                            QBffice    of tfie IZIttotnep   Qkneral
                                         iibtatt of Qcxas

DAN MORALES
 ATTOINEY
       GWEnAL
                                      Setptember 16,199l


    Honorable Rddie Cavaxos                    Opinion No. DM-42

    House Committee on Jnsurance               Re: Validity of statute releasing real
    Texas House of Representatives             estate brokers in certain geographic areas
    P. 0. Rex 2910                             from continuing education requirements
    Austin Texas 78769                         (RQ-112)

    Dear Representative Cavaxos:

            You ask about the validity of a 1991 amendment to section 7A of the Real
    Estate License Act, article 6573a, V.T.C.S. Acts 1991,72d Leg., ch. 553, # 1.041, at
    1910. Subsection (a) of section 7A provides for contin~g education requirements
    for the renewal of real estate brokers’ and real estate salesmens’ licenses. The
    amendment in question added a new subsection (e) directing the Real Estate
    Commission, on or before September 25, 1991, to ident@ each real estate broker
    licensed under the act for ten years or more, and having on June 1, 1991, his
    principal place of business in a county with a 1980 census population of 225,000 or
    less, and to notify him that he may opt out of the continuing education requirements
    of the act in the manner provided for in subsection (0. New subsection (f) permits a
    real estate broker so identified and notified to opt out of the contimdng education
    requirements for renewing his license if, after October 1, 1991, and on or before
    October 31,1991, the broker notifies the commission in writing that he is opting out
    and pays a fee to cover administrative costs in an amount to be determined by the
    commission but not to exceed $100.

            You ask speciScaUy 1) whether such an exemption from a professional
    licensing requirement based on geographic locale is permissible, and 2) whether it
    is legal to deny certain consumers the same protection accorded other consumers
    based on geographical location.” We understand your questions to be whether the
    geographical classifications of the exemption in question are valid under the equal
    protection provisions of the federal and state constitutions and under the state
    constitution’s prohibitions regarding local and special laws. See U.S. Const. amend.
    XIV, Tex. Cmst. art. I, 9 3, art. JR, 9 56. We limit our consideration here to those
    specific constitutional issues.




                                              p. 205
Honorable Eddie Cavazos - Page 2 (DM-42 1




        Federal equal protection challenges to statutory classiCcations made in
regulating occupational pursuits are ordinarily reviewed under the so-called
“rational basis” test. PoUd v. Cocknrg, 578 F2d 1002,1012-13 (5th Cir. 1978).

         The general rule is that legislation is presumed to be valid and
         will be sustained if the clamification drawn by the statute is
         rationally related to a legitimate state interest,

Cf.@of Clkbumev. Ckbume Living Center,473U.S. 432,440 (1985).

         In contrast to the “strict scrunny” applied to statutory classifications
burdening “suspect classifications” or “fundamental rights,”judicial review under the
rational basis test has, as a rule, upheld statutory classifications. The plurality
opinion of the United States Supreme Court in C&me& v. Fushhg, 457 U.S. 957
(1982) stated that unless a state statute burdens a “suspect classification” or a
“fundamental right,” dassiScations made by the statute “are set aside only if they are
based solely on reasons totally unrelated to the pursuit of the State’s goals and only
if no grounds can be conceived to justify them.” 457 U.S. at 963; see aIs0 L TRIBE,
AMERICANINSTITUTIONAL LAW5 16-3 (1978) (‘The Conceivable Basis Test”).

        It is not apparent that a “suspect classification” or “fundamental right” is
burdened by the geographical classifications made by the contimring education
exemption here. See, cg., Koremarsu v. United States,323 U.S. 214 (1944) (race,
ancestry as “suspect” criteria); SIr@u v. T?wmprwt, 394 U.S. 618 (1969) (right to
interstate travel as “fundamental”). Although the numerous letters and briefs we
have received in connection with your request have raised substantial concerns as
to the “rational basis” for the statutory &ssifications in question,t in view of the
rather minimal level of scrutiny it appears a court would apply under federal equal
protection standards we cannot say that the geographical classitkations in the new
continuing education exemption on their face run afoul of then federal equal
protection clause. We think that resolution of this constitutional issue would
require findings of fact, which we would be unable to make in an attorney general




                                         p. 206
HonorableEddieCavaxos       - Page 3 (DM-42)




opinion See, eg , Attorney General Opinion JM-1267 (1990). only a court with its
powers to take evidence on the relevant aspects of the real estate industry in Texas,
aud the reasonableness in that context of the exemptions in question, could make
such a determination.

        Texas’ constitutional counterpart of the federal equal protection clause,
found in article III, section 1, provides that “[a]ll tiee men, when they form a social
compact, have equal rights.” Modem Texas courts have generally held that no
greater protection is afforded thereby than under the federal provision. See Texas
OptometryBd v. Lee Vibion Center, Ine, 515 S.W.2d 380 (‘TX. Civ. App.-Eastland
1974, writ refd n.r.e.); Attorney General opinion JM455 (1986) (and authorities
cited therein).

        We do find several earlier Texas cases which amrounce that statutory
occupational regulations that classify solely on the basis of locale contravene article
III, section 1. See Ex patte Dmibelbir, 109 S.W.2d 476 (T’ex. Grim. App. 1937)
(municipal ordinance imposing license “fee”only on merchants engaged in business
less than a year); Er porte B&cr, 78 S.W.2d 610 (Tex. Grim. App. 1934) and Linen
Serv. Cwp. v. City ofAbilene, 169 S.W.2d 497 (T’ex.Civ. App.-Eastiand 1943, writ
rePd) (municipal ordinances requiring license fee for businesses located outside
municipality but doing business in municipality); Jackton v. State, 117 S.W. 818
(Tex. Crim. App. 1908) (statute exempting barbers in, inter Olin, towns of 1.000
population or less from license tax). We note first that these earlier opinions either
included other grounds for their holdings or were directed to situations significantly
different from the one here. (Jackron also struck down any license tax on barbers as
violative of article VIII, section 1; the other cases cited involved exclusionary
municipal ordinances.) More importantly, we believe a modem court would apply a
different equal protection analysis, patterned on the contemporary federal
approach, from that applied in these older cases. But again, and most significantly,
while the above-mentioned opinions emanated from court proceedings in which
evidence could be taken and findings of facts made as to the reasonableness of the
provisions under attack, we cannot so take evidence or find facts in an attorney
general opinion. Only a court could determine the validity, ti a ti article I, section
3, of the geographical &ssXcations in question here.

        Similarly, the resolution of whether the geographical classifications are viable
under the prohibition on “local or special laws”in article ITf, section 56, of the state
constitution would require findings of fact on such matters as the numbers of
brokers having their designated principal places of business in locales falling within



                                           p. 207
Honorable Eddie Cavazos - Page 4 (DM-42 1




and without the pqpulation bracket created for purposes of the exemption and the
problems experienced witb brokers’ competence in such locales2 Such findings
couldonlybemadebyacomt.       See,cg.,ExpvteSpring.586S.W2d482(Bx.Crim.
App. 1978).



             Whether the use of geographical classifications in the
         exemption for certain real estate brokers in section 74
         subsections (e) and (f) of the Real Estate License Act, from the
         continuing education requirements for license renewal violates
         federal or state constitutional equal protection requirements or
         the state constitutional prohibition on local or special laws
         involves questions of fact that c8Mot be resolved in an attorney
         general opinion




                                               DAN      MORALES
                                               Attorney General of Texas




                                        p. 208
Honorable Eddie Cavazos - Page 5     (DM-42    1




WILL PRYOR
First Assistant Attorney General

MARYKELLER
Exeadve Assistant Attorney General

JUDGEZOLLIE STEARLEY (Ret.)
Special Assistant Attorney General

RENEAHIcK!s
Special Assistant Attorney General

MADELElNE B. JOHNSON
Chair, Opinion Committee

Prepared by William Walker
Assistant Attorney General




                                       p.     209
