Did a Texas school district have to pay registration fees for a vehicle it leased rather than owned by title?

Texas AG Opinion JM-787: Registration Fees for Leased Government Vehicles

Plain-English summary

A Texas legislator asked whether a school district or another listed government body lost the motor-vehicle registration-fee exemption when it leased a vehicle instead of holding legal title. The statute covered vehicles that were the government's property and were used exclusively in its service.

The Attorney General concluded that a typical government lessee still qualified. Article 6675a defined an owner as a person holding legal title or having the legal right to possess or control the vehicle. A lessee with possession or control therefore counted as the statutory owner.

The opinion also concluded that a vehicle owned in that statutory sense was the government's property for purposes of the exemption. Reading the terms differently would have made a government lessee pay a tax on a vehicle used for public purposes, contrary to the exemption's apparent purpose.

The exemption still required exclusive government use. A lease alone did not settle the question if the vehicle was also used for other purposes.

Currency note

This opinion was issued in 1987. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Did the government body need legal title to claim the exemption?

No. The statute's definition of owner also covered a person with the legal right to possess or control the vehicle.

Did a normal vehicle lease make the government body an owner?

The opinion said a typical lessee with the legal right of possession or control would be an owner for purposes of article 6675a-3(c).

Was the statute really about special license plates?

The opinion described article 6675a-3(c) more precisely as an exemption from registration fees. A separate provision addressed specially designated plates for exempt vehicles.

Could a leased vehicle qualify if it had non-government uses?

No. The opinion's conclusion still depended on the vehicle being used exclusively in the service of a listed government body.

Which government bodies did the quoted statute list?

It listed the United States government, the State of Texas, and Texas counties, cities, and school districts.

Background and statutory framework

Article 6675a-3(c) exempted owners from registration fees for vehicles that were the property of and used exclusively in the service of specified government bodies. V.T.C.S. art. 6675a-2(a) generally placed the registration obligation on the owner.

Article 6675a-1(L) defined owner to include the holder of legal title and anyone with the legal right of possession or control. The opinion treated that definition as broad enough to cover a government lessee even though another party retained title.

The Attorney General reasoned that ownership and the phrase property of were coextensive in this setting. Both phrases had appeared in the statute since 1929, and the opinion found no case or prior opinion treating property of as an additional title requirement. It also relied on the exemption's public-purpose rationale and the principle that government taxing itself would be a senseless process.

Citations and references

Constitution and statutes:

• V.T.C.S. article 6675a-1(L), definition of owner
• V.T.C.S. art. 6675a-2(a), vehicle-registration requirement
• V.T.C.S. article 6675a-3(c), government vehicle registration-fee exemption
• V.T.C.S. article 6675a-3aa, specially designated exempt plates
• Texas Constitution article XI, section 9

Cases:

• Lower Colorado River Authority v. Chemical Bank and Trust Co., 190 S.W.2d 48 (Tex. 1945)
• State Highway Commission v. Harris County Flood Control Dist., 247 S.W.2d 135 (Tex. Civ. App. - Galveston 1952, writ ref'd)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-787
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1987/jm0787.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

THE ATTORNEY GENERAL
OF TEXAS

September 16, 1987

Honorable David H. Cain
Chairman
Committee on Transportation
Texas House of Representatives
P.O. Box 2910
Austin, Texas 78769

Opinion No. JM-787

Re: Construction of article 6675a-3(c), V.T.C.S.

Dear Representative Cain:

You ask the following question:

Does the word "and" in the phrase "property of and used exclusively in the service of", found in Article 6675a-3(c), mean that if a school district or other such entity included in the law were to lease a vehicle, and therefore not own it, it would be exempt from this article and would therefore not be required to have exempt license plates?

Article 6675a-3(c) provides, in part:

Owners of motor vehicles, trailers and semi-trailers which are the property of and used exclusively in the service of the United States Government, the State of Texas, or any county, city or school district thereof, shall apply annually to the Department as provided in Section 3-m of this Act to register all such vehicles, but shall not be required to pay the registration fees herein prescribed, provided that affidavit is made at the time of registration by a person who has the proper authority that such vehicles are the property of and used exclusively in the service of the United States Government, the State of Texas, or a county, city or school district thereof, as the case may be.

First, we note that you characterize article 6675a-3(c) as "requiring" vehicles owned and operated by governmental bodies to have exempt license plates. We think that article 6675a-3(c) might be more accurately characterized as exempting owners of certain vehicles from payment of registration fees. See V.T.C.S. art. 6675a-3aa (providing for specially designated license plates for exempt vehicles).

Article 6675a-3(c) states that the owner of a motor vehicle is exempt from payment of registration fees for that vehicle if the vehicle is both "the property of" and "used exclusively in the service of" a governmental body. You suggest that if a governmental body leased a vehicle from some other entity, the governmental body would not own the vehicle and could therefore not meet the requirements of article 6675a-3(c). Because of the way "owner" is defined for purposes of article 6675a-3, however, we think that analysis is incorrect.

The statute requiring registration of motor vehicles generally makes the requirement applicable to the "Owner." V.T.C.S. art. 6675a-2(a). Consistent with the general statute, article 6675a-3(c) exempts "owners" from the payment of registration fees. For purposes of those statutes, the word "owner" is given a broad definition: "'Owner' means any person who holds the legal title of a vehicle or who has the legal right of possession thereof, or the legal right of control of said vehicle." Art. 6675a-1(L). Therefore, a lessee who has the legal right of possession or control of a vehicle, as the typical lessee would, would be an "owner" for purposes of article 6675a-3(c) even though the lessee would not have legal title to the vehicle. See Attorney General Opinion O-5381 (1943).

The article 6675a-3(c) exemption applies to "[o]wners of motor vehicles . . . which are the property of and used exclusively in the service of" certain governmental bodies. (Emphasis added.) Consequently, the exemption could apply to a vehicle leased by a governmental body as long as a leased vehicle that is "owned" by a governmental entity is also "the property of" that governmental entity for purposes of article 6675a-3(c). In other words, to determine whether the article 6675a-3(c) exemption can apply to a leased vehicle, we must determine whether the legislature intended that the phrase "property of" be defined as broadly as "owner" or whether the article 6675a-3(c) requirement that a vehicle be "the property of" a governmental body means that a governmental body must have legal title to the vehicle. We conclude that if a governmental body is the "owner" of a vehicle, the vehicle is "the property of" the governmental body.

It is the "owner" of a vehicle who is responsible for registering it, and it is the "owner" who may avail himself of the exemption from registration fees provided for in article 6675a-3(c). Therefore, if a governmental body "owned" a vehicle by virtue of a lease agreement, the governmental body, not the lessor, would have to pay registration fees if the vehicle was not also "the property of" the governmental body. Attorney General Opinion O-5381 (1943). Such a result would thwart the apparent purpose of article 6675a-3(c), which is to exempt governmental bodies from paying registration fees for vehicles used for public purposes. See Tex. Const. art. XI, §9 ("property of counties, cities and towns, owned and held only for public purposes . . . shall be exempt from forced sale and taxation"); Attorney General Opinion V-955 (1949) (registration fee for motor vehicles is a tax); Lower Colorado River Authority v. Chemical Bank and Trust Co., 190 S.W.2d 48 (Tex. 1945) (government taxing itself would be a senseless process).

Article 6675a-3(c) applies to "the United States Government, the State of Texas, or any county, city or school district thereof." For the sake of simplicity, we will refer to those entities as "governmental bodies." Our use of the term "governmental bodies" is not intended as a comment on the scope of article 6675a-3(c) exemption. See Attorney General Opinions WW-487 (1958); M-1033 (1971).

Furthermore, both the terms "owner" and "the property of" have been in article 6675a-3(c) since its enactment in 1929, Acts 1929, 41st Leg., 2d C.S., ch. 88, at 172, and we find no case or opinion that suggests that the two terms are not coextensive. In Attorney General Opinion WW-487 (1958) this office wrote:

In order to qualify for issuance of fee-exempt license plates, the following requirements must be present:

1. The agency seeking the exemption must have been created by the laws of the State of Texas and be functioning pursuant thereto.

2. The agency must have been created for the purpose of performing governmental functions or duties.

3. The vehicles for which exemption is sought must be owned by such agency.

4. The vehicles must be used exclusively by the agency. (Emphasis added.)

The opinion made no suggestion that the statutory requirement that the vehicle be "the property of" a governmental body was in addition to the "ownership" requirement. See also State Highway Commission v. Harris County Flood Control Dist., 247 S.W.2d 135 (Tex. Civ. App. - Galveston 1952, writ ref'd).

We conclude, therefore, that a governmental body covered by article 6675a-3(c) is exempt from motor vehicle registration fees for a vehicle if it is the "owner" of the vehicle in question and the vehicle is used exclusively in the service of the governmental body.

SUMMARY

If an entity listed in article 6675a-3(c) leases a motor vehicle and thereby becomes its "owner" as that term is defined in article 6675a-1(L), the entity is exempt from the registration fee for a motor vehicle if the vehicle in question is used exclusively in the service of an entity listed in article 6675a-3(c).

Very truly yours,

JIM MATTOX
Attorney General of Texas

MARY KELLER
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Sarah Woelk
Assistant Attorney General