Court Opinion

ID: 4128590
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:40:08.013615+00
Date Added: 2024-06-11T14:31:28.200855
License: Public Domain

ATTORNEY            GENERAL          OF TEXAS
                                           GREG        ABBOTT

                                              January 25,2007

Mr. C. Tom Clowe, Jr.                                    Opinion No. GA-0505
Chair, Texas Lottery Commission
Post Office Box 16630                                    Re: Whether section 2001.160 ofthe Occupations
Austin, Texas 78761-6630                                 Code allows the holder of a commercial bingo
                                                         lessor license to transfer the license to a person
                                                         other than a corporation formed or owned by the
                                                         license holder (RQ-0506-GA)

DearMr. Clowe:

        As chair ofthe Lottery Commission (the “Commission”), you askwhether Occupations Code
section 200 1.160(c) allows the holder of a commercial bingo lessor license to transfer the license to
a person other than a corporation formed or owned by the license holder.’ If not, you ask about the
status of licenses previously transferred with the Commission’s approval to persons other than the
license holder’s corporation. Request Letter, sugra note 1, at 2.

         Generally, a person must hold a commercial lessor license to lease the premises on which
bingo is conducted directly to a licensed authorized organization.      See TEX. OCC.CODEANN.
$5 2001.002(15), .151, ,401 (Vernon 2004). A “person” may be “an individual, partnership,
corporation, or other group.” Id. 5 2001.002(20). The Commission is required to issue the license
if it determines that the applicant meets certain qualifications. Id. 5 2001.159(a). The license is
effective for a period no longer than one or two years, depending on the fee paid and the
Commission’s approval. Id. 5s 2001.158(d), .159, ,307.

         Section 2001.160 of the Occupations Code governs the transfer of a commercial lessor
license. Id. 5 2001.160. Section 2001.160(c) authorizes a commercial lessor license holder to
transfer the license to a corporation formed or owned by the holder. Id. § 2001.160(c). You
specifically ask whether section 2001.160(c) should be construed as (1) a limitation, permitting
transfers only to corporations formed or owned by the licensee, or (2) as ‘Lanon-restrictive example
of one type of permissible transfer.” Request Letter, supra note 1, at 1. Subsection (c) cannot be
construed in isolation, however. See Cont’l Gas. Co. v. Downs, 81 S.W.3d 803,805 (Tex. 2002)
(holding that courts “consider a statute as a whole, not its provisions in isolation”). In essence, your

           ‘SeeLetter from C. Tom Clove, Jr., Chair, Texas Lottery
                                                                Commission,to Honorable Greg Abbott, Attorney
General of Texas (July 5, 2006) (on file with the Opinion Committee, also available al http://www.oag.state.tx.us)
[hereinafter Request Letter].
Mr. C. Tom Clowe, Jr. - Page 2                 (GA-0505)

question is whether section 2001.160, considered as a whole, allows a commercial bingo lessor
license holder to transfer the license to individuals or business entities other than a corporation
owned by the license holder.

        Courts generally interpret an unambiguous statute according to its plain language. See Ci@
of&r Antonio v. City ofBoerne, 111 S.W.3d 22,25 (Tex. 2003). Accordingly, we begin with the
plain language of section 2001.160 of the Occupations Code, which provides:

               (a) A licensed commercial lessor may not transfer a commercial
               lessor license except as provided by this section.

               (b) A transfer of a commercial lessor license under this section may
               be made only with the prior approval of the commission.            The
               commission shall approve the transfer under this section if the person
               to whom the license will be transferred otherwise meets the
               requirements of this section.

               (c) A licensed commercial lessor may transfer a license held by the
               license holder to a corporation formed by the license holder or from
               one corporation owned by the license holder to another corporation
               owned by the license holder.

               (d)     [I]f an individual who holds a commercial lessor license dies
               or becomes incapacitated as determined by a court of this state, the
               individual’s license is part of the individual’s estate and is subject to
               the applicable laws governing the disposition and control of the
               person’s property.

               (e)-(g) [further provisions for transfer upon the death or disability of
               the license holder.]

TEX. Oct. CODEANN. 5 2001.160 (Vernon 2004). The meaning of these provisions, taken
individually and as a whole, is clear. Subsection (a) prohibits transfers “except as provided by this
section.” Id. 5 2001.160(a). Subsection (b) instructs that transfers under this section require prior
Commission approval, but directs the Commission to approve a transfer to a person who meets the
requirements of section 2001.160. Id. 5 2001.160(b). Subsection (c) authorizes the license holder
to transfer the license to a corporation formed or owned by the holder. Id. $ 2001.160(c).
Subsections (d) through (g) allow a license to transfer as a part of the holder’s estate upon
the holder’s death or incapacity; subject to applicable laws governing distribution and control. Id.
 5 2001.160(d)-(g). Taken as a whole, section 2001.160 limits permissible transfers to (1) transfers
from the license holder to corporations formed or owned by the license holder, and (2) transfers upon
the holder’s death or incapacity.
Mr. C. Tom Clowe, Jr. - Page 3                        (GA-0505)

          You suggest that section 2001.160 should be construed to be consistent with the language
of its pre-code predecessor, article 179d, section 13(i) of the Revised Civil Statutes. Request Letter,
supra note 1, at l-2.* Prior to 1997, article 179d, section 13(i) of the Revised Civil Statutes
authorized transfers only to corporations formed or owned by the licensee:

                 A license may not be transferred by a licensee, except that a licensed
                 commercial lessor may transfer a license held by the licensee to a
                 corporation formed by the licensee or horn one corporation owned by
                 the licensee to another corporation owned by the licensee.3

You state that prior to 1997, the Commission did not approve transfers under article 179d other than
to a corporation owned by the licensee. Request Letter, supra note 1, at 2.

        In 1997, section 13(i) was amended to allow transfers in other circumstances:

                 A license may not be transferred by a licensee except as provided by
                 this subsection.

                          (1) A commercial license to lease bingo premises may be
                          transferred to another person with the prior approval of the
                          commission.

                          (2) A licensed commercial lessor may transfer a license held
                          by the licensee to a corporation formed by the licensee or
                          from one corporation owned by the licensee to another
                          corporation owned by the licensee.

                          (3)-(5) [transfer provisions       upon death or incapacity of the
                          licenseholder.]

                          (6) . A transfer of a license under this subsection requires
                          the prior approval of the commission. The commission shall

         *See Bingo Enabling Act, 67th Leg., 1st C.S., ch. 11, 5 13, art. 179d, sec. 13(g), 19X1 Tex. Gen. Laws 85,
92-93, amended by Act of May 25, 1983,68th Leg., RS., ch. 575,§ 10, art. 179d, sec. 13(j), 1983 Tex. Gen. Laws
3443,3454,3458,amendedbyActofMay29,1989,71stLeg.,R.S.,ch.238,~8,                 1989Tex.Gen.Laws     llO7,1111-15,
amended by Act of May 11, 1993,73d Leg., RX, ch 286,§ 5, 1993 Tex. Gen. Laws 1325, 132627,‘amended by Act
ofMay 29, 1995,74th Leg., R.S., ch. 1057, 5 3, 1995 Tex. Gen. Laws 5222,5223, amendedby Act ofMay 3 1, 1997,
75thLeg.,R.S.,  ch. 1009, $4, 1997 Tex. Gen. Laws 3604,3605-07,    repe&dbyAct       ofMay 13, 1999, 76thLeg., RX,
ch. 388,$6(a),  1999 Tex. Gen. Laws 143 I, 2439.

         ‘Act ofMay29,   1995,74th   Leg., R.S., ch. 1057, 5 3, art 179d, sec. 13(j), 1995 Tex. Gen. Laws 5222,5223.
Mr. C. Tom Clowe, Jr. - Page 4                        (GA-0505)

                         approve the transfer if the person to whom the license will be
                         transferred otherwise meets the requirements for the license.4

After the 1997 amendment, “the commission began approving transfers from any commercial lessor
licensee to any person (individual, partnership, corporation, LLC, etc.) that qualified for the license.”
Request Letter, supra note 1, at 2.

         With the adoption ofthe Occupations Code in 1999, article 179d, section 13(j) ofthe Revised
Civil Statutes was repealed, and its provisions were revised and codified as section 2001.160 of the
Code? See TEX. OCC. CODE ANN. 3 2001.160 (Vernon 2004). You inform us that, relying on “the
express [legislative] intent that the recodification was nonsubstantive,” the Commission has
construed section 200 1.160 of the Occupations Code to have the same meaning as the pre-codified
statute and has continued to approve transfers of commercial lessor licenses to any qualified person
(individual or business entity), notjust to a corporation owned by the license holder. Request Letter,
supra note 1, at 2.

        The act adopting the Occupations Code states that no substantive change in the law was
intended.6 As you note, however, the Supreme Court of Texas has limited the effect that may be
given to general statements that a codification is not intended to be substantive:

                [W]hen      specific provisions of a“nonsubstantive” codification and
                the code as a whole are direct, unambiguous, and cannot be
                reconciled with prior law, the codification rather than the prior,
                repealed statute must be given effect.        The codifications enacted
                by the Legislature are the law of this State, not the prior, repealed law.
                When there is no room to interpret or construe the current law as
                embodying the old, we must give fall effect to the current law.
                General statements of the Legislature’s intent cannot revive repealed
                statutes or override the clear meaning of a new, more specific statute.

FlemingFoods of Tex., Inc. v. Rylander, 6 S.W.3d 278,286 (Tex. 1999) (emphasis added) (citations
ommitted); see also Request Letter, supra note 1, at 2.

         Here, section 2001.160 directly and unambiguously prohibits all transfers other than (1)
transfers to a corporation formed or owned by the license holder, and (2) transfers upon the license
holder’s death or incapacity. See TEX. OCC. CODE ANN. $ 2001.160 (Vernon 2004). Section
200 1.160 does not contain any language that implies that the transfers the statute expressly provides

        “Act ofMay   31, 1997,75th   Leg., R.S., ch. 1009, 5 4, art. l79d, sec. 13(j), 1997 Tex. Gen. Laws 3604,3605.

        ‘Act of May 13, 1999,76th    Leg., R.S., ch. 388, $5 I, 6(a), 1999 Tex. Gen. Laws 1431,2333-34,2439-40.

          “See id. $5 1, sec. 1.001(a), 7, at 1436, 2440; see also TEX. GOV’T CODE ANN. 5 323.007 (Vemon          2005)
(Statutory Revision Program).
Mr. C. Tom Clowe, Jr. - Page 5                          (GA-0505)

for are merely examples of other authorized transfers.         See, e.g., TEX. GOV’T CODE ANN.
5 3 12.011(19) (Vernon 2005) (providing that the words “includes” and “including” are “terms of
enlargement and not of limitation or exclusive enumeration”).         To the contrary, by expressly
prohibiting transfers other than those provided by the section, section 2001.160(a) prevents a
construction of subsection (c) as merely an exemplar of a permissible transfer. TEX. Oct. CODE
ANN. 5 2001.160(a), (c) (Vernon 2004). Because the intent expressed in section 2001.160(a) is clear
from its plain language, we need not consider the import of other rules of construction, such as the
doctrine that the~statement of one thing implies the exclusion of others. See, e.g., Mid-Century Ins.
Co. of Tex. v. Kidd, 997 S.W.2d 265,273-74 (Tex. 1999) (descrtbmg doctrine of expressio unius
est exclusio alterius).

         Section 200 1.160’s direct and unambiguous provision for transfers cannot be reconciled with
the prior law. Former article 179d, section 13(i) ofthe Revised Civil Statutes permitted transfer of
a commercial lessor license “to another person with the prior approval of the commission,” which,
as the Commission construed it, authorized a transfer to any person the Commission approved.7
When it was codified, this provision changed from a grant of authority to a prohibition against
unapproved transfers. ,See TEX. OCC. CODE ANN. 5 2001.160@) (Vernon 2004). Further, article
 13(i) previously required the Commission to approve a transfer if the transferee “otherwise meets
the requirements for the license.“’ As codified, this provision was modified to require the
Commission to approve a transfer if the transferee meets the requirements “of this section
[2001,160].” See id. (emphasis added). A person who is not authorized by the statute to receive a
transferred license cannot meet the requirements of section 2001.160. And all of the requirements
of section 2001.160 pertain to transfers described in subsections (c) and (d).

         Because section 2001.160 of the Occupations Code cannot be reconciled with the prior law
that allowed a license holder to transfer a license to “another person” with the Commission’s
approval, we must give section 200 1.160 full effect according to its current language. See Fleming
Foods, 6 S.W.3d at 286. We conclude that section 2001.160 of the Occupations Code does not
authorize the holder of a commercial bingo lessor license to transfer the license to individuals or
business entities other than a corporation formed or owned by the license holder?

         Because section 200 1.160 limits commercial bingo lessor license transfers, we consider your
 question about the status of transfers that the Commission erroneously approved because of a
mistake of law. Chapter 2001 is silent about licenses issued in error, and we have not located a
judicial decision that addresses~ your precise question. Moreover, you have not informed us about
the Commission’s general procedure for authorizing a license transfer, nor have you described the
 circumstances of any particular transfer. We assume that the Commission’s approval of a transfer

         ‘ActofMay31,     1997,75thLeg.,   R.S.,ch. 1009, $4, at. 179d, sec. 13(i)(l),   1997Tex. Gen.Laws3604,3605.

         *Id. art. 179d, sec. 13(j)(6), at 3605 (emphasis added).

          ‘This conclusion is consistent with Attorney General Opinion GA-0007, advising that section 200 1,160 did not
permit a commercial license holder to transfer the license to a limited partnership. See Tex. Att’y Gen. Op. No. GA-0007
(2003)at 1, 6-8.
Mr. C. Tom Clowe, Jr. - Page 6                 (GA-0505)

is embodied in a Commission order. We further assume that in many cases an order transferring a
license has been followed by subsequent orders granting a new license, an amended license, or a
renewal. Based on the limited information provided and because of the potential for widely varying
circumstances, we cannot definitively answer your question. However, there are broad principles
that are pertinent to your inquiry.

         First, some courts have held in the context of collateral attack that an agency’s order may be
void, but only for two reasons: “1) the order shows on its face that the agency exceeded its authority,
or 2) a complainant shows that the order was procured by extrinsic fraud.” Chocolate Bayou Water
Co. v. Tex, NuturalRes. Conservation Comm ‘n, 124 S.W.3d 844,853 (Tex. App.-Austin2003,             pet.
denied); see also Lesikar v. Rappeport, 33 S.W.3d 282, 316 (Tex. App.-Texarkana               2000, pet.
denied). Thus, an order granting a license, an amended license, or a renewal that does not show a
lack of Commission authority on its face and that was not procured by extrinsic fraud would not be
void.

         Second, an agency may not reopen an order that is administratively final except as authorized
by statute or, in some cases, for changed factual circumstances. See Young Trucking,Inc. v. R.R.
Comm ‘n of Tex., 781 S.W.2d 719,721 (Tex. App.-Austin        1989, no writ); S. Tex. Indus.Sews., Inc.
v. Tex. Dep’t of Water Res., 573 S.W.2d 302,304 (Tex. Civ. App.-Austin        1978, writ ref d n. r. e.).
An agency’s reinterpretation of a statute, however, is not the kind of changed circumstances that
warrants reopening an admin@ratively final order. See Al-Jazrawi v. Tex. Bd. of Land Surveying,
719 S.W.2d 670, 672 (Tex. App.-Austin          1986, writ refd n. r. e.) (holding that a registering
agency’s new view of the law, applied to the same facts as before, may not serve as basis for setting
aside the agency’s prior final order).

         And chapter 2001 gives the Commission only limited authority to reexamine an order
granting a license. For instance, the Commission may suspend or revoke a license, after a hearing,
for a failure to comply with chapter 2001 or a Commission rule, or for “a reason that would allow
or require the commission to refuse to issue or renew a license of the same class.” TEX.OCC.CODE
ANN. 5 2001.353(2) (Vernon 2004). The Commission also may order a temporary suspension of a
license, but only after notice and hearing. Id. 5s 2001.355-,356. And the Commission may amend
a license “if the subject matter of the proposed license could properly have been included in the
original license.” Id. 5 2001.306(a). But because no provision in chapter 2001 suggests that the
Commission has general authority to reopen a final order granting a license transfer, we conclude
it does not have such authority. Cf Denton County Elec. Coop., Inc. Y. Pub. Ufil. Comm’n of Tex.,
818 S.W.2d 490, 492 (Tex. App-Texarkana             1991, writ denied) (holding that when a statute
authorizes an agency to amend or revoke a certificate and prescribes the method for doing so, other
powers to reexamine prior orders may not be implied). Of course, the Commission may revoke or
refuse to renew the license of any holder, including a transferee, for violations of a statute or rule,
or for not currently meeting the qualifications of a commercial lessor. See, e.g., TEX.OCC.CODE
ANN. @ 2001.152 (eligibility), 2001.153 (restrictions on source of funds), 2001.154 (ineligible
persons), 2001.353 (suspension or revocation for “a reason that would allow or require the
 commission to refuse to issue or renew a license of the same class”) (Vernon 2004).
Mr. C. Tom Clowe, Jr. - Page 7                (GA-0505)

                                       SUMMARY

                        Section2001.160 ofthe Occupations Code does not authorize
               the holder of a commercial bingo lessor license to transfer the license
               to a person other than a corporation formed or owned by the license
               holder. An order of the Texas Lottery Commission transferring a
               commercial lessor license or granting a subsequent license, an
               amended license, or a renewal that does not show a lack of
               Commission authority on its face and that was not procured by
               extrinsic fraud is not void. The Commission does not have general
               authority to reopen an order granting a license transfer that has
               become administratively final.

                                                              ral of Texas

KENT C. SULLIVAN
First Assistant Attorney General

ELLEN L. WITT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

William A. Hill
Assistant Attorney General, Opinion Committee