Untitled Texas Attorney General Opinion ( 2007 )

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
February 21,2007
The Honorable Kim Brimer Opinion No. GA-0520
Chair, Committee on Administration
Texas State Senate Re: Whether a municipality that operates a pool
Post Office Box 12068 slide at its municipal swimming pool must
Austin, Texas 787 1 l-2068 purchase insurance in compliance with the
Amusement Ride Safety Inspection and Insurance
Act, chapter 215 1 of the Occupations Code,
although the municipality’s liability is limited by
the Texas Tort Claims Act, chapter 101 of the
Civil Practice and Remedies Code (RQ-05 19-GA)
Dear Senator Brimer:
You ask whether a municipality that operates a pool slide at its municipal swimming pool
must purchase insurance in compliance with the Amusement Ride Safety Inspection and Insurance
Act (the “Amusement Ride Act”), chapter 215 1 of the Occupations Code, although the
municipality’s liability is limited by the Texas Tort Claims Act (the “Tort Claims Act”), chapter 10 1
of the Civil Practice and Remedies Code.’ See TEX.CIV. PRAC.& REM. CODEANN. ch. 101 (Vernon
2005 & Supp. 2006); TEX. Oct. CODEANN. ch. 2151 (Vernon 2004 & Supp. 2006); see also TEX.
CIV. PRAC. & REM. CODE ANN. $ 101.002 (Vernon 2005) (titling the Tort Claims Act); TEX. Oct.
CODE ANN. 5 215 1.OOl (Vernon 2004) (titling the Amusement Ride Act).
I0 The Amusement Ride Act, Occupations Code chapter 2151
The Amusement Ride Act sets out certain insurance requirements with which a person must
comply before operating an amusement ride:
(a) A person may not operate an amusement ride unless the person:
(1) has had the amusement ride inspected at least once a year
by an insurer or a person with whom the insurer has contracted;
(2) obtains a written certificate from the insurer or person with
whom the insurer has contracted stating that the amusement ride:
‘See Letter from Honorable Kim Brimer, Chair, Committee on Administration, Texas State Senate, to Honorable
Greg Abbott, Attorney General of Texas (July 27, 2006) (on file with the Opinion Committee, also available at
http://www.oag.state.tx.us) [hereinafter Request Letter].
The Honorable Kim Brimer - Page 2 (GA-0520)
(A) has been inspected;
(B) meets the standards for insurance coverage; and
(C) is covered by the insurance required by Subdivision
(3) ;
(3) has [an] . . . insurance policy currently in effect. . . insuring
the owner or operator against liability for injury to persons arising out
of the use of the amusement ride in an amount of not less than:
(A) for Class A amusement rides:
(i) $100,000 bodily injury and $50,000 property
damage per occurrence with a $300,000 annual aggregate; or
(ii) a $150,000 per occurrence combined single limit
with a $300,000 annual aggregate; and
(B) for Class B amusement rides:
(i) $1 ,OOO,OOO
bodily injury and $500,000 property
damage per occurrence; or
(ii) $1,500,000 per occurrence combined single limit;
(4) files with the [Commissioner of Insurance] . . . the
inspection certificate and the insurance policy . . . ; and
(5) files with each sponsor, lessor, landowner, or other person
responsible for the amusement ride . . . a photocopy of the inspection
certificate and the insurance policy . . . .
TEX. OCC. CODE ANN. 5 215 1.101(a) (Vernon Supp. 2006); see also id. 5 215 1.002(4) (defining
“commissioner”); 28 TEX. ADMIN. CODE 5 5.9004 (2006) (Tex. Dep’t of Ins., Amusement Ride
Operation Requirements).
Whether the Amusement Ride Act applies to a municipally owned pool slide depends on two
issues: first, whether a municipality is -aperson subject to that Act; and second, whether a pool slide
is an amusement ride. See TEX. OCC. CODEANN. 5 215 1.10 1 (Vernon Supp. 2006). With respect
to the first issue, neither the Amusement Ride Act nor rules adopted under the Act by the Texas
Department of Insurance define the term “person.” See id. tj 2151.002; 28 TEX. ADMIN. CODE
5 5.9002 (2006) (T ex. Dep’t of Ins., Definitions); see also TEX. OCC. CODE ANN. $ 2151.051
(Vernon 2004) (authorizing the Commissioner of Insurance to “administer and enforce” the
Amusement Ride Act). We therefore apply the general definition of the term set out in the
Code Construction Act, chapter 3 11 of the Government Code, which applies to all codes unless the
The Honorable Kim Brimer - Page 3 (GA-0520)
statute or context requires a different definition. See TEX. GOV’T CODE Am. $5 3 11 .OOl, .002,
.005 (Vernon 2005). Under that generally applicable definition, the term “person” includes
a “government or governmental subdivision or agency . . . and any other legal entity.” Id.
5 3 11.005(2). We find no reason why the Amusement Ride Act would require a different definition.
We accordingly conclude that a municipality is a person subject to the Amusement Ride Act.
We next consider whether a pool slide is an amusement ride that is subject to the Amusement
Ride Act, i.e., “a mechanical device that carries passengers along, around, or over a fixed or
restricted course or within a defined area for the purpose of giving the passengers amusement,
pleasure, or excitement.“2 TEX. OCC. CODE ANN. $215 1.002( 1) (Vernon Supp. 2006). Whether a
particular pool slide is an amusement ride requires the resolution of fact questions, however, and
must be determined by the Commissioner of Insurance in the first instance. See id. 5 215 1.05 1
(Vernon 2004); see also Tex. Att’y Gen. Op. No. GA-0446 (2006) at 18 (“Questions of fact are not
appropriate to the opinion process.“). Upon making the requisite factual determinations, the
Commissioner may determine that a particular pool slide is an amusement ride subject to the
Amusement Ride Act. For purposes of this opinion only, we adopt your assumption that a pool slide
is an amusement ride subject to the insurance requirements of the Amusement Ride Act. See
Request Letter, supra note 1, at 1.
Likewise, the Commissioner of Insurance must determine whether a particular pool slide is
a Class A or Class B amusement ride. See TEX. OCC. CODE ANN. 9 215 1.05 1 (Vernon 2004). A
Class A amusement ride is one “with a fixed location designed primarily for use by children younger
than 13 years of age.” Id. $ 215 1.002(2) (Vernon Supp. 2006); cJ: id. 5 215 1.002(6) (defining
“mobile amusement ride”). A Class B amusement ride is “an amusement ride that is not a Class A
amusement ride.” Id. 5 2 15 1.002(3). You assume that a pool slide is a Class B amusement ride that
must be insured under the Amusement Ride Act “in an amount of not less than” $1 ,OOO,OOO for
bodily injury and $500,000 for property damage per occurrence or “$1,500,000 per occurrence
combined single limit.” Id. $2 15 1.10 1(a)(3)(B); see Request Letter, supra note 1, at 1. We do not
question your assumption here. CJ: Tex. Att’y Gen. Op. No. GA-0446 (2006) at 16 (“Questions of
fact are not appropriate to the opinion process.“).
2Although the statutory definition of the term “amusement ride” is limited to certain mechanical devices, the
Texas Department of Insurance has adopted a rule defining the term “amusement ride” to include “[alny mechanical,
gravity, or water device or devices that carry or convey passengers along, around, or over a fixed or restricted route or
course or within a defmed area for the purpose of giving its passengers amusement, pleasure, or excitement . . . .” 28
TEX. ADMIN. CODE ANN. 5 5.9002(2) (2006) (Tex. Dep’t of Ins., Defmitions) (emphasis added); see also TEX. Oct.
CODEANN.5 2 15 1.05 1 (Vernon 2004) (setting out the Commissioner’s general powers and duties); cJ: id § 2 15 1.002( 1)
(defming “amusement ride”). A court will accord an agency rule “some deference” if it reasonably interprets an ’
ambiguous statute, but an agency may not adopt a rule that is inconsistent with state law. Fiess v. State Farm Lloyds,
202 S.W.3d 744,747-48 (Tex. 2006); see Gerst v. Oak CZffSav. &Loan Ass’n, 432 S.W.2d 702,706 (Tex. 1968); see
also CordiZZera Ranch, Ltd. v. Kendall County Appraisal Dist., 136 S.W.3d 249,257 (Tex. App.-San Antonio 2004,
no pet.) (“Administrative agency rules cannot impose additional burdens, conditions, or restrictions exceeding or
inconsistent with statutory provisions.“) (citing Riess v. Williamson County Appraisal Dist., 735 S. W.2d 633,63 8 (Tex.
App.-Austin 1987, writ denied)). Given these principles, and given that you do not ask about the validity of the
regulatory definition, we rely solely upon the statutory definition of the phrase “amusement ride.” See Request Letter,
supra note 1, at l-2.
The Honorable Kim Brimer - Page 4 (GA-0520)
II l The Tort Claims Act, Civil Practice and Remedies Code chapter 101
We next lay out the relevant provisions of the Texas Tort Claims Act, Civil Practice and
Remedies Code chapter 101. Under the Tort Claims Act, a municipality is liable “for damages
arising from its governmental functions,” which functions expressly include the operation of “parks
and zoos” as well as “recreational facilities, including but not limited to swimming pools.” TEX.
CIV. PRAC. & REM. CODE ANN. $ lOl.O215(a)(l3), (23) (V emon 2005). Section 101.023(c) of the
Civil Practice and Remedies Code limits a municipality’s liability for governmental functions to
“money damages in a maximum amount of $250,000 for each person and $500,000 for each single
occurrence for bodily injury or death and $100,000 for each single occurrence for injury to or
destruction of property.” Id. $ 101.023(c). On the other hand, the Tort Claims Act does not limit
a municipality’s liability for damages arising from the performance of proprietary functions, “which
are those functions that a municipality may, in its discretion, perform in the interest of the inhabitants
of the municipality, including but not limited to . . . amusements owned and operated by the
municipality,” to the extent such amusements are not within the municipality’s listed governmental
functions. Id. 9 101.0215(b)-( c) ; see Tex. River Barges v. City of San Antonio, 21 S.W.3d 347,356
(Tex. App.-San Antonio 2000, pet. denied); Christopher D. Jones, Comment, Texas Municipal
Liability: An Examination of the State and Federal Causes ofAction, 40 BAYLORL. REV. 595,595
(1988).
While the statute does not classify the operation of a municipal pool slide as either a
governmental or a proprietary function and no Texas court has yet considered the classification, we
believe a court would conclude that it is a governmental function for purposes of the Tort Claims
Act. See TEX. CIV. PRAC. & REM. CODE ANN. 5 101.0215(23) (Vernon 2005). It is possible that
a pool slide, by itself, could be deemed an “amusement” and thus a proprietary function. See id.
5 101.0215(b)(2). H owever, the operation of a swimming pool is expressly classified as a
governmental function. See id. 8 lOl.O215(a)(23). B ecause a pool slide is a component of the
swimming pool to which it is attached, we believe a court would find the pool slide also to be a
governmental function. See id. 5 10 1.0215(c) (stating that a municipality’s proprietary functions “do
not include those governmental activities listed under Subsection (a)“); see also City of Texarkana
v. Cities of New Boston, 141 S.W.3d 778, 785 n.3 (Tex. App.-Texarkana 2004, no pet.) (“The
introduction of a proprietary element into an activity designated by the Legislature as governmental
does not serve to alter its classification.“), abrogated on other grounds by Tooke v. City of Mexia,
197 S.W.3d 325, 338-42 & n.60 (Tex. 2006); Tex. River Barges, 21 S.W.3d at 357 (stating that
although arguably proprietary actions were encompassed within governmental functions, a court has
“no discretion to declare the actions proprietary”); Jones, supra, at 615 (stating that, with regard to
functions that include both governmental and proprietary components, courts seem to conclude that
if any component of a function is governmental, the entire function is governmental and thus subject
to the Tort Claims Act’s limits on liability).
III a Harmonizing the Amusement Ride Act and the Tort Claims Act
Given that operating a slide at a municipal pool is a governmental function that is subject to
the limits on liability set forth in the Tort Claims Act,3 a municipality’s liability for injury or damage
31nthis opinion, we do not consider the status of a water slide that is not part of a municipal pool.
The Honorable Kim Brimer - Page 5 (GA-0520)
proximately caused by the pool slide is limited to “$250,000 for each person and $500,000 for each
single occurrence for bodily injury or death and $100,000 for each single occurrence for injury to or
destruction of property.” TEX. CIV. PRAC. & REM. CODEANN. 6 101.023(c) (Vernon 2005). These
amounts are, of course, less than the insurance amounts the Amusement Ride Act requires for a
Class B amusement ride. See TEX. OCC. CODEANN. 9 215 1.10 1(a)(3)(B) (Vernon Supp. 2006). In
your view, “[i]f municipalities are forced to comply with [the Amusement Ride Act], then they must
needlessly purchase insurance policies in excess of their liability limits.” Request Letter, supra note
1, at 2.
In construing a statute, a court must, among other things, “presume that the Legislature
intended a just and reasonable result” and “construe all portions of a statute . . . to be effective, if
possible.” City of Seabrook v. Port of Houston Auth., 199 S.W.3d 403,430 (Tex. App.-Houston
[ 1st Dist.] 2006, pet. filed); see TEX. GOV’T CODEANN. 5 3 11.021(2)-(3) (Vernon 2005). A court
will prefer a construction of two statutes that effectuates both unless the statutes are irreconcilable.
See La Sara Grain Co. v. First Nat’1 Bank of Mercedes, 673 S.W.2d 558, 565 (Tex. 1984) (citing
State V. Standard Oil Co., 107 S.W.2d 550, 559 (Tex. 1937)); see also TEX. GOV’T CODE ANN.
$5 3 11.021(2), .025(a)-(b), .026(a) (V ernon 2005) (indicating a legislative preference for
harmonizing statutes if possible so that entire statutes may be effective). “Irreconcilable conflict
involves a direct conflict such that ‘it is impossible to comply with both provisions at the same
time. “’ Tex. Att’y Gen. Op. No. GA-0369 (2005) at 4 (quoting Tex. Att’y Gen. LO-98-124, at 4).
While the Amusement Ride Act’s insurance-coverage requirement and the limitation on
liability in the Tort Claims Act cannot be said to irreconcilably conflict, to the extent that the
Amusement Ride Act requires a municipality to purchase insurance coverage in an amount greater
than the municipality’s potential liability under the Tort Claims Act, the Amusement Ride Act
authorizes an unconstitutional grant of public funds. Article III, section 52(a) of the Texas
Constitution prohibits the Legislature from authorizing a municipality “to grant public money or
thing of value in aid of, or to any individual, association or corporation whatsoever.” TEX. CONST.
art. III, 8 52(a). The Texas Supreme Court has held that section 52(a) “means that the Legislature
cannot require gratuitous payments to individuals, associations, or corporations.” Tex. Mun. League
Intergov’tl Risk Pool v. Tex. Workers’ Comp. Comm ‘n, 74 S.W.3d 377, 383 (Tex. 2002). “A
[municipality’s] paying public money is not ‘gratuitous’ if the [municipality] receives return
consideration.” Id. If a municipality is required to purchase insurance coverage in an amount
exceeding its potential liability, the municipality would make a gratuitous payment to the insurer for
insurance coverage it would never need and would thereby be required by the Amusement Ride Act
to violate the constitution. “[T]he Legislature may not authorize an action that our [clonstitution
prohibits.” Id. at 38 1.
Accordingly, to the extent that a municipality that operates a pool slide is subject to the
Amusement Ride Act, it must purchase insurance coverage only in an amount sufficient to cover the
municipality’s potential liability under the Tort Claims Act.
The Honorable Kim Brimer - Page 6 (GA-0520)
SUMMARY
A municipality is a person for purposes of the Amusement
Ride Safety Inspection and Insurance Act (the “Act”), Occupations
Code chapter 215 1. Whether a particular pool slide is an amusement
ride subject to the Act and whether the slide is a Class A or Class B
amusement ride is for the Commissioner of Insurance to determine in
the first instance.
A municipality that operates a pool slide determined to be a
Class B amusement ride under the Act must purchase insurance
coverage only in an amount sufficient to cover the municipality’s
potential liability under the Texas Tort Claims Act, Civil Practice
and Remedies Code chapter 101. Compare TEX. OCC. CODE ANN. ’
@2151.002(l), .101(a) (V emon Supp. 2006) (requiring persons who
operate amusement rides to purchase insurance in specified amounts),
with TEX. CIV. PRAC. & REM. CODE ANN. 5 101.023(c) (Vernon
2005) (limiting a municipality’s liability in certain circumstances).
Very truly
a yours,
KENT C. SULLIVAN
First Assistant Attorney General
ELLEN L. WITT
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
Kymberly K. Oltrogge
Assistant Attorney General, Opinion Committee