Does Senate Bill 22 stop the Texas State Employee Charitable Campaign from listing abortion providers or their affiliates as eligible charities?

Plain-English summary

The State Employee Charitable Campaign is the program that lets Texas state employees donate to approved charities through automatic deductions from their paychecks. A statutory Policy Committee, with members appointed by the Governor, Lieutenant Governor, and Comptroller, runs the program and decides each year which charities are eligible to receive those payroll donations.

In 2019 the Legislature passed Senate Bill 22, which added chapter 2272 to the Government Code. That chapter says a "governmental entity" may not enter into a "taxpayer resource transaction" with an abortion provider or an affiliate of an abortion provider. The Campaign's chairman asked the AG whether SB 22 affects the Campaign's activities, in particular its approval of eligible charities.

The AG analyzed the statute in three steps, because the prohibition only applies if all three of its defined terms are met.

The first step was whether the Campaign is a "governmental entity." Chapter 2272 defines that to include a "state agency," but does not separately define "state agency." Using the ordinary dictionary meaning and how the term is used in other statutes, the AG reasoned that an agency is an administrative unit of government created by constitution or statute and not limited to a geographic part of the state. The Campaign fits: the Legislature created it by statute, it serves state employees throughout Texas, and the Legislature subjected its Policy Committee to laws that apply to state agencies, including the Open Meetings Act, the Public Information Act, and the Sunset Act. So a court would likely treat the Campaign as a state agency and thus a governmental entity.

The second step was whether the Campaign's activities involve an abortion provider or affiliate as the statute defines those terms. SB 22 defines "abortion provider" by reference to certain licensed facilities and surgical centers, and "affiliate" by reference to written relationships showing common ownership, management, control, franchise, or licensed use of a brand. To the extent the Campaign approves a charity that meets one of those definitions, its activities implicate SB 22.

The third step was whether approving a charity is a "taxpayer resource transaction." The statute defines that term broadly, reaching the donation of money or services or "any other transaction" that gives a private entity something of value derived from state or local tax revenue, whether or not the government gets anything back. The AG concluded that approving a charity conveys value in two ways: the employee donations themselves, and the service of processing those donations through the state payroll system and the Comptroller's electronic-funds-transfer system. Those systems and the state employees' time are funded with tax revenue. So the approval is a taxpayer resource transaction.

With all three elements satisfied, the AG concluded that section 2272.003 prohibits the Policy Committee from approving abortion providers or affiliates as eligible charitable organizations for the Campaign. The AG noted that the statute contains a narrow exception for a transaction subject to a conflicting federal law, as determined by the executive commissioner of the Health and Human Services Commission and confirmed in writing by the attorney general.

Currency note

This opinion was issued in 2020. 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.

What the opinion meant for those who asked

For the Policy Committee that runs the Campaign, the opinion described how SB 22 applied to the eligibility decision the committee makes each year. Under the AG's reading, the committee, as part of a state agency, could not approve a charity that met the statutory definition of an abortion provider or affiliate, because doing so would be a taxpayer resource transaction barred by section 2272.003. The opinion located the prohibition specifically at the approval step, the point where the committee admits a charity into the payroll-deduction program, because that is what conveys the donations and the state-funded processing service. The AG also pointed to the statute's own exception for transactions subject to a conflicting federal law, which requires a determination by the HHSC executive commissioner confirmed in writing by the attorney general. One drafting wrinkle the opinion flagged: a separate 2019 bill (House Bill 1999) created a different chapter 2272 about construction-liability claims with overlapping section numbers, and the AG clarified it was construing the SB 22 chapter 2272 titled "Prohibited Transactions."

Common questions

Q: What does Senate Bill 22 prohibit?
A: It added Government Code chapter 2272, which bars a governmental entity from entering a "taxpayer resource transaction" with an abortion provider or an affiliate of an abortion provider.

Q: Is the State Employee Charitable Campaign a "governmental entity" under the law?
A: The AG concluded yes. The Campaign is a state agency, because it was created by statute, operates statewide, and is subject to laws that govern state agencies, so it qualifies as a governmental entity.

Q: Why is approving a charity a "taxpayer resource transaction"?
A: Because approval conveys value to the charity, both the employee donations and the service of processing them through the state payroll and electronic-funds systems, which are funded by tax revenue.

Q: Is there any exception?
A: The statute provides a narrow exception for a transaction subject to a conflicting federal law, as determined by the HHSC executive commissioner and confirmed in writing by the attorney general.

Background and statutory framework

The State Employee Charitable Campaign is authorized by Government Code sections 659.131-.150. It lets state employees authorize a per-pay-period payroll deduction for approved charities (section 659.132(a)), with voluntary participation (section 659.133(a)). The Policy Committee, appointed by the Governor, Lieutenant Governor, and Comptroller (section 659.140(b)), determines charitable-organization eligibility and approves charities each spring for the autumn campaign (sections 659.138, 659.146(c), 659.147(b)), and is subject to the Open Meetings Act, Public Information Act, and Sunset Act (section 659.140(f), (g), (i)). The Comptroller provides administrative support and distributes the deducted funds (sections 659.132(g), 659.140(e-1); 34 Tex. Admin. Code § 5.48). Senate Bill 22, the Act of May 24, 2019, 86th Leg., R.S., ch. 501, 2019 Tex. Sess. Law Serv. 1341, added Government Code chapter 2272 (sections 2272.001-.005), which prohibits a governmental entity from entering a taxpayer resource transaction with an abortion provider or affiliate (section 2272.003(a)), subject to a federal-conflict exception (section 2272.003(b)). The chapter defines "abortion provider," "affiliate," "governmental entity," and "taxpayer resource transaction" (section 2272.001(2)-(5)). Because chapter 2272 does not define "state agency," the AG applied the ordinary-meaning approach of Tex. State Bd. of Exam'rs of Marriage & Family Therapists v. Tex. Med. Ass'n, 511 S.W.3d 28 (Tex. 2017), consulting dictionaries and analogous definitions in Government Code section 2052.201(4), Civil Practice and Remedies Code section 105.001(3), and prior opinions (Tex. Att'y Gen. Op. No. MW-43 (1979); LO-94-064 (1994); GA-0565 (2007)). The AG also noted the separately enacted, duplicatively numbered chapter 2272 from House Bill 1999 (Act of May 23, 2019, 86th Leg., R.S., ch. 1287, 2019 Tex. Sess. Law Serv. 3803).

Citations and references

Statutory provisions:

• Tex. Gov't Code § 659.132; § 659.140; § 659.146; § 659.147
• Tex. Gov't Code § 2272.001; § 2272.003
• Tex. Gov't Code § 2052.201(4); § 2103.001
• Tex. Civ. Prac. & Rem. Code § 114.001(3); § 105.001(3)
• 34 Tex. Admin. Code § 5.48
• Act of May 24, 2019, 86th Leg., R.S., ch. 501, § 1, 2019 Tex. Sess. Law Serv. 1341 (Senate Bill 22)
• Act of May 23, 2019, 86th Leg., R.S., ch. 1287, § 1, 2019 Tex. Sess. Law Serv. 3803 (House Bill 1999)

Cases:

• Tex. State Bd. of Exam'rs of Marriage & Family Therapists v. Tex. Med. Ass'n, 511 S.W.3d 28, 34-35 (Tex. 2017)

Attorney General opinions:

• Tex. Att'y Gen. Op. No. GA-0565 (2007)
• Tex. Att'y Gen. Op. No. MW-43 (1979)
• Tex. Att'y Gen. LO-94-064 (1994)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0282
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2020/kp-0282.pdf

Original opinion text

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

January 2, 2020

Mr. Gregory S. Davidson
Chairman, State Policy Committee
State Employee Charitable Campaign
1910 East Martin Luther King Jr. Boulevard
Austin, Texas 78702

Opinion No. KP-0282

Re: Whether activities of the State Employee Charitable Campaign constitute a taxpayer resource transaction under section 2272.003 of the Government Code (RQ-0308-KP)

Dear Mr. Davidson:

You ask whether the activities of the State Employee Charitable Campaign constitute a taxpayer resource transaction under Government Code section 2272.003.[1]

The Legislature provided state employees with the ability to make voluntary charitable contributions to eligible organizations by authorizing "a deduction each pay period from the employee's salary or wage payment" through the State Employee Charitable Campaign (the "Campaign"). TEX. GOV'T CODE § 659.132(a); see also id. § 659.133(a) (explaining that participation is voluntary). The Campaign is organized and operated by the Campaign Policy Committee (the "Policy Committee"), composed of members appointed by the Governor, Lieutenant Governor, and Comptroller. Id. § 659.140(b). The Legislature tasked the Policy Committee with establishing the organization and structure of the Campaign at both state and local levels, selecting the state campaign manager, and determining the eligibility of agencies and charitable organizations for participation in the Campaign, among other roles. Id. § 659.140(e)(1), (4), (6).

To receive donations through the Campaign, a charitable organization must meet certain statutory requirements and must apply "during the annual eligibility determination period specified by the committee." Id. §§ 659.146(a), (c), .147(a). The Policy Committee votes to approve charitable organizations each spring for the Campaign the following autumn. Id. §§ 659.138 (requiring the Campaign "be conducted each autumn"), 659.146(c) ("The state policy committee may approve an affiliated charitable organization . . . ."), 659.147(b) ("The state policy committee . . . shall review each application and may approve a charitable organization for participation . . . ."); see also 34 TEX. ADMIN. CODE § 5.48(n)(2)(A) (requiring the Policy Committee to "establish an annual application, eligibility determination, and appeals period for statewide or local participation" in the Campaign). The Policy Committee may appoint a local employee committee to assist it with evaluating applications from organizations that seek to participate in the Campaign only in a local campaign area. TEX. GOV'T CODE § 659.140(e)(1)(B).

During the Campaign, state employees may authorize a deduction from their salary or wages each pay period for designated charitable organizations.[2] Id. § 659.132(a). The deduction "is effective for a maximum of one campaign year." Id. § 659.137(b). The deduction authorization directs the Comptroller to distribute the funds to the state or local campaign managers, which then distribute funds to the eligible charities. Id. § 659.132(g); 34 TEX. ADMIN. CODE § 5.48(i)(1)(A) (prohibiting the Comptroller from paying deducted amounts directly to an eligible local charitable organization); see also Tex. Att'y Gen. Op. No. GA-0565 (2007) at 1-2 (explaining state versus local activity). You question whether any of these activities are impacted by the enactment of Senate Bill 22 during the past legislative session. See Request Letter at 1.

The Eighty-sixth Legislature passed Senate Bill 22 to prohibit "certain transactions between a governmental entity and an abortion provider or affiliate of the provider."[3] The bill added Government Code chapter 2272,[4] which generally provides that "a governmental entity may not enter into a taxpayer resource transaction with an abortion provider or an affiliate of an abortion provider."[5] TEX. GOV'T CODE § 2272.003(a).

To determine whether Senate Bill 22 impacts the Campaign's activities, we must first analyze whether the Campaign qualifies as a governmental entity under subsection 2272.001(4). That section defines "governmental entity" to include a "state agency" in any branch of state government. Id. § 2272.001(4). Various statutes throughout Texas law define "state agency" in different ways for specific purposes. See, e.g., TEX. CIV. PRAC. & REM. CODE § 114.001(3) (defining state agency for purposes of adjudicating contract claims with state agencies); TEX. GOV'T CODE § 2103.001 (defining "state agency" for purposes of state accounting and fiscal management). But chapter 2272 does not define the term "state agency" for purposes of that chapter. When a statute does not define a term, courts apply the "common, ordinary meaning unless a contrary meaning is apparent from the statute's language." Tex. State Bd. of Exam'rs of Marriage & Family Therapists v. Tex. Med. Ass'n, 511 S.W.3d 28, 34-35 (Tex. 2017). To determine a statutory term's common meaning, courts typically look first to the dictionary definitions and then "consider the term's usage in other statutes, court decisions, and similar authorities." Id. at 35.

The term "agency" is commonly understood to refer to "a department or other administrative unit of government." WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 40 (2002); see also MERRIAM WEBSTER'S COLLEGIATE DICTIONARY 24 (11th ed. 2004) (defining "agency" as "an administrative division (as of a government)"); see also Tex. Att'y Gen. Op. No. MW-43 (1979) at 3 (explaining the common definition of "agency" as "a person or thing through which power is exerted or an end is achieved" (quotation marks omitted)). Statutes using "state agency" for other purposes define the term to include governmental entities "created by the constitution or a statute of this state" that possess authority "not limited to a geographical portion of the state." See, e.g., TEX. GOV'T CODE § 2052.201(4); TEX. CIV. PRAC. & REM. CODE § 105.001(3).

The Legislature created the Campaign by statute to administer a program for state employee charitable contributions. See Tex. Att'y Gen. LO-94-064 (1994) at 3 (concluding that the Policy Committee "has supervision or control of public business or policy"). The Campaign serves state employees throughout Texas and is not limited to a geographical portion of the State. TEX. GOV'T CODE § 659.146(c). Moreover, the Legislature made applicable to the Policy Committee multiple state statutes governing state agencies. See id. § 659.140(f), (g), (i) (making the Policy Committee subject to the Open Meetings Act, the Public Information Act, and the Sunset Act). Thus, under both the dictionary definitions of state agency and use of the term in other statutes, a court would likely conclude that the Campaign is a state agency for purposes of section 2272.003(a) of the Government Code, and therefore qualifies as a governmental entity.

We next consider whether the Campaign's activities involve abortion providers or affiliates as defined in subsections 2272.001(2) and (3). The Legislature defined "abortion provider" as either "a facility licensed under Chapter 245, Health and Safety Code" or "an ambulatory surgical center licensed under Chapter 243, Health and Safety Code, that is used to perform more than 50 abortions in any 12-month period." Id. § 2272.001(2). It defined "affiliate" as

a person or entity who enters into with another person or entity a legal relationship created or governed by at least one written instrument, including a certificate of formation, a franchise agreement, standards of affiliation, bylaws, or a license, that demonstrates:

(A) common ownership, management, or control between the parties to the relationship;

(B) a franchise granted by the person or entity to the affiliate; or

(C) the granting or extension of a license or other agreement authorizing the affiliate to use the other person's or entity's brand name, trademark, service mark, or other registered identification mark.

Id. § 2272.001(3). To the extent the Campaign approves eligible charities that also qualify as abortion providers or affiliates under these definitions, its activities implicate Senate Bill 22.

Finally, we consider whether the Campaign's activities involve a "taxpayer resource transaction." The Legislature defined "taxpayer resource transaction" to include the "donation of money, . . . services, . . . or any other transaction between a governmental entity and a private entity that provides to the private entity something of value derived from state or local tax revenue, regardless of whether the governmental entity receives something of value in return." Id. § 2272.001(5). By defining the phrase broadly to include "any other transaction," the Legislature intended to include any "exchange or transfer of goods, services, or funds" that meets the other statutory requirements. MERRIAM WEBSTER'S COLLEGIATE DICTIONARY 1327 (11th ed. 2004).

An eligible charity's application to participate in the Campaign, and the Policy Committee's subsequent approval of the charity, involves a transaction that conveys value to the charity in the form of both employee donations and the service of processing those donations through the state payroll system. See 34 TEX. ADMIN. CODE § 5.48(i)(2) ("the Comptroller shall pay deducted amounts to a local campaign manager or a statewide federation or fund"). Processing the authorized donations utilizes state employee time as well as use of the state payroll system and the electronic funds transfer system.[6] See TEX. GOV'T CODE § 659.140(e-1) (requiring the Comptroller to "provide administrative support" to the Policy Committee); 34 TEX. ADMIN. CODE § 5.48(a)(6) (defining the "Comptroller's electronic funds transfer system"), (i)(2) (requiring the Comptroller to pay deducted amounts by electronic funds transfer). The employees and systems are funded by state or local tax revenue. The transaction between the Policy Committee and an approved charitable organization therefore involves a taxpayer resource transaction. Section 2272.003 of the Government Code thus prohibits the Policy Committee from approving abortion providers or affiliates as eligible charitable organizations for the Campaign.

SUMMARY

Section 2272.003 of the Government Code prohibits the State Employee Charitable Campaign and its Policy Committee from entering into a taxpayer resource transaction with an abortion provider or an affiliate of an abortion provider.

The Policy Committee's approval of abortion providers or affiliates as charitable organizations eligible to participate in the Campaign constitutes a taxpayer resource transaction. Section 2272.003 of the Government Code thus prohibits the Policy Committee from approving abortion providers or affiliates as eligible charitable organizations for the Campaign.

Very truly yours,

KEN PAXTON
Attorney General of Texas

JEFFREY C. MATEER
First Assistant Attorney General

RYAN L. BANGERT
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

[1] See Letter from Mr. Gregory S. Davidson, Chairman, State Policy Comm., State Emp. Charitable Campaign, to Honorable Ken Paxton, Tex. Att'y Gen. at 1 (Sept. 18, 2019), https://www2.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").

[2] The Comptroller and Policy Committee must approve the deduction authorization forms. 34 TEX. ADMIN. CODE § 5.48(t)(1).

[3] Act of May 24, 2019, 86th Leg., R.S., ch. 501, § 1, 2019 Tex. Sess. Law Serv. 1341 (codified at TEX. GOV'T CODE §§ 2272.001-.005).

[4] Through House Bill 1999, the Legislature enacted new laws related to construction liability claims, and it also labeled those laws as chapter 2272 with duplicative section numbers to those in Senate Bill 22. See Act of May 23, 2019, 86th Leg., R.S., ch. 1287, § 1, 2019 Tex. Sess. Law Serv. 3803 (codified at TEX. GOV'T CODE §§ 2272.001-.009). This opinion addresses the chapter 2272 titled "Prohibited Transactions" and its corresponding provisions.

[5] The law makes an exception for "a taxpayer resource transaction that is subject to a federal law in conflict with Subsection (a) as determined by the executive commissioner of the Health and Human Services Commission and confirmed in writing by the attorney general." TEX. GOV'T CODE § 2272.003(b).

[6] State employee participation in the Campaign is voluntary, and a state agency may not reimburse a state employee for expenses incurred while acting as a representative of a charitable organization. Id. § 659.133(a); 34 TEX. ADMIN. CODE § 5.48(d)(2). However, state agencies donate employees' time to participate in the Campaign and provide administrative support.