"Special Franchise" Defined

1. Law
2. Georgia Code
3. Revenue and Taxation
4. Ad Valorem Taxation of Property
5. Franchises
6. "Special Franchise" Defined

As used in this article, the term "special franchise" means:

1. Every right and privilege exercised within this state and granted to any person by the state or its authority, by any county or county officer, or by any municipality or municipal officer for the:
   1. Exercise of the power of eminent domain;
   2. Use of any public highway or street; or
   3. Use of land above or below any highway or street;
2. Every special right exercised within this state and granted by charter, resolution, statute, or otherwise, whether pursuant to the laws of this state or any other state, for the exercise of any public service including, but not limited to, the:
   1. Construction and operation of railroads;
   2. Common carriage of passengers or freight;
   3. Construction and operation of any plant for the distribution and sale of gas, water, electric lights, electric power, steam heat, refrigerated air, or other substances by means of wires, pipes, or conduits laid under or above any street, alley, or highway; and
   4. Construction and operation of any telephone plant or telegraph plant;
3. All rights to conduct wharfage, dockage, or cranage business;
4. All rights to conduct any express business or for the operation of sleeping, palace, dining, or chair cars;
5. All rights and privileges to construct, maintain, or operate canals, toll roads, or toll bridges; and
6. The right to carry on the business of maintaining equipment companies, navigation companies, freight depots, passenger depots, and every other similar special function dependent upon the grant of public powers or privileges not allowed by law to individuals or involving the performance of any public service.

   The term does not include the mere right to be a corporation engaged in trading or manufacturing and exercising no franchise enumerated in this Code section.

(Ga. L. 1902, p. 37, § 1; Civil Code 1910, § 1019; Code 1933, § 92-2301; Code 1933, § 91A-1801, enacted by Ga. L. 1978, p. 309, § 2.)

Cross references.

- Acquisition of property for highway and other transportation purposes, T. 32, C. 3.

Grants of franchises by counties to cable television systems, T. 36, C. 18.

JUDICIAL DECISIONS

Contractual rights not impaired.

- Franchise granted in 1940 by town ordinance to a gas company allowing for the sale and distribution of gas services to town inhabitants was not granted in perpetuity; thus, a 1980 town ordinance providing for a three-percent franchise tax on gas sales impaired no contractual rights granted to the assignor of the gas company's franchise, and the trial court did not err in refusing to declare the 1980 ordinance unconstitutional as an impairment of contract. Gas Light Co. v. Town of Bibb City, 253 Ga. 498, 322 S.E.2d 250 (1984).

Franchise is a grant of right by public authority, the main element of which is permission to do something which otherwise the grantee would not have the right to do. Western Union Tel. Co. v. Wright, 185 F. 250 (5th Cir. 1910).

Exemption of franchise by charter.

- When the scheme of taxation, provided in the charter of a corporation, is to tax stock (meaning capital stock) by taxing the net earnings, it necessarily covers and embraces the franchise and prevents a subsequent taxation of the franchise as such. Georgia R.R. & Banking Co. v. Wright, 132 F. 912 (C.C.N.D. Ga. 1904), aff'd, 216 U.S. 420, 30 S. Ct. 242, 54 L. Ed. 544, 1910 U.S. LEXIS 1908 (1910).

Right of telegraph companies to use federal military or post roads.

- Whatever franchise or right a telegraph company acquires from the United States by its acceptance of the provisions of the Act of July 24, 1866, c. 230, 14 Stat. 221 (U.S. Comp. St. 1901, p. 3579), giving such companies the right to use the military or post roads of the United States, etc., is exempt from taxation by a state. Western Union Tel. Co. v. Wright, 185 F. 250 (5th Cir. 1910).

OPINIONS OF THE ATTORNEY GENERAL

Rights granted by Georgia Public Service Commission are a special franchise.

- Rights granted by the Georgia Public Service Commission, when the commission issues a certificate of public convenience and necessity, are a special franchise within the meaning of this statute. All persons exercising such special franchise are required to make a special return thereof as of January 1. Any firm failing to make a return of such special franchise is liable to double taxes thereon. 1962 Op. Att'y Gen. p. 511 (see O.C.G.A. § 48-5-240).

RESEARCH REFERENCES

Am. Jur. 2d.

- 71 Am. Jur. 2d, State and Local Taxation, §§ 171, 172.

C.J.S.

- 37 C.J.S., Franchises, § 1 et seq.

ALR.

- Indebtedness of corporation as proper item for inclusion in computing franchise tax, 107 A.L.R. 1303.

Mortgage on property of taxpayer who is not personally liable as "debt" for purposes of taxing statute, 107 A.L.R. 1310.

Transfer of surplus to capital stock account as a dividend for purposes of franchise tax, 107 A.L.R. 1335.

Franchise tax of corporation as affected by creation of affiliated corporation, 117 A.L.R. 508.

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