1999 Texas Attorney General Reports and Opinions 1 (1999)

handle is hein.sag/sagtx0075 and id is 1 raw text is: O     OFFICE OF THE ATTORNEY GENERAL * STATE OF TEXAS
JOHN CORNYN
February 24, 1999
The Honorable Michael P. Fleming           Opinion No. JC-0001
Harris County Attorney
1019 Congress, 15th Floor                 Re: Whether a racetrack admission fee collected
Houston, Texas 77002-1891                  by a county to distribute to municipalities
pursuant to the Texas Racing Act, see TEX. REV.
Civ. STAT. ANN. art. 179e,  6.17(a) (Vernon
Supp. 1999), violates article VIII, section 1(f) of
the Texas Constitution (RQ-10 16)
Dear Mr. Fleming:
You ask whether a fee set forth in article 179e, section 6.17(a) of the Revised Civil Statutes,
a racetrack admission fee that a county is authorized to collect to distribute to municipalities in the
county, runs afoul of the limitations on county and municipal occupation taxes set forth in article
VIII, section 1(f) of the Texas Constitution, which precludes counties and cities from levying
occupation taxes unless the state has done so. A tax is an occupation tax if its primary purpose is
to raise revenues in excess of the amount needed for regulation of the industry. Conlen Grain &
Mercantile, Inc. v. Texas Grain Sorghum Producers Bd., 519 S.W.2d 620, 623-24 (Tex. 1975).
Because a municipality has no authority to regulate a racetrack located outside its jurisdiction, we
conclude as a matter of law that the admission fee at issue is an occupation tax. We are unable to
determine whether the admission fee violates article VIII, section 1(f), however, because we cannot
resolve whether the state has imposed an occupation tax on racetracks.
Article 179e, the Texas Racing Act (the Act), generally delegates the authority to regulate
racing in this state to the Texas Racing Commission (the Racing Commission). See generally
TEX. REV. Civ. STAT. ANN. art. 179e,  3.02 - .22 (Vernon Supp. 1999). The Racing Commission
regulates racetrack licensing and is expressly authorized to set application fees, id.  6.03(e), license
fees, id.  5.01(b), and annual fees, id.  6.18(b). In addition, the Act requires the Comptroller to
collect a portion of each pari-mutuel pool' on behalf of the state and grants the Comptroller rule-
making authority with respect to those duties. Id.  4.01 - .06 (Comptroller's authority), 6.09, .091,
.093 (setting forth state's entitlement to portion of pari-mutuel pools).
IPari-mutuel pool means the total amount of money wagered by patrons on the result of a particular race
or combination of races, the total being divided into separate mutuel pools for win, place, show, or combinations. TEX.
REv. Civ. STAT. ANN. art. 179e,  1.03(19) (Vernon Supp. 1999).

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