                              ATTORNEY GENERAL OF TEXAS
                                           GREG        ABBOTT




                                              November 19, 2010



Mr. Victor Vandergriff                                   Opinion No. GA-0820
Chairman of the Board
Texas Department of Motor Vehicles                       Re: Delegation authority of the governing board
4000 Jackson Avenue                                      of the Texas Department of Motor Vehicles
Austin, Texas 78731                                      (RQ-0879-GA)

Dear Mr. Vandergriff:

        On behalf ofthe Board of the Texas Department of Motor Vehicles ("TxDMV Board"), 1 you
request an opinion on the Board's authority to issue final orders and to allow subordinates to exercise
its powers under Occupations Code chapter 2301 and Transportation Code chapter 503. 2 You also
inquire about the conflict of interest provisions applicable to Board members. Request Letter at
12-13.

       The TxDMV Board was established by Transportation Code section 1001.021 and granted
the powers and duties stated in Transportation Code chapters 1001 through 1005. See TEX. TRANSP.
CODE ANN. §§ 1001.001(1), .021 (WestSupp. 2010). Chapter 2301 provides for the Motor Vehicle
Division ("MVD" or "Division") of the TxDMV and for a director of the MVD, the division's chief
executive and administrative officer. TEX. OCC. CODE ANN. §§ 2301.002(10)-(12), . 101 (a) (West
Supp. 2010).

         Your first question involves the Board's and theMVD director's authority under Occupations
Code chapter 2301, which regulates the sale or lease of motor vehicles. Request Letter at 6; TEX.
OCC. CODE ANN. §§ 2301.001-.853 (West 2004 & Supp. 2010). You ask whether Occupations
Code sections 2301.709-.711 authorize the Board to make final decisions in administrative cases
arising under chapter 2301, except for subchapter M, known as the "Lemon Law." Request Letter
at 6; see TEX. OCC. CODE ANN. §§ 2301.601-.613 (West 2004 & Supp. 2010) (subchapter M).3



        'The Legislature created the TxDMV in 2009, transferring certain powers from the Texas Department of
Transportation ("TxDOT") to the TxDMV Board. See Act of May 23, 2009, 81st Leg., R.S., ch. 933, § 6.01(a), 2009
Tex. Gen. Laws 2485, 2519.

        2Request Letter at 1, 6-7 (available at http://www.texasattorneygeneral.gov).

        3See 43 TEx. ADMIN. CODE § 215.21 (2010) (Tex. Dep'tofMotor Vehicles, Objective) (describing Occupations
Code chapter 2301, subchapter M as the "Lemon Law").
Mr. Victor Vandergriff - Page 2                   (GA-0820)



        Sections 2301.709-.711 relate to hearing procedures in contested cases. See TEX. OCC.
CODE ANN. §§ 2301.701, .703 (West 2004). Hearings in contested cases arising under chapter 230 1
or a Board rule must be conducted by an administrative law judge ("ALI") of the State Office
of Administrative Hearings. Id. §§ 2301.703 (West 2004), 2301.704(a) (West Supp. 2010).
The ALI is authorized to "issue a proposal for decision and recommend a final order." See id.
§ 2301.704(b)(8) (West Supp. 2010). After reviewing the case, the Board "shall issue a written final
decision or order." Id. § 2301.709(d); see also id. §§ 2301.710 (West 2004) (authorizing the Board
to issue a final order dismissing a complaint), 2301.711 (stating required content of orders and
decisions). lfthe language of a statute is unambiguous, "its plain meaning will prevail." Leland v.
Brandal, 257 S.W.3d204, 206 (Tex. 2008). Sections 2301.709(d) and 2301.710 expressly authorize
the Board to issue a final order in a contested case under chapter 2301 and Board rules, except for
cases under chapter 2301, subchapter M, which we next consider.

        Chapter 2301, subchapter M of the Occupations Code" the Lemon Law, requires
manufacturers, converters, or distributors to take actions necessary to conform the vehicle to the
express warranties they have made. See id. §§ 2301.603(a), .604(a) (West 2004). ·If an
administrative proceeding is necessary to enforce the law, "[tlhe director under board rules shall
conduct hearings and issue final orders for the implementation and enforcement of this subchapter."
Id. § 2301.606(a). An order issued by the MVD director under subchapter M "is considered a final
order of the board." Id. As the plain language of section 2301.606(a) shows, the MVD director
"shall ... issue final orders" to implement and enforce subchapter M. Id.

       You also ask whether the MVD director is authorized to make the final decision in
enforcement cases arising under Transportation Code chapter 503, which provides for the regulation
of motor vehicle dealers and manufacturers. Request Letter at 6; see TEX. TRANsp. CODE ANN.
§§ 503.001-.095 (West 2007 & Supp. 2010). Transportation Code section 503.009 provides for
hearings in contested cases:

                        (a) The department's Motor Vehicle Board' may conduct
                hearings in contested cases brought under and as provided by this
                chapter.

                        (b) The procedures applicable to a hearing conducted under
                this section are those applicable to a hearing conducted as provided
                by Section 2301.606(a), Occupations Code.

                       (c) A decision or final order issued under this section is
                final and may not be appealed, as a matter of right, to the
                commission.


        'TEx. Occ. CODE ANN. §§ 2301.601-.613 (West 2004 & Supp. 2010).

         'The term "department" in section 503.009 now means the "Texas Department of Motor Vehicles," while
"board" and "commission" mean the TxDMV Board. See TEx. TRANSP. CODE ANN. § 503.001(1)-(2), (5) (West Supp.
2010).
Mr. Victor Vandergriff - Page 3                     (GA-0820)



                         (d) [Board may adopt rules for an action brought under
                 section 503.009].

TEX. TRANSP. CODE ANN. § 503.009 (West 2007).

         Read in isolation, section 503.009(a) seems to authorize the TxDMV Board to "conduct
hearings in contested cases brought under and as provided by" chapter 503. Id. § 503.009(a).
Section 503.009(b), however, provides that the procedures "applicable to a hearing conducted as
provided by Section 230 1.606(a), Occupations Code" also apply to a hearing under section 503.009.
Id. § 503.009(b). "Statutes which refer to other statutes and make them applicable to the subject of
legislation are called 'reference statutes,' and are a familiar and valid mode of legislation." W. Cas.
& Sur. Co. v. Young, 339 S.W.2d 277, 280 (Tex. Civ. App.-Beaumont 1960, writ ref' d) (quoting
Trimmier v. Carlton, 296 S.W. 1070, 1074 (Tex. 1927)). When one statute references another, we
look to the referenced statute to understand the referencing statute. See In re R.l.l., 959 S.W.2d 185,
186 (Tex. 1998) (per curiam). Thus, we look to section 2301.606(a), which states that "[t]he director
under board rules shall conduct hearings and issue final orders for the implementation and
enforcement of this subchapter. An order issued by the director under this subchapter is considered
a final order of the board." TEX. OCC. CODE ANN. § 2301.606(a) (West 2004). Because the
procedures of subsection 2301.606(a) authorizing the director to conduct hearings and issue final
orders are incorporated into Transportation Code section 503.009, the director is authorized to issue
final orders in contested cases brought under chapter 503. 6

         As your second question, you ask whether the Board may delegate its decision-making
authority to the MVD director. Request Letter at 7. You mention Occupations Code section
2301.154, which provides that "[t]he [MVD] director may delegate any of the director's powers to
one or more ofthe division's employees." TEX. OCc. CODE ANN. § 2301.154 (West Supp. 2010);
see id. § 2301.002(10), (12) (defining "director"). A predecessor of section 2301.154 authorized the
Motor Vehicle Board of TxDOT to delegate any of its powers to board members, the director, or
employees, but a 2005 amendment adopted the present language. See Act of May 18, 1989, 71st
Leg., R.S., ch. 1130, § 12, 1989 Tex. Gen. Laws 4653, 4659 (adopting article 4413(36), section 3.04,
Revised Civil Statutes), amended by Act of May 30, 2005, 79th Leg., R.S., ch. 281, § 7.05, 2005
Tex. Gen. Laws 778, 840. In amending a statute, the Legislature is presumed to have intended some
change to existing law and effect must be given to the amendment. See City of Houston v. Clear
Creek Basin Auth., 589 S.W.2d 671, 681 (Tex. 1979). Occupations Code section 2301.154 does not
authorize the Board to delegate its decision-making powers to the director.

        You raise Transportation Code section 1003.002(a)(1), which provides that "[t]he board or
the department by rule may ... create a summary procedure for routine matters." Request Letter
at 11. See TEX. TRANSP. CODEANN. § 1003.002(a)(1) (West Supp. 2010); see also id. § 1003.002(d)
(authorizing the board by rule to provide for delegating authority to an employee to take action on



         'From 1995 through 2005 the MVD director and not the Board made the final decisions in enforcement cases
brought under Transportation Code chapter 503. Request Letter at 4. The director continued to make those decisions
from 2005 through 2009, when no Board existed. Id. at 5-6.
Mr. Victor Vandergriff - Page 4                         (GA-0820)



a routine matter). The Board may designate an activity as a routine matter only if it is "(1)
voluminous; (2) repetitive; (3) believed to be noncontroversial; and (4) oflimited interest to anyone
other than persons immediately involved in or affected by the proposed department action." [d.
§ 1003.002(b) (paragraph form deleted). This is the only provision that expressly authorizes the
Board to delegate any of its powers.

       We question whether issuing a final order is a routine matter under this provision. The
governing body of an administrative agency has some discretion to change a finding of fact or
conclusion of law made by the AU or to vacate or modify an order issued by the ALJ. See TEX.
GOV'T CODE ANN. § 2001.058(e) (West 2008). Thus, the Board may construe the statutes it
administers, an action that could be controversial or of interest to persons other than those
immediately involved in or affected by the proposed department action. See TEX. TRANSP. CODE
ANN. § 1003.002(d) (West Supp. 2010). Accordingly, we cannot say as a matter of law that section
1003.002(d) authorizes the Board to delegate its authority to issue a final order.

         You suggest that the Board has implied authority to delegate its chapter 2301 duties as to
final orders. See Request Letter at 7-12. When a statute vests a specific function in a designated
public officer or body, the Legislature presumably intends that only that officer or body shall exercise
the assigned functions. See Schade v. Tex. Workers' Compo Comm 'n, 150 S.W.3d 542,548-49 (Tex.
App.-Austin 2004, pet. denied), Lipsey V. Tex. Dep't of Health, 727 S.W.2d 61, 64 (Tex.
App.-Austin 1987, writ ref'd n.r.e.), Moody V. Tex. Water Comm'n, 373 S.W.2d 793, 797 (Tex.
Civ. App.-Austin 1963, writ ref'd n.r.e.). Absent express authority, a governmental entity may
delegate only ministerial tasks. 7 See Schade, 150 S.W.3d at 548-49, Newsom v. Adams, 451 S.W.2d
948,953 (Tex. Civ. App.-Beaumont 1970, no writ), Moody, 373 S.W.2d at 797, Tex. Att'y Gen.
Op. No. GA-0434 (2006) at 3. While section 2301.153 grants the Board "all powers necessary,
incidental, or convenient to perform a power or duty expressly granted under this chapter," including
specific enumerated powers, neither this provision nor any other authorizes the Board to delegate
its duties as to final orders. TEX. OCe. CODE ANN. § 2301.153 (West 2004).

        You finally raise Transportation Code section 1001.042, which provides that "[tlhe board
shall develop and implement policies that clearly define the respective responsibilities of the
director and the staff of the department,"· suggesting that this provision would allow the Board to
delegate final order authority to Board members and to the MVD director. TEX. TRANSP. CODE
ANN. § 1001.042 (West Supp. 2010); Request Letter at 10-11. Section 1001.042 does not expressly
authorize the Board to delegate statutory duties to the executive director or to individual Board
members. In answer to your second question, we advise you that the TxDMV Board has no implied
authority to delegate its final order authority to the DMV director or any other person.

        Your third question relates to Board members' conflicts of interest. See Request Letter
at 12. You ask whether Board members who represent a dealer or manufacturer are prohibited from


         '''Ministerial acts are those for which 'the law prescribes and defines the duty to be performed with such
precision and certainty as to leave nothing to the exercise of discretion or judgment. '" Ballantyne v. Champion Builders,
Inc., 144 S.W.3d 417, 425 (Tex. 2004) (quoting Comm'r of the Gen. Land Office V. Smith; 5 Tex. 471, 479 (1849)).
Mr. Victor Vandergriff - Page 5                   (GA-0820)




voting on cases where their industry affiliation might place them in opposition to a party. [d. at
12-13; see also TEX. TRANSP. CODE ANN. § 1001.021(b) (West Supp. 2010) (requiring industry
representatives to be included on Board).

         Transportation Code 1001.028 provides that "[a] member of the board shall disclose in
writing to the executive director if the member has an interest in a matter before the board or has a
substantial financial interest in an entity that has a direct interest in the matter" and "shall recuse
himself or herself from the board's deliberations and actions on the matter." TEx. TRANSP. CODE
ANN. § 1001.028(a)-(b) (West Supp. 2010). "A person has a substantial financial interest in an
entity if [he or she] (I) is an employee, member, director, or officer of the entity; or (2) owns or
controls, directly or indirectly, more than a five percent interest in the entity." Id. § 1001.028(c).
This provision does not automatically bar Board members who are industry representatives from
participating in a decision of the Board that involves a dispute between industry parties. Instead,
section 1001.028 requires a Board member to decide, in the first instance, whether he or she has an
interest in a matter or a substantial financial interest in an entity that has a direct interest in a matter.
If so, the Board member may not participate in the Board's decision on the matter. Whether a Board
member is barred from participation in a particular matter must be decided on a case-by-case basis
in view of the relevant facts. See Tex. Att'y Gen. Op. No. GA-0557 (2007) at 3 (recognizing that
questions involving conflicts of interest require an examination of all the facts and are not
appropriate for an attorney general opinion).

        The Board is also "subject to the code of ethics and the standard of conduct imposed by
Chapter 572, Government Code, and any other laws regulating the ethical conduct of state officers
and employees." TEX. TRANSP. CODE ANN. § 1005.001 (West Supp. 2010); see, e.g., TEX. GOV'T
CODE ANN. § 572.051 (West Supp. 2010) (prohibiting certain conduct that might influence the
officer or employee in the discharge of official duties). The application of chapter 572 to a Board
member must be decided on a case-by-case basis in view of the relevant facts.
Mr. Victor Vandergriff - Page 6             eGA-0820)



                                     SUMMARY

                      The Board of the Department of Motor Vehicles is authorized
              to issue a final order in a contested case under Occupations Code
              chapter 230 I, except for cases under chapter 2301, subchapter M, the
              "Lemon Law." The director of the Motor Vehicle Division of the
              Department is authorized to issue final orders in cases under the
              Lemon Law and under Transportation Code chapter 503.

                      The Board has no implied authority to delegate its authority
              to issue final orders in contested cases to the director of the Motor
              Vehicle Division.

                      Board members are subject to conflict-of-interest provisions
              found in Transportation Code section 1001.028, Government Code
              chapter 572, and any other law that regulates the ethical conduct of
              state officers and employees. The application of these statutes to a
              Board member must be decided on a case-by-case basis in view of the
              relevant facts.




DANIEL T. HODGE
First Assistant Attorney General

DAVID J. SCHENCK
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Susan L. Garrison
Assistant Attorney General, Opinion Committee
