Harris County v. Shepperd

• Decision Date: 02 May 1956
• Docket Number: No. A-5591,A-5591
• Citation: 291 S.W.2d 721,156 Tex. 18
• Parties: COUNTY of HARRIS, Texas, Relator, v. John Ben SHEPPERD, Attorney General of Texas, Respondent.
• Court: Texas Supreme Court

Page 721

291 S.W.2d 721

156 Tex. 18

COUNTY of HARRIS, Texas, Relator, v. John Ben SHEPPERD, Attorney General of Texas, Respondent.

No. A-5591.

Supreme Court of Texas.

May 2, 1956.

Rehearing Denied July 11, 1956.

Burke Holman, County Atty., Houston, Tex., for relator.

John Ben Shepperd, Atty. Gen., Elbert M. Morrow and Frank Pinedo, Asst. Attys. Gen., for respondent.

CULVER, Justice.

Harris County seeks a mandamus to require the Attorney General to approve certain bonds which the County proposes to issue under the authority of Chapter 382, Acts of the 54th Legislature, 1955.

Section 1 of the Act reads:

'This local law for the maintenance of public highways for Harris County shall not be operative unless or until a majority of the resident property taxpayers who are qualified voters, residing in the County, participating in an election called for the purpose, shall have voted in favor of placing it in operation. The procedures for calling, holding and the effect of such election, are prescribed in Section 8 hereof.'

The Act further provides that the Tax Collector shall, upon receiving an application for registration of a motor vehicle, collect an additional sum equal to one-third of the registration fee which shall be used for the purpose of acquiring right of way for state and federal highways in and by Harris County and for incidental expense. The Commissioners Court is authorized in its discretion to issue negotiable bonds secured only by the fund created from the collection of these fees. At a special election called for the purpose a majority voted in favor of placing the Act in operation.

The Attorney General has refused to approve the bonds issued by the Commissioners Court on the ground that the Act is unconstitutional. The points upon which he bases his conclusion are as follows:

(1) The Act is a tax measure and contravenes the provisions of Article 8, Section 3 of the State Constitution, Vernon's Ann.St. which provides that 'taxes shall be levied and collected by general laws and for public purposes only.'

(2) The motor vehicle registration fee authorized by Article 8, Section 7-a is required by the provisions of this as well as other sections of the Constitution to be uniform and of state-wide application.

(3) Where the Constitution of Texas prescribes the sources of revenue available to counties for the purpose of building roads these sources are exclusive. Article 8, Section 7-a of the Constitution is not a grant of power but a confirmation of existing policy to be followed in the application of the state motor vehicle registration fees.

(4) The method prescribed by the Legislature for the adoption of the provisions of Chapter 382, is in conflict with the requirements of Article 6, Section 2 of the Constitution, and, therefore, this basis for placing the Act in operation and the election held in Harris County must be held void and of no effect.

(5) If Harris County has been properly delegated the power to collect the increased fees from motor vehicle registration, the commissioners court has still exceeded its authority in attempting to prescribe that the fees collected for 1956 shall be collected in succeeding years.

Admittedly the act is of local application only to Harris County and is wholly a revenue raising measure for the purpose, as explained in the act, of providing the county with another source of revenue to acquire needed rights of way for state and federal highways. In our opinion the authority therefor must be derived, if at all, from the taxing power of the state, and, therefore the act is clearly violative of Article 8, Section 3 of our Constitution which provides that taxes must be levied and collected by general laws.

A charge or fee which has regulation for its purpose is imposed under the police power. On the other hand, if for the purpose of raising revenue, it is a tax and levied under taxing power. This rule is pointed out in Cooley on Taxation, Fourth Edition, Vol. 1, Sec. 27 as follows: 'The distinction between a demand of money under the police power and one made under the power to tax is not so much one of form as of substance. The proceedings may be the same as in the two cases, although the purpose is essentially different. The one is made for regulation and the other for revenue. If for regulation, it is an exercise of the police power while if for revenue it is an exercise of the taxing power. If, therefore, the purpose is evident in any particular instance, there can be no difficulty in classifying the case and referring it to the proper power. So-called license taxes are of two kinds. The one is a tax for the purpose of revenue. The other, which is, strictly speaking, not a tax at all but merely an exercise of the police power, is a fee imposed for the purpose of regulation. * * *.'

This rule was followed and approved in Hurt v. Cooper, 130 Tex. 433, 110 S.W.2d 896, 899, this court saying:

'It is sometimes difficult to determine whether a given statute should be classed as a regulatory measure or as a tax measure. The principle of distinction generally recognized is that when, from a consideration of the statute as a whole, the primary purpose of the fees provided therein is the raising of revenue, then such fees are in fact occupation taxes, and this regardless of the name by which they are designated. On the other hand, if its primary purpose appears to be that of regulation, then the fees levied are license fees and not taxes. * * *'

In Brown v. City of Galveston, 97 Tex. 1, 75 S.W. 488, 496, the court was concerned with the constitutionality of an ordinance of the City of Galveston requiring the payment of 'license dues' for keeping and operating certain vehicles for public or private use within the city. In ruling on this question the court held: 'It is true the authorities hold that the police power cannot be used for the purpose alone of raising revenue, and, when exercised by a city for the purpose of raising revenue, it will be held to be by virtue of taxing power, and not of the police.' See also Booth v. City of Dallas, Civ.App., 179 S.W. 301.

Decisions from other jurisdictions holding to the same effect may be cited. In City of Terre Haute v. Kersey, 159 Ind. 300, 64 N.E. 469, a city ordinance conditioned the right to the use of the streets upon the payment of a license tax and provided that the revenues were to be used solely for the maintenance and repairs of the streets. The court held that the validity of the ordinance could only be upheld on the ground that the authority was derived from the taxing power. See also Ellis v. Frazier, 38 Or. 462, 63 P. 642, 53 L.R.A. 454; Smith v. Mahoney, 22 Ariz. 342, 197 P. 704; Vernor v. Secretary of State, 179 Mich. 157, 146 N.W. 338.

In City of Wichita Falls v. Williams, 119 Tex. 163, 26 S.W.2d 910, 79 A.L.R. 704, the court expressed the view that the term 'taxes' as used in the general provision of the State Constitution referred to ordinary ad valorem taxes only. In that case, however, the court was dealing with the question as to whether or not a special assessment for street improvements was included within the term 'taxes' in the excepting clause of Section 50, Article 16, the homestead section of the Constitution. The court was pointing up the distincition between a tax in the ordinary acceptation of the term and a special assessment levied against the property on the basis of enhanced value.

Certainly the taxing power of the state embraces a variety of forms and measures apart from those based only on value. The tax on gasoline, cigarettes and liquor are for revenue purposes only and the authority to levy these taxes is necessarily derived from the taxing power of the state. Article 8, Section 1 of the Constitution expressly authorizes property taxes, poll taxes, occupation taxes and income taxes. Section 17 of the same article confers upon the Legislature the power to require other subjects or objects to be taxed 'in such manner as may be consistent with the principles of taxation fixed in this Constitution.' One of the principles so fixed by the Constitution is that taxes shall be levied and collected by general laws only.

Petitioner, Harris County, maintains that, 'Article 8, Sec. 7-a, gives the Legislature specific authority and absolute power to enact legislation by special law to collect automobile license fees for the purpose of constructing highways which includes the purchase of right of way; with the constitutional limitation that such fees to be collected and allocated to counties shall never be less than the maximum amount now collected.' We are unable to read into this constitutional provision any authority given to the Legislature to enact this kind of a local and special law. It directs how the proceeds from the automobile license fees shall be expended and confirms to the counties the portion set aside to them out of these fees under the law in effect on January 1, 1945. This section is statewide in its application and by no reasoning can it be said to authorize the Legislature to adopt any different fee schedule for any one or more counties in the state. This provision does not constitute a grant of power, but affirms existing policy.

The relator contends that the Legislature has the inherent power to enact such legislation as Chapter 382 for the state, through the Legislature, has positive and absolute control of all state highways and the means by which they are constructed and maintained.

In support of that contention it cites Robbins v. Limestone Co., 114 Tex. 345, 268 S.W. 915, 918. In that case the controlling issue was whether the title and ownership of the public roads in the state lay in the county and road districts of the counties and under the control of the commissioners court or in the state. The relator relies on the following holding in that case:

'The establishment of public highways being primarily a function of government belonging to ...