### THE ATTORNEY GENERAL OF TEXAS

.nmMAnox August29,1988 ATMRNEY OENERAL

Honorable W. S.McBeath Administrator Opinion No. JR-948

Texas Alcoholic Beverage Commission Re: Authority of the P. 0. Box 13127, Capitol Station Alcoholic Beverage ComAustin, Texas 78711 mission toprorate club membership forpurposes of determining permit fees for aprivate club registration permit (RQ-1432)

DearMr. McBeath:

Your request letter describes the along-standing practice of the Alcoholic Beverage Commission of "prorat[ing] eachmember's membership for that portion of theyear during which he or shewas amember" for purposes of calculating the permit feedue fromprivate clubs ~issued permits under chapter 32 of the Alcoholic Beverage Code. you askwhether the Commission is "presently authorized or required to continue" this practice.

Section 32.02 of the Alcoholic Beverage Code provides inpart:

.

(b)The permit fee shall bebased on the hiuhest number fmmbers ingood standing during theyear Tar zhich permit fee isto be paid according to the following rates:

0to 250--$ 750 651 to 750--82,250 251 to 350--$1,050 751 to 850--$2,550 351 to 450--$1,350 051 to 950--$2,850 451 to 550--$1,650 951 to l,OOO--$3,000 551 to 650--$1,950 Over l,OOO--$3 per member.
(c)All fees collected pursuant to this section shall be deposited in the general
revenue fund.

p.4784Honorable W. S.McSeath -Page 2 LX-9481

(d)No later than 90 days before the expiration of the year forwhich the permit fee ispaid, thepermit holder may submit an amended application with asmuch additional fee as isrequired under the amended return. (Emphasis added.)

The commission's request as to the propriety of continuing itspractice ofprorating membership for determining permit feeswas apparently prompted by arguments of persons inthe State Auditor's office that permit fees should be based on the hiahe tnmber pursuant to subsectik (E) of members during the year of section 32.02, and not on a **DrOrated** UM3mberShi.D ficure, the latter method possibly
venue legally due to the state from resulting ina loss-of rG the permitting process.
its request letter has advanced its continuing the proration of calculation, which arguments we The commission in arguments in support of membership method of fee summarize as follows:

Prior to 1971, andprior to the codification in 1977 of theAlcoholic Beverage Coded,. the Texas Liquor Control Act provided that permits of the sort issued toprivate clubs expired on the next August 31 following the dates of issuance. Penal Code art. 666-13(a), (repealed); art. 666-15e(6), (repealed). At that time, article 666-15(b) provided that ifa feewas %ollected foraportion of the year" . . . "only the proportionate part of the fee levied for such permit shall be collected.*q Also, article 666-15e, applying specifically to private club permits, required proration ofprivate club permit fees pursuant to article 666-15(b).

In 1971, article 666-13(a) was amended toprovide that all permits expired one year fromthe date of issuance. Acts 1971, 62d Leg., ch. 65, 5 7,at 686. But theproration provisions of articles 666-15(b) and 666-15e, cited above,
were not amended or repealed at that time.

In 1977, the provisions of the Texas Liquor Control Act were repealed and many of itsprovisions codified as the Alcoholic Beverage Code. Acts 1977, 65th Leg., ch. 194. The provision that all permits expire oneyear from the date of issuance became, at that time, section 11.09 of the Alcoholic Beverage Code. The'proration provisions of former articles 666-15(b) and 666-15e were, however, omitted from the new code. The revisor's note, appearing after section 11.71 of the Alcoholic Beverage Code, states that the

p.4785Honorable W. S.McBeath -Page 3 (JM-948)

proration provisions were omitted inthe code because the 1971 amendment providing that permits expire oneyear from thedate of issuance made theproration provisions obsolete.

The commission argues that "since 1962, some nine years prior to the 1971 amendments and fifteen years before the codification of the Texas Alcoholic Beverage Code," it has followed the practice of prorating memberships for fee determination purposes. It argues, in effect, that the proration provisions, which were not repealed until 1977 with the adoption of theAlcoholic Beverage Code, have authorized itspractice of prorating membership and that since those provisions were *'substantive,"their omission from the Alcoholic Beverage Codewas due to an error of the revisors. In light ofprovisions inthe code, in the act adopting it, and inthe Government Code, to the effect that theAlcoholic Beverage Code was only non-substantive revision of prior law, the commission argues, ineffect, that the proration provisions, being substantive, constitute still subsisting law authorizing the commission*s membership proration practice. See, Alto. Bev. Code 5 1.01(a); Acts 1977, 65th Leg., ch. 194, 57, at 558; Gov't Code g 323.007(b). The commission also argues that the long-standing practice of the commission, based on its construction of the provisions discussed above, supports such construction, particularly in view of the non-intervention of the legislature over that time, citing, inter alia Stenhens **COUntv** v. Hefner, Tex. 397, adopted).1 16 S.W.2d 804'(Tex. 118 Comm'n App. 1929, opinion

We disagree with the commission's position. "The rule that a departmental ruling adhered to through years of administering a statute will be given weight, only applies to statutes of doubtful construction.l' ~A11 Associated Retail Credit Men of Austin, 41 S.W.!d 45Um(Tez: Comm'n App. 1931). We do not find that the provisions governing calculation of club membership for purposes of assessing apermit feehave ever supported the construction placed on them by the commission inadopting its proration method of calculating the number ofmembers, and thus, the amount due forthe permit fee.

1. The commission notes that separate substantive amendments to the Liquor Control Act in 1977 left the proration provisions unchanged. Acts 1977, 65th Leg., ch. 453.

p.4786Honorable W. S.McBeath -Page 4 (JX-948)

The provisions for issuance ofprivate club permits
were first adopted in 1961, and that legislation made the substantially identical provision, that calculation of the fee is based on "the highest number ofmembers in good standing during theyear," as iscurrently made in section 32.02 of theAlcoholic Beverage Code. Acts 1961, 57th Leg., ch. 262, § 1, at 560. We believe that even in 1961, when the proration provision of repealed article 666-15(b) was in effect, the proration provision had no applicability to the calculation of a club's membership. Article 666-15(b) on its faceprovided only forproration of the feewhere a fee
was collected fora portion of a year. We believe the commission's adoption of apractice in 1962 ofproratina the nEmberShiD was unwarranted by any logical reading of the controlling provisions, particularly since the provision which isnow section 32.02 cf the code has provided since its inception in 1961 that the fee "shall bebased on the hiahest number ofmembers."

We do concede that not all of the provisions of the Alcoholic Beverage Code aremodels of clarity. Section 32.16 provides, for example:

No private club registration permittee may allow itsaveraae membership to exceed that authorized by itspermit. (Emphasis added.)

Itwould appear somewhat anomalous tohave provided in section 32.02 that the permit fee is based on the hiahest number ofmembers, but in section 32.16 that apermittee may not allow its averaae membership to exceed that authorized by the permit. However, section 32.16 isnot applicable to the fee calculation under section 32.02. Itappears, rather, to operate inconjunction with section 32.17, subsection (a)(S),which provides that a permit may be cancelled or suspended on a finding that thepermittee club has violated anyprovision ofthe code. EiSSalso section 1.05 of the code providing criminal penalties foraviolation of a provision of the code.)

We also concede that the fee assessment provisions themselves present certain administrative difficulties for the commission.. Subsection (b) of section 32.02 indicates
on its face that "[t]he permit fee shall be based on the hiahest number ofmembers in good standing during the year forwhich the permit fee is tobepaid." A permit expires
oneyear after the date it issued. Alto. Bev. Code 5 11.09. However, since the fee ispayable inadvance at the time of the application for a permit or renewal permit (section 11.35), the calculation of the fee "based on the highest

p.4787,
Honorable W. S.McBeath -Page 5 (JM-948)

number ofmembers . . .during theyear forwhich the permit fee is to be paid" is necessarily only an estimate. Subsection (d) of section 32.02, providing for "amended applications" no later than ninety days before a permit's expiration, somewhat but not entirely mitigates the problem ofassessing a fee based on the highest number of members during theyear since themembership cannot be ascertained with certainty until thenn8 of the year inquestion. The commission has informed us that ithas found the subsection (d)amendment procedure insufficient fordetermining actual amounts due onpermit feesunder subsection (a),because the membership might change after submission of the amended application, and because the procedure led to frequent overpayment of fees. Amounts overpaid, once deposited in the general revenue fund, could not be reimbursed without legislative action. Tex. Const. art.VIII, 9 6. Similar administrative problems exist under the present procedure.

The commission informs us that, instead of following the subsection (d)amendment procedure, it has relied on routine audits of licensees once accurate membership figures
are available at the end of the permit year. However, the method of calculation used, even in such audits, for determining clubmembership for purposes of fee assessment has apparently been themembership proration method referred to above rather than one determining thehiahest number of members during the year pursuant to the language in subsection (b).2

But again, even granting that the fee assessment provisions present administrative difficulties, we do not believe that those provisions are or have been ambiguous such that the board was warranted in construing the requirement of section 32.02(b), that the fee "shall be based on the highest number ofmembers," as authority to base the feedetermination onaprorated membership figure.

2. Please note thatwe donot address, because you do not raise, any issues with respect to the operation of the amendment procedure provided for in subsection (d) of section 32.02 orwith respect to the commission's practice ofdetermining additional fees duebyuse of aroutine audit rather than the amendment procedure.

~7.4788Honorable W. S.McBeath -Page 6 (JM-948)

.-,

SUMMARY

TheAlcoholic Beverage Commission is not authorized toprorate private clubmembership forpurposes ofdetermining the permit fee under Alcoholic Beverage Code section 32.02. Under section 32.02, thepermit fee is based
on the hj,g&& number of members in good standing during theyear forwhich the permit fee istobe paid, rather than on a prorated membership figure.

.

JIM MATTOX Attorney General of Texas

MARY KELLER First Assistant Attorney General

LCUMCCREARY Executive Assistant Attorney General

JUDGE ZOLLIE STEAELBY Special Assistant Attorney General

RICK GILPIN Chairman, Opinion Committee
Prepared byWilliam Walker Assistant Attorney General

p.4789