Can the Texas Comptroller write rules to fill a gap in the Major Events Trust Fund law?

Plain-English summary

Texas runs a program called the Major Events Trust Fund, which lets the Comptroller of Public Accounts put state money toward the costs of hosting big events, paid for out of the extra local tax revenue an event is projected to bring in. Only an event that appears on a list in the statute can qualify, and the list names specific things like a Super Bowl or an NCAA Final Four. Representative Tan Parker, who chaired the House Committee on Corrections, asked the Attorney General about how a 2013 amendment to that program was supposed to work.

That amendment, Senate Bill 1678, added three new entries to the list of eligible events: the X Games, a mixed martial arts championship, and what the statute calls the "largest event held each year at a sports entertainment venue in this state with a permanent seating capacity, including grandstand and premium seating, of not less than 125,000." The Representative's first question was whether the Legislature had effectively picked a specific venue with that 125,000-seat description. The AG explained that even if the Legislature seemed to have a particular venue in mind, reading the statute as a whole, an event at that venue still has to clear all the eligibility requirements the law sets before any money can flow.

The real problem, and the Representative's main question, was the next step. Getting on the list is not enough. To actually receive funding, an event has to satisfy several requirements, two of which depend on a "site selection organization," the governing body (like the NFL or the NCAA for other events) that selects a Texas site for the event. Senate Bill 1678 added the three new events to the list but never added a site selection organization to match the largest event, and it exempted the largest event from only one of the site-selection requirements, not the one that requires an organization to actually select the site. So as written, the largest event could not meet that requirement and could not be funded.

The Representative suggested the Comptroller could solve this through rulemaking, writing rules that spell out how the site-selection duties get carried out. The AG disagreed. An agency only has the powers the Legislature gives it, and it can adopt rules only to carry a statute into effect, not to make new law or do something the statute forbids. Because the involvement of a site selection organization is both an eligibility requirement and a direct limit on the Comptroller's authority to spend money, no rule could supply the organization the Legislature failed to designate. A rule that tried to bypass that requirement would be directly contrary to the statute. The Comptroller can adopt rules to implement Senate Bill 1678, the AG concluded, but cannot adopt a rule that contradicts the statute. The fix has to come from the Legislature amending the law.

Currency note

This opinion was issued in 2014. 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

Representative Parker and the committee (as the opinion described it): The opinion answered that, read as a whole, the amended statute still requires an event at the described venue to satisfy the eligibility requirements before receiving funding, and that the Comptroller's rulemaking authority does not extend to a rule contrary to the statute. The opinion described a legislative amendment as the way to make the largest event eligible.

The Comptroller (as the opinion described it): The opinion described the Comptroller as having express authority under section 5A(v) to adopt rules implementing the Major Events Trust Fund statute, but not authority to adopt a rule that bypasses the site-selection-organization requirement or otherwise contradicts the statute. It described the Comptroller's disbursement duties as directly limited by the statute's eligibility requirements and the documentation a site selection organization must provide.

Venues and event organizers (as the opinion described it): The opinion described the "largest event" category as added by Senate Bill 1678 but not yet eligible for funding, because the Legislature designated no site selection organization for it and the statute continued to require such an organization to select a site.

Common questions

What is the Texas Major Events Trust Fund?
The AG described it as a funding mechanism in article 5190.14, section 5A of the Revised Civil Statutes, under which the Comptroller may spend money on the costs of holding a listed "event," drawing on a portion of the projected increase in local tax receipts attributable to the event.

What did Senate Bill 1678 change?
The AG explained that it added three new categories to the definition of "event": the X Games, a mixed martial arts championship, and the "largest event" held each year at a Texas sports entertainment venue with permanent seating of at least 125,000. It did not add a matching site selection organization for those events.

Why couldn't the "largest event" get funding right away?
The AG explained that being listed is not enough. The statute requires an event to meet several eligibility requirements, including that a site selection organization select a sole site for it. Senate Bill 1678 exempted the largest event from one site-selection requirement but not from the one requiring the actual selection, and no site selection organization was designated for the event.

Can the Comptroller fix the gap with rules?
No. The AG explained that an agency may adopt only rules consistent with its statutory authority, not rules that create a new power or contradict the statute. A rule reassigning or bypassing the site-selection-organization requirement would be directly contrary to the statute.

What would it take to make the largest event eligible?
The AG said the Legislature would have to amend the statute, as it had done by designating site selection organizations for other events. The opinion noted in a footnote that a resolution meant to remedy the defect during the same session failed to pass.

Background and statutory framework

The Major Events Trust Fund statute, article 5190.14, section 5A of the Texas Revised Civil Statutes, lets the Comptroller expend funds for costs of holding an "event," supported by a portion of the projected incremental increase in local tax receipts attributable to the event (Tex. Rev. Civ. Stat. Ann. art. 5190.14, § 5A(d), (f) (West Supp. 2013)). An "event" must appear in the statutory definition to be eligible (§ 5A(a)(4)), but listing alone is not enough: a listed event may receive funding only if it satisfies the requirements of subsection (a-1), two of which involve a "site selection organization," such as the NFL or the NCAA (§ 5A(a)(5), (a-1)). Senate Bill 1678 added the X Games, a mixed martial arts championship, and the "largest event" at a Texas venue seating at least 125,000 to the definition of "event," but did not add a matching site selection organization (§ 5A(a)(4), (a)(5)). It exempted the largest event from subsection (a-1)(1) but not from (a-1)(2)-(4), leaving in place the requirement that a site selection organization select a sole site (§ 5A(a-1), (a-2)). The Comptroller's disbursement duties are themselves limited by these requirements (§ 5A(p)).

On the first question, the AG explained that courts seek legislative intent but are constrained by the enacted language and read a statute as a whole (Liberty Mut. Ins. Co. v. Adcock, 412 S.W.3d 492, 493 (Tex. 2013); Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 453 (Tex. 2012)), so even an apparent selection of a particular venue did not relieve an event there of the eligibility requirements. On the second question, the AG explained that an administrative agency has only the powers expressly conferred or necessarily implied (Tex. Natural Res. Conservation Comm'n v. Lakeshore Util. Co., 164 S.W.3d 368, 377-78 (Tex. 2005); Tex. Const. art. IV, § 23; Tex. Gov't Code Ann. §§ 403.001-.455 (West 2013 & Supp. 2013)), may adopt only rules authorized by and consistent with its statutory authority (Pruett v. Harris Cnty. Bail Bond Bd., 249 S.W.3d 447, 452 (Tex. 2008)), and may not exercise a new or contradictory power for administrative convenience (Pub. Util. Comm'n of Tex. v. City Pub. Serv. Bd. of San Antonio, 53 S.W.3d 310, 316 (Tex. 2001); Tex. Const. art. II, § 1; art. III, § 1). Although the Comptroller has express authority to adopt rules to implement section 5A (§ 5A(v); 34 Tex. Admin. Code §§ 2.100-2.205 (2013)), the AG concluded that authority could not supply the missing site selection organization, so any rule bypassing the requirement would be contrary to the statute (R.R. Comm'n of Tex. v. Tex. Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, 624-25 (Tex. 2011)). The opinion noted that a concurrent resolution that session, which would have added the National Association for Stock Car Auto Racing to the site-selection-organization definition, failed to pass (Tex. S. Con. Res. 48, 83rd Leg., R.S. (2013)).

Citations

Statutory and constitutional provisions:

• Tex. Rev. Civ. Stat. Ann. art. 5190.14, § 5A(a)(4) (West Supp. 2013) (definition of "event")
• Tex. Rev. Civ. Stat. Ann. art. 5190.14, § 5A(a)(5) (West Supp. 2013) (definition of "site selection organization")
• Tex. Rev. Civ. Stat. Ann. art. 5190.14, § 5A(a-1), (a-2) (West Supp. 2013) (eligibility requirements; largest-event exemption)
• Tex. Rev. Civ. Stat. Ann. art. 5190.14, § 5A(d), (f), (p), (v) (West Supp. 2013) (funding mechanism; Comptroller duties; rulemaking authority)
• Tex. Const. art. IV, § 23 (Comptroller's duties)
• Tex. Const. art. II, § 1; art. III, § 1 (separation of powers; legislative power)
• Tex. Gov't Code Ann. §§ 403.001-.455 (West 2013 & Supp. 2013) (Office of the Comptroller)
• 34 Tex. Admin. Code §§ 2.100-2.205 (2013) (Comptroller rules)
• Tex. S. Con. Res. 48, 83rd Leg., R.S. (2013) (failed resolution adding NASCAR as a site selection organization)

Cases:

• Liberty Mut. Ins. Co. v. Adcock, 412 S.W.3d 492, 493 (Tex. 2013)
• Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 453 (Tex. 2012)
• Tex. Natural Res. Conservation Comm'n v. Lakeshore Util. Co., 164 S.W.3d 368, 377-78 (Tex. 2005)
• Pruett v. Harris Cnty. Bail Bond Bd., 249 S.W.3d 447, 452 (Tex. 2008)
• Pub. Util. Comm'n of Tex. v. City Pub. Serv. Bd. of San Antonio, 53 S.W.3d 310, 316 (Tex. 2001)
• R.R. Comm'n of Tex. v. Tex. Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, 624-25 (Tex. 2011)

Other authority:

• Tex. Att'y Gen. Op. No. GA-0931 (2012)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-1052
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2014/ga1052.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

April 21, 2014

The Honorable Tan Parker Opinion No. GA-1052
Chair, Committee on Corrections
Texas House of Representatives Re: Implementation of Senate Bill 1678, relating
Post Office Box 2910 to the Major Events Trust Fund
Austin, Texas 78768-2910 (RQ-1159-GA)

Dear Representative Parker:

You inquire whether the "Comptroller of Public Accounts must give full application to certain amendments to the Major Events Trust Fund [("METF")] statute made by [Senate Bill] 1678."[1] Specifically, you ask:

1) Is it clear that the Legislature chose a specific venue for an annual event to be included in the METF?

2) Does the Comptroller have sufficient authority to promulgate rules implementing S.B. 1678 immediately under applicable state laws? If so, should the Comptroller promulgate rules to implement this "largest venue" provision?

Request Letter at 5.

The METF statute, contained in section 5A, article 5190.14 of the Texas Revised Civil Statutes, provides a funding mechanism by which the Comptroller of Public Accounts may expend funds for costs associated with the holding of an "event." See TEX. REV. CIV. STAT. ANN. art. 5190.14, § 5A(d), (f) (West Supp. 2013) (providing for a trust fund for an event with a portion of the projected incremental increase in local tax receipts attributable to the event). The term "event" is defined by an extensive list of specific sporting, entertainment, and political events. Id. § 5A(a)(4). An event must be listed in the definition of "event" to be eligible for funding under the METF. Id. § 5A(a-1). The inclusion of an event in the definition does not by itself make the event eligible for funding: Section 5A(a-1) expressly provides that "[a] listed event may receive funding under this section only if" the event satisfies certain requirements, two of which involve the work of a site selection organization. Id. § 5A(a-1)(1)-(2). A "site selection organization" is defined to include a list of governing or administrative bodies relating to the various events.[2] Id. § 5A(a)(5); compare id. § 5A(a)(4) (defining "event" to include a Super Bowl and a National Collegiate Athletic Association Final Four tournament game), with id. § 5A(a)(5) (defining "site selection organization" to include the National Football League and the National Collegiate Athletic Association).

Senate Bill 1678 added three items to the definition of "event": "the X Games," "a mixed martial arts championship," and "the largest event held each year at a sports entertainment venue in this state with a permanent seating capacity, including grandstand and premium seating, of not less than 125,000" (the "largest event"). Id. § 5A(a)(4). Senate Bill 1678 did not amend the definition of "site selection organization" to add any governing or administrative bodies relating to the three new events. See generally id. § 5A(a)(5). By the terms of the amended statute, an event generally is not eligible for METF funding unless all four requirements in subsection (a-1) are met. Id. § 5A(a-1). Senate Bill 1678 exempts one new event, the largest event, from the eligibility requirement of (a-1)(1), which involves a site selection organization. See id. § 5A(a-2). But the bill does not exempt the largest event from the other eligibility requirements in subsections (a-1)(2)-(4), including (a-1)(2). See id. § 5A(a-1)(2)-(4). Thus, the statutory requirement that a site selection organization select for the event a sole site in this state or region remains in place. Id. § 5A(a-1)(2). Without such a selection by a site selection organization, an event cannot satisfy subsection (a-1)(2) and thus is ineligible for METF funding. Moreover, the Comptroller's fund disbursement responsibilities and duties are directly limited by the eligibility requirements and the documentation responsibilities of a site selection organization. See id. § 5A(p) (providing that "[t]he comptroller may not undertake any of the responsibilities or duties set forth in this section unless" the event meets the funding requirements including those in subsection (a-1), and the request is accompanied by documentation from a site selection organization).

Your first question is, in essence, about the Legislature's intent in enacting Senate Bill 1678 to choose "a specific venue for an annual event to be included in the METF." Request Letter at 5. In statutory interpretation, courts seek to effectuate the Legislature's intent but are nonetheless constrained by the language of the enactment. See Liberty Mut. Ins. Co. v. Adcock, 412 S.W.3d 492, 493 (Tex. 2013) ("A fundamental constraint on the court's role in statutory interpretation is that the Legislature enacts the laws of the state and the courts must find their intent in that language and not elsewhere."); Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 453 (Tex. 2012) (noting that the "intent of the Legislature is derived from the language it finally enacted"). Further, in construing statutes, courts look to the whole of the statute, not just isolated provisions. See Tex. Mut. Ins. Co., 381 S.W.3d at 454 (stating that "[L]egislative intent emanates from the [statute] as a whole, and not from one isolated provision"). Despite the Legislature's apparent selection of a particular venue for the largest event, when considered as a whole, as explained above the language of article 5A as amended by Senate Bill 1678 requires that an "event" at that venue must still satisfy specified eligibility requirements in order to receive METF funding.

Your primary legal question is your second question concerning the Comptroller's authority. See Request Letter at 5. You suggest the Comptroller, through the adoption of rules, may provide a mechanism for the largest event to benefit from METF funding despite the fact that the Legislature has not designated a site selection organization for the event. See id. at 3-4. You argue that the rulemaking process is the appropriate method to determine how the site selection organization duties are to be carried out satisfactorily. See id. at 4.

An administrative agency has only those powers expressly conferred and those necessarily implied to accomplish its express duties. Tex. Natural Res. Conservation Comm'n v. Lakeshore Util. Co., 164 S.W.3d 368, 377-78 (Tex. 2005); see generally TEX. CONST. art. IV, § 23 (requiring the Comptroller of Public Accounts to perform duties required by law), TEX. GOV'T CODE ANN. §§ 403.001-.455 (West 2013 & Supp. 2013) (governing the Office of the Comptroller of Public Accounts). An agency may only adopt rules that "are authorized by and consistent with its statutory authority." Pruett v. Harris Cnty. Bail Bond Bd., 249 S.W.3d 447, 452 (Tex. 2008). The power to adopt rules, however, is not the power to make laws but only to adopt regulations to carry the statute into effect. Cf. TEX. CONST. arts. II, § 1 (separating executive, judicial, and legislative powers), III, § 1 (vesting legislative power in the Legislature). Furthermore, "[a]n agency may not, however, exercise what is effectively a new power, or a power contradictory to the statute, on the theory that such power is expedient for administrative purposes." Pub. Util. Comm'n of Tex. v. City Pub. Serv. Bd. of San Antonio, 53 S.W.3d 310, 316 (Tex. 2001).

Here, the Comptroller has express authority to "adopt rules necessary to implement [section 5A]." TEX. REV. CIV. STAT. ANN. art. 5190.14, § 5A(v) (West Supp. 2013); see also 34 TEX. ADMIN. CODE §§ 2.100-2.205 (2013) (Comptroller of Public Accounts). Yet, that general authority is likely insufficient to remedy the Legislature's failure to designate a site selection organization that corresponds to the largest event. The statute cannot be remedied by using administrative rulemaking to reassign site selection organization duties because the involvement of a site selection organization is a statutory eligibility requirement as well as a direct statutory limit on the Comptroller's authority to perform disbursement duties. The Legislature could have designated a site selection organization for the largest event, as it has for other events. It did not do so. If the Legislature wishes to make the largest event eligible for METF funding, it must amend the statute.[3]

Although we have not been provided with language of a proposed rule to consider, any rule purporting to bypass the site selection organization involvement required by article 5190.14, section 5A(a-1)(2) would be directly contrary to the language of the statute. The Comptroller's Office has authority to adopt rules to implement Senate Bill 1678, but that does not include authority to adopt a rule that is contrary to the statute. See generally R.R. Comm'n of Tex. v. Tex. Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, 624-25 (Tex. 2011).

SUMMARY

While the Comptroller of Public Accounts is expressly authorized by article 5190.14, section 5A(v) of the Revised Civil Statutes to adopt rules to implement the Major Events Trust Fund statute, such authority does not include authority to adopt a rule that is contrary to the language of the statute.

Very truly yours,

GREG ABBOTT
Attorney General of Texas

DANIEL T. HODGE
First Assistant Attorney General

JAMES D. BLACKLOCK
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

Charlotte M. Harper
Assistant Attorney General, Opinion Committee

[1] See Letter from Honorable Tan Parker, House Comm. on Corrs., to Honorable Greg Abbott, Tex. Att'y Gen. at 1 (Oct. 21, 2013), http://www.texasattorneygeneral.gov/opin ("Request Letter").

[2] The METF statute contemplates that a site selection organization will select a site in the state pursuant to an application from a local entity. TEX. REV. CIV. STAT. ANN. art. 5190.14, § 5A(b) (West Supp. 2013) (prescribing Comptroller of Public Accounts duties if site selected pursuant to local initiation), § 5A(a)(1) (defining "endorsing county"), § 5A(a)(2) (defining "endorsing municipality"); see also Tex. Att'y Gen. Op. No. GA-0931 (2012) at 1-2.

[3] It appears the defect in the statute was discovered during the same legislative session in which Senate Bill 1678 was adopted. See Tex. S. Con. Res. 48, 83rd Leg., R.S. (2013) (Introduced) (adding the National Association for Stock Car Auto Racing to the definition of site selection organization). The resolution designed to remedy the defect failed to pass.