Case Information

*1 OFFICE OF THE ATTORNEY GENERAL OF TEXAS

AUSTIN

GERALD C. MANN ATTORNEY GENERAL

Monorable George H. Sheppard Comptroller of Public Accounts Austin, Texas

Dear Sir!

Opinion No. 0- 5084 Re: Whether the title to H.B. 251, Chapter 212, note of the Regular Session, 42nd Legislature, 18 aufi- sient to among abbodation 18th of Article 7047 B.C.S., 1925, and related questions.

In your letter of January 3, 1843, you request the opinion of this department as to the constitutionality of the above mentioned amendabory 495. According to such letter, certain general and special agents of life insurance companies are refusing to pay their occupation taxes, and are contending that H.B. 251 above 18 unconstitutional be- cause the title they to be deffative.

HICITORY OF THE ACT

In 1855, by H.B. 413, note of the Regular Session, 24th Legislature, the first occupation tax upon in- surance agents was passed in Texas. It provided for an occupation tax upon general and local agents of life, fire, marine, and accident insurance companies; also upon these agents of industrial life insurance companies.

In the Revised Statutes of 1895, Article 5049 was substatistically the same as H.B. 412 above, except it provided for an occupation tax upon certain insurance companies doing business in this state in addition to the tax upon certain agents thereof.

At the First Called Session of the 25th Logis- lature of 1897, Article 5049 was amended and general ad- lusters of losses... of life, fire, marine and accident.

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Insurance companies were included for the first time. The balance of the net was substantially the same as before.

In the Revised Statutes of 1911, Article 7355 (Section 20) provided for an occupation tax upon general adjustment of losses, or agents of fire and service insurance companies. "Local agents" were not taxed, neither were "general adjustment of losses, nor agents" of life or accident insurance companies.

In the Revised Statutes of 1925, Section 20 of Article 7355 (1911) was carried forward in Identical wording as Section 10 of Article 7047 (1925).

In 1931, E.B. 251, Acts of the Regular Session, 42nd Legislature, amended Section 10 of Article 7047 (1925) as follows:

(1) said Section 10 was divided into subsections (a) and (b), reading as follows:

"(a) Insurance Adjusters.—From every insurance adjuster, who adjusts insurance losses, whether employed by an insurance company, or companies, or by an adjustment bureau, or by the insured whether a member of a firm, association of persons, or whether an agent or officer of such firm, association, or of any corporation, whether the charge therefor be paid by the insured or the insurer, an annual tax of fifty Dollars ($50.00).

"(b) General and Special Agents.—From each and every person acting as a general or special agent of every insurance company that may transport any insurance business in this State, an annual occupation tax of Twenty-five Dollars ($25.00). By "general agent" as used herein, 18 meant any person, whether a member of a firm or association, or an representative or employee, who may exercise a general supervision over the business of any insurance company in this State, or over local agencies of such insurance companies, or any person supervising such business, or any part thereof, as controlled/regulished

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from a local agent or local agenay. By "special agent" as used herein, is meant any person, whether a member of a firm or association, or as representative or employee, who may exercise supervision in any executive capacity, other than of an officer of such company, over the business of any insurance company in this state, or over the adjustment of losses or the placing of risks. But one payment of the annual occupation tax herein imposed shall be required of any one person under this subdivision. Acts 1897, 1st C.S., p. 49; Acts 1931, 42nd Leg., p. 355, ch. 212 1.0

(2) Other changes were as follows:

(a) "General adjusters of losses... of fire and marine insurance companies" was changed to "every insurance adjuster, who adjusts insurance losses", with no reference to fire and marine insurance companies.

(b) "General agents of fire and marine insurance companies" was changed to general agents "of every insurance company".

(c) "Special Agents" of every insurance company was inserted into the law for the first time.

The caption or title of the Act reads, in so far as pertinent here, as follows:

"An Act amending subsections 4, 6, 7, 8, 9, 10, 12, 15, 23... of Article 7047... 6. 8. 10.

Section 35, Article 3 of our Constitution reads as follows:

"No bill, (except general appropriation bills, which may embrace the various citizens.

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Honorable George H. Shepperd, Page 4

and aecounta, for and on account of which moners are appropriated) shall contain more than one subject, which shall be expressed in its title. But if any subject shell be ombreced in an act, which shall not be oxpressed in the title, such act shall be rold only as to so much thereof, as shall not be so expressed."

It is contended that the title to R.B. 251 above is defective and violative of Soetion 35, Article 3 of our Constitution. The question is:

Whether the title to the amendatory act (R.B. 251 above) is suffisiant to allow the amendmont of suboestion 108 of Artile 7047, which provides for an occupation tax only upon general agents of fire and marine insurance compenies, to cover general agents of every insurance eompeny, and special agents of every insurance eompeny?

It should be observed that "special agents" of every insurance eompeny was inserted into the law for the first time by such amendatory act, and "general adjutors of losses" and "general agents" had been previously confined to such adjutors and agents "of fire and marine insurance eompenies".

The purpose of foetion 35, Article 3 of our Constitution, and similar constitutionel provisions elsewhere, is well exp:essed in Cooley's "Constitutionel limitations", Volume 1, page 300 (Zighth Edition): "First, to prevent 'hodge-podge' or 'log-rolling' legislation; aecord, to prevent surprise or fraud upon the legislaturo by means of provisions in bills of which the titles give no intination, and which might therefore be overlooked and oere1easly and unintentionally adopted; and

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third, to fairly apprise the people, through such publication of legislative proceedings as is usually made, of the subjects of legis- lation that are being considered, in order that they may have an opportunity of being heard thereon, by petition or otherwise, if they shall so desire."

For Texas cases to the same effect, see citations in 39 Texas Jur. p. 77.

It is the settled rule that "a liberal construction will be applied in determining whether or not a statute vio- lates Section 35, Article 3 of the Constitution, and, where the provisions are germane in any degree, the law will be apable". Katz v. State, 54 S.W. (2d) 130.

It has been said in Gibson v. Sterrett, 144 S.W. 1189, that "it is sufficient compliance with the constitutional requirement if the subject-matter of the amendment is germane to the subject matter of the original act, and is within the title of that Act".

Applying these principles to our factual situation, we believe the title to the amendment set insufficient to levy a valid occupation tax upon any persons not "general agents of fire and marine insurance companies", for the follow- ing reasons:

(a) INCOPEICITNCT OF TITLE:

The title to the amendment set is copied above. That portion of the amendment set which applies to general agents "of every insurance company", and "special agents" of every insurance company, is now substantive matter not expressed in the title. We cannot refer to the title of the original act to see if its title was broad enough to include such new substantive matter, as suggested by Gibson v. Sterrett, supra, because the original act (Article 7047, R.O.S., 1925) was copied from the identical wording of Artio- lo 7355 of the Revised Statutes of 1911. Since both of

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Honorable George H. Sheppard, Page 6 these Artioles appear in Revised Statutes, it was not meceasary for either of them to have a title, but it is nignificant that Article 7355 (1911) limits the prior atatutes to the aubject of "fire and marine insurance compantes". It cannot be said, therefore, that the new subatentive matter contained in the amendatory not is expressed either in the title of the amendment or the amended act.

(b) NOTICE:

In Sutherland v. Board of Trustees, 261 S.V. 489, the tree test to be applied in eases of this character is said to be: "Does the title fairly give notice by its reoftals, to all persons conserned, of the aubject-matter of the act?"

No one would seriously oontend that the title in question gave notice to anyone not a general agent of a fire and marine insurance cor;any. Rapeolally in this true when we consider that no attempt had been made from 1911 to 1931 to levy an occupation tax upon agents of insurance compenies other than "fire and merine ins arance compantes".

(c) ANTNEMENT GERMANE?

In our opinion the most difficult question is whether the meaument is germane to the aubject matter of the anended act "in any degree". The main aubject matter of the original act was an occupation tax upon general agents of fire and marine insurance companies. Was there a suffisiantly olose connection in aubject matter between the original act and the amendatory act, which embraced general and apecial agents of avay insurance compeny, to sustain the amendment" "e think not. Our opinion would be different if the title to the original act involved the subject of insurance agents generally, and the body of the act was limited to "fire and marine insurance compenies", but ainoe there was no title to the original act (it appearing in a revised edition of the atatutes), and the subject matter of the prior acts were ohanged and limited to "fire and marine insurance compenies" by such revisions, we are ompelled to say that the provisions of the amendatory

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Nonorable George H. Sheppard, Page 7

set are not suffisiantly connected with the main subject matter of the anended set to mistein the emendnents.

Subsection 23 of the amendatory set in question was held rold in Ex parte Turner, 55 S.W. (2d) 833, besause it contained new sabetentive matter not germane or pertinent to that contained in subsection 23 of Artiole 7047, and was logicalation upon a subjeet not expressed in the eaption to the set. There the subeestion of the amendatory set made mo reference to anything contained in the original subseotion, and was in no way germane to anything contained in aush subseotion, but related to an entirely different subjeet matter. It presents a atronger foetual altuation than we have here, but it is sabmitted that this precedent is very persuasive, if not controlling.

Tours very truly

ATTOHET GENERAL OF TEXAS

By

Thos. B. Duggan Assistant

TBD Law

APEROVED

OPINION COMMITTED BY LEAVY CHAIRMAN