THE ATTORNEY GENERAL 

OF TEXAS 

July 27, 1990 

Mr. Larry E. Kosta 

Executive Director 

Department of Licensing 

and Regulation 

P. 0. Box 12157 

Austin, Texas 78711 

Dear Mr. Kosta: 

Opinion No. JM-1195 

Re: Authority of a municipality to impose a registration 

fee, license fee, occupation 

tax, or a bond requirement 

on a state licensed air conditioning and refrigeration 

contractor (RQ-1993) 

You ask whether an air conditioning and refrigeration 

contractor licensed by the Department of Licensing and Regulation pursuant to article 8861, V.T.C.S., may be required 

by a municipality to pay a local registration fee, license 

tax, occupation tax, or to file a bond with the municipality. 

Article 8861 provides for a broad scheme of regulation 

of air conditioning and refrigeration contractors by the 

Texas Department of Licensing and Regulation. See V.T.C.S. 

art. 8861, 55 3(a) (commissioner of department shall adopt 

by rule standards for practice of air conditioning and refrigeration contracting, and may adopt rules for enforcement 

of act), 3(f) (commissioner shall set insurance requirements 

for licensees), 4 (requirements for licensure by department, 

including examinations), 5 (denial, suspension, or revocation of licenses), 5A (consumer complaint investigation by 

commissioner). 

You point to section 9(a) of that article, which provides: 

A license issued by a municipality of this 

state is valid under the terms of the license 

within that municipality. However, a license 

under this Act is valid throuahout the state, 

and the holder and oeonle under sunervision 

are not recuired to hold a municioal license 

to nractice air conditionins and refriaeration contractina in any municinalitv within 

this state. (Emphasis added.) 

P. 6308 
Mr. Larry E. Kosta - Page 2 (JM-1.195) 

With respect to the municipal '*license tax" you ask 

about, the above-quoted provision of section 9(a) of article 

8861, in itself, 

municipal 

precludes a municipality from imposing a 

"license tax" on a state licensee. 

The municipal "occupation tax" you ask about would, we 

think, be invalid as contravening the provisions of article 

VIII, section 1, of the state constitution. That section 

has been construed to prohibit municipal imposition of an 

"occupation tax" on pursuits on which the state levies no 

occupation tax. See Ex carte Dreibelbis, 109 S.W.2d 476 

(Tex. Crim. App. 1937). We find no provision of state law 

for imposition of a state occupation tax on air conditioning 

and refrigeration contractors. 

not impose such a tax. 

Therefore a municipality may 

With regard to whether a municipality may require an 

air conditioning and refrigeration contractor licensed under 

article 8861 to file a "bond" with the municipality, we 

think that by virtue of section 3(f) of the article, the 

state has occupied the field of regulation of such persons 

and, therefore, such a municipal requirement is preempted. 

Generally, municipalities are prohibited from 

a field of 

entering 

legislation occupied by general legislative 

enactments. Where a field of legislation has been occupied 

by a state statute, specific grants of authority to municipalities to enact ordinances in such field should be 

considered'as implicitly limiting municipal authority to 

that specifically conferred by statute. See V.T.C.S. art. 

8861, 58 6(b) (persons not covered by article 8861 remain 

subject to permit, inspection, or approval requirements 

prescribed by municipal ordinance), 7 (article 8861 licensee 

must notify municipality in which he is engaged in air 

conditioning and refrigeration contracting, the notification 

to be "in the form required by the municipality"), 9 (b) 

(municipalities may by ordinance adopt and enforce standards 

for air conditioning and refrigeration contractors that are 

consistent with the standards established under the 

article): see also Prescott v Citv of Boroer, 158 S.W.Zd 578 

(Tex. Civ. App. - Amarillo 1942, writ ref'd); Tex. Const. 

art. XI, § 5: 67 Tex. Jur. 3d Statutes § 119 (1989), and 

authorities cited there (exoressio unius est exclusio 

alterius rule).1 

1. The bi .ll analysis to the 1983 act in which the 

provisions of article 8861 were first adopted stated as 

background for that legislation: 

Some cities regulate air conditioning contractors and 

(Footnote Continued) 

P- 6309 
Mr. Larry E. Kosta - Page 3 (JR-1195) 

Section 3(f) requires the commissioner of the Department of Licensing and Regulation to set insurance reguirements for persons licensed under article 8861. See also 16 

T.A.C. § 75.6. We think that having provided for the 

regulation of article 8861 licensees* insurance coverage by 

the department, the legislature has in effect preempted 

municipal authority in the area of requiring licensees to 

insure against risks attendant on their operations. We 

assume that the bonds you say some municipalities require of 

article 8861 licensees are in the nature of such insurance.2 

In our opinion, municipalities lack authority to impose such 

bond requirements. See. e.a., Massachusetts Bondina & Ins. 

Co. v. McKay 10 S.W.2d 770 (Tex. Civ. App. - Austin 1928, 

writ ref'd).l 

As to whether a municipality may require a "registration fee" of an article 8861 licensee performing air conditioning and refrigeration contracting in the municipality, 

we think that the nature of a particular Vegistration fee" 

(Footnote Continued) 

others do not regulate air conditioning contractors. 

Some air conditioning contractors need ten or twelve 

permits in order to operate their business and others 

do not need any permits to operate in their geographic 

area. 

Bill Analysis, S.B. 642, 68th Leg. (1983). 

We think it is clear that article 8861 was meant to 

relieve air conditioning and refrigeration contractors from 

compliance with regulations varying from jurisdiction to 

jurisdiction, by providing a scheme under which the obtaining of a state license would authorize such contractors 

to do business anywhere in the state. 

2. Also, we assume that the bonds which you ask 

whether municipalities may require would be imposed by 

municipalities in their regulatory capacities. We do not 

here address the propriety of a municipality which has 

contracted with an article 8861 licensee for the performance 

of work for the municioality requiring a bond in connection 

with such contract. 

3. While we did not address the preemption effect of 

article 8861 on municipal authority to impose the "license 

tax" or "occupation taxes II because we feel that issues as to 

the permissibility of such requirements are sufficiently 

disposed of on the grounds stated above, we think that 

general preemption considerations would also support the 

conclusions we reached as to the permissibility of such 

requirements. 

P. 6310 
Mr. Larry E. Kosta - Page 4 (JM-1195) 

might have a bearing on a resolution of the issue of its 

validity. The state's entry, in article 8861, into the 

field of regulation of air conditioning and refrigeration 

contracting, as discussed above with respect to insurance or 

bond requirements, would severely limit the authority of a 

municipality to additionally require a "registration fee." 

However, we think that determination of the permissibility 

of a particular fee would depend on factual questions as to 

the nature of the fee, which we have not been supplied in 

your request. See V.T.C.S. art. 8861, 5 7 (article 8861 

licensee to notify municipality where performing work under 

license that he has obtained license, the notification to be 

"in the form required by the municipality"); see also 16 

T.A.C. § 75.9 (department rule regarding notification of 

municipality). 

SUMMARY 

Municipalities may not impose additional 

local license taxes, occupation taxes, or 

requirements of filing a bond with the municipality on air conditioning and refrigeration 

contractors licensed under V.T.C.S. article 

8861. Whether a municipality may impose a 

"registration fee" on such licensees would 

involve questions of fact as to the nature of 

the particular fee. 

JIM MATTOX 

Attorney General of Texas 

MARY KELLER 

First Assistant Attorney General 

LOU MCCREARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RENEA HICKS 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by William Walker 

Assistant Attorney General 

P. 6311