Can a Texas home-rule city regulate outdoor signs, displays, and storage at pawnshops?

Plain-English summary

The City of Dallas was thinking about an ordinance to ban the outdoor sales, storage, and display of merchandise at pawnshops. A state representative asked the Attorney General whether the city could do that, given that the state's Pawnshop Act already addresses pawnshop signs and premises.

The Attorney General concluded the city could not. Dallas is a home-rule city, which means it has broad self-government power, but that power yields when the Legislature preempts a subject with "unmistakable clarity." The Pawnshop Act supplied exactly that clarity. One provision (article 5069-51.17B(p)) gives the Consumer Credit Commissioner authority to adopt rules about outdoor displays and signs at pawnshops and about maintaining the premises. Another (article 5069-51.17B(r)) says the Legislature keeps exclusive authority over how pawnshops operate, except for the specific matters it hands to the commissioner. Reading those together, the Attorney General found the field of pawnshop signs, displays, and storage had been taken over by the state and handed to the commissioner, so the city was preempted from regulating it. That was true even though the commissioner had not yet written rules; the delegation itself is what preempts the city. And a flat ban on outside sales or storage did not escape the rule, because a ban is just the strongest form of regulation.

The opinion leaned on the Texas Supreme Court's then-recent decision in Dallas Merchant's & Concessionaire's Ass'n v. City of Dallas, where the same kind of "exclusive" language in the Alcoholic Beverage Code preempted Dallas from zoning liquor stores. The pawnshop statute's language was just as clear. The Attorney General drew one important line, though: preemption of pawnshop-specific rules does not exempt pawnshops from ordinances that apply to everyone. So Dallas could still enforce its generally applicable rules, like those on high weeds and landscaping, against pawnshops; courts should read the Pawnshop Act so it does not conflict with those general ordinances.

Currency note

This opinion was issued in 1993. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The Pawnshop Act has since been recodified (the V.T.C.S. article 5069 consumer-credit statutes were moved into the Finance Code) and the Alcoholic Beverage Code provision discussed here may have been amended; confirm the current statutes and any later preemption decisions before relying on anything described here.

Background and statutory framework

A home-rule city's powers are limited by article XI, section 5 of the Texas Constitution, which bars any charter or ordinance provision inconsistent with the state constitution or general laws; home-rule cities have all powers of self-government not denied them by the Legislature (Dallas Merchant's & Concessionaire's Ass'n v. City of Dallas; Attorney General Opinion DM-229 (1993)). Courts try to construe a local ordinance and a state law so both survive (City of Richardson v. Responsible Dog Owners of Texas), and the Legislature must preempt a subject within home-rule power "with unmistakable clarity" (Dallas Merchant's).

The Pawnshop Act (V.T.C.S. art. 5069-51.01 et seq.) supplied that clarity. Article 5069-51.17B(p) authorizes the Consumer Credit Commissioner to adopt rules related to the use of outdoor displays and signs at pawnshops and the maintenance of the premises. Article 5069-51.17B(r) provides that the Legislature has exclusive authority over the operation of pawnshops except for matters delegated to the commissioner. The Attorney General found this parallel to Alcoholic Beverage Code section 109.57(b), which the Texas Supreme Court held in Dallas Merchant's preempted Dallas from zoning liquor stores. Because the power to regulate outdoor displays and signs (and premises maintenance) was delegated to the commissioner with the requisite clarity, the city was preempted from regulating those matters, regardless of whether the commissioner had adopted rules, and a prohibition on outside sales, storage, or display was merely the severest form of the regulation the city could not impose. The Attorney General added that article 5069-51.17B(r) preempts pawnshop-specific regulation but does not exempt pawnshops from generally applicable ordinances, so the Act should be read not to conflict with city-wide rules such as those on high weeds and landscaping (City of Richardson).

Citations

• V.T.C.S. art. 5069-51.01 et seq. (Pawnshop Act)
• V.T.C.S. art. 5069-51.17B(p) (commissioner may adopt rules on outdoor displays, signs, and premises maintenance), (r) (Legislature's exclusive authority over pawnshop operation except matters delegated to the commissioner)
• Tex. Const. art. XI, § 5 (home-rule cities; no charter or ordinance inconsistent with general law)
• Alco. Bev. Code § 109.57(b) (exclusive state regulation of alcoholic beverages, quoted by analogy)
• Dallas Merchant's & Concessionaire's Ass'n v. City of Dallas, 852 S.W.2d 489, 491-92 (Tex. 1993)
• City of Richardson v. Responsible Dog Owners of Texas, 794 S.W.2d 17, 19 (Tex. 1990)
• Attorney General Opinion DM-229 (1993)

Common questions

Can a Texas home-rule city regulate pawnshop signs and outdoor displays?
Under this opinion, no. The Attorney General concluded that the Pawnshop Act delegates regulation of outdoor displays, signs, and premises maintenance at pawnshops to the Consumer Credit Commissioner and reserves exclusive authority over pawnshop operation to the Legislature, so a home-rule city like Dallas is preempted.

Does it matter that the commissioner had not written rules yet?
No. The opinion concluded the delegation of authority to the commissioner is what preempts the city, whether or not the commissioner has actually adopted rules.

Could the city at least ban outside sales and storage at pawnshops?
No. The Attorney General concluded a ban is just the severest form of regulation, and the city is preempted from regulating these matters at all.

Are pawnshops exempt from ordinary city rules like weed and landscaping codes?
No. The opinion concluded the Pawnshop Act preempts pawnshop-specific regulation but does not exempt pawnshops from generally applicable ordinances, so city-wide rules on high weeds and landscaping still apply.

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0253
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1993/dm0253.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
Attorney General

September 3, 1993

Honorable David Cain
Chair
Committee on Transportation
Texas House of Representatives
P.O. Box 2910
Austin, Texas 78769

Opinion No. DM-253

Re: Whether a home-rule city has authority to regulate outdoor displays and signs at pawnshops, and related questions (RQ-556)

Dear Representative Cain:

You have inquired of this office whether, in light of certain provisions of the Pawnshop Act, V.T.C.S. articles 5069-51.01 et seq., the City of Dallas (the "city") may by ordinance regulate outdoor displays, signs, and storage at pawnshops within the city. You direct our attention to article 5069-51.17B of the Pawnshop Act, which deals with the authority of the Consumer Credit Commissioner (the "commissioner") to regulate the operation of pawnshops, and in particular to two subsections of that article, articles 5069-51.17B(p) and 5069-51.17B(r), which read:

(p) The commissioner may adopt rules related to the use of outdoor displays and signs at pawnshops and the maintenance of the premises at pawnshops.

. . . .

(r) The legislature has exclusive authority regarding the operation of pawnshops, except for those matters delegated in this Act to the commissioner. Notwithstanding the provisions of this Act, the commissioner has the authority to regulate only those business practices which require a pawnshop license.

You inform us that the Dallas City Council "is currently considering an ordinance that would prohibit the accessory outside sales, accessory outside storage, and accessory outside display of merchandise" at pawnshops in the city. You ask a series of questions concerning the authority of the city to enact such legislation, given the existence of the already-cited provisions of the Pawnshop Act.

The City of Dallas is a home-rule city. As such, its powers are delimited by article XI, section 5 of the Texas Constitution, which declares that "no charter [of a home-rule city] or any ordinance passed under said charter shall contain any provision inconsistent with the Constitution of the State, or of the general laws enacted by the Legislature of this State." Home-rule cities have all powers of self-government not expressly denied them by the Legislature. Dallas Merchant's & Concessionaire's Ass'n v. City of Dallas, 852 S.W.2d 489 (Tex. 1993); Attorney General Opinion DM-229 (1993). In attempting to determine whether a local ordinance is preempted by a state law, courts must seek to construe the two in such a way that both will remain in effect. City of Richardson v. Responsible Dog Owners of Texas, 794 S.W.2d 17, 19 (Tex. 1990). "[I]f the Legislature chooses to preempt a subject matter usually encompassed by the broad powers of a home-rule city, it must do so with unmistakable clarity." Dallas Merchant's & Concessionaire's Ass'n, 852 S.W.2d at 491.

You first ask us whether, if the commissioner does not enact rules concerning the use of outdoor displays and signs at pawnshops, the city may do so. It may not.

The most recent Texas Supreme Court preemption decision, the Dallas Merchant's & Concessionaire's case, governs here. In that case, the City of Dallas sought by zoning regulations to restrict the sale of alcoholic beverages in certain areas of South Dallas. The Supreme Court held that the Texas Alcoholic Beverage Code (the "TABC") preempted any such local regulation or ordinance. The basis for the court's decision was section 109.57(b) of the TABC:

It is the intent of the legislature that this code shall exclusively govern the regulation of alcoholic beverages in this state, and that except as permitted by this code, a governmental entity of this state may not discriminate against a business holding a license or permit under this code.

In the view of the Texas Supreme Court, section 109.57(b) was a sufficiently clear indication of legislative intent to preempt the home-rule powers of the City of Dallas with respect to the zoning of liquor stores. See Dallas Merchant's & Concessionaire's Ass'n, 852 S.W.2d at 492, n.3.

In the present case, the language of article 5069-51.17B(r) of the Pawnshop Act is equally clear. The Pawnshop Act, like the TABC, speaks of the "exclusive" nature of legislative authority. The legislature has kept all powers to regulate pawnshops save those it expressly delegates to the commissioner.

The power to regulate outdoor displays and signs has been delegated to the commissioner by article 5069-51.17B(p) of the Pawnshop Act. This grant is made with the requisite "unmistakable clarity," Dallas Merchant's & Concessionaire's Ass'n, 852 S.W.2d at 491, and accordingly the city is preempted from legislating in this regard.

Your second question presupposes an affirmative answer to your first question. We therefore need not address it.

You next ask whether the city may "adopt regulations prohibiting outside sales and outside storage at pawnshops." For the reasons already outlined above, the answer is again that it may not. Regulation of these matters is delegated by V.T.C.S. article 5069-51.17B(p) to the commissioner, who is given authority to promulgate rules concerning "the maintenance of the premises." Prohibition of such displays or storage would be no more than the severest form of regulation; and this is a matter which the city is preempted from regulating.

Your final question is whether article 5069-51.17B(r) "exempt[s] pawnshops from city-wide regulations regarding high weeds and landscaping." It does not. While article 5069-51.17B(r) preempts cities from specifically regulating pawnshops, it does not purport to exempt such establishments from the operation of generally applicable ordinances. Accordingly, the Pawnshop Act should be read here in such a way as not to conflict with such ordinances. City of Richardson, 794 S.W.2d at 19.

SUMMARY

Articles 5069-51.17B(p) and 5069-51.17B(r) of the Pawnshop Act, V.T.C.S. article 5069-51.01 et seq., preempt any regulation by the City of Dallas of outdoor signs, displays, or storage at pawnshops, because these matters have been delegated to the Consumer Credit Commissioner by the legislature. However, the Pawnshop Act does not purport to exempt such establishments from laws of general application such as the Dallas city regulations concerning high weeds and landscaping.

DAN MORALES
Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Attorney General for Litigation

RENEA HICKS
State Solicitor

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by James Tourtelott
Assistant Attorney General