Untitled Texas Attorney General Opinion ( 1990 )

THE ATTORNEY GENERAL
OF TEXAS
July 27, 1990
Mr. Larry E. Kosta Opinion No. JM-1195
Executive Director
Department of Licensing Re: Authority of a municipal-
and Regulation ity to impose a registration
P. 0. Box 12157 fee, license fee, occupation
Austin, Texas 78711 tax, or a bond requirement
on a state licensed air con-
ditioning and refrigeration
contractor (RQ-1993)
Dear Mr. Kosta:
You ask whether an air conditioning and refrigeration
contractor licensed by the Department of Licensing and Regu-
lation 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 municipal-
ity.
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 re-
frigeration 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 revoca-
tion of licenses), 5A (consumer complaint investigation by
commissioner).
You point to section 9(a) of that article, which pro-
vides:
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 refriaera-
tion 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, precludes a municipality from imposing a
municipal "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. Therefore a municipality may
not impose such a tax.
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 entering
a field of legislation occupied by general legislative
enactments. Where a field of legislation has been occupied
by a state statute, specific grants of authority to munici-
palities 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 Depart-
ment of Licensing and Regulation to set insurance reguire-
ments 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 "registra-
tion fee" of an article 8861 licensee performing air condi-
tioning 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 ob-
taining 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 IIbecause 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 munic-
ipality 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