Case Information
*1 OFFICE OF THE AITORNEY GENERAL OF TEXAS AUSTIN
BonoFable SUlne~ I&hm
Searetar~ of State
Au&in, Foxas
Dear sir:
reportu br Artl- posar rorles to be rertrictob by, the provirlons of tales vere enaoted at the ~amo (Aatr 1931, 42nd Leg., p. ; aquage dearly revoalr their es pl&n the faat that Astiole 141s I.8 Artdale 7089. !Cho formor Art%- retary of State or en7 other State oyoe, or an7 other perman, having l a aeae to any fmuehise tax report filed a8 pro.- vi&d by lav, including My shareholder Who ir per- aitted to examine the report 09 an7 corporation a8 wovlded in SeatLon 2 hemot. 8hM.l make kxwvn in -by manner whatever not pm&&d by lav the &ouut or aour of inaome. rrrofita. lofloeu, eXDenU.ture8, or any mrtiaulnrs theroof, or any other Lnforma- klon DertainlnR to the firwclal aondittnn of the *2 Eonorable Sidney Lathes, page 2
ctX%mratlon 8et forth or dlr0lored In 8uah rmort,
he not exaedlng One Thou8ana Bo 8ha11 brlE?8ba 8 (@,OOO.OO) oanflneasnt in jail by a f
for not exaeedlng one year, or both.' (Rupha818 added)
The relevant portion of Article reads:
II Said report 8hall be deemed to be plvli&&**ad not for the iri8pdatIon of th8 gun- era1 publlo, but a bona fide toakholder ovnzlng one per cent (l#) or more of the out8tendlng rtoak of any aorporatlon, may examine ruoh return8 upon pre8entatlon 0r evldenae of rueh Ovnerahlr, to the &#eretmy of 3tate. lo other exam&nation; dlralo- owe, or we. ehall be mmitted pi raid remrt8 exarpt in the aour8e of wme ,judiaial proaeebtngr la rhlah the mate 18 a partymor Ia tiult by tiie st4te to aanael the permit or iorrelt the eharter OS 8wh aorporetlon or to oolloat penaltier f'or a violation oi the law8 of tU8 State, or ior in- fwmatloa of say offlaer, of this State aharged Vlth the enroruemeat of it* &VB, lnaluding the Comptroller of Publla Aaaouat8, State Auditor and the 8tate Tax Commissioner. . . ." (@+a818
added)
Thu8 vh.lle Artiole 1410 make8 uIlhVful only the dlr- 0108ure of aertaln InforMtlon pert- to the Sinmblal aondition of the reporting corporation, Artlole 8peaitla- ally forbid8 any "examination, dlralowe or use" of fraaahl8r tax report8 by unauthorired perrona. Illnae 80~1) of the ln- formation required by Artlole lnoluded in rwh re- port8 I8 unrelated to the finanolal QOnditlOn OS the aorpora- tlon and 8lnae uader &tlale 7089a the Searetwy o? State m8y require the lnclu8lon In the report8 ol additional Information, both flnanclal and non-flnanaisJ, the re8peatlve field8 or Artiole8 7089 and 141s are ea8lly dl8oerned. Unauthorized examinatloia, dI8clorure8 anb u8e8 of the report8 and OS any information acntalned therein, regardle88 of vhether or not 8UUh lnfornutlon is related to the t-ala1
aondltlon of the corpor- atlon, are forbidden by Artlale 7089; unauthorlred dl8aloaure8 of' flnanaial information alone are made unlawful by Article 1418. The fact that the violation of Artlole 141e 18 expre88ly made a miwlenmanor while no penalty tr attaahed to a violation of
xonaable BIdna~Utham, pqp 3
&tiele fn no vay over-ridma tka language of either or th#M &&iUbS, POr a008 it Ompd wih0r tb OtrmOhUiOn that they are aoextmulve or t&t the latter 18 rertriated by the sorlmr. Abaenoe a sp0alila penalty may oreate lmniunity fez the doing of an aat pmhlblted by statute, but it aannot oreate authority. C~e~UOUntly, frtW f'ir#t QuO0tiOIl 18 (1l1- OVered in the MgatiVe 82kd VU are re#pOtftily adVised th8t *rtia& 7089 and Artiale 14le are to bo mxmtrwa indepenaent- and that the 80tr) problblted theroln differ to the extent above Set foCth.
"Would th8 di80108UN Of th8 -8 ody Of OorpOratiOM fiu7&& trurohiae tax ZOpOrtS t0 pW- l onu not @ten l aoe88 u0h reports by the Nat- ate be a vlolatlon OS tbu prov~10xu of either Artlolb or 141etn %%a ItmS Of th0 repQFt$.Ug OwpOMtiOII 18 Or OOUPSO, in the franfdire tax re-
a part of the lnf0rmatloa to ba touad Oi OW OMtiQM VhiOhhWe tiid awhre- &3WtU, Uldthe~U aorta can only be o btaimd Ii J l Ulin$ the report8 and by ‘di#- a part of the information eontaiosa therein. alo8*’ IanoauLt and unproduotlve of evil though 8unh ume aad dlraloaure mt tbst SUiih OOlldUOt 18 OOQWe- See8, MV~~th8bSS Ye t-1 headed by &tla.le 7089. Ocmrequentl~, with referenae to Arti- i8 moered in the #firmatiVe. de 7089, yOUr 8WXId QtuStiQU Esxt you *tire;
*would d~80108~ 0i th8 lrpue 0s OOC- that have filed porationa rwh ro t8, togethm rlth a 0tatemat OS vhotbar or no all fFqpOhi#~ ?- taxer due had been paid by uah uorporatlonr be a ;f;i:$lon of the tiermu OS eAther Artiole 7089 or The filing of Srsncrhiw tax reports and the pati aOt8 whlah IWed fl’~OhiSe taXe# @l’O Si?p8MtO al¶d di#tinOt coincide. Although Article 7089 requires the tlllng of franahlae tax reports brtveen January 1st and llarah 15th of eaah year, under the tem8 or Artial8 7084 the tax itself maa not bs p0ld Until my let. Yhsre th8 tu 3.8 @?bid #Ub#aQwnt
iionorable Sidney latham, page 4
to the filing of the report, obvlouJly it 18 impOS#ible for the report to refleat whether or not the taxer have been pala. Moreover, with the form of report currently eEployed by your offioe, even vhere the tax is paid at the time the report 18 mede, no evidence of l uah payment PppefWS on the report. Al- though l p4ae is provided in 8uch report for the oorporation to oompute its tax md to reveal the amount 0r the tax aaaord- ing to its oolnputrtionr, nowhere on auah report can it be as- aertained whether payment ha8 aoaoBQanled the report, vhat amount, if any, ,&as been pia, or even vhether the mount of the tu as aomputed by the corporation is the true amount of the tu a-.
It will noticed fihnt Artlole8 7089 and 141e oon- fer a privilege anl7 upon the report ind upon the l.nforBatlon contain0a therein. The tact that taxer have or have not been pala aan be dotermlned neither by azt "examinatj.on," a 'die- aloaure" nor a Qne" of l uah reports. Conr~uently, we are OS the .op%niOn that a revstition of awh fast i8 in no Way a vlolatlon of either of the Artialea i.A que8tionr lotdoe, how- ever, that we are 8 aking only of a revelation of whether or nothing raid hereill 18 to be not tih0 t4XeS have WUI pIbid. k aomtrued as l utho rlslng a diralo8urs of the amount of the t-8 y&d, ii such t-8 have bOen wholly paid, the uto=tS Of t4UeS paid urd dUt9, if 8uah t-8 brrVe been &Wtiall7 paid, or the WUlltS oitue0 due or QllnqUent, ii Swht~s have not been paid.
It i8 appulent that WIy di8OlO8~e the faOt that tax08 have or heve not been peld by a given OorporatloA nee- t388~ily Vill, in OM 88XlSO, lnvolvo a di80~08~e or the name uah corporation. lie feel that this latter bi8alo8ure al80 18 authorized urd that OUl' pOSitiOn ti th18 re#peUt in no Way OoniliOtS with OUX' (BIuWer t0 your SeOand qUeStiO!l. ~'IIlLeS of oorporrtlons Sillng reports o8nnot be diaalored beaause uah Mm98 cm be a#OertaiMd only by a prohibited we ana dia- closure of the report and the infoxmitlon thereini however, the name8 of oorporatlone fran&lae taxes aan be deter- -d without reierenee e 0 the report or to rush in- forMtion. Iior, ve feel, a068 fact that the tvo groups of 11111008 normally vi11 be ldentloal (though not always, atice a oorporatlon lrury ill.6 a report without paying the tax pad, ltu- probably but aonoeivably, aould pay the tnx without filing a report) mflltate a@n8t this conalu8ion. We see no re88on why the fact that lnforaretlon obtained from a non-privileged eourae happens to colnolde vlth that whloh aould be obtained from privileged source should preclude recouroe to ana employ- ment of the former.
Honorable Sidney Idham, page 5
SiAma YOU QUOStiOA 18 OOWh8d in tW'E# Of diB&Or- ing the AR8IeS Of eOrpOratiOM rbi0h hrVe riled th0 FqKh end lcevealing vhether such aOrpOratlOA8 have pald their taxes, Ye SUlSt answer your ~UOStiOA in the 8ftlrruktlve. Hov*ver, ve are of the opinion that you may divulge the nanma 0s those aorporation8 which have p8ia their frMahl#e taxer and nm7, with reapeat to a given oorporation, dl#UlOse 8hether not it ha8 paid 8uCh tax.
YOUC iOUt% QUOStiOA iAQUir88: %Odd a di8UlO8LWe Of the ABRie Of OffiOclFS end dlreatora of any corporation as 8hown on uoh report be vlolatlaa of the term8 of either of SUCh al’tiU~S?* reptires, inter alla, that 'eaah report Article
8hall be sworn to by either the preSideAt, vlae pe~rldent, l earetary, treasurer o r general -or, and 8hall give the mm8 and aadre88 0s eaah ofriaer aa dlreator." SlAoe the ABJ8eS.Of OffiCWrS and dlreotOr8 are XpreS#ly m a pWt Of the information to be aontalrmd in franohlre tax reports, we feel that rush lniorm&lon meiy not be obtained from ze- ports ULcr, divulged to unauthorioed peraoA8. GanieQuently, vlth r6fersnae to Artlole 7089, this question 18 answered in the affirmultiVe, aAd YOU are re#peCt~ly AdViSed th8t SuOh hfOrmtiOII may di8~108ed.
b%Stly YOU aOk:
‘lihat offiaerr are inaludea within the mekn- lng of the word8 'sng officer of this State charged vlth the eAforaea&mt of its laWat 88 rued in &ti- ale 7089?”
Our Constitution and statutes are replete vlth refer- ences to "state offleers ' *offiaerr of the state," *offloera Of the St&e gOVeF2USMt, I 'offiaer 0s this state’ and 8i1nilar expre0010A8. Llk0~188, ao8t of thew expre88loA8 have xwelved both statutory and judicial deflnitlOne. See Tex. Jur. p. 321, et seq. However, all of these definitloA8 hme been enunoieted efther expre88~y or impliadly with referenae to the context in whloh auah expreeslon8 have been elpployed. T$ua, for example, our 0Ae statutory definition 0s the phrase or- ficer of this state,' COAtai.Aed in &tiole of the Penal
43 Eomrable Sidney Utbaa, page 6
code, 18 expre88ly iimiba to the USA 0s that q1r088i~n ia AS i8 #rid the C?OAtOXt the b@tidlO %mSSdiately preOediII& in 34 Tex. Jur. pp. 334-335;
"IA a popular sense 8 State offloer is one whose jUPi#diCtiOq, dUtie8 and funatianr lule ao- extensive with the Stat&j but in S larger ae~ae he 18 one who reoelvea his authority mder state laW8 rpd perfom8 same of the govemmentel ruA0ti0AS of State. In this aen8e offlaer8 may be state or- flUera though the%r Juri8dlotlon or powers are oon- finsa t0 the li.ISitS Of the aOUAty w et811 t0 OIU Of its politlaal 8ubdlvi8lonr. TM term is gerural- 17 USed %,A the COAStitUtiOA SiAd StcltUteS iA it8 Old7 t&OS* Offi~WS PpUhr SefiSe a8 iwlUdb$ whore dUtie8 urd fI&AOtiOM al'e OOUteMiVe With the bouudorloa 0s the state, QF such geAera1 0s.
ricers as immediately belong to ore of the three OOAStituQAt bWMhe8 Of th8 Stat, $OVWTl8l8nt. %&t it may reter to the eharaoter the offloe rathm than its territorial extent 0s vhethw the of- floe OMJ for whioh the Whole State Vote8 Op Ml'aly 8O8tb SUbdiViSiOn thereof, #k&ah S8 a dir- trlct cz countg.* the broad aa4 0s l uah term are tha oases of
Illustratlvr JemQan v. Finley 90 Tex. 205, 38 S. Y. 24, urd 0-0~. v. Zaokry, 115 8. V. $67, 117 8. Y. 177, both of whlah hold that a# t0 the #Oh001 fond a UOMtiy Offiaer 18 aA 'OffiaeF Of thS State," and b pate baoey, 93 a). W. 538 (Cr. Am.), holding that a ahlef of police anb a poliae- are 'state OffieOrSD Or %@88i State OffiUerS.”
We feel that this @Mae Was employed in &tiob in the broad MASS mentlolled in the above quotation.
It will be noticed that this ktiole biers to officers of the state *ahargea vith the enforoement of its ISus.* Slaae offioera 80 charged are co~flne6 neither to those whore powers are aoextenslve with the boundaries of the state POP to those who belong to one of the t&e@ brulrrhea of state governvwnt or who are elected by the entim state, this added clauae is iadloatlve of the broad sense in which the phrase 'offiaera Of this State" Y88 USSd. Horeover, under brtiale 708& iran- chiss tex reports nay be examined, dfaalo8ed 01) u88d in the *7 Hommable bidaey I&ham, page 7
oourse of some judicial prooeedlnga _._ ._ -.. . in vhloh the State la a a ._ _ . party or Ilr a atit Dy tne atate to wumea tna peraut or ror- felt the oharter of awh aorporatlon or to oolleat penalties for a violation of the laws of this State.” Sinoe some of these emaerated suite may be inatltuted and prosecuted by county or dietriot offloera, and indeed, in some fnatanoea mat be brought by these offlclala, a restriction of the of this state” to offloera of the state phrase “oifioera overnmeat eanuot find praetloal juatlfioation. Conaequent- y, ue are of the opinion that any offloer, his l eleotlon f and authorfty state-wide or aoaflned to dlatrlot, oounty, munlai9allty, or other polltloal or geographloal aubdlrIalon of this Mate may be lnoluded wlthln t&la portion of Artlole 7089,pcrovlded he is aharged vlth the enforoement of any of the l&v* of this Btate. We ~8910~ the word “amy” advlaedly in the pr*oedS.ng aentenoe beaauae ve feel that the mere iaot that one la an offioer of this btate oharged with the enforoement 0S ita lame does oonfer a oarto blanahe authority upon.hU UIth reopeat to the examination of franohlae tax reports.
Rather, we feel, his prlvllege to make rush an exaninatlon la llalted bg the requirqment the purpose of a*uoh ma&- that nation be oeaaonably related to the enforoeakeat of the rt&t- ute air statutes wit&In his ohargo. A deaonstratloa of l uoh relatlonshlp la, we feel, a necessary prerequL*lte to aa examlnatlon of f’ranohlae tax reports by auah an offiolal. We fully reallee the generality of these statemeats, but PO feel that the task of making ooqlete and detailed list uah oSil0era and 0S aomplllng an all lnolualve enumeratloa of the varloua lava with whose eaforaement they mat be olaer ed la both futile md We ahall, of Course, be 9 eased f impoaalble. at aay time to give you our oplnlon 8s to vhether any e~olfio oiflOer,or group of offlaera, la, with rea ot to imy given law, lnoluded within thla portion of Artla p" e 7089.
Trusting that the raregolng,fully anavers your In- quiries, we are
Very truly yours ATTOR88Y GltUSlAL 09 TEXAS - A \ /K . R . ban noahead
RDlI:db Aaalat8at