Untitled Texas Attorney General Opinion ( 1988 )

THE ATTORNEY GENERAL
OF TEXAS
.nm MAnox August 29, 1988
ATMRNEY OENERAL
Honorable W. S. McBeath Opinion No. JR-948
Administrator
Texas Alcoholic Beverage Commission Re: Authority of the
P. 0. Box 13127, Capitol Station Alcoholic Beverage Com-
Austin, Texas 78711 mission to prorate club
membership for purposes
of determining permit
fees for a private club
registration permit
(RQ-1432)
Dear Mr. McBeath:
Your request letter describes the along-standing
practice of the Alcoholic Beverage Commission of
"prorat[ing] each member's membership for that portion of
the year during which he or she was a member" for purposes
of calculating the permit fee due from private clubs ~issued
permits under chapter 32 of the Alcoholic Beverage Code.
you ask whether the Commission is "presently authorized or
required to continue" this practice.
Section 32.02 of the Alcoholic Beverage Code provides
in part:
.
(b) The permit fee shall be based on the
hiuhest number f m mbers in good standing
during the year Tar zhich permit fee is to be
paid according to the following rates:
0 to 250--$ 750 651 to 750--82,250
251 to 350--$1,050 751 to 850--$2,550
351 to 450--$1,350 051 to 950--$2,850
451 to 550--$1,650 951 to l,OOO--$3,000
551 to 650--$1,950 Over l,OOO--$3 per member.
(c) All fees collected pursuant to this
section shall be deposited in the general
revenue fund.
p. 4784
Honorable W. S. McSeath - Page 2 LX-9481
(d) No later than 90 days before the
expiration of the year for which the permit
fee is paid, the permit holder may submit an
amended application with as much additional
fee as is required under the amended return.
(Emphasis added.)
The commission's request as to the propriety of contin-
uing its practice of prorating membership for determining
permit fees was apparently prompted by arguments of persons
in the State Auditor's office that permit fees should be
based on the hiahe t n mber of members during the year
pursuant to subsectik (E) of section 32.02, and not on a
DrOrated UM3mberShi.D ficure, the latter method possibly
resulting in a loss-of rGvenue legally due to the state from
the permitting process.
The commission in its request letter has advanced
arguments in support of its continuing the proration of
membership method of fee calculation, which arguments we
summarize as follows:
Prior to 1971, and prior to the codification in 1977 of
the Alcoholic Beverage Coded,.the Texas Liquor Control Act
provided that permits of the sort issued to private clubs
expired on the next August 31 following the dates of
issuance. Penal Code art. 666-13(a), (repealed); art.
666-15e(6), (repealed). At that time, article 666-15(b)
provided that if a fee was %ollected for a portion of the
year" . . . "only the proportionate part of the fee levied
for such permit shall be collected.*q Also, article 666-15e,
applying specifically to private club permits, required
proration of private club permit fees pursuant to article
666-15(b).
In 1971, article 666-13(a) was amended to provide that
all permits expired one year from the date of issuance.
Acts 1971, 62d Leg., ch. 65, 5 7, at 686. But the proration
provisions of articles 666-15(b) and 666-15e, cited above,
were not amended or repealed at that time.
In 1977, the provisions of the Texas Liquor Control Act
were repealed and many of its provisions codified as the
Alcoholic Beverage Code. Acts 1977, 65th Leg., ch. 194.
The provision that all permits expire one year from the date
of issuance became, at that time, section 11.09 of the
Alcoholic Beverage Code. The' proration provisions of former
articles 666-15(b) and 666-15e were, however, omitted from
the new code. The revisor's note, appearing after section
11.71 of the Alcoholic Beverage Code, states that the
p. 4785
Honorable W. S. McBeath - Page 3 (JM-948)
proration provisions were omitted in the code because the
1971 amendment providing that permits expire one year from
the date of issuance made the proration provisions obsolete.
The commission argues that "since 1962, some nine years
prior to the 1971 amendments and fifteen years before the
codification of the Texas Alcoholic Beverage Code," it has
followed the practice of prorating memberships for fee
determination purposes. It argues, in effect, that the
proration provisions, which were not repealed until 1977
with the adoption of the Alcoholic Beverage Code, have auth-
orized its practice of prorating membership and that since
those provisions were *'substantive," their omission from the
Alcoholic Beverage Code was due to an error of the revisors.
In light of provisions in the code, in the act adopting it,
and in the Government Code, to the effect that the Alcoholic
Beverage Code was only non-substantive revision of prior
law, the commission argues, in effect, that the proration
provisions, being substantive, constitute still subsisting
law authorizing the commission*s membership proration
practice. See, Alto. Bev. Code 5 1.01(a); Acts 1977, 65th
Leg., ch. 194, 5 7, at 558; Gov't Code g 323.007(b). The
commission also argues that the long-standing practice of
the commission, based on its construction of the provisions
discussed above, supports such construction, particularly in
view of the non-intervention of the legislature over that
time, citing, inter alia Stenhens COUntv v. Hefner, 118
Tex. 397, 16 S.W.2d 804'(Tex. Comm'n App. 1929, opinion
adopted).1
We disagree with the commission's position. "The rule
that a departmental ruling adhered to through years of
administering a statute will be given weight, only applies
to statutes of doubtful construction.l' ~A11
Associated Retail Credit Men of Austin, 41 S.W.!d 45Um(Tez:
Comm'n App. 1931). We do not find that the provisions
governing calculation of club membership for purposes of
assessing a permit fee have ever supported the construction
placed on them by the commission in adopting its proration
method of calculating the number of members, and thus, the
amount due for the permit fee.
1. The commission notes that separate substantive
amendments to the Liquor Control Act in 1977 left the
proration provisions unchanged. Acts 1977, 65th Leg., ch.
453.
p. 4786
Honorable W. S. McBeath - Page 4 (JX-948)
The provisions for issuance of private club permits
were first adopted in 1961, and that legislation made the
substantially identical provision, that calculation of the
fee is based on "the highest number of members in good
standing during the year," as is currently made in section
32.02 of the Alcoholic Beverage Code. Acts 1961, 57th Leg.,
ch. 262, § 1, at 560. We believe that even in 1961, when
the proration provision of repealed article 666-15(b) was in
effect, the proration provision had no applicability to the
calculation of a club's membership. Article 666-15(b) on
its face provided only for proration of the fee where a fee
was collected for a portion of a year. We believe the
commission's adoption of a practice in 1962 of proratina the
nEmberShiD was unwarranted by any logical reading of the
controlling provisions, particularly since the provision
which is now section 32.02 cf the code has provided since
its inception in 1961 that the fee "shall be based on the
hiahest number of members."
We do concede that not all of the provisions of the
Alcoholic Beverage Code are models of clarity. Section
32.16 provides, for example:
No private club registration permittee may
allow its averaae membership to exceed that
authorized by its permit. (Emphasis added.)
It would appear somewhat anomalous to have provided in
section 32.02 that the permit fee is based on the hiahest
number of members, but in section 32.16 that a permittee may
not allow its averaae membership to exceed that authorized
by the permit. However, section 32.16 is not applicable to
the fee calculation under section 32.02. It appears, rath-
er, to operate in conjunction with section 32.17, subsection
(a)(S), which provides that a permit may be cancelled or
suspended on a finding that the permittee club has violated
any provision of the code. EiSSalso section 1.05 of the
code providing criminal penalties for a violation of a pro-
vision of the code.)
We also concede that the fee assessment provisions
themselves present certain administrative difficulties for
the commission.. Subsection (b) of section 32.02 indicates
on its face that "[t]he permit fee shall be based on the
hiahest number of members in good standing during the year
for which the permit fee is to be paid." A permit expires
one year after the date it issued. Alto. Bev. Code 5 11.09.
However, since the fee is payable in advance at the time of
the application for a permit or renewal permit (section
11.35), the calculation of the fee "based on the highest
p. 4787
,
Honorable W. S. McBeath - Page 5 (JM-948)
number of members . . . during the year for which the permit
fee is to be paid" is necessarily only an estimate.
Subsection (d) of section 32.02, providing for "amended
applications" no later than ninety days before a permit's
expiration, somewhat but not entirely mitigates the problem
of assessing a fee based on the highest number of members
during the year since the membership cannot be ascertained
with certainty until the nn8 of the year in question. The
commission has informed us that it has found the subsection
(d) amendment procedure insufficient for determining actual
amounts due on permit fees under subsection (a), because the
membership might change after submission of the amended
application, and because the procedure led to frequent
overpayment of fees. Amounts overpaid, once deposited in
the general revenue fund, could not be reimbursed without
legislative action. Tex. Const. art. VIII, 9 6. Similar
administrative problems exist under the present procedure.
The commission informs us that, instead of following
the subsection (d) amendment procedure, it has relied on
routine audits of licensees once accurate membership figures
are available at the end of the permit year. However, the
method of calculation used, even in such audits, for
determining club membership for purposes of fee assessment
has apparently been the membership proration method referred
to above rather than one determining the hiahest number of
members during the year pursuant to the language in
subsection (b).2
But again, even granting that the fee assessment
provisions present administrative difficulties, we do not
believe that those provisions are or have been ambiguous
such that the board was warranted in construing the
requirement of section 32.02(b), that the fee "shall be
based on the highest number of members," as authority to
base the fee determination on a prorated membership figure.
2. Please note that we do not address, because you do
not raise, any issues with respect to the operation of the
amendment procedure provided for in subsection (d) of
section 32.02 or with respect to the commission's practice
of determining additional fees due by use of a routine audit
rather than the amendment procedure.
~7.4788
Honorable W. S. McBeath - Page 6 (JM-948)
.-,
SUMMARY
The Alcoholic Beverage Commission is not
authorized to prorate private club membership
for purposes of determining the permit fee
under Alcoholic Beverage Code section 32.02.
Under section 32.02, the permit fee is based
on the hj,g&& number of members in good
standing during the year for which the permit
fee is to be paid, rather than on a prorated
membership figure. .
JIM MATTOX
Attorney General of Texas
MARY KELLER
First Assistant Attorney General
LCUMCCREARY
Executive Assistant Attorney General
JUDGE ZOLLIE STEAELBY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by William Walker
Assistant Attorney General
p. 4789