Can a neighborhood nonprofit hold a charitable raffle to pay for opposing a landfill permit before a Texas state agency?

Texas AG Opinion JM-1180: Does Fighting a Landfill Permit Disqualify a Charity Raffle?

Plain-English summary

The Dallas County District Attorney asked about a nonprofit corporation that opposed construction of a landfill near its community and wanted to use raffle proceeds to pay for representation before the Texas Department of Health in opposing the landfill permit. He asked two questions: first, whether raising money for that purpose met the Charitable Raffle Enabling Act's definition of "charitable purpose," and second, whether the act's exclusion of organizations that lobby disqualified a group raising funds to appear before a state administrative agency.

On the first question, the Attorney General explained that the act's definition of "charitable purposes" has two independent branches, benefiting needy or deserving persons (through things like education, health, or civic betterment) or fostering worthy public works, connected by "or," so an organization doesn't need to fit both. The opinion noted case law recognizing that garbage disposal is a governmental function and a "public work," but ultimately could not decide, as a fact question outside the opinion process, whether this particular group's purpose was charitable; that determination would require a court to examine the organization's charter and its ultimate beneficiaries. On the second question, the opinion concluded that the act's lobbying exclusion, borrowed from the state's lobby regulation law, is limited to attempts to influence "legislation," a term the Government Code's lobby chapter treats as distinct from "administrative action," so opposing a landfill permit before the Department of Health, an administrative action, did not constitute lobbying under the act and did not by itself disqualify the organization.

Currency note

This opinion was issued in 1990. Subsequent statutory amendments, court decisions, or later AG 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 mentioned here.

Who this opinion affected (as of 1990)

Neighborhood and civic nonprofit organizations: The opinion meant a nonprofit opposing an administrative permit decision, rather than lobbying the legislature, was not automatically disqualified from holding a charitable raffle under the act on lobbying grounds, though it still had to independently satisfy the act's charitable-purpose and qualified-nonprofit-organization requirements.

Local prosecuting attorneys: The opinion noted that county, district, and criminal district attorneys, along with the Attorney General, have authority under the act to seek an injunction or restraining order in court, and are better positioned than the opinion process to make the underlying factual determinations about whether a specific raffle violates state gambling laws.

Common questions

Does raising money to oppose a landfill count as a "charitable purpose" under Texas raffle law?
The opinion could not answer that definitively for this organization, since it depends on facts about the group's charter and beneficiaries that only a court can find, but it confirmed that fostering "worthy public works" is one of two independent ways to satisfy the act's charitable-purpose definition, separate from directly benefiting needy or deserving persons.

Why doesn't opposing a landfill permit before a state agency count as lobbying?
Because the opinion read the act's lobbying exclusion as limited to attempts to influence "legislation," borrowing that term's meaning from the Government Code's lobby regulation chapter, which treats influencing legislation and influencing administrative action as two distinct categories; since a landfill permit decision is administrative action, not legislation, opposing it isn't lobbying under the act.

Is being a nonprofit corporation enough to prove a charitable purpose?
No. The opinion noted that being a nonprofit corporation is not, by itself, proof of charitable purpose; a court would look at the organization's charter or articles of incorporation and its ultimate beneficiaries to decide that question.

Background and statutory framework

The Charitable Raffle Enabling Act, article 179f, V.T.C.S., lets a "qualified nonprofit corporation" conduct a raffle for "charitable purposes," with section 3(d) requiring that all raffle-ticket proceeds be spent for the organization's charitable purposes. Section 2(a)(2) defines "charitable purposes" in two parts, connected by "or": (A) benefiting needy or deserving persons through religious or educational advancement, relief from disease or suffering, physical well-being, self-betterment, or civic devotion, or (B) initiating or fostering worthy public works or public structures. The opinion found no conflict between the two branches, since the word "or" signals an organization need only fit one. Drawing on the definition's roots in the law of charitable trusts, citing Boyd v. Frost, Powers v. First Nat'l Bank of Corsicana, and Carr v. Jones, the opinion noted the Supreme Court has described "charitable purposes" as having a fixed legal meaning since at least 1946, one it found no less fixed in 1990. The opinion also noted case law recognizing garbage disposal as a governmental function and, for some purposes, a "public work" (citing City of Houston v. George and Schulman v. City of Houston), but concluded that whether this particular organization's purpose was charitable depended on facts, including its charter and ultimate beneficiaries, that the opinion process could not determine, citing River Oaks Garden Club v. City of Houston (nonprofit status alone is not dispositive) and Blocker v. State (charitable identity is established in the corporate charter).

On the lobbying question, section 6 of the act, defining "qualified nonprofit organization," requires (among other things) that neither the organization nor its parent organization "devote a substantial part of its activities to attempting to influence legislation," under section 6(a)(3), (b)(3), and (c)(3). The opinion read that phrase against the state's lobby regulation law, Government Code chapter 305, which since 1983 has covered both influencing legislation and influencing administrative action, using the paired phrase "to influence legislation or administrative action" throughout its provisions. Because the Charitable Raffle Enabling Act's exclusion used only "legislation," without the paired "administrative action" language, the opinion concluded the legislature intended to prohibit only attempts to influence legislation, not administrative action, so opposing a landfill permit before the Texas Department of Health did not constitute lobbying under the act. The opinion closed by noting that county, district, and criminal district attorneys and the Attorney General are authorized under section 5(a) of the act to seek an injunction or restraining order in court, and are better positioned than the opinion process to make preliminary factual determinations about compliance with state gambling laws.

Citations

Statutes:

• V.T.C.S. art. 179f, § 2(a)(2)
• V.T.C.S. art. 179f, § 3(a), (d)
• V.T.C.S. art. 179f, § 5(a)
• V.T.C.S. art. 179f, § 6(a)(3), (b)(3), (c)(3)
• Gov't Code ch. 305
• Gov't Code § 305.002(1), (6)
• Gov't Code §§ 305.003(a)(1), 305.004(1), 305.005(1)
• Health & Safety Code chs. 361, 363, 364

Cases:

• Boyd v. Frost, 196 S.W.2d 497, 502 (Tex. 1946)
• Powers v. First Nat'l Bank of Corsicana, 161 S.W.2d 273 (Tex. 1942)
• Carr v. Jones, 403 S.W.2d 181 (Tex. Civ. App.-Houston [1st Dist.] 1966, writ ref'd n.r.e.)
• City of Houston v. George, 479 S.W.2d 257 (Tex. 1972)
• Schulman v. City of Houston, 406 S.W.2d 219 (Tex. Civ. App.-Tyler 1966), pet. overruled, 412 S.W.2d 34 (Tex. 1967)
• River Oaks Garden Club v. City of Houston, 370 S.W.2d 851 (Tex. 1963)
• Blocker v. State, 718 S.W.2d 409 (Tex. Civ. App.-Houston [1st Dist.] 1986, writ ref'd n.r.e.)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1180
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1990/jm1180.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

May 25, 1990

Honorable John Vance
District Attorney
Frank Crowley Courts Bldg.
Dallas, Texas 75207-4313

Opinion No. JM-1180

Re: Applicability of the Charitable Raffle Enabling Act, article 179f, V.T.C.S., to a nonprofit corporation whose purpose is to oppose construction of a landfill (RQ-1962)

Dear Mr. Vance:

You ask two questions about whether a certain organization in Dallas County is authorized to conduct a raffle under the Charitable Raffle Enabling Act [hereinafter the act], article 179f, V.T.C.S. You tell us that the organization, a nonprofit corporation, opposes the construction of a landfill near the group's community. You also tell us that the organization would use the proceeds of the raffle to pay for representation before the Texas Department of Health in order to oppose the construction of the landfill because the members feel that the landfill would be detrimental to the health of the community.

In your first question, you ask:

Does the group's purpose for conducting the raffle meet the definitions of 'charitable purpose' under art. 179f, § 2(a)(2) where the purpose is to raise money to pay for representation before the Texas Department of Health?

Section 3(a) of the act allows a qualified organization to conduct a raffle, and section 3(d) requires that all proceeds from the sale of raffle tickets be spent for the charitable purposes of the organization. Section 2(a)(2) defines "charitable purposes" as follows:

(A) benefiting needy or deserving persons in this state, indefinite in number, by enhancing their opportunity for religious or educational advancement, relieving them from disease, suffering, or distress, contributing to their physical well-being, assisting them in establishing themselves in life as worthy and useful citizens, or increasing their comprehension of and devotion to the principles on which this nation was founded and enhancing their loyalty to their government; or

(B) initiating, performing, or fostering worthy public works in this state or enabling or furthering the erection or maintenance of public structures in this state.

V.T.C.S. art. 179f, § 2(a)(2).

Along with your first question, you indicate your impression that the goal of this organization raises the issue of a possible conflict between subsections (A) and (B) in that the organization is attempting to contribute to the physical well-being of the populace through the defeat of the construction of a public work.[1]

We do not believe that there is any conflict between the two subsections. The use of the word "or" to connect the two subsections of the definition clearly signifies that an organization need not find its purpose in both subsections.

The act's definition of "charitable purposes" closely tracks definitions used by the courts relative to the establishment of charitable trusts. See, e.g., Boyd v. Frost, 196 S.W.2d 497, 502 (Tex. 1946); Powers v. First Nat'l Bank of Corsicana, 161 S.W.2d 273 (Tex. 1942); Carr v. Jones, 403 S.W.2d 181 (Tex. Civ. App.-Houston [1st Dist.] 1966, writ ref'd n.r.e.); see also Zollman, American Law of Charities, § 185 et seq.

The Texas Supreme Court has determined that the term "charitable purposes" has a fixed meaning in the law. Boyd, supra, at 501. The meaning of that term, described as fixed in 1946, appears no less fixed in 1990, when we compare the definition found in the act with that offered by Perry (in 2 Perry, Trusts and Trustees § 697 (7th ed. 1929)) and approvingly quoted by the supreme court. Id. at 502. In the Powers opinion, the commission of appeals knowingly applied charitable use law derived from tax statutes to a charitable trust established in a will. Powers, supra, at 280. Thus, we can see no reason not to apply charitable purpose law derived from taxation statutes and the law of trusts to the relatively new use of the term "charitable purposes" in the charitable raffle act.

1. There is authority for the proposition that the construction of a landfill is the construction of a "public work." See, e.g., City of Houston v. George, 479 S.W.2d 257 (Tex. 1972) (for liability purposes, garbage disposal is a governmental function); Schulman v. City of Houston, 406 S.W.2d 219 (Tex. Civ. App.-Tyler 1966), pet. overruled, 412 S.W.2d 34 (Tex. 1967) (manner, method, and site of garbage disposal within discretion of city council); see also Health & Safety Code chs. 361, 363, 364.

Although we can review relevant legal principles, we cannot make a determination as to whether the expenditures you ask about would be for a charitable purpose. Such a determination would depend on findings of fact, which we cannot make in the opinion process. The fact that an organization is a nonprofit corporation is not, by itself, dispositive of the question of charitable purpose. River Oaks Garden Club v. City of Houston, 370 S.W.2d 851 (Tex. 1963). To determine whether the purpose of the organization is charitable, a court would examine at least the organization's statement of purpose in its charter or articles of incorporation, and the ultimate beneficiaries. See Blocker v. State, 718 S.W.2d 409 (Tex. Civ. App.-Houston [1st Dist.] 1986, writ ref'd n.r.e.) (charitable identity permanently established in corporate charter); Powers, supra, (orphanage devoted to all orphans, regardless of their religious affiliation, is charitable).

Local prosecuting attorneys are better equipped to make preliminary factual determinations in regard to whether certain conduct violates state gambling laws. Section 5(a) of the act authorizes county, district and criminal district attorneys, as well as the attorney general, to bring action in a county or district court for an injunction or restraining order.

In your second question, you ask:

Does the act's exclusion of lobbying organizations, contained in § 6(a)(3), § 6(b)(3), and § 6(c)(3), apply to a citizen's group which is raising funds in order to appear before an administrative board or agency, in this case the Texas Department of Health?

The act and the constitutional amendment that authorize charitable raffles permit a "qualified nonprofit corporation" to conduct a raffle for "charitable purposes." Section 6 of the act defines the term "qualified nonprofit organization" and includes requirements in addition to incorporation as a nonprofit corporation. V.T.C.S. art. 179f, § 6(a).

The three provisions about which you ask require that to be qualified to hold a raffle, neither the organization nor its parent organization "devote a substantial part of its activities to attempting to influence legislation."

These prohibitions on "attempting to influence legislation" are limited to exactly that. The lobby regulation act includes both traditional, legislative lobbying and, since 1983, attempts to influence administrative action. See Gov't Code ch. 305. Inasmuch as that chapter's various provisions repeatedly contain the expression "to influence legislation or administrative action," we believe that the legislature intended, in the Charitable Raffle Enabling Act, to prohibit only attempts to influence legislation. See Gov't Code §§ 305.003(a)(1), 305.004(1), 305.005(1); see also Gov't Code § 305.002(1) (definition of administrative action), 305.002(6) (definition of legislation). Therefore, we conclude that opposing approval of a landfill before the Department of Health would not constitute an attempt to influence legislation under the act.

SUMMARY

The opposition of the approval of a landfill before the Department of Health does not constitute lobbying and does not, by itself, disqualify an organization from being a qualified nonprofit corporation under the Charitable Raffle Enabling Act.

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Karen C. Gladney
Assistant Attorney General