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                                              R-379




                        May   8,   1947

Han, C, E, Patterson      Opinion No. V-193
County Attorney
Brewster County           Re: Taxation of wool in gov-
Alpine, Texas                 ernment warehouses on
                              consignmentfrom rancharc,
Dear Mr. Patterson:
          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 bovernmentWarehouses 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 circumstanceacov-
ered by your letter is the property of the producer,
the rancher, or the governmentwarehouse involve8 an
issue of fact which is beyond our province to pass upon
and which we will not attsrpt tomresolve. 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 consummatedthe wool re-
mains in the hands of the producer and is a farm product
specificallyexempt frem taxation by virtue of Article
VIII, Section 19, of the State Constitutionadopted in
1879, which reads as follow&:
            '?Farmproducts 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; proclamationOctcber 14,
       1879eIW
Hon, CO E, Patterson - Page 2, v-193


          We think that wool does constitutea "farm
productt',and its storage in a governmentwarehouse
pending ultimate sale does not preclude its being "in
the hands of the producereD
          Literally farming means the tillage or cul-
tivation of the soli. But.,as said by the court in the
-e,o;p;r;tJw~~        &   jJq$$ f$yy~     @fag;""
l%ike many words 'compoundldof 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 synonymoucwith 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 necessarilyan ag-
riou1tura.l.
           pursu
              9 t, for the production of milk from
cattle which consuma,the cropo grown on the farm ie as




duction and sale of wool is producingan agricultural
or farm product. Ao long es such wool remains unsold
by the ranchman it is a farm product in h a hando'and
as such is specificallyexemnt under the.4-oregoing pro-
vision of thi)Constitution.-
          The Legislaturehas never by two-thirds vote
of all members of both Housea imposed a tax upon farm
products "in the hands of the producerno
          This constitutionalexemption from taxation
would not apply,to wool that has passed out of the hando
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~sCongress has specificallypermitted 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
of the producer" as provided,byArticle VIII, Section
19 of the Constitution.
                     SUMMARY
          Wool stored in Federal Governmentware-
     houses by ranchmen, but not actually sold, is
     specificallyexempt 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, it is not
     subject to ad valorem taxes by this State, in
     ;;e absence of Congressionalaction permitting
       .
                               Yours very truly,"
                          ATTORNEY GENERAL OF TEXAS

                                                                 .:.
ATTORNEY GENERAL
                                          Assistant
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