### THE ATTORNEY GENERAL OF TEXAS

July 27, 1990

Mr. Larry E.Kosta Executive Director Department ofLicensing and Regulation P. 0. Box 12157 Austin, Texas 78711

DearMr. Kosta: Opinion No. JM-1195

Re:Authority of amunicipalityto impose a registration fee, license fee, occupation tax, or a bond requirement
on a state licensed air conditioning and refrigeration contractor (RQ-1993)

You askwhether 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 amunicipality topay a local registration fee, license tax, occupation tax, or to file abondwith the municipality.

Article 8861 provides forabroad scheme of regulation ofair conditioning and refrigeration contractors by the Texas Department of Licensing and Regulation. See V.T.C.S. art. 8861, 55 3(a) (commissioner ofdepartment shall adopt by rule standards forpractice ofair conditioning and refrigeration contracting, andmay adopt rules for enforcement of act), 3(f) (commissioner shall set insurance requirements for licensees), 4 (requirements for licensure bydepartment, 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 issuedby amunicipality of this

state isvalid under the terms of the license within thatmunicipality. However, a license under thisAct isvalid throuahout the state, and the holder and oeonle under sunervision
are not recuired tohold amunicioal license tonractice air conditionins and refriaeration contractina in anymunicinalitv within this state. (Emphasis added.)

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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 amunicipality from imposing a

"license tax" on a state licensee.

Themunicipal "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 toprohibit municipal imposition of an "occupation tax" on pursuits onwhich the state levies no occupation tax. See Ex carte Dreibelbis, 109 S.W.2d 476 (Tex.Crim. App. 1937). We findnoprovision of state law for imposition ofa state occupation tax onair conditioning and refrigeration contractors. not impose such a tax. Therefore amunicipality may

With regard to whether amunicipality 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 amunicipal requirement ispreempted.
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 ofauthority to municipalities to enact ordinances in such field should be considered'as implicitly limiting municipal authority to that specifically conferred by statute. SeeV.T.C.S. art. 8861, 58 6(b) (persons not covered by article 8861 remain subject to permit, inspection, or approval requirements prescribed bymunicipal ordinance), 7 (article 8861 licensee must notify municipality inwhich he isengaged in air conditioning and refrigeration contracting, the notification tobe "inthe formrequired 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: 67Tex. Jur. 3dStatutes § 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)

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Section 3(f) requires the commissioner of the Department of Licensing and Regulation to set insurance reguirements forpersons 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 thebonds you say somemunicipalities require of article 8861 licensees are inthe nature of such insurance.2 Inour opinion, municipalities lack authority to impose such bond requirements. See. e.a.,Massachusetts Bondina & Ins. Co.v. McKay 10S.W.2d 770 (Tex.Civ.App. -Austin 1928, writ ref'd).l

As towhether a municipality may require a "registration fee" of anarticle 8861 licensee performing air conditioning and refrigeration contracting inthe municipality,
we think that the nature ofaparticular Vegistration fee"

(Footnote Continued) others do not regulate air conditioning contractors. Some air conditioning contractors need ten or twelve permits inorder to operate their business and others do not need anypermits to operate intheir geographic
area.
BillAnalysis, S.B. 642, 68th Leg. (1983).

We think it isclear that article 8861 wasmeant 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 dobusiness anywhere inthe state.

2. Also, we assume that the bonds which you ask whether municipalities may require would be imposed by municipalities intheir regulatory capacities. We do not here address the propriety of a municipality which has contracted with anarticle 8861 licensee forthe performance ofwork forthemunicioality requiring abond in connection with such contract.

3. While we did not address the preemption effect of article 8861 onmunicipal authority to impose the "license tax" or "occupation taxesII 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.

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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, asdiscussed abovewith 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 aparticular feewould depend on factual questions as to the nature of the fee,which we have notbeen supplied in your request. See V.T.C.S. art. 8861, 5 7 (article 8861 licensee tonotify municipality where performing work under license that he has obtained license, the notification tobe "inthe 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 abondwith themunicipality on air conditioning and refrigeration contractors licensed under V.T.C.S. article 8861. Whether amunicipality 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

LOUMCCREARY Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY Special Assistant Attorney General

RENEA HICKS Special Assistant Attorney General

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

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