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DAN MORALES ATTOINEY GWEnAL Setptember 16,199l

Honorable Rddie Cavaxos

House Committee on Jnsurance Texas House ofRepresentatives P. 0. Rex2910 Austin Texas 78769 Opinion No. DM-42

Re: Validity of statute releasing real estate brokers in certain geographic areas from continuing education requirements 

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Dear Representative Cavaxos:

You ask about the validity of a 1991amendment to section 7A of the Real Estate License Act, article 6573a, V.T.C.S. Acts 1991,72d Leg., ch. 553, # 1.041,at 1910. Subsection (a) of section 7A provides for contin~g education requirements for the renewal of real estate brokers’ and real estate salesmens’ licenses. The amendment in question added a new subsection (e) directing the Real Estate Commission, on or before September 25, 1991,to ident@ each real estate broker licensed under the act for ten years or more, and having on June 1, 1991, his principal place ofbusiness in a county with a 1980census population of 225,000 or less, and to notify him that he may opt out ofthe continuing education requirements ofthe act in the manner provided for in subsection (0. New subsection (f) permits a real estate broker so identified and notified to opt out of the contimdng education requirements for renewing his license if, after October 1, 1991, and on or before October 31,1991, the broker notifies the commission in writing that he is opting out and pays a fee to cover administrative costs in an amount to be determined by the commission but not to exceed $100.

You ask speciScaUy 1) whether such an exemption from a professional licensing requirement based on geographic locale is permissible, and 2) whether it is legal to deny certain consumers the same protection accorded other consumers based on geographical location.” We understand your questions to be whether the geographical classifications ofthe exemption in question are valid under the equal protection provisions of the federal and state constitutions and under the state constitution’s prohibitions regarding local and special laws. SeeU.S. Const. amend. XIV, Tex. Cmst. art. I, 93, art. JR, 956. We limit our consideration here to those specific constitutional issues.

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Federal equal protection challenges to statutory classiCcations made in regulating occupational pursuits are ordinarily reviewed under the so-called

“rational basis”test. PoUd v.Cocknrg,578F2d 1002,1012-13 (5th Cir. 1978).

The general rule is that legislation is presumed to be valid and will be sustained if the clamification drawn by the statute is rationally related to a legitimate state interest,

Cf.@ ofClkbume

v. CkbumeLivingCenter,473 U.S.432,440 (1985).

In contrast to the “strict scrunny” applied to statutory classifications burdening “suspect classifications” or “fundamental rights,”judicial review under the rational basis test has, as a rule, upheld statutory classifications. The plurality opinion of the United States Supreme Court in C&me& v. Fushhg, 457U.S. 957 (1982) stated that unless a state statute burdens a “suspect classification” or a

“fundamental right,”dassiScations made by the statute “are set aside only ifthey are based solely on reasons totally unrelated to the pursuit ofthe State’s goals and only ifno grounds can be conceived tojustify them.” 457 U.S. at 963;see aIs0 L TRIBE, AMERICAN

INSTITUTIONAL LAW5 16-3(1978) (‘The Conceivable BasisTest”).

It is not apparent that a “suspect classification” or “fundamental right” is burdened by the geographical classifications made by the contimring education exemption here. See, cg., Koremarsu v. UnitedStates,323U.S. 214 (1944) (race, ancestry as “suspect”criteria); SIr@u v. T?wmprwt, 394 U.S. 618 (1969) (right to interstate travel as “fundamental”). Although the numerous letters and briefs we have received in connection with your request have raised substantial concerns as to the “rational basis” for the statutory &ssifications in question,t in view of the rather minimal level of scrutiny it appears a court would apply under federal equal protection standards we cannot say that the geographical classitkations in the new continuing education exemption on their face run afoul of thenfederal equal protection clause. We think that resolution of this constitutional issue would require findings of fact, which we would be unable to make in an attorney general

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opinion See,eg , Attorney General Opinion JM-1267 (1990). only a court with its powers to take evidence on the relevant aspects ofthe real estate industry in Texas, aud the reasonableness in that context of the exemptions in question, could make such a determination.

Texas’ constitutional counterpart of the federal equal protection clause, found in article III, section 1,provides that “[a]lltiee men, when they form a social compact, have equal rights.” Modem Texas courts have generally held that no greater protection is afforded thereby than under the federal provision. See Texas Optometry

Bd v.Lee VibionCenter, Ine, 515 S.W.2d 380 (‘TX.Civ. App.-Eastland 1974,writ refd n.r.e.); Attorney General opinion JM455 (1986) (and authorities cited therein).

We do find several earlier Texas cases which amrounce that statutory occupational regulations that classify solely on the basis oflocale contravene article III, section 1. See Ex patte Dmibelbir, 109 S.W.2d 476 (T’ex.Grim. App. 1937) (municipal ordinance imposing license “fee”only on merchants engaged in business less than a year); Er porte B&cr, 78 S.W.2d 610 (Tex. Grim. App. 1934) and Linen Serv.Cwp. v. CityofAbilene, 169 S.W.2d497 (T’ex.Civ. App.-Eastiand 1943,writ rePd) (municipal ordinances requiring license fee for businesses located outside municipality but doing business in municipality); Jackton v. State, 117 S.W. 818 (Tex. Crim. App. 1908) (statute exempting barbers in, inter Olin,towns of 1.000 population or less from license tax). We note first that these earlier opinions either included other grounds for their holdings or were directed to situations significantly different from the one here. (Jackron also struck down any license tax on barbers as violative of article VIII, section 1; the other cases cited involved exclusionary municipal ordinances.) More importantly, webelieve a modem court would apply a different equal protection analysis, patterned on the contemporary federal approach, from that applied in these older cases. But again, and most significantly, while the above-mentioned opinions emanated from court proceedings in which evidence could be taken and findings of facts made as to the reasonableness of the provisions under attack, we cannot so take evidence or find facts in an attorney general opinion. Only a court could determine the validity, ti a ti article I, section 3,ofthe geographical &ssXcations in question here.
Similarly, the resolution ofwhether the geographical classifications are viable under the prohibition on “localor special laws”in article ITf,section 56, of the state constitution would require findings of fact on such matters as the numbers of brokers having their designated principal places ofbusiness in locales falling within

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and without the pqpulation bracket created for purposes of the exemption and the problems experienced witb brokers’ competence in such locales2 Such findings couldonlybemadebyacomt. See,cg.,ExpvteSpring.586S.W2d482(Bx.Crim. App. 1978).

Whether the use of geographical classifications in the

exemption for certain real estate brokers in section 74 subsections (e) and (f) ofthe Real Estate License Act, from the continuing education requirements for license renewal violates federal or state constitutional equal protection requirements or the state constitutional prohibition on local or special laws involves questions offact that c8Mot be resolved in an attorney general opinion

DAN MORALES Attorney General ofTexas

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WILL PRYOR First Assistant Attorney General

MARYKELLER Exeadve Assistant Attorney General

JUDGEZOLLIE STEARLEY (Ret.) Special Assistant Attorney General

RENEAHIcK!s Special Assistant Attorney General

MADELElNE B.JOHNSON Chair, Opinion Committee
Prepared by William Walker Assistant Attorney General

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