Is the Texas Racing Act's 10-year residency requirement for racetrack owners constitutional under the Commerce Clause?

Plain-English summary

The Texas Racing Act sets requirements for who can hold a racetrack license. Section 6.06(d) says the majority ownership of a partnership, firm, or association that applies for or holds a racetrack license must be held by citizens who meet the residency qualifications spelled out for individual applicants, and those qualifications let the Texas Racing Commission refuse a license if an applicant has not been a U.S. citizen residing in Texas for the ten consecutive years before filing the application. Rolando Pablos, the Commission's chair, asked the Attorney General whether that residency requirement is constitutional under the Commerce Clause of the U.S. Constitution.

The opinion did not decide the question. It explained that the Commerce Clause gives Congress power to regulate commerce among the states, and that the U.S. Supreme Court evaluates whether a state law violates the Commerce Clause through a multi-part test: whether the statute regulates evenhandedly with only incidental effects on interstate commerce or instead discriminates against it, whether the statute serves a legitimate local purpose, and whether alternative means could serve that purpose without discriminating. The opinion pointed out that the second and third parts of that test involve mixed questions of law and fact, and that Attorney General opinions do not answer fact questions. Because the office could not perform the fact-based analysis a court would conduct, it concluded it could not say how a court would resolve the constitutionality of section 6.06(d).

The opinion added a practical caveat. Even if it had answered the fact questions and concluded the provision was unconstitutional, which it expressly was not doing, that opinion would not empower the Racing Commission to disobey section 6.06. A state agency has only the powers granted by statute, and AG opinions are persuasive but not binding. So the statute remained in force, and the constitutional question was left for a court to resolve.

Currency note

This opinion was issued in 2011. Subsequent statutory amendments, court decisions, or later Attorney General 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.

What the opinion meant for those who asked

The Texas Racing Commission (as the opinion held for it): The opinion told the Commission that the AG would not resolve whether the residency requirement was constitutional, because the controlling test turned on fact questions the opinion process does not decide. It also told the Commission that, absent a court ruling, section 6.06 stayed in effect and the agency could not treat it as void.

Racetrack-license applicants and owners (what the opinion left unresolved): The opinion did not decide whether the 10-year residency and citizenship requirement was enforceable against out-of-state or non-citizen owners. That constitutional question was left open for a court.

Common questions

Did the Attorney General say the racetrack residency requirement is unconstitutional?
No. The opinion expressly declined to decide the constitutionality of section 6.06(d), explaining that the Commerce Clause test involves fact questions the AG does not resolve.

Why couldn't the Attorney General answer the question?
The opinion explained that the U.S. Supreme Court's Commerce Clause test asks whether a statute serves a legitimate local purpose and whether less discriminatory alternatives exist, which are mixed questions of law and fact, and AG opinions do not answer fact questions.

Does this opinion let the Racing Commission ignore the residency requirement?
No. The opinion stated that even an opinion finding the provision unconstitutional, which it did not issue, would not empower the Commission to disobey the statute; an agency has only the powers the law grants it.

Who can decide whether the requirement violates the Commerce Clause?
A court. The opinion framed the constitutional question as one for judicial resolution after the necessary fact-finding.

Background and statutory framework

Section 6.06(d) of the Texas Racing Act requires the majority ownership of a partnership, firm, or association applying for or holding a racetrack license to be held by citizens who meet the residency qualifications for individual applicants. Tex. Rev. Civ. Stat. Ann. art. 179e, § 6.06(d) (West 2010); see id. § 1.01 (identifying article 179e as the Texas Racing Act). Those qualifications let the Commission refuse a license if an applicant has not been a U.S. citizen residing in Texas for the 10 consecutive years before the application. Id. § 6.06(a)(12).

The Commerce Clause gives Congress power to regulate commerce among the states. U.S. Const. art. I, § 8, cl. 3. The U.S. Supreme Court's general test for whether a state law violates the Commerce Clause asks whether the statute regulates evenhandedly with only incidental effects on interstate commerce or discriminates against it, whether it serves a legitimate local purpose, and whether alternative means could promote that purpose without discriminating. Hughes v. Oklahoma, 441 U.S. 322, 323 (1979). Because the second and third inquiries involve mixed questions of law and fact, and AG opinions do not answer fact questions, the opinion declined to resolve the constitutional question. A state agency has only the powers granted by statute or necessarily implied. Sexton v. Mount Olivet Cemetery Ass'n, 720 S.W.2d 129, 137-38 (Tex. App.-Austin 1986, writ ref'd n.r.e.); Pierce v. Tex. Racing Comm'n, 212 S.W.3d 745, 751-52 (Tex. App.-Austin 2006, pet. denied). Attorney general opinions are persuasive but not binding. Holmes v. Morales, 924 S.W.2d 920, 924 (Tex. 1996).

Citations

Statutes:

• Tex. Rev. Civ. Stat. Ann. art. 179e, § 6.06(d) (West 2010)
• Tex. Rev. Civ. Stat. Ann. art. 179e, § 6.06(a)(12)
• Tex. Rev. Civ. Stat. Ann. art. 179e, § 1.01
• U.S. Const. art. I, § 8, cl. 3

Cases:

• Hughes v. Oklahoma, 441 U.S. 322, 323 (1979)
• Sexton v. Mount Olivet Cemetery Ass'n, 720 S.W.2d 129, 137-38 (Tex. App.-Austin 1986, writ ref'd n.r.e.)
• Pierce v. Tex. Racing Comm'n, 212 S.W.3d 745, 751-52 (Tex. App.-Austin 2006, pet. denied)
• Holmes v. Morales, 924 S.W.2d 920, 924 (Tex. 1996)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0867
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2011/ga0867.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT

August 1, 2011

Mr. Rolando B. Pablos, Chair Opinion No. GA-0867
Texas Racing Commission
Post Office Box 12080 Re: Constitutionality of section 6.06(d) of article 179e
Austin, Texas 78711-2080 of the Texas Racing Act, which imposes racetrack
licensing residency requirements (RQ-0936-GA)

Dear Mr. Pablos:

You ask "whether Section 6.06(d) of the Texas Racing Act ... is constitutional under the Interstate Commerce Clause of the United States Constitution."[1]

Section 6.06(d) provides that the "majority ownership of a partnership, firm, or association applying for or holding a [racetrack] license must be held by citizens who meet the residency qualifications enumerated in this section for individual applicants." TEX. REV. CIV. STAT. ANN. art. 179e, § 6.06(d) (West 2010). See also id. § 1.01 (indicating that article 179e is the Texas Racing Act). Those qualifications provide that the Texas Racing Commission ("TRC") may refuse to issue a license if "the applicant has not been a United States citizen residing in this state for the period of 10 consecutive years immediately preceding the filing of the application." Id. § 6.06(a)(12).

The Commerce Clause of the United States Constitution provides, "The Congress shall have Power ... To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes[.]" U.S. CONST. art. I, § 8, cl. 3. See also Hughes v. Oklahoma, 441 U.S. 322, 323 (1979) (identifying article I, section 8, clause 3 as the Commerce Clause). The United States Supreme Court's general rule in evaluating whether a state law violates the Commerce Clause is to inquire

(1) whether the challenged statute regulates evenhandedly with only "incidental" effects on interstate commerce, or discriminates against interstate commerce either on its face or in practical effect; (2) whether the statute serves a legitimate local purpose; and, if so, (3) whether alternative means could promote this local purpose as well without discriminating against interstate commerce.

Hughes, 441 U.S. at 336 (citation omitted). The second and third Hughes inquiries involve mixed questions of law and fact. Attorney general opinions do not answer fact questions. Tex. Att'y Gen. Op. No. GA-0643 (2008) at 7 n.4.[2] Because we cannot perform the fact-based analysis that a court would conduct in considering the constitutionality of section 6.06(d), we cannot conclude how a court would resolve constitutional questions involving section 6.06(d).[3]

SUMMARY

The United States Supreme Court's test for determining whether a state statute violates the Commerce Clause of the United States Constitution involves mixed questions of law and fact. Because this office cannot answer questions of fact, we cannot perform the legal analysis necessary to determine how a court would resolve constitutional questions involving section 6.06(d) of the Texas Racing Act.

Very truly yours,

GREG ABBOTT
Attorney General of Texas

DANIEL T. HODGE
First Assistant Attorney General

DAVID J. SCHENCK
Deputy Attorney General for Legal Counsel

JASON BOATRIGHT
Chair, Opinion Committee

Jason Boatright
Assistant Attorney General, Opinion Committee

[1] Letter from Mr. Rolando B. Pablos, Chair, Texas Racing Commission, to Honorable Greg Abbott, Attorney General of Texas at 1 (Dec. 20, 2010), https://www.oag.state.tx.us/opin/index_rq.shtml ("Request Letter").

[2] Although the Legislature requires the TRC to adopt rules relating to license applications "[t]o preserve and protect the public health, welfare, and safety[,]" it does not explain why it included citizenship requirements in section 6.06(d). TEX. REV. CIV. STAT. ANN. art. 179e, § 6.06(a), (d) (West 2010).

[3] If we answered the fact questions necessary to perform the Hughes test, which we cannot do, and if we issued an opinion concluding that section 6.06 is unconstitutional, which we are not doing, our opinion would not empower the TRC to disobey section 6.06. See Sexton v. Mount Olivet Cemetery Ass'n, 720 S.W.2d 129, 137-38 (Tex. App.-Austin 1986, writ ref'd n.r.e.) (explaining that a state agency has no power other than one expressly granted by statute or implied as necessary to exercise a power expressly granted); Pierce v. Tex. Racing Comm'n, 212 S.W.3d 745, 751-52 (Tex. App.-Austin 2006, pet. denied) (indicating that the TRC is a state agency). See also Holmes v. Morales, 924 S.W.2d 920, 924 (Tex. 1996) (explaining that attorney general opinions are persuasive but not binding).