DAN MORALES 

*TTORNEY GENERAL 

QBffice of tije JZlttornep QBeneral 

&date of PCexae 

March29,1993 I 

Mr. David J. Freeman 

Bxecutivesecrrtary 

Texas Bating Commission 

P.O. Box 12080 

Austin, Texas 7871 I-2080 

Opinion No. DM-211 

Re: Authority of the Texas Racing 

Commission pursuant to sections 6.09 and 

10.05 of the Texas Racing Act, article 179e, 

V.T.C.S., to receive and regulate the use of 

breakage generated by pari-mutuel wagering 

on greyhounds (RQ-230) 

Dear Mr. Free-man: 

The Texas Racing Act (the “act”) authorizes the Texas Racing Commission (the 

%mnmision”) to regulate pari-mutuel wagering in the state of Texas. See, e.g., V.T.C.S. 

art. 179e, 0 3.02. Your questions concern the authority of the cmnmission under sections 

6.09(d) and 10.05 of the act to rcseive and regulate the UK of breakage generated by parimutuelwageringongreyhoundmcesinTexas. “Br&age”mcans: 

theoddMltsbywhichthtMlountpayableoneachdollarwagmd 

exceedsamultip~eof10~exceptintheeventaminuspool 

oczurs,inwhichcasethebRakageshaubeinmultiplcsof6vecents. 

Id 8 1.03(20).’ 

Section 6.09(c) provides that 50 percent of the breakage gawrated by pari-mutuel 

wagesingon~raasisduethertllteudpclidtothe~~~whilesection 

6.09(d) of the act aUocatcs the remaing 50 percent. Section 6.09(d) provides: 

Fiftypercentofthe~eistobepaidtotheappropriate 

state greyhound breedhg registty. Ofthat portion of the breakage 

tForinrtana,a~‘ofS217wooldberolmdeddownto~u),udthcoddrcvcncmtrwould 

Mtbcpaidtothewiooiagkttw,bot-tothcEomminiosthc a?mptmkofFobkAEEounts, 

~VdOOSOthSi#didO&Orcntiticrin- with tie XL See V.T.C.S. art. 179~. 05 6.08(b) - (i). 

6.09(c)-(d), 9.04. 10.05; 16 TAX. 0 301.1 (defining ‘mirmr pod” as a pool with t!sufficient net 

Empayh 

minimum~cctowinaingktton);mETavnlAeovrHoasERACINoINTO(AS,at 

(l3mmgh Flh. co. 1978). 

Tb d.50 V.T.C.S. an 179~. 0 3.09(a) @vision for deposit in state tmsmy by ammisior~ of 

mDacysitCOllectJurdcrthC~). 

p. 1112 
Mr.DavidJ.Freeman -Page2 ml-2 11) 

25pacentofthatbreakageistobeu~in~~~’Md25 

percmtofthatlotibmtiage#vtnaiiveprai-muruelpmlaa 

simu&arl pri-mutueI pool is to be pid to tk -won for lhe 

use by the state grqhomd breed registty, subject IO mks 

pramdgaied by the cmmhian. [Emphasis md footnote added.] 

WeuadastMdyouto~whatpartofthrtSOpacenthtobeprid~totbe 

Tacpp Grcyhmd Awxiation (the “TGA”). the only breed r&try for greyhounds in 

Texas. We- youalsotoask~partofthatbreakageistobe~for~~ 

racesmd~partissubj~torulesado~bythecommission. Weconcludethatallof 

thebrralcage~~by~on6.09(d)istobepclidfirsttothewMnissionratherthsn 

to the TGA. We also conclude that one-hsJfof the breakage allocated by section 6.09(d), 

or25pacent,istokusedfor~~ncesMdthrttheTGA’suseofthe25pacentsa 

asideforst&esracesaswellasitsuseofthe remaining 25 percent is subject to rules 

adoptedbythecommission. 

In 1991. the legislature &led the langursc of section 6.09(d) italicized hove. 

Acts 1991.72d Leg.. ch. 386.5 30,8t 1456. Spe&caUy, the wadded the it&&cd 

languageduringthethirdrwdingofHouseBii2263 onMay 18.1991. S.J. ofTen, 72d 

Leg.. at 1717-18 (May 18. 1991) (5oor aawhent 16). Earlier that day, the senate 

added sections 10.04 ud 10.05 to the act during the second read@ of the bii. Id. at 

1703 (500r Mlmdmmt 3). Those sections provide: 

section 10.04. The state greyhod breed regiey shd nuke 

rrrconabletulestoestablishthcqua55cuionsof-Tcxasbredgeyhmdstopro~deveiop,8lldimprovetbebnsdingof 

gmyhombintbisstate. Rulcsadoptedbythemgistryaresubjeotto 

wmmission approval. 

section 10.05. The 05cially d&hated state .grqkmd breed 

regiay ‘for accrehd Tcxasked gwyhmds is the Tsar 

GteyhoundAawcktion. Tbest8tebrc®istqshUadoptndato 

provide for the use of brehgc ruxived by it under Section 6.09(d) 

OfthiSAct. Anasso&ionskdlpaytbe~duethebrced 

registry to the appropriate state greyhound registry at least every 30 

days. 

p. 1113 
h4r.DavidJ.F recmm-Page3 (DM-2 11) 

V.T.C.S. ut. 179e, 00 10.04- .05; Acts 1991, 72d Leg.. ch. 386, 548, at 1460.4 The 

referenw to “aswciui0n” in the last sentenw in section 10.05 is not to the TGA, but to 

theiadividualorentitylicenssdtoconductnca,ita~~tracl. V.T.C.S.ut. 179e, 

3 1.03(2) (defhing “usociatim” as person licawd to conduct race meet@ with parimutuel -8=w. 

You note in your reqtte~ letter that section 6.09(d) as amcntly worded is subject 

to diGring inteqmtatioas. You expLin that the commission intuprets the section as 

~~~for~~n#sorarbjectingtow~~~~theentirr5Opercent 

ofthe bredage allocated by section 6.09(d), with one-half of that amount or 25 percent to 

kusedin~~cesudtheothaonahlfor25pacenttokusedbytheTGAin 

acwrdanw with wmmission rules.’ You further explain, however, that the section wuld 

be read to set aside for stakes races or subject to commission rqulation only one-half of 

the5Opementofthebrcakage,or25penmt,witb 12 1/2percmtsetasidefixusein 

~es~~12l~pacmttobe~bytheTGAhr~~withw~ssion 

ndea. Underthtxtintcrpremion,tbcTGAwould~the mnainiq 25 percent f&e of 

eithastatutoryorrqulatorycontrol. Youstate,however,thatthisint~raationwuld 

nsultinthe~ofbreabgeiaconsistentwitbthe~~ofthe~~chindudesthe 

~1~,69LhLeg,zdC.S..&19,~1,~61. Tbisi8n@mgcmas&kddur&tkUdrdrmdingd 

SamkBUlSiatk+nrtc. SJ.dTa,6~Icg.IdC.S.w166(~26,1986)(~PncaQlvnt 

4).N&hertheaaultcddmtcduriagthirdndingallicr~ ofsech6.O9(d),mrothcrcspcusaf 

tkle&laiwhinaydSantcBiu15duifytbemmlill8dtk~~. srr,e.g..Same 

comm~~s~.1s,BillF~69LhLcg,zdcs.~HollrRcrasb~FbaRcpmoll 

C.S.S.B. 15, at 6 (AqaU 28. 19S6) (irmmcdy rrdcrriDg to rctioa 6.09(d) uul (e) in the Samtc 

commiarc 8obWitulc rc@aced by mztioo 6.09(d) duriq third madi@. We u&m& that the 

- didnmcd to tk TtiA SlS2.275. OI me-iuuoftk s361.55O iu bmkagc tbal Ihe alrmdsh 

lcceklfmm~mcLrnosintionrfolfircplyar1991. 

p. 1114 
Mr. David J. Frecmw - Page 4 (DM-211) 

promotion of the gqhnmd brecdhg indusby in Texas. &e id. 5 1.02 (stat@ act’s 

-l.6 

We note also several other ambiguities in section 6.09(d). First, the phrase 

“subject to rules promulgated by the commission” could be wnst~ed to apply to both 

perwntages mentioned in the second sentence; or to apply to only the latter of the two 

puwdaga Sewnd,tbere@awntthat25perwntbcpaidtothewmmissionappcars 

toconfliawiththerequirrmmtthatthe~5Opacmtoftheb~irtobeplidtothe 

TGA,thestategrqhmdbreedreghy Furkmo~, the requiremwt in section 6.09(d) 

that25pacaabe~dtothewmmi~wrrppeMltowntliawithtberequiranentin 

section10.05thatthegreyhmdassohtionspaytotheTGA brehgedueitatleast 

evwy 30 days. 

Tacrurcourtssutethrttheprimaryplrpo~ofstatutoryw~wirto 

ztscedn the intent ofthe kgishturc and that ambiguous statutes should be interpreted to 

~~shthelegislrrtunsintenteMIifthatintentis~~stentwitha~cttit~or 

grmmatiwl reading of the statute. See Green v. i&x@, 773 S.W.2xl 816, 818 (Tex. 

App.-San Antonio 1989, no writ); 67 TEX JUIL 3d Sturutes 85 91, 113 (and authorities 

cited therein). Acwrdingly, we turn to the legislative history of the phrase “is to be paid 

to the commission for the use by the state greyhound registry, subject to rules 

promulgatedbythewmmission.” 

Asmartionedearlia,therenate~thatp~duringthethirdreadingof 

House Bill 2263 on adoption of floor amemhnt 16. S.J. of Tcx.. 72d Leg.. at 1717-18 

(May 18,199l). Adoption of floor amwdmwt 16 resulted in termhtion of Senator John 

Leedom’s 5liier on the floor against passage of House Bii 2263. During the filii, 

thesenatorr&red armaoustimesto~w6.O~)ofthebin,aprovisiwrlloutinga 

partofthebreaLageg~bypui-~wrgaingonhonerclcesto~o~hone 

breedregistries,ud,statedhisdesireto~~lddedthatwouldbothrequire~of 

thebrralrage~ocatedtothebonebreed~~tobepaidfirsttothewmmissionud 

8UthOliZCthCW ~ontolrdoptrulesreguLtiagtbeborsebretdngistrieS’uSe0fthat 

breakage. See Debate on H.B. 2263 on the Floor of the Senate, 72d Leg. (uay 18, 1991) 

p. 1115 
Mr.DavidJ.Freunan -Page5 (DM-2 11) 

(tape available 5xnn Swude Staff Sesviw3).7 Floor amwdmwt 16. w-sponsored by 

Swwtor Lcedom added to saxion 6.08(i) the proviso that the bre&ge allocated by 

~~a.~)tothehonebned~~wrs”tobe~dtothecommissionforuseby 

tkappropriatestatehorsebreedEgistry,alQecttoNlespromulgatedbythe 

~mmission.“* ThishnguageisaentiAythesameasthtuIdedbyflooranwhmnt 16 

toseuion6.09(d). hatorChetBrooks,anotherc&sponsoroftheamaha&inkct 

cxphinedtotkhouae~5oor- 16auurcdthatthcsamebre&age 

bitations applied to horse racing and dog aiog. See Debate on H.B. 2263 on the Floor 

of the !knate, 72d Leg. (May 18.1991) (tape available from Senate StaE Services). 

Given~~o~,wewncludethelegidatureintadedtouaho~thewnrmissionto 

~~rul~reguktiagthe~of~brsrlrrge~~byredion6.09(d),indudingthe 

pawntage ret aside 5x stakes races. Furthnore, we conclude that the legislature 

intended by the addition of the phrase “is to be paid to the wmmission for the use by the 

atate gmyhomd breed regktry, subjecl to rules promulgated by the commission” 8lso to 

rsquirethtrll~rllocatedbyKaion6.09(d)bepaidfirsttothew~~. 

oUrwnstructionof~~6.09(d)unbeharmwizedwiththeraquirrmentinthe 

5nt swtence of section 6.09(d) that 50 percent of the breakage “is to be paid to the 

~~~brredingregirtry”dnceeM1if950pacentisfintpaidto 

thewmmission,itwillbeultimatcJypaidtotheregistry.9 Thiswnstructioncanalsobe 

hamonbd with the statement in se&m 10.05 that the TGA “shall adopt rules to provide 

p. 1116 
Mr. David J. F m-Page6 (DM-2 11) 

for the use of breakage rewived by it under Section 6.09(d) of this Act.” While this 

statrmentbyitstennsdoesnotprovidefor wmmisaion review and adoption of the TGA’s 

rules, we conclude that the provision in section 10.04 that “[r]ules adopted by the m&try 

[the TGA] arc subject to commission approval” appties to the TGA’s rules on breakage as 

well as to its rules establishing quali5cations for gryhwnds. The section 10.04 provision 

is not expressly limited to the TGA’s rules establishing quaiikations for Texas-bred 

~~~the~eaddedittothe~ctatthcMmetimerCthestatanentinsection 

10.05. SJ. of Tex.. 72d Leg.. at 1703 (May 18, 1991). In addition, we found no 

indication ia the kgisMve history of the floor amwdment adding section 10.04 and 10.05 

tothe~thrtthelegiduureintendedtheTGA’snrleswbreakageto~eeffectwithout 

prior wmmission approval. More importantly, as we explain later in this opinion, no other 

conclusion would render the tioa 10.05 statemwt wnstkutional.~O 

We are not able, however, to harmonhe our wnstnztion of section 6.09(d) with 

the requirwnwt in section 10.05 that the greyhound asocktions pay to the TGA breakage 

due it at least every 30 days. As mentioned above, the senate amended section 6.09(d) 

during the third reading on May 18. 1991. while s&ons 10.04 and 10.05 were added 

dtningthewwndreadingearliathRtday. This&ctalongwiththelegislativehistoryof 

5oor amendmwtt 16 lead us to wncbde that the wntlicting payment requkement in 

section 10.05 is iwlktive. 

We turn now to the relevant wnwitu5otud principles.*l State regdatory statutes 

must~~cleII,~onl~article~sedionloftheTarasCo~~which 

prohii the legkkure firorn ddegating legi&ive powers Yo the unwntrolkd dkretion 

of a private individual or entity.” See Attorney General opinion JIM-509 (1986) at 3. 

S~with~dentwntrolsto~the~~~~ofpublicRthathanprivue 

purpom however, will not violate these wnstitutional provisions. Compare Minlan v. 

Ci@ of Fart Worth Phning Can&n, 786 S.W.2d 563 (Tex App.-Fort Worth 1990. no 

writ)(replattiagstatuteitwalidbeauseit~egatedtonarroweegmentofwmmunity 

kgidatk power ldthout controls on exercise of power) wifh Llt&ng v. Auramatic Gas 

Co., 193 S.W.2d 517 (Tar. 1946) (holding valid statute that inwm by refuwcc 

aristiagregulationsofa~e~o~aw~ofwhichwasonfilewithstatc 

p. 1117 
Mr.DavidJ.F reeman-Page7 @M-211) 

wy39.” Thwwhiiethckgislatureorstateagenciesmayrequesttbeticeaad 

aruutrnaofprivllteindividrulsmdesltitiesinthebaftiagofreguLtorynrles,theymust 

~~udapprovethefhalrukstobeahccdagainsthdustrymembersorother 

manbars of the public.1’ our wnchlsion that seuions 10.04 and 10.05, whal mad 

~getba,arbjecttbeTGA’rrukson~to~w;Ipprovllisw~with 

this gmed principle, and thuq we need wt iiad that section 10.05 vioiates article I& 

swtion 1 or article III, seotion 1 of the Texas Constitution. 

~conclusionmdourcoadusionthat~6.09(d)~theconrmission 

touloptfinrlnrl~fortheTG~s~ofrllbrerloeeit rE!c&esunderthusectionrrealso 

wnaiwwtwithgweraldueproceMpfinciples. AdoptionofregulatoryshbJtessochasthe 

lWillgEUWCWithillthCStUdSpoliWpowertOpKdCUthepeece,lKWlthOr~ 

welfkre of the public. ~IIiams v. State, 176 S.W.2d 177, 182 (Tex. Grim. App. 1943); 

T-State T&rsAshv.S&te. 711 S.W2d421,425 (Tex. App.-Austin 1986, writ 

ref’d n.r.e.). Although a state’s poke power is broad, it may not exceed the state’s duty to 

protect the welfhre of its citizws “as consistently as may be with private property rights.” 

Brawn v. Humbk Oil&Refining Co., 83 S.W.2d 935,943 (Tat. 1935). Due process of 

lawthusrrquiresthatthestateexerciseitspoliwpoweronlyforpublicprrposesandina 

malulerthw ensures the acwmplishmwt of those public purposes. Id.; hte Stur Gus Co. 

v. Kelly, 165 S.W.2d 446.449 (Rx. 1942) (the state’s poke power may not be acercised 

~easitmultshabu&tothepublic). InTrrpPhmaucehcalA&nv.&wley,a 

~~owrtrpptiedthae~prindplesudimnlidateda~requiringastlte 

rg~tohunovertoaprintephnnaceutiallrsociatiwlwrtofthe~liceasing 

fees imposed by the statute on phmacisu. 146 S.W.2d 206 (Tex. Cii. App.-Austin 

1936, writ dism’d judgm’t cur.). The wutt wnchded 

animnlidaracire 

thuthefketmnsferplwisionwas 

OfthCStU&pOliCCpOWWbCOWWCthCprivltellWWiUiWWlWWithK 

p. 1118 
Mr. David J. Freeman -Page8 (DM-211) 

SUMMARY 

Section 6.09(d) oftbe Texas Racing Act, V.T.C.S. article 179e. 

mpiresall0ftbebrcakqeaatedbythatsecti0l&thfItiqthe50 

perceat0ftbcbrakgegeneratedbypari-mutuel~elingoa 

greyhmdracu,tobeprid~totheTexu~conrmiarion. 

ThtKctionrlrodedicdmonahlf0fthe50pacent,or25perant 

tostakesraces. TheTcxasRacingComissionis~by 

aection6.090toldopt~k1sreeuLtiagaUbreJEllgeaUocatedby 

~mtion6.09(d),incMingtbe25pacsatset~&fwstelrer~. 

Howcvq in awordancc with seuions 10.04 and 10.05 of the act,.the 

TexasGreyhmdAsso&timnuypropwendesfortheuseof 

brerloee,a teccivawderthe~butthoseNlesare8ubjectto 

rpprovrlbytheTgEyRZiQgCotllhioU. 

DAN MORALES 

Attorney General of Texas 

p. 1119 
Mr. David J. Framm -Page9 (DM-211) 

WILL PRYOR 

FiiAMiuantAttomeyGweral 

MARYKELLBR 

Deputy AttomeyGenadforLitigation 

BENEAHlcKs 

state solicitor 

MADELEINE B. JOHNSON 

Chair, opinion Commbc 

p. 1120 

L