Must a Texas school district accept and spend PTA donations earmarked for extra staff positions?

Plain-English summary

The chair of the Texas Senate Education Committee asked the AG two questions about House Bill 1525, which the 87th Legislature passed and which added subsection (c) to Education Code § 11.156. The first: does the bill require school districts to accept PTA donations designated to fund supplemental educational staff positions and spend those funds? The second: can a district skip that requirement for the 2021-2022 school year if it set its budget and staffing before the bill's September 1, 2021 effective date? The questions arose because Austin ISD had taken the position that, having finalized its 2021-2022 budget in June, the new subsection did not apply to it for that year.

The AG started with the existing text. Subsections (a) and (b) of § 11.156 govern donations to public schools: a district board holds a donation in trust unless the donor directs otherwise, and the trustees "may" spend donated funds or income for any purpose the donor designates that fits the schools' lawful purposes, or for any legal purpose if the donor designates none. Because "may" generally creates discretionary authority (Tex. Gov't Code § 311.016(1); Pedernal Energy, LLC v. Bruington Eng'g, Ltd.), those subsections gave districts discretion over how to spend donations.

House Bill 1525 changed that for a specific category. New subsection (c) says a school district "shall" accept, from a PTA the district recognizes, a donation designated to fund supplemental educational staff positions at a campus, and "shall" spend it for that purpose at the direction of and within the time the campus specifies. "Shall" imposes a duty unless context requires otherwise (Tex. Gov't Code § 311.016(2); Perryman v. Spartan Tex. Six Capital Partners, Ltd.), and the contrast with the discretionary "may" in subsection (b) reinforced that reading. So the AG concluded subsection (c) creates a mandatory duty, but only when three conditions are met: the donation is from a district-recognized PTA, it is designated for supplemental educational staff positions at a campus, and the campus directs the expenditure and specifies the period within which to spend it. The statute does not require acceptance or spending in any particular fiscal year, only within the time the campus specifies.

On the second question, the AG rejected the budget-timing argument. A district may spend public funds only as provided in its adopted budget under § 44.006(a), but the same statute lets the board amend the budget or adopt a supplementary emergency budget for necessary unforeseen expenses. Courts read an unambiguous statute by its plain language unless that produces an absurd result (Combs v. Health Care Servs. Corp.). The AG acknowledged that applying the September 1, 2021 effective date as written could create administrative challenges for a district that already locked its budget, but said that is not an absurd outcome no rational legislature could have intended. So a district must spend donations received for the 2021-2022 school year to the extent they satisfy all of subsection (c)'s conditions. Whether any particular donation meets those conditions is a fact question outside the AG opinion process.

What this means for you

This describes what the opinion holds. It is the AG's 2021 reading; statutes can change, so confirm current law before relying on it.

School districts and boards of trustees

The opinion treats § 11.156(c) as a mandatory duty, not discretionary, once its conditions are met. A district that has already adopted its budget is not excused; the AG pointed to the § 44.006(a) authority to amend a budget or adopt a supplementary emergency budget as the mechanism to comply.

School administrators and campus leaders

The duty turns on campus action: it applies only to a donation the campus has tied to supplemental educational staff positions, with the campus directing the expenditure and setting the spending period. The opinion frames the campus's direction and time specification as conditions that trigger the district's obligation.

Parent-teacher associations

The duty reaches only a donation from a PTA the district recognizes that is designated for supplemental educational staff positions at a campus. The opinion does not decide whether any specific donation qualifies; that depends on the facts.

Common questions

Q: Does a Texas school district have to take a PTA donation for staff positions?
A: Per the AG, yes, when § 11.156(c)'s conditions are met: the donation is from a district-recognized PTA, designated for supplemental educational staff positions at a campus, and the campus directs the spending and sets the time period.

Q: What does "supplemental educational staff positions" cover?
A: The opinion uses the statute's phrase without defining it further. Whether a particular position and donation fit the statute is a fact question the AG said it cannot resolve in an opinion.

Q: Can a district refuse because it already passed its budget for the year?
A: No, per the AG. The September 1, 2021 effective date applies as written, and the board can amend its budget or adopt a supplementary emergency budget under § 44.006(a) to comply.

Q: Does the district have to spend the money in the same school year?
A: The statute does not name a fiscal year. It requires spending "within the time period specified by the school campus" for which the donation was designated.

Q: Is "shall" really mandatory here?
A: The AG read it that way. Under Government Code § 311.016, "shall" imposes a duty and "may" is discretionary, and the AG said the contrast with the discretionary "may" in subsection (b) confirmed subsection (c) is mandatory.

Background and statutory framework

Education Code § 11.156 governs donations to public schools. Subsection (a) vests a donation in the district board as trustee unless the donor directs otherwise; subsection (b) says trustees "may" spend the funds, property, or income for a donor-designated lawful purpose or, absent a designation, any legal purpose. The AG read "may" as discretionary under Government Code § 311.016(1) and Pedernal Energy, LLC v. Bruington Eng'g, Ltd., consistent with prior opinion KP-0236 (a district's use of received property must comply with the transfer terms and serve a lawful district purpose).

H.B. 1525 (Act of May 31, 2021, 87th Leg., R.S., § 2) added subsection (c), which says a district "shall" accept and spend a recognized PTA's donation designated for supplemental educational staff positions at a campus, at the campus's direction and within the campus's specified period. The AG applied Government Code § 311.016(2) and Perryman v. Spartan Tex. Six Capital Partners, Ltd. for the rule that "shall" imposes a duty, and read the new mandatory language against the discretionary "may" in subsection (b). On budget timing, the AG cited Education Code § 44.006(a) (spending limited to the adopted budget, but the board may amend or adopt a supplementary emergency budget) and Combs v. Health Care Servs. Corp. for plain-language construction absent an absurd result. It noted whether a specific donation qualifies is a fact question (KP-0239).

Citations and references

Statutes:

• Tex. Educ. Code § 11.156 (acceptance and use of donations; PTA-donation duty in subsection (c))
• Act of May 31, 2021, 87th Leg., R.S., H.B. 1525, § 2 (enacting § 11.156(c))
• Tex. Gov't Code § 311.016(1), (2) ("may" discretionary; "shall" imposes a duty)
• Tex. Educ. Code § 44.006(a) (budget amendment and supplementary emergency budget)

Key cases:

• Pedernal Energy, LLC v. Bruington Eng'g, Ltd., 536 S.W.3d 487 (Tex. 2017) ("may" indicates a provision is discretionary)
• Perryman v. Spartan Tex. Six Capital Partners, Ltd., 546 S.W.3d 110 (Tex. 2018) ("shall" denotes mandatory action)
• Combs v. Health Care Servs. Corp., 401 S.W.3d 623 (Tex. 2013) (plain-language construction unless absurd)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0387
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2021/kp-0387.pdf

Original opinion text

September 23, 2021

The Honorable Larry Taylor
Chair, Senate Committee on Education
Texas State Senate
Post Office Box 12068
Austin, Texas 78711-2068

Opinion No. KP-0387

Re: Whether House Bill 1525 requires school districts to accept PTA donations designated to fund supplemental educational staff positions and use funds donated for that purpose for the 2021–2022 school year (RQ-0411-KP)

Dear Senator Taylor:

You ask whether House Bill 1525 requires school districts to accept PTA donations designated to fund supplemental educational staff positions and use funds donated for that purpose for the 2021–2022 school year.¹

Background

Section 11.156 of the Education Code governs the acceptance and use of donations to public schools. TEX. EDUC. CODE § 11.156 (a), (b). During its recently concluded regular session, the Eighty-seventh Legislature enacted House Bill 1525, which adds subsection 11.156(c), specifically addressing certain donations by a parent-teacher organization or association (a "PTA") designated to fund supplemental educational staff positions at a school campus. See Act of May 31, 2021, 87th Leg., R.S., H.B. 1525, § 2 (codified at TEX. EDUC. CODE § 11.156(c)) ("House Bill 1525" or "section 11.156(c)"). You tell us that Austin Independent School District ("Austin ISD") has taken the position that because the district completed its budget and staffing decisions for the 2021–2022 school year before House Bill 1525 became effective on September 1, 2021, subsection 11.156(c) has no application to Austin ISD's funding and staffing of positions for the 2021–2022 school year. Request Letter at 2. You ask whether House Bill 1525 requires a school district to accept and spend donations already received by PTAs to fund positions for the 2021–2022 school year. Id.

¹ See Letter from Honorable Larry Taylor, Chair, Senate Comm. on Educ., to Honorable Ken Paxton, Tex. Att'y Gen. at 2 (June 11, 2021), https://www2.texasattorneygeneral.gov/opinions/opinions/51paxton/rq/2021/pdf/RQ0411KP.pdf ("Request Letter").

HB 1525 creates a mandatory duty for districts to accept and use funds donated by PTAs and directed by the campus to fund supplemental educational staff positions.

Subsections (a) and (b) of section 11.156 of the Education Code currently provide:

(a) A conveyance, devise, or bequest of property for the benefit of the public schools made by anyone for any . . . district, if not otherwise directed by the donor, vests the property in the . . . board of trustees of the . . . district, or their successors in office as trustees for those to be benefited by the donation.

(b) The funds or other property donated or the income from the property may be spent by the trustees:

(1) for any purpose designated by the donor that is in keeping with the lawful purposes of the schools for the benefit of which the donation was made; or

(2) for any legal purpose if a specific purpose is not designated by the donor.

TEX. EDUC. CODE § 11.156(a), (b) (emphasis added). Subsection (a) provides that unless the donor directs otherwise, a school district board holds a donation to district public schools in trust. Id. § 11.156(a).² Subsection (b) provides that trustees, including school district trustees, "may" spend funds, property, or income for lawful purposes authorized in the statute. Id. § 11.156(b). When used in a statute, the word "may" generally "creates discretionary authority or grants permission or a power." TEX. GOV'T CODE § 311.016(1); Pedernal Energy, LLC v. Bruington Eng'g, Ltd., 536 S.W.3d 487, 492 (Tex. 2017) ("'May,' when used in a statute, indicates that the provision is discretionary."). Thus, subsection (b) grants a school district discretionary authority to spend donated funds either as designated by the donor or, if the donor does not designate a purpose, any other lawful purpose. TEX. EDUC. CODE § 11.156(b); see also Tex. Att'y Gen. Op. No. KP-0236 (2019) at 2 (stating that "while the District's use of any property acquired or received by its trustees must comply with the terms of the transfer, the use must also serve a lawful purpose of the District").

House Bill 1525 adds the following language:

(c) A school district shall:

(1) accept from a parent-teacher organization or association recognized by the district a donation designated to fund supplemental educational staff positions at a school campus; and

(2) spend the donation accepted under Subdivision (1) for the designated purpose at the direction of and within the time period specified by the school campus for which the donation was designated.

² Not pertinent here, subsection 11.156(a) also provides for county and municipal public school trustees. TEX. EDUC. CODE § 11.156(a).

House Bill 1525, § 2 (codified at TEX. EDUC. CODE § 11.156(c)) (emphasis added). Unless context necessarily requires a different construction, the word "'[s]hall' imposes a duty." TEX. GOV'T CODE § 311.016(2); see also Perryman v. Spartan Tex. Six Capital Partners, Ltd., 546 S.W.3d 110, 131 (Tex. 2018) ("By its plain and common meaning, 'shall' denotes mandatory action."). Moreover, by providing in subsection (b) that a school district "may" spend a donation for specified purposes, the statute reinforces the reading of "shall" in subsection (c) as creating a mandatory duty for a school district to spend designated funds as the subsection provides. TEX. EDUC. CODE § 11.156(b); House Bill 1525, § 2 (codified at TEX. EDUC. CODE § 11.156(c)). Thus, subsection (c) creates a duty for a school district to accept and spend those donations, as we presently explain.

First, the duty in subsection 11.156(c) concerns only a donation from a PTA recognized by the school district. House Bill 1525, § 2 (codified at TEX. EDUC. CODE § 11.156(c)(1)). Second, the duty applies only to a PTA donation that designates funding for a supplemental educational staff position or positions at a school campus. Id. Third, the statute provides that the school district must act according to the benefited school campus's direction and specification of the time period within which to spend the donation according to its designation.³ Id. (codified at TEX. EDUC. CODE § 11.156(c)(2)). In such circumstances, a school district has a duty to accept and spend a donation according to the statute. Id. The statute does not address whether acceptance and expenditure must occur during any particular fiscal year, only that the expenditure occur "within the time period specified by the school campus." Id.

HB 1525 requires a district to spend donations received for the 2021–2022 school year to the extent that the donations satisfy all conditions of subsection 11.156(c).

Your second question is whether a school district need not comply with subsection 11.156(c) for the 2021–2022 school year if the school district issued its final budget and staffing orders before House Bill 1525's effective date, September 1, 2021. Request Letter at 2. Briefing received from Austin ISD argues that subsection 11.156(c) should be construed in the context of the entire educational statutory scheme as allowing a school district to postpone spending a donation designated for supplemental educational staff until the 2022–23 fiscal year.⁴ The brief informs us that Austin ISD adopted its final 2021–2022 budget on June 24, 2021, for a fiscal year beginning June 30, and with classes beginning two weeks before September 1. Austin ISD Brief at 1–2.

A school district may not spend its public funds "in any manner other than as provided for in the budget adopted by the board of trustees." TEX. EDUC. CODE § 44.006(a). But the board of trustees "may amend a budget or adopt a supplementary emergency budget to cover necessary unforeseen expenses." Id. Courts will read an unambiguous statute according to its plain language unless that interpretation would lead to absurd results. Combs v. Health Care Servs. Corp., 401 S.W.3d 623, 629 (Tex. 2013). While construing House Bill 1525 and its effective date as written potentially presents administrative challenges, such a construction does not produce an absurd result—one that no rational legislature could have intended.

³ Although section 11.156 does not address potential limitations on the donor's designation or a campus's direction, a donation may be used only for lawful purposes of a school district. Id. § 11.156(b); see also Tex. Att'y Gen. Op. No. KP-0236 (2019) at 2.

⁴ See Letter from Holly McIntush, Thompson & Horton LLP, on behalf of Austin ISD, to Honorable Ken Paxton, Tex. Att'y Gen. at 2–3 (June 30, 2021) ("Austin ISD Brief") (on file with the Op. Comm.).

In sum, House Bill 1525 provides that subsection 11.156(c) is effective on September 1, 2021. Since that date, a school district has a duty to accept and spend certain donations when (1) the donation derived from a parent-teacher organization or association recognized by the district, (2) the donation is designated to fund supplemental educational staff positions at a school campus, and (3) the campus directs the expenditure for its designated purpose and specifies the time period within which to spend the donation. Whether a specific donation satisfies the requirements of the statute will depend on the particular facts, which cannot be resolved in an Attorney General opinion. See Tex. Att'y Gen. Op. No. KP-0239 (2019) at 3. Accordingly, House Bill 1525 requires a district to spend donations received for the 2021–2022 school year to the extent that the donations are made consistent with subsection 11.156(c).

S U M M A R Y

Subsection 11.156(c) of the Education Code, as enacted by House Bill 1525, requires a school district to accept and spend a donation from a parent-teacher organization or association designated to fund a supplemental education staff position at a specified campus in specified circumstances.

House Bill 1525 provides that subsection 11.156(c) is effective on September 1, 2021. On or after that date, a school district has a duty to accept and spend certain donations once all of the specified conditions of subsection 11.156(c) have occurred, namely that (1) the donation derived from a parent-teacher organization or association recognized by the district, (2) the donation is designated to fund supplemental educational staff positions at a school campus, and (3) the campus has directed the expenditure for its designated purpose and has specified the time period within which the donation is to be spent. Accordingly, House Bill 1525 requires a district to spend donations received for the 2021–2022 school year to the extent that the donations satisfy all conditions of subsection 11.156(c).

Very truly yours,

KEN PAXTON
Attorney General of Texas

BRENT E. WEBSTER
First Assistant Attorney General

LESLEY FRENCH
Chief of Staff

MURTAZA F. SUTARWALLA
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

WILLIAM A. HILL
Assistant Attorney General, Opinion Committee