Untitled Texas Attorney General Opinion ( 1999 )

November 16, 1999
The Honorable Bob Turner Opinion No. JC-0145
Chair, Committee on Public Safety
Texas House of Representatives Re: Authority of a municipality to regulate or
P.O. Box 2910 prohibit street vendors (RQ-0070-JC)
Austin, Texas 78768-2910
Dear Representative Turner:
On behalf of the City of Camp Wood, you request an opinion fiorn this office with respect
to a city’s authority to regulate or prohibit street vendors. You inform us that the city desires a ruling
on the legality of a city ordinance on vendor permits, and you specifically ask us the following
questions:
Is it legal for a city to pass a city ordinance that restricts street
vendors from selling in a city without a permit? If not, what
restrictions can they impose?
May a city pass a city ordinance that requires a vendor to construct a
permanent building with restrooms and parking?
May a city impose the above restrictions on a street vendor if he or
she is state licensed and has a state tax number?
May a city pass a city ordinance that restricts a vendor from selling
on private property?
Letter from Honorable Bob Turner, Chair, Committee on Public Safety, Texas House of
Representatives, to Elizabeth Robinson, Office of the Attorney General (May 20, 1999) (on file
with Opinion Committee) [hereinafter “Request Letter”]. You state: “Basically, I would like an
opinion . as to what a city can do in regards to vendors on public and private property.” Id. We
limit our discussion and answers in this opinion to the general law relating to itinerant vendor
regulation insofar as a Type A general-law city is concerned, keeping in mind the issues with which
your questions apparently are concerned. We cannot in the opinion process determine the legality
of any city ordinance regulating street vending or of any particular restriction on street vending.
The Honorable Bob Turner - Page 2 (X-0145)
Municipal Authority
The scope of a city’s authority in general is determined by its organization as a home-rule
city or a general-law city. Unlike a home-rule city that possesses all powers not denied to it by
statutes or the constitution so long as the city has incorporated those powers in its home-rule charter,
a general-law city possesses only those powers expressly given to it by statutes or those necessarily
implied therefrom. See Tex. Att’y Gen. Op. No. JM-169 (1984) at l-2; Tex. Att’y Gen. LO-90-14,
at 1. The City of Camp Wood, we understand, is a Type A general-law city.’
A Type A city has the general authority to prohibit or regulate the sale of all or certain
merchandise on all or certain parts of its city streets and sidewalks by ordinance based on its
statutory authority to pass ordinances or police regulations, control streets and public places, and
prohibit or regulate hawkers and peddlers. Section 51.001(l) of the Local Government Code,
applicable to all cities, authorizes a city to adopt an ordinance, rule, or police regulation that is for
good government, peace, or order of the municipality or for the trade and commerce of the
municipality. See TEX.LOC.Gov’TCODEANN. 4 51.001(l) (Vernon 1999). Section215.028 ofthe
Local Government Code specifically authorizes a Type A city to designate and regulate market
places, see id. 5 215.028, and section 215.031 authorizes such a city to license, suppress, prevent,
or otherwise regulate hawkers, peddlers, and pawnbrokers, see id. 5 215.031. Further, section
3 11.002 of the Transportation Code gives all general-law cities exclusive control over their streets
and alleys. See TEX. TRANSP.CODEANN. § 3 11.002 (Vernon 1999).
A Type A city may not prohibit the occupation or business of street vending, but it may, in
general, prohibit or reasonably regulate by ordinance the sale of merchandise on its city streets and
other public places by itinerant vendors. Under its statutory powers to pass ordinances and police
regulations for good government, control streets and public grounds, and to control and regulate
market places and hawkers and peddlers, inExparte Hogg, 156 S.W. 931 (Tex. Crim. App. 1913),
the Court of Criminal Appeals held that the City of Weatherford could pass an ordinance prohibiting
peddlers from selling articles in all or a portion of the city’s public streets and squares. See Hogg,
156 S.W. at 932-33. Significantly, the court emphasized that the ordinance did not prohibit persons
from following the occupation of peddling, but simply denied them the right to follow that
occupation in the public streets and squares of the city. See id. at 933. Furthermore, the court said
the ordinance did not discriminate against peddlers, but merely classified peddlers in a different
category than other merchants, “which is perfectly proper and legitimate.” Id. A long line of Texas
cases have followed Hogg. See, e.g., Exparfe Killam, 162 S.W.2d 426 (Tex. Crim. App. 1942); City
of Waco v. O’Neal, 33 S.W.2d 205 (Tex. Civ. App.-Waco 1930, writ refd) (upholding City of
Waco’s ordinance prohibiting barter and sale of farm products based on city’s statutory and special
lTelephoneConversationwithHonorable JimBlakeney,Mayor,Cityof CampWood(Aug.Z&1999).A Type
A general-lawmunicipalityis one that has incorporatedas a Type A under subchapterA of chapter6 of the Local
GovernmentCode,has changedto a TypeA undersubchapterB of chapter6, or operatedunderchapten 1 through10
of title 28 of the RevisedCivil StatutesimmediatelyprecedingSeptember1.1987. SeeTEX.LOC.GOV’T CODE ANN.
g 5.001(Vernon1999).
The Honorable Bob Turner - Page 3 (X-0145)
charter powers to control its city streets and other public property) (and cases cited therein); see also
Annotation, Authorization, Prohibition, or Regulation by Municipality of the Sale of Merchandise
on Streets or Highways, or Their Usefor Such Purpose 14 A.L.R. 3D 896,908-09 (1967) (discussing
Texas cases).
You ask whether a Type A city may pass an ordinance that (1) requires a vendor to construct
a permanent building with restrooms and parking and (2) that restricts a vendor from selling on
private property. See Request Letter, supra, at 1. First, we conclude that a city may not require
street vendors to construct permanent buildings with restrooms and parking facilities because that
would be, in our opinion, tantamount to prohibiting the occupation of street vending. Second, to the
extent you ask whether a city may generally restrict the sale of goods on private property, we
conclude in the negative given that a city’s authority to regulate itinerant vendors extends to city
streets and other public places, excluding, by definition, private property.
We note that because of the particular items sold or the particular area involved, a city under
its zoning authority might be able to require that the items be sold in a permanent structure or restrict
sales fromprivateproperty. See, e.g., TEX.LOC.GOV’TCODEANN. $5 211.003(a)(S) (Vernon 1999)
(city may regulate location and use of buildings, other structures, and land for business, industrial,
residential, or other purposes); 211.005 (governing body may divide city into districts and regulate
construction and use of buildings, other structures, or land). A city might also be able to restrict
sales from private property under its authority to abate nuisances. See id. 5 217.002 (Type A city’s
authority to abate nuisance). We do not, however, understand you to ask about particular sales or
regulating in particular areas.
Licensing Authority
You also ask whether a Type A general-law city may pass an ordinance that restricts street
vendors from selling in a city without a permit2 We conclude in the affirmative.
A Type A city has the authority to require vendors to obtain a license as a condition to selling
merchandise on its city streets. It is expressly authorized to license, tax, suppress, prevent, or
otherwise regulate hawkers and peddlers. Id. 5 215.031(l), (2). But see Houston Credit Sales Co.
Y. City of Trinity, 269 S.W.2d 579,581 (Tex. Civ. App.-Waco 1954, writ ref’d n.r.e.) (questioning
whether “hawkers and peddlers” includes itinerant vendors, specifically door-to-door salesmen of
household goods). The city’s governing body may direct the manner of issuing a license and set the
fees to be paid for the licenses, but the license may not be for more than a year. See TEX. LOC.
Gov’~ CODEANN. 9 215.033 (Vernon 1999); see also TEX.TAXCODEANN. 5 302.101(b) (Vernon
1992) (license required by Type A city may not extend to more than one establishment or apply to
more than one occupation, business, or calling).
‘Theterms“license”and “permit”are essentiallythe same,althoughlegally“license”ordiily refersto the
privilegeof conductinga continuingactivitywhile“petit” ordinarilyrefersto an activityof limiteddurationon whose
completiontheprivilegeexpires.SeeJohnsonV.City ofAustin, 674S.W.2d894,897(Tex.App.-Austin1984,no tit).
The Honorable Bob Turner - Page 4 (X-0145)
Although you do not ask, we understand that the City of Camp Wood is concerned about the
amount it may charge for a vendor permit.’ A city may charge an amount reasonably necessary to
cover its administrative and regulatory costs or reasonably related to its legitimate licensing
objective. See TEX. Lot. GOV’TCODEANN. 5 215.033 (Vernon 1999); Houston v. Harris County
OutdoorAdver. Ass ‘n, 879 S.W.2d 322,326-27 (Tex. App.-Houston [ 14th Dist.] 1994, writ denied);
Houston Credit Sales, 269 S.W.2d at 58 1.
A Type A general-law city may charge a reasonable license fee for the primary purpose of
regulation. See Harris County Outdoor Adver., 879 S.W.2d at 326 (ifprimary purpose of exaction
is regulation, then it is a license fee). A reasonable license fee “cannot be excessive nor more than
reasonably necessary to cover the cost of granting the license and of exercising proper police
regulation, or it must bear some reasonable relationship to the legitimate object of the licensing
ordinance.” Id. at 326-27 (emphasis in original); see also Johnson v. City of Austin, 674 S.W.2d
894, 897 (Tex. App.-Austin 1984, no writ) (“A ‘license’ has the purpose of regulation under the
police power.“).
The authority under section 215.031 to suppress or prevent hawkers and peddlers does not
allow a city to charge fees that are so excessive as to preclude an itinerant vendor from engaging in
that occupation, although what is excessive depends on the particular facts and circumstances. For
instance, in Houston Credit Sales, the court concluded that an annual “licensing” vendor fee of
$1200, irrespective of whether characterized as a tax or license fee, was so large and excessive as
to render the ordinance imposing it invalid. “[Sluch oppressive exaction by a town of less than
2,500 population,” the court said, “is manifestly prohibitive and confiscatory in its application to the
business of appellants.” Houston Credit Sales, 269 S.W.2d at 581. The trial court had found that
the vendor - a door-to-door salesperson of household goods -collected approximately $22 per
week in the city. The court rejected the city’s argument that because the city had the statutory
power, under the predecessor provision to section 2 15.03 1, to prohibit the activity of peddling and
hawking, it had the power to do anything less than that in the way of regulation. See id.
Notwithstanding the section 2 15.03 1 authority to license, tax, suppress, prevent, or otherwise
regulate hawkers and peddlers, a city is not authorized to levy an occupation tax on street vendors,
given that the state does not levy such tax. See TEX.CONST.art. VIII, 5 l(f) (implicitly prohibiting
city from levying occupation tax where no such tax is levied by state); Exparte Stevenson, 169
S.W.2d 175 (Tex. Crim. App. 1943) (invalidating city ordinance levying city occupation tax given
1931 repeal of state occupation tax on foot peddlers). In contrast to license fees, an occupation tax
is designed primarily to raise revenues. See Harris County Outdoor Adver., 879 S.W.2d at 326 (if
primary purpose of exaction to raise revenue, then it is occupation tax).
‘TelephoneConversationwithHonorableJii Blakeney,Mayor,City of CampWood(Aug.22.1999).
The Honorable Bob Turner - Page 5 (X-0145)
Goine on Private Proper@
You next ask whether a Type A general-law city may pass an ordinance that restricts a
vendor from selling on private property. To the extent your question concerns vendors going to
private residences to sell goods, we conclude that a city may regulate but not prohibit such activity.
Again, notwithstanding the broad statutory authority to “license, tax, suppress, prevent, or
otherwise regulate hawkers and peddlers” discussed above, a city may regulate but notprohibit the
going in and on private property by persons to sell merchandise. See Exparte Luehr, 266 S.W.2d
375 (Tex. Crim. App. 1954); Enparte Faulkner, 158 S.W.2d 525 (Tex. Crim. App. 1942); Houston
Credit Sales, 269 S.W.2d 579. In other words, a city may impose conditions, selectively restrict, or
prohibit certain solicitations based on considerations related to the city’s regulatory objective; it
cannot simply prohibit all such solicitations regardless of such considerations. See Faulkner, 158
S.W.2d at 527.
In Faulkner, the court, while acknowledging a city’s power to prohibit hawkers and peddlers,
and solicitors on its city streets and other public places, invalidated as going beyond that authority
an ordinance prohibiting any uninvited person f?om going in and upon private residences to solicit
the sale of goods or sell any goods as a nuisance. See id. at 526-27. The court questioned that a city
could justifiably determine that all goods presented or sold in this manner should not be so sold or
are always anuisance. Although the court did not expressly delineate what it meant by “regulation”
and “prohibition,” its statement regarding a city’s appropriate authority is telling:
It is sufficient that the municipality be given the power to establish an
available agency with facilities for looking into the merits of all
goods to be sold and the responsibility and methods of the parties
selling them, and, therefore, be able to say whether or not they should
be permitted to operate within the bounds of such municipality.
Id. at 527; see also Luehr, 266 S.W.2d at 377 (city without authority to prohibit solicitors going in
and on private residences without regard to goods sold and responsibility and method of parties).
The FauZkner court concluded that although the legislature has delegated to a municipality the
authority to regulate, “we are . unable to find that our legislature has, or may, delegate to the
municipality the right to prohibit solicitors from going in and upon private property for the purpose
of selling their wares.” Faulkner, 158 S.W.2d at 527. The Faulkner court did not discuss the
predecessor to section 215.03 1 of the Local Government Code. But the court in Houston Credit
Sales, following Faulkner, specifically stated that a city could regulate but not prohibit the going in
and upon private residences notwithstanding the statutory authority to “license, tax and regulate or
suppress and prevent hawkers, peddlers.” Houston Credit Sales, 269 S.W.2d at 581.
The Honorable Bob Turner - Page 6 (JC-0145)
State Law Preemation
Lastly, you ask whether a Type A general-law city may impose restrictions on a street vendor
if he or she is state licensed and has a state tax number. We conclude that it depends on the
authorizing or licensing state statute.
A city may not adopt an ordinance regulating a business activity that is in conflict with a state
statute. See Dallas Merchant’s & Concessionaire’s Ass’n v. City of Dallas, 852 S.W.2d 489,491
(Tex. 1993) (city ordinance that attempts to regulate subject matter preempted by state statute is
unenforceable to extent it conflicts with statute); Utter v. State, 571 S.W.2d 934, 936 (Tex. Crim.
App. [Panel Op.] 1978) (generally discussing cases dealing with city’s authority to regulate and
license buses, taxis, taxi drivers, or ambulances also regulated or licensed by state). Thus, when a
state statute provides that a person holding an operator’s, commercial operator’s, or chauffeur’s
license from the state shall not be required to obtain any other license to operate a motor vehicle, a
city may not license those drivers. See Reed Y. City of Waco, 223 S.W.2d 247 (Tex. Civ.
App.-Waco 1949, writ refd); City of Corpus Christi v. Gilley, 458 S.W.2d 124 (Tex. Civ.
App.Xorpus Christi 1970, writ ref d n.r.e.).
No statute specifically authorizes or licenses “street vending.” But, ifthe state has authorized
or licensed a particular occupation or activity that is the subject of street vending, a city might be
precluded from requiring a permit as a condition of engaging in that activity within the city. See
CombinedAm. Ins. Co. v. City ofHillsboro, 421 S.W.2d488 (Tex. Civ. App.-Waco 1967, writref d
n.r.e.). For instance, in Combined American Insurance, the court held invalid an ordinance as it
related to insurance sales by a state licensed insurance company and its state licensed salesmen
prohibiting any person Tom going house-to-house or J?om place-to-place in the city to sell goods
unless the person had obtained a license from the city and paid the required license fees. See
CombinedAm. Ins., 421 S.W.2d at 491. The court stated that the insurance company had complied
with the relevant state insurance licensing laws, had been issued a certificate of authority Tom the
State Board of Insurance evidencing such compliance, and that the company was accordingly
“authorized to transact the business of life, health and accident insurance in the State of Texas, and
that the City of Hillsboro . [is] without authority to interfere with it in the soliciting of its
business.” Id.
Although you do not specify, the City of Camp Wood is apparently concerned that it may
be precluded from licensing street vendors who have a sales tax permit from the state.4 A person
engaged in the business of making sales of taxable items subject to the sales and use tax under
chapter 15 1 of the Tax Code must obtain a permit from the Comptroller of Public Accounts for each
place of business in the state. See TEX. TAX CODE ANN. $5 151.008 (Vernon 1992) (defining
“Seller” and “Retailer”); 1S 1.201 (issuance of sales tax permits); 151.202 (application for permit).
This permit simply allows the seller to collect the sales tax on the items sold, which is required to
be remitted to the Comptroller. See, e.g., id. $4 15 1.052 (collection by seller of tax as part of sale
‘See sup-anote3.
The Honorable Bob Turner - Page 7 (JC-0145)
price), 151.251 (applicant for permit must tile adequate security for taxes due); id. 5 151.401
(Vernon Supp. 1999) (taxes imposed payable to Comptroller).
The sales tax permit provisions do not license or authorize street vending and, therefore,
cannot present a conflict with a city ordinance regulating by permit such activity. See Utter, 571
S.W.2d at 936 (city’s power to regulate by requiring permit for operation of wrecker not limited
since no conflicting statute found); see also City of Richardson v. Responsible Dog Owners, 794
S.W.2d 17, 19 (Tex. 1990) (“[Tlhe mere fact that the legislature haa enacted a law addressing a
subject does not mean that the subject matter is completely preempted. When there is no conflict
between a state law and a city ordinance, the ordinance is not void.“).
In short, if the state has authorized or licensed a particular occupation or activity that is the
subject of street vending, a city might be precluded from regulating that activity by requiring a
permit as a condition of engaging in it within the city. Issuance of a sales tax permit to a vendor,
however, is not such state authorization or license as to preclude a city from requiring the vendor to
obtain a permit in order to sell in the city.
Constitutional Limits
In addition to the parameters discussed above, a city’s authority to adopt an ordinance
regulating street vending is subject to state and federal constitutional constraints. We limit our
discussion to those most commonly addressed by the courts in this context.
An ordinance regulating street vending must comport with the equal protection provisions
of the state (article I, section 3) and federal (Equal Protection Clause of the Fourteenth Amendment)
constitutions. It may, consistently with these provisions, reasonably classify persons according to
their business and apply different rules to different classes - as long as persons in the same class
are treated the same - to further legitimate purposes of the city. See, e.g., City of New Orleans v.
Dukes, 427 U.S. 297 (1976); Hixon v. State, 523 S.W.2d 711 (Tex. Crim. App. 1975); Rucker v.
State, 342 S.W.2d 325 (Tex. Crim. App. 1961); Houston Chronicle Publ’g Co. v. City ofHouston,
620 S.W.2d 833,838 (Tex. App.-Houston [14thDist.] 1981,nowrit). For example, in CityofNew
Orleans v. Dukes, the United States Supreme Court upheld a City of New Orleans ordinance
prohibiting all vendors fi-om selling food from pushcarts in the French Quarter, except those that
had “continuously operated the same business . for eight or more years prior to January 1,1972,”
Dukes, 427 U.S. at 298, stating: “The city’s classification rationally furthers the purpose which
. . . the city had identified as its objective in enacting the provision, that is, as a means ‘to preserve
the appearance and custom valued by the Quarter’s residents and attractive to tourists.“’ Id. at 304
(citation omitted). Allowing the continued operation of some vendors, the Court continued, was not
an arbitrary or irrational method of achieving the city’s purpose because the city could rationally
choose to initially eliminate only recent vendors rather than all vendors; reasonably determine that
newer businesses were less likely to have built up substantial reliance on continued operation; and
that the vendors excepted under the grandfather clause who had operated for over twenty years had
themselves become part of the distinctive part of the charm of the French Quarter. Id. at 305; see
The Honorable Bob Turner - Page 8 (X-0145)
also Hixon, 523 S.W.2d 71 l(upholding city ordinance prohibiting sale of all merchandise on city
streets except flowers and ice cream).
But an ordinance regulating street vending may not, as a general matter, impinge on
fundamental personal rights or classify persons based on inherently suspect distinction such as race,
religion, or alienage. See Dukes, 427 U.S. at 303. A different test is applied by the courts under the
equal protection analysis when a regulatory ordinance’s classification affects fundamental rights
such as the rights of free speech and free press. If such rights are affected, the classification becomes
suspect, and the city must show that the classification is necessary to promote a compelling interest.
See Houston Chronicle Pub1 ‘g Co., 620 S.W.2d at 838 (citing Dunn v. Blumstein, 405 U.S. 330
(1972)). For example, in Houston Chronicle Publishing Co. the court struck down an ordinance that
prohibited the sale of newspapers to any occupant of a motor vehicle on a city street or other public
place, but allowed such sales of frozen desserts and flowers. The court observed that the three
classes of street vendors established by the ordinance-those selling flowers, those selling frozen
desserts, and those selling newspapers - were similarly situated as sellers of merchandise on the
city’s streets and sidewalks. See Houston Chronicle Publ’g Co., 620 S.W.2d at 838. The reasons
offered by the city, the court concluded, for the differential treatment of newspaper vendors were
insufficient to justify the selective exclusion of newspaper vendors from the city streets: “While
traffic control and vendor safety are compelling interests, access to the street cannot be denied on
those bases to those who would there exercise fundamental rights, yet allowed to those involved in
purely commercial endeavors.” Id.
Further, a regulatory ordinance affecting fundamental rights such aa those of free speech or
free press may violate the First Amendment of the United States or article I, section 8 of the Texas
Constitution, as well as the due process clause of the Fourteenth Amendment of the United States
or article I, section 19 of the Texas Constitution. If a regulation impinges on First and Fourteenth
Amendment rights, the city must show the validity of its asserted interest and the absence of less
intrusive alternatives to achieving that interest. See id. at 836-37. For instance, the court in Houston
Chronicle Publishing Co. also invalidated the City of Houston ordinance prohibiting newspaper
sales to motor vehicle occupants as violating those rights, stating: “The . ordinance is
unreasonably restrictive. While the ends are permissible [preventing traffic hazard and congestion],
[in] the means of achieving those ends the ordinance sweep[s] too broadly, unnecessarily invading
appellant’s protected freedom.” Id. at 837.
Lastly, an ordinance regulating street vending may not interfere with interstate commerce.
A regulatory ordinance violates the Commerce Clause of the federal constitution (article I, section
8) if it (1) affirmatively discriminates against out-of-state merchants, or (2) regulates evenhandedly
but incidentally burdens interstate commerce and the burden is clearly excessive in relation to the
local benefits. See Hispanic Taco Vendors v. City ofpasco, 994 F.2d 676,678-79 (9th Cir. 1993).
In Hispanic Taco Vendors v. City ofPasco, the court upheld a city ordinance that imposed licensing
fees on street vendors, made the licenses nontransferable, banned sales from vacant lots, and
imposed setback requirements against the contention, among others, that it imposed unreasonable
burdens on interstate commerce. See id. at 677. The court determined the burden on interstate
The Honorable Bob Turner - Page 9 (JC-0145)
commerce - decreased sales of out-of-state products to the vendors’ state assuming the vendors
went out of business - to be slight and not clearly excessive in relation to the benefits to the city
in adopting the ordinance, i.e., “reduction in urban blight, the potential development of vacant lots
with permanent structures, and a heightened ability to police the vendors’ operations.” Id. at 679.
In short, a city may not, broadly speaking, unreasonably discriminate against persons,
infringe on personal fundamental rights, or interfere with interstate commerce when regulating street
vending.
The Honorable Bob Turner - Page 10 (JC-0145)
SUMMARY
A Type A general-law city may not prohibit the occupation or
business of street vending, but it may, in general, prohibit or
reasonably regulate by ordinance the sale of merchandise on its city
streets, sidewalks, and other public places. It may also require by
ordinance that a vendor obtain a permit as a condition to selling
merchandise in the city and charge a reasonable fee. The city may
regulate but not prohibit street vendors from going on private
residences to sell their goods. If the state has authorized or licensed
a particular occupation or activity that is the subject of street vending,
a city might be precluded from requiring a permit as a condition of
engaging in that activity within the city. Issuance of a sales tax
permit to a vendor, however, is not such state authorization or license
as to preclude the city from requiring a city permit. An ordinance
regulating street vending may not, broadly speaking, unreasonably
discriminate against persons subject to the ordinance, infringe on
personal fundamental rights, or interfere with interstate commerce.
Yo rs very truly,
4&C
JOtiN CORNYN
O-r
L
Attorney General of Texas
ANDY TAYLOR
First Assistant Attorney General
CLARK RENT ERVIN
Deputy Attorney General - General Counsel
ELIZABETH ROBINSON
Chair, Opinion Committee
James E. Tourtelott
Assistant Attorney General - Opinion Committee