Could a Texas business corporation contribute to a nonprofit that performed nonpartisan research requested by a legislative caucus and shared the results broadly?
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This page answers the general question as of 1983. Ezel answers yours: what it means for your facts, under current Texas law, with citations.
Texas AG Opinion JM-50: Corporate Funding of Nonpartisan Legislative Research
Plain-English summary
JM-50 concluded that, on the described facts and assumptions, a Texas business corporation could contribute to a nonprofit organization performing nonpartisan research on subjects suggested by a legislative caucus and distributing its data and reports to all legislators and other interested people.
"We believe a non-profit research organization operating as you described does not directly or indirectly participate in the election of a candidate for office or further the cause of a political party. Accordingly, a business corporation may make contributions of its assets to a research organization."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf"The fact that the research is performed for a legislative caucus does not alter this conclusion."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
The opinion was expressly limited to corporations operating under the Texas Business Corporation Act and contributions used for nonpartisan research, with the resulting work broadly disseminated.
"We assume that your question relates only to contributions by corporations organized or operating under authority of the Texas Business Corporation Act and to contributions that will be used by a non-profit corporation for nonpartisan research, the subjects of which are suggested by a legislative caucus."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf"We understand that the research data and reports of the non-profit corporation are disseminated to all members of the legislature and other interested persons."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
Under those facts, the contribution was not necessarily prohibited by the Business Corporation Act, campaign-finance law, the Lobby Act, or Penal Code bribery and corrupt-influence provisions.
"A contribution by a business corporation to a non-profit organization conducting non-partisan research for a legislative caucus is not necessarily prohibited by or subject to the Texas Business Corporation Act, article 1349 of the Revised Statutes, the Political Funds Reporting and Disclosure Act, the Lobby Act, or chapter 36 of the Texas Penal Code."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
Currency note
This opinion was issued in 1983. 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, deadline, or remedy mentioned here.
Common questions
Could a business corporation make charitable, scientific, or educational donations?
Generally yes, unless its articles of incorporation imposed an inconsistent limitation.
"Under general law, a corporation may make donations for the public welfare and for purposes that are charitable, scientific, or educational, unless the donation is inconsistent with limitations in the corporation's articles of incorporation."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
What political uses were corporate gifts barred from supporting?
The former statute barred contributions to organizations directly or indirectly furthering a political party, aiding a candidate's election or defeat, paying candidate expenses, or helping finance a political campaign or headquarters.
"Contributions of the assets or property of a corporation . . . may not be made to organizations that are in any manner or to any extent directly or indirectly engaged in the following: (1) furthering the cause of a political party; (2) aiding in the election or defeat of a candidate for office; (3) aiding in defraying the expenses of a candidate for office; or (4) defraying or aiding in defraying the expenses of a political campaign or political headquarters."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
Why was the research nonprofit not treated as a political committee?
A political committee had to collect contributions or make expenditures for candidates or officeholders. The described nonprofit instead conducted and disseminated nonpartisan research.
"To be deemed a political committee, that research organization must collect contributions or make expenditures for candidates to public office or for officeholders."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf"[W]e do not believe that the dissemination of information based on the organization's nonpartisan research and study constitutes a prohibited contribution or expenditure under article 14.06 of the Election Code."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
Did campaign-finance law permit corporate spending on ballot measures?
JM-50 noted that the former statute expressly allowed corporate contributions or expenditures supporting or opposing measures submitted to voters.
"[S]ection 14.06 expressly authorizes corporations to make contributions or expenditures to support or oppose measures."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
Was the contribution a lobbying expenditure?
Not on the described facts. The Lobby Act reached covered expenditures and direct communications intended to influence legislation, while the nonprofit contribution funded nonpartisan research rather than specified person-to-person, telephone, telegraph, or letter contacts.
"The Lobby Act, article 6252-9c, V.T.C.S., requires persons, including corporations, to register as lobbyists and report their contributions if they make certain expenditures and communications to influence legislation."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf"For purposes of the Lobby Act, 'direct communication' with members of the legislative or executive branches means a 'contact in person or by telephone, telegraph, or letter.'"
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf"[C]orporate contributions to a non-profit corporation for nonpartisan research on subjects suggested by a legislative caucus are not lobby expenditures for purposes of article 6252-9c."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
Could similar conduct still amount to bribery?
Yes if the facts included the required elements, such as intentionally or knowingly offering or accepting a pecuniary benefit as consideration for a public servant's official decision, recommendation, vote, or exercise of discretion. JM-50 found no such facts in the request presented.
"Certain conduct similar to lobbying could constitute a crime if it included the elements of bribery or other offenses under chapter 36 of the Texas Penal Code."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf"In our opinion, the factual situation that you presented does not involve violations of chapter 36 of the Texas Penal Code dealing with bribery and corrupt influence."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
Was the opinion a blanket approval of corporate caucus funding?
No. Its assumptions were narrow, and its summary said the contribution was "not necessarily" prohibited or regulated under the identified laws.
"We assume that your question relates only to [the described corporations and nonpartisan research]."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf"[The contribution] is not necessarily prohibited by or subject to [the listed statutes]."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
Background and statutory framework
The requester provided a representative description of a business corporation's contribution to a nonprofit research organization serving a legislative caucus.
"You submitted as representative of the question a description of a contribution by a business corporation to such a non-profit corporation."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
JM-50 considered four legal frameworks: corporate authority and political-donation restrictions, campaign-finance law, lobbying disclosure, and bribery and corrupt influence.
"In forming our opinion, we considered the possible effect of the Texas Business Corporation Act, article 1349 of the Revised Statutes, the Political Funds Reporting and Disclosure Act, the Lobby Act, and Penal Code provisions dealing with bribery and corrupt influence."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
Holding
"A contribution by a business corporation to a non-profit organization conducting non-partisan research for a legislative caucus is not necessarily prohibited by or subject to the Texas Business Corporation Act, article 1349 of the Revised Statutes, the Political Funds Reporting and Disclosure Act, the Lobby Act, or chapter 36 of the Texas Penal Code."
Source: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
Citations and references
Statutes discussed by JM-50:
- "articles 2.02(A)(14) and 2.02(B) of the Texas Business Corporation Act" Official PDF
- "article 1349, V.T.C.S." Official PDF
- "chapter 14 of the Texas Election Code" Official PDF
- "article 14.06 of the Election Code" Official PDF
- "article 6252-9c, V.T.C.S." Official PDF
- "chapter 36 of the Texas Penal Code" Official PDF
Cases cited by JM-50:
- "State v. Duke, 137 S.W. 654, 655 (Tex. 1911)" Official PDF
- "Texas State Board of Medical Examiners v. McClellan, 307 S.W.2d 317 (Tex. Civ. App. - Houston 1957, writ ref'd n.r.e.)" Official PDF
- "First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978)" Official PDF
Source
- Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-0050
- Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1983/jm0050.pdf
Original opinion text
Best-effort transcription from a scanned PDF. Minor errors may remain. The linked PDF is authoritative.
The Attorney General of Texas
JIM MATTOX
Attorney General
July 29, 1983
Honorable Gerald Hill
Chairman
Elections Committee
Texas House of Representatives
P. O. Box 2910
Austin, Texas 78769
Opinion No. JM-50
Re: Whether a corporation may contribute to a non-profit organization which serves as a research arm of a legislative caucus
Dear Representative Hill:
You have requested our opinion as to whether a corporation may contribute to a non-profit organization that conducts research for a legislative caucus. You submitted as representative of the question a description of a contribution by a business corporation to such a non-profit corporation. We assume that your question relates only to contributions by corporations organized or operating under authority of the Texas Business Corporation Act and to contributions that will be used by a non-profit corporation for nonpartisan research, the subjects of which are suggested by a legislative caucus. We understand that the research data and reports of the non-profit corporation are disseminated to all members of the legislature and other interested persons.
In forming our opinion, we considered the possible effect of the Texas Business Corporation Act, article 1349 of the Revised Statutes, the Political Funds Reporting and Disclosure Act, the Lobby Act, and Penal Code provisions dealing with bribery and corrupt influence.
One aspect of your question concerns the authority of a business corporation to make a gift of the corporation's assets. Under general law, a corporation may make donations for the public welfare and for purposes that are charitable, scientific, or educational, unless the donation is inconsistent with limitations in the corporation's articles of incorporation. Bus. Corp. Act art. 2.02(A)(14), 2.02(B). Contributions of the assets or property of a corporation, however, may not be made to organizations that are in any manner or to any extent directly or indirectly engaged in the following: (1) furthering the cause of a political party; (2) aiding in the election or defeat of a candidate for office; (3) aiding in defraying the expenses of a candidate for office; or (4) defraying or aiding in defraying the expenses of a political campaign or political headquarters. V.T.C.S. art. 1349.
We believe a non-profit research organization operating as you described does not directly or indirectly participate in the election of a candidate for office or further the cause of a political party. Accordingly, a business corporation may make contributions of its assets to a research organization. The fact that the research is performed for a legislative caucus does not alter this conclusion.
The Political Funds Reporting and Disclosure Act, codified in chapter 14 of the Texas Election Code, regulates political campaign financing and contributions to candidates, officeholders, and political committees. A contribution within the meaning of chapter 14 is something of value transferred to a candidate or political committee with the intent that it be used in an election or transferred to an officeholder for use in financing the duties and functions of his office that are not reimbursable out of public money. Elec. Code art. 14.01(D). Article 14.06 prohibits certain corporate contributions, including contributions from a corporation organized or operating under authority of the Business Corporation Act. The article also prohibits a candidate, officeholder, or political committee from knowingly accepting a corporate contribution. The donations about which you inquire are not made by the corporation to a candidate or officeholder, but to a separate research organization. To be deemed a political committee, that research organization must collect contributions or make expenditures for candidates to public office or for officeholders. Elec. Code art. 14.01(O). Since the Political Funds Reporting and Disclosure Act is a penal statute that requires strict construction, we do not believe that the dissemination of information based on the organization's nonpartisan research and study constitutes a prohibited contribution or expenditure under article 14.06 of the Election Code. See State v. Duke, 137 S.W. 654, 655 (Tex. 1911); Texas State Board of Medical Examiners v. McClellan, 307 S.W.2d 317 (Tex. Civ. App. - Houston 1957, writ ref'd n.r.e.). Further, section 14.06 expressly authorizes corporations to make contributions or expenditures to support or oppose measures, which are defined as proposals "submitted to the people for their approval or rejection at an election, including any proposed law, Act or part of an Act of the legislature, revision of or amendment to the constitution." See Elec. Code art. 14.01(M); First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978).
The Lobby Act, article 6252-9c, V.T.C.S., requires persons, including corporations, to register as lobbyists and report their contributions if they make certain expenditures and communications to influence legislation. Id. §3. The contribution or expenditure is not prohibited, but must be reported to the secretary of state. This office several times has reiterated the following:
The Lobby Act, as a penal statute, is carefully drafted to reach only those persons who make contributions or expenditures for 'communicating directly' with one or more members of the Legislative or Executive branches to influence legislation. Section 1 states the policy of the Lobby Act to be the public disclosure of activities and expenditures made to urge 'specific actions' with respect to legislation.
For purposes of the Lobby Act, "direct communication" with members of the legislative or executive branches means a "contact in person or by telephone, telegraph, or letter." V.T.C.S. art. 6252-9c, §2(5). Therefore, it is consistent with prior opinions of this office to conclude that corporate contributions to a non-profit corporation for nonpartisan research on subjects suggested by a legislative caucus are not lobby expenditures for purposes of article 6252-9c.
Certain conduct similar to lobbying could constitute a crime if it included the elements of bribery or other offenses under chapter 36 of the Texas Penal Code, such as intentionally or knowingly offering, conferring, soliciting, or accepting a pecuniary benefit as consideration for the recipient's decision, opinion, recommendation, vote, or other exercise of discretion as a public servant or party official. See Tex. Const. art. XVI, §41; Penal Code §§36.01, 36.02, 36.08(f), 36.10. In our opinion, the factual situation that you presented does not involve violations of chapter 36 of the Texas Penal Code dealing with bribery and corrupt influence.
SUMMARY
A contribution by a business corporation to a non-profit organization conducting non-partisan research for a legislative caucus is not necessarily prohibited by or subject to the Texas Business Corporation Act, article 1349 of the Revised Statutes, the Political Funds Reporting and Disclosure Act, the Lobby Act, or chapter 36 of the Texas Penal Code.
Very truly yours,
JIM MATTOX
Attorney General of Texas
TOM GREEN
First Assistant Attorney General
DAVID R. RICHARDS
Executive Assistant Attorney General
Prepared by Nancy Sutton
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Rick Gilpin, Acting Chairman
David Brooks
Colin Carl
Susan Garrison
Nancy Sutton
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