You present for the opinion of this Depart- ment in your letter of April 15 1947, the question of whether or not wool in Federal bovernment Warehouses ao of January 1st is oubject to ad valorem taxes for that year; and, if 80, upon whom the duty rests to render and pay the taxes, i.e., whether the rancher who pro- duced and consigned the wool to the warehouse or the warehouseman.

-&ether the wool under.the circumstancea cov- ered by your letter is the property of the producer, the rancher, or the government warehouse involve8 an issue of fact which is beyond our province to pass upon and which we will not attsrpt tom resolve. We will ao- sume, however for the purpose of this opinion, that the wool remains the property of the producer until it is appraised and in fact sold at a price mutually a- gread,upon betweenthe producer and the Federal Govern- ment.

Based upon this assumption, we are'of the o- pinion that until such oale is consummated the wool re- mains in the hands of the producer and is a farm product specifically exempt frem taxation by virtue of Article VIII, Section 19, of the State Constitution adopted in 1879, which reads as follow&:

'?Farm products in the hands of the pro- ducer, and family supplies for home and farm use, are exempt from all taxation until other- wise directed by a two-thirds vote of all the members elect to both houses of the Legislature. (Set, 19, Art, 8, adopted election first Tueo- ' day in September, 1879; proclamation Octcber 14, 1879eIW

Hon, CO E, Patterson - Page 2, v-193

We think that wool does constitute a "farm productt', and its storage in a government warehouse pending ultimate sale does not preclude its being "in the hands of the producereD

Literally farming means the tillage or cul- But., as said by the court in the tivation of the soli. -e,o;p;r;tJw~~ & jJq$$ f$yy~ @fag;"" l%ike many words 'compoundld of differ&< &.ements it has the meaning of its own broader than that of thi elements considered separately; for from time immemorial it has been regarded as synonymouc with husbandry and

the soil and the in the crops and earliest7ZFeZ7

We continue to quote from this case as fol- lows: "But, where the milk sold is produced by cattle kept on the farm as a part of its operation, the busi- neas of produc and selling it lo necessarily an ag- riou1tura.l. pursu t, for the production of milk from cattle which consuma,the cropo grown on the farm ie as duction and sale of wool is producing an agricultural or farm product. Ao long es such wool remains unsold by the ranchman is a farm product in h a hando'and as such is specifically exemnt under the. 4- oregoing pro- vision of thi) Constitution. -

The Legislature has never by two-thirds vote of all members of both Housea imposed a tax upon farm products "in the hands of the producerno

This constitutional exemption from taxation would not apply, to wool that has passed out of the hando *3 Hon. C. E. Patterson, Page 3, V-193

of the producer by sale or otherwise, for it is exempt only "in the hands of the producer". If in fact the wool has passed out of the hands of the producer by sale to the Federal Government, then it would not be taxable unles~s Congress has specifically permitted the State to tax it. The State has no authority to tax property owned by the Federal Government so long as it insists upon its immunity.

If we assume that there has been a completed sale and thewool has in fact become the property of the Federal Government and as such continued in storage in the Federally owned warehouses? we know of no Congress- ional action waiving the immunity of the Federal Govern- ment from State taxation under such circumstances. ..s ( . . If, however, a sale of the wool has been made ,.

to a purchaser not itcelf entitledt o claim immunity from taxation a different rule would apply and tax liability would begin as in the case of any other per- sonal property, for it would no longer beninthe hands Article VIII, Section of the producer" as provided,by 19 of the Constitution.

SUMMARY Wool stored in Federal Government ware- houses by ranchmen, but not actually sold, is specifically exempt from ad valorem taxes by virtue of Article VIII Section 19 of the Con- stitution of this State, as a farm product in the hands of the producer, If it actually has been sold to the Federal Government, is not subject to ad valorem taxes by this State, in ;;e absence of Congressional action permitting .

Yours very truly," ATTORNEY GENERAL OF TEXAS .:. ATTORNEY GENERAL

Assistant LPL:lh:jm