, /’




                                                                  March 16, 1939


       Hon. R. Emmett Morse
       Speaker, House of Representatives
       Austin, Texas

       Dear Sir:

                               Opinion No. Q-409
                               Re: Constitutionality of H. B, 247, relating
                                    to horse-racing under certain conditions

               We have your letter of March 13th, stating the request of the House
       of Representatives for our opinion as to the constitutionality of pending
       House Bill No, 247.
            I
              While your letter did not specify any particular part of the Act,
      which has a "savings olausee (Sea, 52), since its effectual operation is
      governed by the seotions.propo.singto permit ratification or rejection
  t   of permit holders to oonduct horse races, by the voters of counties under
    ' stated provisions, we shall discuss those sections, inviting further in-
      quiry oncany portions of the bill not considered by us.
    :
               The bill creates The Texas Horse Racing Commission, provides for
       its organization and incidentals thereto, contains oertain revenue and
       tax features, and provides for the distribution of its funds,whhenand if
       collected.

               The general powers of the Commission are stated in Section 8:

               "The Commission is hereby authorised end empowered to adopt
            rules and regulations for the control and supervision and direc-
            tion of applicants, permittees and licensees for the holding,
            conducting and operating of all horae race meetings held in this
            $tate, provided such rules end regulations shall be uniform in
            their application and effect, snd the duty of exercising this
            control is hereby made mandatory upon such Commission."

               As we understand the salient working features of the bill, the method
       of operation is thus proscribed:

               A person (association or corporation) must first file an application
       with the Conmission to conduct a horse raoe meeting and operate c pari-.
Hon. R. Bmnett Morse, March 16, 1939, Page 2


mutuel betting pools. He must comply with certain requirements of Sec. 13,
giving in fill the information there prescribed. He pays a fee of $50.00
to the Commission, The Commission then holds 8 public hearing, and if the
Commission concludes the applicant complies with all the provisions of law,
the rules and regulations of the Commission and is financially able to con-
duct the proposed meet, and the cosnmanitywherein the track is located is
not already adequately served with racing,

        "the Commission shall issue a permit to the applicant, subject
     to ratification or vote of the people residing within the county
     wherein the horse race track is located at a referendum held for
     that purpose and as hereinafter provided for." (Sec. 13; under-
     scoring ours).

        Such permit is then oertified to the Commissioners~ Court of the
County wherein is located the track at which the races are proposed to be
operated, It is then the duty of the Covmissioners' Court to call an elec-
tion at the expense of‘the applicant and there is submitted to the qualified
voters- the question of the approval or rejection of the particular permit
granted by the Ccrmmission. The form of ballot is set out:

        "For the approval of the permit granted by the Texas State
     Racing Commission to .,...(nting the permittee) to hold and conduct
     horse race meetings at ,.... track (naming the track) in .....
     County (naming the county)", end the words, "Against the appro-
     val of the permit granted by the Texas State Racing Ccsmission~
     to .... (naming the permittee) to hold and conduct horse race
     meetings at .,., track (naming the track) in ..,. County, (nam-
     ing the county)."

         If the result of the election is favorable to the approval of the
permit, an approved permit is then issued by the Commission to the appli-
 cant or permittee, which entitles the permittee to issuance of a license
,by the Commission for a period of one year upon payment of the license fee
provided in the Act. No further discretion exists to the Commission, if
 the fee is paid.

        Thereafter, the license, upon application, may be renewed from
year to year during the period of the permit, which is ten years, provided
the Commission finds the applicant still possesses all the qualifications
provided by the Act and that the permit has not been revoked by a subse-
quent election, and that the licensee has not violated any of the provi-
sions of the Act or the rules and regulations of the Commission made and
provided for in the Act.  An approved permit expires after a period of
ten years and no license may be issued after the expiration of the period
of the approved permit, The Commission is vested with power to suspend
or revoke any license or permit if it be made to appear to the satisfac-
tion of the Ccmmission that the holder or holders thereof'have violated
any provision of the Act or any rule promulgated by the Commission.
Hon. R. mett   Morse, March 16, 1939, Page 3


        Independent of the findings of the Ccmmission, a permit or license
cnce approved may be revoked by majority vote of the electorate of the
county where such racing is allowed, if twenty (2%) per cent of the total
qualified voters petition for such referendum, and if the expenses of such
election are provided for. This may be done as often as cnce every two
years.

        Section 33 of the proposed bill reads as follows:

       "Every horse race meeting at which racing is conducted end pari-
    mutuel pools are operated, except as allowed by this Act, is hereby
    prohibited and declared to be a public nuisance, and every person,
    association or corporation aiding or abetting therein or conducting
    or attempting to conduct horse racing and operate pari-mutuel pools
    in this State net in conformity with this Act shall be deemed guilty
    of a felony and upon conviction thereof be confined in the state
    penitentiary for not less than one year nor mere than tenyears."

        In analyzing the provisions of the proposed legislation, we must
recognize and take into consideration certain inalienable principles upon
which our form of government is based. The Texas Constitution ordains that
the powers of our government shall be divided into three distinct depart-
ments with specific and exclusive delegation cf power to the legislative
branch to enact or suspend law. All official authority in Texas is derived
from the people as delegated in the constitution. Even the people them-
selves are bound by that document, until they change it as provided by its
express terms,

        Ours is a representative democracy, as opposed to a pure democracy.
The laws are made not by the people directly, but through their chosen repre-
sentatives. See Art. 1, Sec. 2 and 28, Bill of Rights; Art. 2, Constitution;
Rx Parte Farnsworth, 133 S. W, 536, 33 L. R. A. (New Series) 968; State v.
Swisher, 17 Tex. 441; Lyle v. State, 193 S. W. 680.

        Under the provision of Section 33 of the bill, supra, the racing
of horses with pari-mutuel betting is prohibited throughout the State and
in every county in it, until some specific one individual (or association
or corporation) can obtain a majority vote of the electors within scme
one county of this State wherein is located a race track. No matter the
said individual has satisfied fully every regulation of the statute, every
rule of the Commission, every whim or caprice of the individual members
of the Commission. The designated "permit" gives the holder thereof no
right to conduct a race, and he would be subject to penal servitude in the
penitentiary if he undertook the operation of racing (with betting), be-
fore the voters of the county favored him with their favorable referendum.

        The question of whether the people of the various counties may by
local option election suspend the general laws has been definitely and con-
clusively settled in Texas. Likewise, that the Legislature cannot delegate
Hon. R. Rmnett Eiorsc,March 16, 1939, Page 4


its legislative functions to local option, to place in force or not place
in force * general law. The first Supreme Court of Texas in the case of
State v. Swisher, 17 Tax. 441, uses the following language:

       "The mode in which the acts of the Legislature are to become
    laws is distinctly pointed cut by cur Constitution. After an act
    has passed both houses of the Legislature, it must be signed by
    the speaker of the house and the president of the senate. It
    must then receive the approval of the Governor. It is then a law.
    But should the Governor veto it and send it back, it can only be-
    come law by being passed again by both houses, by a constitutional
    majority. There is no authority for asking the approval of the
    voters at the primary elections in the different counties. It
    only requires the votes of their representatives in a legisla-
    tive capacity. But, besides the fact that the Constitution does
    not provide for such reference to the voters to give validity to
    the acts of the Legislature, we regard it as repugnant to the
    principles of the representative government formed by our Consti-
    tution. Under our Constitution the principle of laxmaking is that
    laws are made by the people, not directly, but by and through
    their chosen representatives. By the act under consideration
    this principle is subverted, and the law is proposed to be made
    at last by the popular vote of the people, leading inevitably
    to what was intended to be avoided, confusion and great popular
    excitement in the enactment of laws." State v. Swisher, supra.

        This rule of law was subject to much discussion by the courts,
and at one time the Supreme Court favored the rule while the majority of
the Court of Criminal Appeals did not, but in the case of Lyle v. State;
193 S. W. 680, the reasoning of the Swisher case, supra, is set out and
adopted by the latter court, as is the following language of Chief Justice
Phillips in the Supreme Court case of Rx Parte Mitchell, 177 S. W. 953:

        "The case presents the question of the constitutionality
    of the referendum act of the Thirty-third Legislature authoris-
    ing the qualified voters of any county, or certain political sub-
    divisions of a county, to determine by an election whether pool
    rooms or pool halls should be prohibited therein, and making it an
    offense to there operate or maintain them if the result of the
    election be in favor of their prohibition.

        "The constitutionality of the act is assailed upon two grands:
    (1) That it amounts to a delegation by the Legislature of its own
    legislative power, imposed upon it by the Constitution, which it
    *lone must exercise, and which it may not commit to any other agency;
    (2) that it authorizes the suspension of a general law of the state
    by the voters of a county, or subdivision of a county, namely, the
    statute licensing the operation cf pool halls generally within the
    state, in violation of article 1, para. 28, of the Constitution,
    Hon. R. Rmaett Morse, March 16, 1939, Page 5


    which is "No power of suspending laws in this State shall be exer-
    cised, except by the Legislature; an amendment of previous Consti-
    tutions which permitted such suspension under 'the authority1 of
    the Legislature.

        "The act is plainly unconstitutional, in cur opinion, for both
    of these reasons. We largely rest cur decision as to the first
    question upon State v. Swisher, 17 Tex. 441, where an act of the
    Legislature in no way dissimilar in its effect from this one was
    upon this ground held unconstitutional by the first Supreme Court
    of the state. That decision has never been overturned, and is the
    law upon the question. .The second question is equally well settled,
    according to cur view, by Brown Cracker ECCandy Co. v. City of
    Dallas, 104 Tex. 290, 137 S. W. 342, Ann. Cas. 1914B, 504."

        In adhering the Court of Criminal Appeals to the Supreme Court
view, Judge Morrow in the Lyle case, supra, says:

        "We are unable to find anything in our constitutional and
    judicial history upon which to base a conclusion that the deci-
    sion of the Supreme Court in following the rule in the Swisher
    case is unsound. On the contrary, we have pointed out herein-
    above much that, in our judgment, supports its correctness."

        In the case of Jannin v, State, 61 S. W. 1126, it appeared the
Legislature had passed a statute making it a penal offense for any other
person than the agent of a railroad company to sell its tickets, with
the further provision that it should not apply to tickets on which it
was not plainly printed that it was a penal offense for the holder to
transfer the same. The majority of the court held the act unconstitu-
tional, employing this language:

        "We accordingly hold that because the legislature left it op-
    tional with the railroad companies whether or not, in the issuance
    of tickets, they would create a penal offense, the act of the legis-
    lature is without authority of law; is violative of the law, in that
    it does not define with certainty an offense; does not itself oreate
    an offense, but delegates its authority to another agency to make
    the sale of railroad tickets a violation of the law. In this respect
    it would appear to be violative of section 28 of our bill of rights,
    which says: 'No power of suspending laws in this state shall be
    exercised except by the legislature.' See Suth. St. Con&    Pam.
    69.   We therefore hold that the sale of railroad tickets in this
    case is not a violation of law."

         In the case of Rx Parte Maynard, 275 S. W. 1070, it appears the
City of Jacksonville, Texas, enacted an ordinance making it unlawful
for persons engaged in the transfer business to solicit hire of passengers,
-about any railroad station, exempting frcm operation of the ordinance
Hon. R. Rnmett Morse, March 16, 1939, Page 6


persons under contract with a railroad to transfer its through passengers
or baggage to another railroad station. The Court of Criminal Appeals
in its original opinion by Presiding Judge Morrow, and in the opinion on
motion for rehearing by Judge Lattimore, held the ordinance in contraven-
tion of the constitution, based on "the well settled rule that the power
to make laws which, by their terms, become and are effective or not at
the pleasure of individuals or corporations, does not exist in the Legis-
lature, and cannot be asserted by a municipality created under legislative
authority." (Underscoring curs).

        In the case of Ex Parte Farnsworth, 133 S. WV 535, 33 L. R. A. (New
Series) 968, en ordinance of the City of Dallas was adopted by referendum
vote. Said ordinance was authorized by the "initiative and referendum"
clause of the charter granted by the Legislature. Farnsworth was arrested
and charged with a violation of the ordinance. The Court of Criminal Ap-
peals had before it an original writ of habeas corpus. Relator was dis-
charged, the court striking down the referendum clause.

        We find these words in Judge Davidson's opinion:

         "That the referendum is adverse to our constitutional form of
     government as a means of putting into operation enactments by the
     legislature has been expressly decided in this state as early 88
     State v.~Swisher, 17 Tex, 441; That case has been recognized and
     followed in subsequent decisions. See Stanfield v, State; 83 Texi
     319, 18 S. W. 577, and also Werner vi.Galveston, 72 Tex. 22; 7 S.-WA.
     726, 12 S. W.- 1596 In the last cited case; Judge Gaines,.writing
     the opinion, uses this language:. *It is a well-settled principle
     that the legislature cannot delegate its authority to make laws,
     by submitting the question of their enactment to a popular vote.6.;
     It is equally certain that the people cannot be reinvested by the
     legislature with the functions of legislation conferred by them on
     a department of government; nor can the legislature render the enact-
     ment of a law dependent upon the acceptance by the people by popu-
     lar vote. See oases already cited, Rx parte Wall, 48 Cal.,279; 17
     Am..Rep. 425; Morford vd Unger, 8 Iowa, 82; Santa v. State, 2 Iowa
     165, 63 Am. Dec. 487; State vd Beneke, 9 Icwa, 203; State ex rel;
     Dome v. Wilcox, 46 Mo.~458; Gibson v. Mason, 5 Neb. 283; Cincinnati,
     W. & 2. R. Co. V~ Clinton County, liOhio St. 77, This inability
     arises no less from the joint principle applicable to every dele-
      gated authority requiring knowledge, discretion, and rectitude in
     its exercise, than fran the positive provisions of the Constitution
     itself. The people in whom the power resided have voluntarily
     transferred its exercise, and have positively ordained that it
      shall be invested in the legislature, To allow the legislature
     to cast it back on the people would be a subversion of the Consti-
     tution, and would change its distribution of power without the
     action or consent of those who created the Constitution."
Hon. R. Emmett Morse, March 16, 1939, Page 7


Local option elections to determine the law applicable to the several
counties have been sustained as to prohibition of intoxicating liquor and
prohibition of stock running at large, but in each instance direct au-
tnority is given by the Constitution. Another exception is noted in some
cases, such as City of San Antonio v. Jones, 28 Tex. 19; Werner v, City
of Galveston, 72 Tex. 27; Riley v. Town of Trenton, 184 S. W. 344; Spears
v. City of San Antonio, 223 S. W. 166 and Johnson v. Martin, 12 S. W.
321, but many of these are distinguished by Judge Morrow in the Lyle case,
supra, as cases wherein municipal corporations are concerned and where
charter provisions are declaratory. The later cases are likewise dis-
tinguishable. None of these cases are analogous to the bill before us
and none of them decide the question of whether an act of the Legislature
general in application would be given life by the vote of the people of
the county.

        The case of Trimmier v. Carlton, 296 S. W. 1070, has been sug-
gested to us as authority for the validity of this bill. A careful study
of the lengthy opinion in that case will disclose the power of the Board
of Water Engineers to exercise much discretion after the vote has been
declared; that there is constitutional authority for the procedure follcw-
ed; and specifically recognizes the principles of law discussed herein.
The cases of Ex Parte Farnsworth, Fz Parte Mitchell, and State v. Swisher,
herein cited are recognieed by style, and no intimation given they should
be overruled,

        We have carefully considered the question andfor the reasons
given e.ndcases discussed, are of the opinion that H. B, 247 is unconsti-
tutional insofar as its provisions pertain to approval of the permit by
the voters before issuance of license.

         We do not question the legal right of the Legislature to legalise
racing with pari-mutuel betting by passage of a general bill so providing,
nor do we.deny the right to create a commission to administer and super-
vise same. It is well known that Commissions created by the legislature
to administer laws complete within themselves have been declared a valid
exercise  of the legislative power, but in no instance have we found where
the appellate courts sanction such a procedure as set cut in the bill
you submit.

                                                Very truly yours

                                          ATTORNkY GENERAL OF TEXAS


                                                (Signed) Benjamin Woodall
                                           BY
                                                     Benjamin Woodall
                                                            Assistant

BW:AW
APPR@fED:
(Signed) Gerald C. Mann
ATTORNEY GENERAL OF TEXAS
