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March 16, 1939

Hon. R. Emmett Morse Speaker, House of Representatives Austin, Texas

Dear Sir: OpinionNo. Q-409 Re: Constitutionalityof H. B, 247, relating to horse-racingunder certain conditions

We have your letter ofMarch 13th, stating the request of the House of Representativesfor our opinion as to the constitutionalityof pending House Bill No, 247. I While your letter did not specifyany particular part of the Act, which has a "savings olausee (Sea, 52), since its effectual operation is governedby the seotions.propo.sing to permit ratificationor rejection t of permit holders to oonducthorse races, by the voters of counties under ' stated provisions,we shall discuss those sections, inviting further in-

: quiry oncany portions of the bill not consideredby us.

The bill creates The Texas Horse Racing Commission,provides for its organizationand incidentals thereto, contains oertain revenue and tax features, and provides for the distribution of its funds,whhen and if collected.

The general powers of the Commission are stated in Section 8:

"The Commission is hereby authorised end empowered to adopt rulesand regulationsfor the control and supervisionand direction of applicants, permittees and licensees for the holding, conductingand operating of all horae racemeetings held in this $tate, provided such rules end regulations shall be uniform in their applicationand effect, snd the duty of exercising this control is herebymade mandatory upon such Commission."

As we understand the salientworking features of the bill, themethod of operation is thus proscribed:

A person (associationor corporation)must first file an application with the Conmission to conducta horse raoemeeting and operate c pari-.Hon. R. Bmnett Morse, March 16, 1939, Page 2

mutuel betting pools. He must complywith certain requirementsof Sec. 13, giving in fill the information there prescribed. He pays a fee of $50.00 to the Commission, The Commission then holds 8 public hearing, and if the Commission concludesthe applicant complieswith all the provisions of law, the rules and regulationsof the Commission and is financially able to conduct the proposedmeet, and the cosnmanity wherein the track is located is not already adequately servedwith racing,

"the Commission shall issue a permit to the applicant, subject to ratificationor vote of the people residingwithin the county wherein the horse race track is located at a referendumheld for that purpose and as hereinafterprovided for." (Sec. 13; underscoring ours).

Such permit is then oertifiedto the Commissioners~Court of the Countywherein is located the track at which the races are proposed to be operated, It is then the duty of the Covmissioners'Court to call an election at the expense of‘the applicant and there is submitted to the qualified voters- the question of the approval or rejection of the particular permit grantedby the Ccrmmission. The form of ballot is set out:

"For the approval of the permit granted by the Texas State Racing Commission to .,...(nting the permittee) to hold and conduct horse race meetings at ,.... track (naming the track) in

..... County (naming the county)",end the words, "Against the approval of the permit grantedby the Texas State Racing Ccsmission~ to

.... (naming the permittee) to hold and conducthorse race meetings at .,., track (naming the track) in ..,. County, (naming the county)."

If the result of the election is favorable to the approval of the permit, an approved permit is then issuedby the Commission to the applicant or permittee,which entitles the permittee to issuance of a license ,bythe Commission for a period of one year upon payment of the license fee provided in the Act. No further discretion exists to the Commission, if the fee is paid.

Thereafter, the license, upon application,may be renewed from year to year during the period of the permit, which is ten years, provided the Commission finds the applicant stillpossesses all the qualifications providedby the Act and that the permit has not been revoked by a subsequent election, and that the licenseehas not violated any of the provisions of the Act or the rules and regulations of the Commissionmade and provided for in the Act. An approved permit expires after a period of ten years and no licensemay be issued after the expiration of the period of the approved permit, The Commission is vested with power to suspend
or revoke any license or permit if it be made to appear to the satisfaction of the Ccmmission that the holder or holders thereof'haveviolated any provision of the Act or any rule promulgatedby the Commission.Hon. R. mett Morse, March 16, 1939, Page 3

Independent of the findings of the Ccmmission, a permit or license
cnce approvedmay be revokedby majority vote of the electorate of the countywhere such racing is allowed, if twenty (2%) per cent of the total qualifiedvoters petition for such referendum,and if the expenses of such election are provided for. Thismay be done as often as cnce every two years.
Section 33 of the proposedbill reads as follows:

"Every horse racemeeting at which racing is conducted end parimutuel pools are operated, exceptas allowedby thisAct, is hereby prohibited and declared to be a public nuisance, and every person, association or corporationaiding or abetting therein or conducting
or attempting to conducthorse racing and operate pari-mutuelpools in this State net in conformitywith this Act shallbe deemed guilty of a felony and upon conviction thereof be confined in the state penitentiary for not less than one year normere than tenyears."

In analyzing the provisions of the proposed legislation,we must recognizeand take into considerationcertain inalienable principlesupon which our form of government is based. The Texas Constitutionordains that the powers of our government shallbe divided into three distinct departments with specificand exclusive delegation cf power to the legislative branch to enact or suspend law. All official authority in Texas is derived from the people as delegated in the constitution. Even the people themselves are boundby that document,until they change it as providedby its express terms,

Ours is a representativedemocracy,as opposed to a pure democracy. The laws are made not by the people directly,but through their chosen representatives. See Art. 1, Sec. 2 and 28, Bill of Rights;Art. 2, Constitution; Rx Parte Farnsworth, 133 S. W, 536, 33 L. R. A. (New Series) 968; State v. Swisher, 17 Tex. 441; Lyle v. State, 193 S. W. 680.

Under the provision of Section 33 of the bill, supra, the racing of horses with pari-mutuelbetting is prohibitedthroughout the State and in every county in it, until some specific one individual (or association
or corporation) can obtain a majority vote of the electorswithin scme one county of this State wherein is located a race track. No matter the said individualhas satisfied fully every regulation of the statute, every rule of the Commission, everywhim or caprice of the individualmembers of the Commission. The designated "permit" gives the holder thereof no right to conducta race, and he would be subject to penal servitude in the penitentiary if he undertook the operation of racing (with betting), before the voters of the county favored him with their favorable referendum.

The question ofwhether the people of the various countiesmay by local option election suspend the general laws has been definitely and conclusively settled in Texas. Likewise, that the Legislature cannot delegateHon. R. RmnettEiorsc, March 16, 1939, Page 4

its legislativefunctions to local option, to place in force or not place in force * general law. The first Supreme Court of Texas in the case of Statev. Swisher, 17 Tax. 441, uses the following language:

"Themode in which the acts of the Legislature are to become laws is distinctlypointed cut by cur Constitution. After an act has passed both houses of the Legislature, it must be signedby the speaker of the house and the president of the senate. It must then receive the approval of the Governor. It is then a law. But should the Governor veto it and send it back, it can only become law by being passed againby both houses,by a constitutional majority. There is no authority for asking the approval of the voters at the primary elections in the different counties. It only requires the votes of their representativesin a legislative capacity. But, besides the fact that the Constitutiondoes not provide for such reference to the voters to give validity to the acts of the Legislature,we regard it as repugnant to the principles of the representativegovernmentformed by our Constitution. Under our Constitutionthe principle of laxmaking is that laws aremade by the people, not directly,but by and through their chosen representatives. By the act under consideration this principle is subverted,and the law is proposed to be made at last by the popular vote of the people, leading inevitably to what was intended to be avoided, confusionand great popular excitement in the enactment of laws." State v. Swisher, supra.
This rule of law was subject to much discussionby the courts, and at one time the Supreme Court favored the rulewhile themajority of the Court of CriminalAppeals did not, but in the case of Lyle v. State; 193 S. W. 680, the reasoning of the Swisher case, supra, is set out and adopted by the latter court, as is the following language of Chief Justice Phillips in the Supreme Court case of Rx ParteMitchell, 177 S. W. 953:

"The case presents the question of the constitutionality of the referendum act of the Thirty-thirdLegislature authorising the qualifiedvoters of any county, or certain political subdivisions of a county, to determineby an electionwhether pool
rooms or pool halls shouldbe prohibited therein, and making it an offense to there operate ormaintain them if the result of the electionbe in favor of their prohibition.

"The constitutionalityof the act is assailed upon two grands: (1) That it amounts to a delegationby the Legislature of its own legislativepower, imposed upon it by the Constitution,which it *lonemust exercise, and which itmay not commit to any other agency; (2) that it authorizes the suspensionof a general law of the state by the voters of a county, or subdivisionof a county, namely, the statute licensing the operation cf pool halls generallywithin the state, in violation of article 1, para. 28, of the Constitution,Hon. R. Rmaett Morse, March 16, 1939, Page 5

which is "No power of suspending laws in this State shallbe exercised, exceptby the Legislature; an amendment of previous Constitutionswhich permitted such suspensionunder 'theauthority1 of the Legislature.

"The act is plainlyunconstitutional,in cur opinion, for both of these reasons. We largely rest cur decisionas to the first questionupon State v. Swisher, 17 Tex. 441,where an act of the Legislature in no way dissimilar in its effect from this one was upon this ground held unconstitutionalby the first Supreme Court of the state. That decision has never been overturned,and is the law upon the question. .Thesecondquestion is equallywell settled, according to cur view, by Brown Cracker ECCandy Co.v. City of Dallas, 104 Tex. 290, 137 S.W. 342, Ann. Cas. 1914B, 504."

In adhering the Court of CriminalAppeals to the Supreme Court view, JudgeMorrow in the Lyle case, supra, says:

"We are unable to find anything in our constitutionaland judicialhistory uponwhich to base a conclusionthat the decision of the Supreme Court in following the rule in the Swisher
case is unsound. On the contrary,we have pointed out hereinabovemuch that, in our judgment, supports its correctness."

In the case of Janninv, State, 61 S.W. 1126, it appeared the Legislaturehad passed a statutemaking it a penal offense for any other person than the agent of a railroad company to sell its tickets,with the further provision that it shouldnot apply to tickets on which it
was not plainly printed that it was a penal offense for the holder to transfer the same. The majority of the court held the act unconstitutional, employing this language:

"We accordinglyhold that because the legislature left it optionalwith the railroad companieswhether or not, in the issuance of tickets, they would create a penal offense, the act of the legislature is without authority of law; is violative of the law, in that it does not define with certainty an offense; does not itself oreate an offense,but delegates its authority to another agency to make the sale of railroad tickets a violation of the law. In this respect it would appear to be violative of section 28 of our bill of rights, which says: 'Nopower of suspending laws in this state shallbe exercised except by the legislature.' See Suth. St. Con& Pam. 69. We therefore hold that the sale of railroad tickets in this
case is not a violation of law."

In the case of Rx Parte Maynard, 275 S.W. 1070, it appears the City of Jacksonville,Texas, enacted an ordinancemaking it unlawful for persons engaged in the transferbusiness to solicithire of passengers, -aboutany railroad station, exempting frcm operation of the ordinanceHon. R. RnmettMorse, March 16, 1939, Page 6

persons under contractwith a railroad to transfer its throughpassengers or baggage to another railroad station. The Court of CriminalAppeals in its original opinionby Presiding Judge Morrow, and in the opinion on motion for rehearingby Judge Lattimore, held the ordinance in contravention of the constitution,based on "the well settledrule that the power to make lawswhich, by their terms, become and are effective or not at the pleasure of individualsor corporations,does not exist in the Legislature, and cannot be assertedby a municipality created under legislative authority." (Underscoringcurs).

In the case of Ex Parte Farnsworth, 133 S.WV 535, 33 L. R. A. (New Series) 968, en ordinance of the City of Dallaswas adoptedby referendum vote. Said ordinancewas authorizedby the "initiativeand referendum" clause of the charter grantedby the Legislature. Farnsworthwas arrested and chargedwith a violation of the ordinance. The Court of CriminalAppeals had before it an originalwrit of habeas corpus. Relatorwas discharged, the court strikingdown the referendum clause.

We find thesewords in Judge Davidson's opinion:

"That the referendumis adverse to our constitutionalform of governmentas a means of putting into operation enactmentsby the legislaturehas been expressly decided in this state as early 88 Statev.~Swisher, 17 Tex, 441; That case has been recognized and followed in subsequentdecisions. See Stanfieldv, State; 83 Texi 319, 18 S.W. 577, and alsoWerner vi.Galveston, 72 Tex. 22; 7 S.-WA. 726, 12 S.W.- 1596 In the last cited case; Judge Gaines,.writing the opinion,uses this language:. *It is a well-settled principle that the legislature cannot delegate its authority to make laws, by submittingthe question of their enactment to a popularvote.6.; It is equally certainthat the people cannot be reinvestedby the legislaturewith the functions of legislation conferredby them on a department of government;nor can the legislature render the enactment of a law dependentupon the acceptanceby the peopleby popular vote. See oases already cited, Rx parteWall, 48 Cal.,279; 17 Am..Rep. 425; Morford vd Unger, 8 Iowa, 82; Santav. State, 2 Iowa 165, 63 Am. Dec. 487; Statevd Beneke, 9 Icwa, 203; State ex rel; Dome v. Wilcox, 46 Mo.~458; Gibson v. Mason, 5 Neb. 283; Cincinnati, W. & 2. R. Co. V~ ClintonCounty, li Ohio St. 77, This inability arises no less from the joint principle applicable to every delegated authority requiringknowledge, discretion,and rectitude in its exercise,than fran the positive provisions of the Constitution itself. The people in whom the power resided have voluntarily transferred its exercise,and have positively ordained that it shallbe invested in the legislature, To allow the legislature to cast it back on the peoplewould be a subversion of the Constitution, andwould change its distribution of powerwithout the action or consent of thosewho created the Constitution."Hon. R. Emmett Morse, March 16, 1939, Page 7

Local option elections to determine the law applicable to the several countieshave been sustainedas to prohibition of intoxicating liquor and prohibition of stock running at large,but in each instance direct autnority is givenby the Constitution. Another exception is noted in some cases, such as City of SanAntonio v. Jones, 28 Tex. 19;Werner v, City of Galveston, 72 Tex. 27; Rileyv. Town of Trenton, 184 S. W. 344; Spears
v. City of San Antonio, 223 S. W. 166 and Johnsonv. Martin, 12 S. W. 321, but many of these are distinguishedby Judge Morrow in the Lyle case, supra, as caseswherein municipal corporationsare concernedand where charterprovisions are declaratory. The later cases are likewisedistinguishable. None of these cases are analogous to the bill before us and none of them decide the question of whether an act of the Legislature general in applicationwould be given life by the vote of the people of the county.

The case of Trimmierv. Carlton, 296 S.W. 1070, has been suggested to us as authority for the validity of this bill. A careful study of the lengthy opinion in that casewill disclose the power of the Board of Water Engineers to exercisemuch discretion after the vote has been declared; that there is constitutionalauthority for the procedure follcwed; and specificallyrecognizesthe principles of law discussedherein. The cases of Ex Parte Farnsworth, Fz Parte Mitchell, and Statev. Swisher, herein cited are recognieedby style, and no intimation given they should be overruled,

We have carefully considered the question andfor the reasons given e.ndcases discussed,are of the opinion that H. B, 247 is unconstitutional insofar as its provisionspertain to approval of the permit by the voters before issuance of license.

We do not question the legal right of the Legislature to legalise racingwith pari-mutuelbetting by passage of a generalbill so providing,
nor do we.deny the right to createa commission to administer and supervise same. It is well known that Commissions createdby the legislature to administer laws completewithin themselveshave been declared a valid exercise of the legislativepower, but in no instancehave we foundwhere the appellate courts sanction such a procedure as set cut in the bill you submit.
Very truly yours
ATTORNkY GENERAL OF TEXAS

(Signed) BenjaminWoodall BY BenjaminWoodall

Assistant

BW:AW APPR@fED: (Signed) Gerald C. Mann ATTORNEY GENERAL OF TEXAS