# The Attorney General of Texas

July 29, 1983 JIM MATTOX Attorney General

Supreme Court Building P. 0. Box 12546 Austin, TX. 78711~2548 51214752501 T&X 9101674-1367 TelecoiYer 51214750266

1607 Main St., Suite 1400 Dallas, TX. 75201.4709 2141742-6944

4624 Alberta Ave.. Suite 160 El paso. TX. 79905-2793 9151533.3484 P

lLLo Dallas Ave.. Suite 202 Houston, TX. 77002-6966 7131650-0666

606 Broadway, Suite 312 L”btxxk. TX. 79401.3479 606/747-5238

4309 N. Tenth, Suite B McAllen. TX. 76501-1665 5121662-4547

200 Main Plaza, Suite 400 San Antonio, TX. 78205-2797 5121225-4191

An Equal Opportunityl Affirmative Action Employer HonorableGeraldHill Chairman ElectionsCommittee TexasHouse of Representatives P. 0. Box 2910 Austin, Texas 78769 opinionNo. JM-50

I&: Whether a corporationmay contribute to a non-profit organizationwhich servesas a research arm of a legislative
csucus

Dear RepresentativeHill:

You have requested our opinion as to whether a corporationmay contribute to a non-profit organization that conducts research for a legislativecaucus. You submittedas representativeof the questiona description of a contribution by a business corporation to such a non-profit corporation. We assume that your question relates only to contributionsby corporations organized or operating under authority of the Texas Business CorporationAct 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 interestedpersons.

In formingour opinion,we considered thepossible effect of the Texas Business CorporationAct, article 1349 of the Revised Statutes, the Political Funds Reporting and Disclosure Act, the Lobby Act, and Penal Code provisionsdealingwith bribery and corrupt influence.

One aspect of your question concerns the authority of a business corporationtomake a gift of the corporation’sassets. Under general law, a corporationmay make donations for the publicwelfare 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). Contributionsof the assets orproperty 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 politicalparty; (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.

p. 212HonorableGeraldHill - Page 2 (JM-50)

7

we believe a non-profit research organization operating as you described does not directly or indirectlyparticipate 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 legislativecaucusdoes 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 contributionwithin themeaning 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 functionsof his office that are not reimbursableout of publicmoney. Elec. Code art. 14.01(D). Article 14.06 prohibits certain corporate contributions,includingcontributionsfrom a corporationorganizedor 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 donationsaboutwhich you inquireare notmade by the corporationto s candidate or officeholder, but to a separate research organization. To be deemed a political committee, that research organizationmust collect contributions or make expenditures for candidates to public office or for officeholders. Elec. Code art. 14.01(O). See also Attorney General Opinions MW-48 (1979); H-743 (1975); H-486, H-252 (1974); H-189 (1973). Since the Political Funds Reporting and Disclosure Act is a penal statute that requires strict construction,
we do not believe that the disseminationof informationbased on the organization'snonpartisanresearchand study constitutesa prohibited contributionor expenditureunder article 14.06 of the Election Code.
e Statev. 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 opposemeasures,which are defined as proposals "submitted to the people for their approval or rejection at an election, includingany 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. Bellxi, 435 U.S. 765 (1978);AttorneyGeneralOpinionsMW-48 (1979);H-1175 (1978).

The Lobby Act, article 6252-9c, V.T.C.S., requires persons, including corporations, to register as lobbyists and report their contributions if theymake certain expendituresand communications to influence legislation. Id. §3. The contribution or expenditure is not prohibited,but must be reported to the secretaryof state. This office several timeshas reiterated the following:

The Lobby Act, as a penal statute, is carefully drafted to reach only those persons who make

p. 213Honorable GeraldHill - Page 3 (JM-50)

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 expendituresmade tourge 'specific actions'with respect to legislation.
AttorneyGeneralOpinionsMW-48 (1979);H-252 (1974). 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, 52(S). 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 suggestedby a legislative caucus are not lobby expenditures for purposes of article 6252-9c. See Attorney General Opinions MW-48 (1979); H-743 (1975); H-486, H-252 (1974); H-191 (1973).

Certain conduct similar to lobbying could constitute a crime if it included the elementsof bribery or other offensesunder chapter36 of the Texas Penal Code, such as intentionallyor 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, 841; Penal Code §§36.01, 36.02, 36.08(f), 36.10; Attorney General Opinion H-265 (1974). In our opinion, the factual situation that you presented does not involve violations of chapter 36 of the Texas Penal Code dealingwith bribery and corrupt influence.

SUMMARY

A contributionby a business corporation to a non-profit organization conducting non-partisan research for a legislative caucus is not necessarily prohibitedby 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.

JIM MATTOX Attorney Generalof Texas

TOM GREEN FirstAssistantAttorneyGeneral

p. 214. . .

HonorableGeraldHill - Page 4 (JM-50)

DAVID R. RICHARDS ExecutiveAssistantAttorneyGeneral
Preparedby Nancy Sutton AssistantAttorney General

APPROVED: OPINION COMMITTEE
Rick Gilpin,Acting Chairman David Brooks Colin Carl SusanGarrison Nancy Sutton

p. 215