any oapaolty, but. . . e trust fund to be held
out of the State Treasury, , , . in the hand8 of the Stat8
-.?‘reasurer as Trustee" for the benefit of those to whom the
benefits provided by the Aot may be payable. The fund ln-
valved in the Firemen's Pension Law Is of the same oharaoter
aa that Involved In the Friedman case and we a26 thereiore
OGn8tralned to apply the dootrine of that ease to the la-
stant sltuatlon.
.'
In any event, however, 6s observed in the Ix$Mrcaa
. . 'case, the Invalidity, if any, of the appropriation or the
funds, for loor than tn.0 ye8r8, xould not invalidate 3CU8a
Bill 46. It would not arleot the oolleotion of the iuzd,
but the authority to dleburse it, and may be cured by biennial
reappropriation of the fund for the purposes ior which the
fund is created.
It is ureed that the original .Aot (Eouse Bill 258,
45th Legislature) is invalid because containing more than
on6 subjeot in the title, in violation of Seotion 35, Artiole
III, Texas Constitution. Tiiis objeotion is without merit.
The title ds oonoerned with but a sin&e subjeot, tAe pro-
viding of the oomprehenalve system of pension and disability
benerits to rlrelten,-- and the provisions OS the tit.16 and
or th6 ;ict ltaelr a:6 all germane to thie single purpose.
Zobblns V, Limestone County, 114 Tex. 345, 268 S. X. 915.
The objeotion that the Aot violates tit1018 III,
s6CtiOn 44, 0r our Constitution, by providing extra oompen-
i i
i?onoreble Zorar Leo.mrd, Speaker, Taae 3
jat.Ionarter :;ublloservloe kz pcrfcrzed % the persona ?or-
fgly": ?uch rcrvios, oust bo rejeotsd~on thq nuthority of
. Llty OS Dallas, et al, 118 '3s. 2;. I
';hlsdls.poses or 011 questions w?ilchooour to us
?olativd to the aonrtitutlcnclify oi :io*ueoEl11 46 upon lta
face en4 a3 it I8 zig deyzd u.y0:1 the COEst~t!itfo~ollt~ Or
the Act OS w!:lcli it will ion en lctegral Fart. In view oi
the mcesslty fcrrprc~pt ootJ.cn upon yclurx-q-zest,beoauoe
of 2x mar approaoh 0r :ho and or thi5 l~~lslotlro oesalon,
a-e tavc zot undertrken ia this crinton on exhaustive troat-
cent or, the subject, ilcrtam Ye atteiqtbd a Cl8ocsalon 0r
confIictln3 authorltlea In other jurisdlotions reqeoting
Iam or the im:e &enerul ohn=actor. It stifioez Co say that
A'6 kCVC fiad thE b,stICrit Or tki >riPtk? pretpbrsb betor th8
Court of ~1'1~11q&e&8 In the
caee of imr'Zo:2nnlliunce In-
3UlUiCb ki!ZF@Xiy.f, :.'OrZ'i!
of Smmno3 Coxn,ise?o~~cr,above
Olt6C, se 5.avcsivea the rattc~r oarciti ccr.all6tat!.on,and
upon the authorltlea and reaeonlcs,nbcve cited and axpremed,
eza cr t,ks opinlc\nthat :!cum Cl11 46 Is constitutional.
FIRST ASSISTAI
A TTORNM GENE