Court Opinion

ID: 4127672
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:32:02.482684+00
Date Added: 2024-06-11T14:31:38.679221
License: Public Domain

GREG
                                             0
                             ATTORNEY GENERAL OF TEXAS
                                                  ABBOTT

                                              June 9, 2014

Mr. J. Winston Krause                                 Opinion No. GA-1065
Chair, Texas Lottery Commission
Post Office Box 16630                                 Re: Whether the Lottery Commission may
Austin, Texas 78761-6630                              deny or revoke an entity's bingo-related
                                                      license based on the criminal history of an
                                                      individual associated with that entity
                                                      (RQ-1173-GA)

Dear Mr. Krause:

        You ask whether the Texas Lottery Commission (the "Commission") may deny or revoke
an entity's bingo-related license based on the criminal history of an individual associated with
that entity. 1 You explain that bingo-related licenses are often issued to corporations,
partnerships, and other legal entities that are not individual persons. Request Letter at 1; see also
TEX. Occ. CODE ANN. § 2001.002(20) (West 2012) (defining "person" as "an individual,
partnership, corporation, or other group"). A legal entity seeking a bingo-related license must
provide information about its officers, directors, and certain other individuals so that the
Commission may conduct background checks. See, e.g., id. § 2001.102(b)(12) (stating that an
entity applying for a license to conduct bingo must include "information necessary to conduct
criminal background checks on the applicant organization's officers and directors"); see also id.
§ 2001.3025(2) (authorizing the Commission to investigate and obtain criminal history
information to aid in the investigation of "a person required to be named in a license
application"). The Commission may not issue a bingo-related license to an entity if an officer,
director, or other specified individual of the entity has been convicted of gambling, a gambling-
related offense, or criminal fraud. See, e.g, id § 2001.105(b) (West Supp. 2013) (license to
conduct bingo).

        You ask about recently-enacted section 2001.0541 ofthe Occupations Code:

                The commission shall adopt rules and guidelines as necessary to
                comply with Chapter 53 [of the Occupations Code] when using
                criminal history record information under this chapter to issue or

        1
         See Letter from Mr. J. Winston Krause, Chair, Tex. Lottery Comm'n, to Honorable Greg Abbott, Tex.
Att'y Gen. at l (Dec. ll, 2013), http://www.texasattomeygeneral.gov/opin ("Request Letter").
Mr. J. Winston Krause - Page 2                        (GA-1065)

                  renew a bingo license or to list or renew the listing of an individual
                  in the registry of approved bingo workers.

!d. § 2001.0541 ("Rules on Consequences of Criminal Conviction").                              Under subsection
53.02l(a),

                  A licensing authority may suspend or revoke a license, [or]
                  disqualify a person from receiving a license ... on the grounds that
                  the person has been convicted of: (1) an offense that directly
                  relates to the duties and responsibilities of the licensed occupation;
                  (2) an offense that does not directly relate to the duties and
                  responsibilities of the licensed occupation and that was committed
                  less than five years before the date the person applies for the
                  license; [or certain other specified offenses].

!d. § 53.02l(a) (emphasis added). Your first question is "whether, under Chapter 53, [a non-
individual] entity's license may be denied or revoked if an officer, director, shareholder, or other
individual required to be listed in the entity's application has been convicted of an offense listed
in subsection 53.021(a)." Request Letter at 2?

        Chapter 53, entitled "Consequences of Criminal Conviction," applies broadly to
"licensing authorities" with some exceptions. TEX. Occ. CODE ANN. §§ 53.001-.105 (West 2012
& Supp .. 2013). The chapter incorporates definitions from the Administrative Procedure Act
("APA"), chapter 2001 of the Government Code. !d. § 53.001 (West 2012). The APA defines
the word "person" as "an individual, partnership, corporation, association, governmental
subdivision, or public or private organization that is not a state agency." TEX. Gov'T CODE ANN.
§ 2001.003(5) (West 2008). Thus, "person" in chapter 53 may include legal entities other than
an individual.

        A corporation or association may be convicted for its own offenses. See TEX. PENAL
CODE ANN. § 7.22 (West 2011); Vaughan & Sons, Inc. v. State, 737 S.W.2d 805, 811 (Tex.
Crim. App. 1987). Consequently, subsection 53.021(a) of the Occupations Code is applicable
when a legal entity is a licensee or applicant that has been convicted of one of the specified
offenses, although a legal entity may not be capable of committing all of the offenses listed in
subsection 53.021(a). TEX. Occ. CODE ANN. § 53.021(a) (West Supp. 2013) (concerning
licensing consequences when the "person" has been convicted for offenses related to the
occupation, or for fraud, or for various violent or sexual offenses).

         2
          The Commission has recently adopted a rule stating that it "will not apply Chapter 53, Occupations Code,
to officers, directors, or shareholders of, or other individuals associated with, an applicant that is a nonindividual
business entity." 16 TEX. ADMIN. CODE § 402.702(a) (2014). We limit our analysis to the statutory authority that
has been granted to the Commission under chapter 53.
Mr. J. Winston Krause - Page 3                 (GA-1065)

        More importantly, all of the references to "a person" or "the person" in subsection
53.021(a) plainly mean the same "person." Jd. Accordingly, subsection 53.021(a) does not
authorize a licensing authority to deny or revoke the license of one person (the legal entity) for
the conviction of an offense by a different person (an individual). Chapter 53 does not have a
provision such as subsection 2001.105(b), which allows the Commission to deny a bingo-related
license to a legal entity when an officer, director, or other specified individuals of the entity have
been convicted of a specified offense. See id. § 2001.1 05(b). Consequently, to answer your first
question, chapter 53 of the Occupations Code does not independently provide the Commission
with authority to deny or revoke an entity's bingo-related license based solely on the conviction
of an officer, director, or shareholder for a subsection 53.021(a) offense.

        You also ask if section 2001.0541 of the Occupations Code independently authorizes the
Commission, "when reviewing the criminal history of individuals required to be listed in an
entity's license application and deciding whether to deny or revoke that entity's license, ... to
consider offenses other than convictions for gambling, gambling-related offenses, and criminal
fraud." Request Letter at 2. Section 2001.0541 requires the Commission to "adopt rules and
guidelines as necessary to comply with Chapter 53" which, as discussed above, does not
authorize a licensing authority to revoke or deny a corporate license based solely on the criminal
history of certain persons associated with the entity. TEX. Occ. CODE ANN. § 2001.0541 (West
Supp. 2013). Section 2001.0541 should not be construed as authorizing the Commission to write
rules and regulations to give itself the power to deny or revoke a license for reasons not set forth
in chapters 53 or 2001. An agency such as the Commission may not "exercise what is
effectively a new power, or a power contradictory to the statute, on the theory that such a power
is expedient for administrative purposes." Pub. Uti/. Comm 'n of Tex. v. City Pub. Serv. Bd. of
San Antonio, 53 S.W.3d 310, 316 (Tex. 2001 ). Thus, while nothing in the law prohibits the
Commission from investigating arid considering an associated individual's entire criminal
history, the Commission lacks authority under current law to revoke or deny a license of an
entity based solely on the existence of a conviction of an individual associated with the entity for
a crime other than gambling, a gambling-related offense, or criminal fraud. See TEX. Occ. CODE
ANN. § 2001.3025 (West 2012) (authorizing the Commission to obtain and investigate the
"criminal history" of certain individuals associated with a legal entity). Subsection 2001.1 05(b)
demonstrates that the Legislature knows how to disqualify a license applicant based on the
criminal history of an individual associated with the applicant. It is for the Legislature, not this
office, to expand the list of disqualifying offenses to include crimes other than gambling,
gambling-related offenses, and criminal fraud.
Mr. J. Winston Krause - Page 4              (GA-1065)

                                      S U MM A RY

                      Chapter 53 of the Occupations Code does not authorize the
              Lottery Commission to deny or revoke an entity's bingo-related
              license solely on the basis that an officer, director, or shareholder
              has been convicted or constructively convicted of an offense
              specified in section 53.021(a). The Legislature has chosen not to
              give the Commission the authority to revoke or deny an entity its
              license for the conviction of an individual required to be listed in
              the entity's application for an offense other than gambling, a
              gambling-related offense, or criminal fraud.

                                      4;you~

                                            GREG ABBOTT
                                            Attorney General of Texas

DANIEL T. HODGE
First Assistant Attorney General

JAMES D. BLACKLOCK
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

William A. Hill
Assistant Attorney General, Opinion Committee