Texas Boll Weevil Eradication Foundation, Inc. v. Lewellen

Decision Date09 October 1997
Docket Number96-0839,Nos. 96-0745,s. 96-0745
Citation952 S.W.2d 454
Parties40 Tex. Sup. Ct. J. 523 TEXAS BOLL WEEVIL ERADICATION FOUNDATION, INC., Appellant, v. Eddie LEWELLEN, Jack F. Witten, Elliott Hayes, Scott Allison, Chris Lewellen, Randy Falkenberg, Ricky Biggs, Charles Burrus, Kevin Igo, and Mark K. Gunter, Appellees. TEXAS BOLL WEEVIL ERADICATION FOUNDATION, INC., Appellant, v. Jack ABBOTT d/b/a Arroyo Farms, et al., Appellees.
CourtTexas Supreme Court
Opinion Denying Rehearing

Oct. 9, 1997.

Ed Small, Matt Dow, Ana Kirk Thornton, Austin, for Appellant.

Rudd F. Owen, Paul Lyle, Anna Evans, Plainview, Shannon H. Ratliff, William H. Bingham, Marc O. Knisely, Patricia D. Pope, Austin, for Appellees in No. 96-0745.

Randolph K. Whittington, Harlingen, Neil E. Norquest, Chris A. Brisack, McAllen, Rudd F. Owen, Plainview, Shannon H. Ratliff, William H. Bingham, Marc O. Knisely, Particia D. Pope, Deborah A. Vervil, Austin, for Appellees in No. 96-0839.

PHILLIPS, Chief Justice, delivered the opinion of the Court as to Parts I, II, IV, and V, in which OWEN, Justice, joins. GONZALEZ and BAKER, Justices, join in Parts I, IV, and V of the Court's opinion and in the judgment. HECHT, Justice, joins in Parts IV and V of the Court's opinion and in the judgment. CORNYN, ENOCH, SPECTOR and ABBOTT, Justices, join in Parts I, II, and IV of the Court's opinion.

Subchapter 74D of the Texas Agriculture Code (the Act) provides for the creation and operation of an "Official Cotton Growers' Boll Weevil Eradication Foundation." Subject to referendum approval from the affected cotton growers, this Foundation is authorized to operate boll weevil eradication programs and assess the growers for the cost. Appellees in these consolidated direct appeals, who are cotton growers subject to the Foundation's jurisdiction, filed declaratory judgment actions challenging the Foundation's assessments on a variety of constitutional and statutory grounds. The trial court in each case invalidated the assessments and enjoined their collection.

We hold that the assessments levied by the Foundation constitute regulatory fees, rather than taxes, and thus are not taxes on an agricultural pursuit in violation of Article VIII, Section 1(c) of the Texas Constitution. We further hold that the Act, on its face and as applied to appellees, does not violate the right to equal protection under the United States or Texas Constitutions.

We do conclude, however, that the Legislature made an unconstitutionally broad delegation of authority to the Foundation, a private entity, thereby violating Article II, Section 1 of the Texas Constitution. For this reason, without reaching all the other constitutional and statutory arguments raised by appellees, we affirm the judgments of the trial courts.


There is no dispute among the parties to these appeals or the numerous amici curiae that the Anthonomus grandis Boheman, an insect commonly known as the boll weevil, presents a major economic threat to the Texas cotton industry. See TEX. AGRIC. CODE § 74.001. This pest, which entered Texas from Mexico in 1892, causes an estimated $20 million in crop loss in Texas every year. See HOUSE RESEARCH ORGANIZATION BILL ANALYSIS OF SB 30 at 5 (Feb. 24, 1993). To aid in the ongoing battle against the boll weevil, the Legislature in 1993 authorized the creation of the Official Cotton Growers' Boll Weevil Eradication Foundation. See TEX. AGRIC. CODE §§ 74.101-74.127. 1 Instead of directly creating the Foundation, however, the Legislature merely authorized the Commissioner of Agriculture to certify some nonprofit organization representing cotton growers to create the Foundation and propose geographic eradication zones. See TEX. AGRIC. CODE § 74.103(a). The Act authorizes the creating organization or the Foundation to conduct referenda in each proposed eradication zone ("zone referenda") to determine whether those cotton growers desire to establish an official boll weevil eradication zone. See id. § 74.105. Contemporaneous with the zone referendum, the growers are also to elect a member to represent them on the Foundation's board. See id. § 74.106. If the growers vote not to establish a zone, their board selection is without effect. Id. § 74.105(d).

Under the Act, once the initial zone has been created and the first board member elected, the growers of that zone must approve the assessment to fund the eradication at a subsequent referendum. Thereafter, the board is authorized to determine the assessment needed for each additional participating zone, which must be approved by the growers at a referendum. See id. § 74.113; 4 TEX. ADMIN. CODE § 3.3(c). The Foundation may collect the assessment only if the assessment referendum passes. See TEX. AGRIC. CODE § 74.113(e). Approval of a zone and of the assessment each requires a vote of either two-thirds of the cotton growers in the zone or of those who farm more than one-half of the cotton acreage in the zone. See id. §§ 74.113(d), 74.114(g). The election of board members, on the other hand, requires only a plurality vote. See id. § 74.114(c)(2); 4 TEX. ADMIN. CODE § 3.6(c).

The Foundation exercises broad governmental powers. Besides being authorized to conduct elections in proposed eradication zones, TEX. AGRIC. CODE § 74.108(a)(1), (2), the board may add an area to a zone under certain circumstances if approved by a referendum of cotton growers in the area. Id. § 74.108(b). The board determines what eradication programs to conduct. Id. § 74.108(a)(4). The Foundation may impose penalties for late payment of assessments. Id. § 74.115(a). A cotton grower who fails to pay an assessment within ten days of its due date must destroy his cotton crop. Id. § 74.115(b). If the grower fails to do so, his crop is automatically declared a public nuisance. Id. On the Foundation's recommendation, and after notice, the Department of Agriculture must destroy it, even if not infested with boll weevils, at the owner's cost. Id. In addition, a cotton grower who violates the statute (including, presumably, by failing to pay an assessment or failing to destroy his own crop if payment is more than ten days late) is guilty of a Class C misdemeanor. Id. § 74.126(b). Cotton which a delinquent grower has already produced and harvested is subject to a lien. Id. § 74.115(c). Representatives of the Foundation may enter private property which is subject to eradication without the owner's permission for any purpose under the Act, including "the treatment, monitoring, and destruction of growing cotton or other host plants." Id. § 74.117. Finally, the Commissioner and the Foundation may adopt rules necessary to carry out the purposes of the Act. Id. § 74.120(c).

While growers in a zone must approve their assessments, they do not approve the type of eradication program or the amount of debt incurred by the Foundation to finance it. These matters are left to the Foundation's discretion. If the eradication program is discontinued for any reason, the Foundation may continue collecting assessments "as necessary to pay the financial obligations of the foundation." Id. § 74.127(c).

Under the Act, some power is retained by the Commissioner of Agriculture. For example, the Foundation can change the number of board positions or the eradication zone representation on the board only with the Commissioner's approval. Id. § 74.107(b). The Commissioner must also make rules to protect life and property from pesticides and other aspects of eradication programs. Id. § 74.120. See 4 TEX. ADMIN. CODE §§ 3.20-3.24. The Commissioner may prohibit planting cotton in zones when it would jeopardize the success of an eradication program. Id. § 74.118. See 4 TEX. ADMIN. CODE §§ 3.50-3.57. The Commissioner may exempt a cotton grower from payment of the Foundation's assessment penalties if payment would leave the grower with less than $15,000 taxable income. Id. § 74.116. See 4 TEX. ADMIN. CODE §§ 3.70-3.81. The Foundation may expend revenue only on "programs approved by the commissioner as consistent with this subchapter and applicable provisions of the constitution." TEX. AGRIC. CODE § 74.109(h). Finally, the Commissioner must determine when elimination of boll weevils is no longer necessary to prevent economic loss to cotton growers. Id. §§ 74.102(6), 74.112.

After a referendum has passed, the cotton growers in the zone must be allowed to conduct referenda "periodically" under the terms prescribed in the initial referendum to determine whether to continue their assessments, id. § 74.105(f), although the Act says nothing about how often these referenda must occur. In addition, the Foundation must conduct a referendum on whether to discontinue the program on the petition of at least forty percent of the cotton growers in the zone. Id. § 74.112(f)-(i). As noted, however, the Foundation may continue to collect assessments previously approved to pay its financial obligations. Id. § 74.127(c).


Because the Texas Constitution prohibits occupation taxes on agricultural pursuits, see TEX. CONST. art. VIII, § 1(c), lawmakers focused on the constitutionality of the Act when considering its passage. See SENATE DEBATE ON SB 30 (Feb. 3, 1993) (tape 1); HOUSE RESEARCH ORGANIZATION BILL ANALYSIS OF SB 30 at 9 (Feb. 24, 1993); SENATE NATURAL RESOURCES COMMITTEE PUBLIC HEARING ON SB 30 (Jan. 25, 1993); SENATE SUBCOMMITTEE ON AGRICULTURE HEARING ON SB 30 (Jan. 27, 1993). In an apparent attempt to preempt any constitutional problems, the Legislature included several references to Article XVI, Section 68 of the Texas Constitution. That section, which creates a limited exception to the ban on agricultural occupation taxes, provides The legislature may provide for the advancement of food and fiber in this state by providing representative associations of agricultural producers with authority to collect such refundable assessments on their product sales as may be approved by...

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