Honorable Steven D. Wolens Opinion No. X4-1257 

Chairman 

Business and Commerce Committee Re: Whether a chamber of 

Texas Rouse of Representatives commerce is a "charitable 

P. 0. Box 2910 organizationot within the 

Austin. Texas 78768-2910 Charitable Immunitv and 

Liability Act of -1987, 

Civil Practice and 

Remedies Code chapter 84 

(RQ-2054) 

Dear Representative Wolens: 

You request advice about the Charitable Immunity and 

Liability Act off 1987, codified as chapter 84 of the Civil 

Practice and Remedies Code. You specifically inquire 

whether a chamber of commerce is a "charitable organization 

as defined by that statute. 

The Charitable Immunity and Liability Act of 1987 

[hereinafter the act] was adopted to reduce the liability 

exposure and insurance costs of charitable organizations "in 

order to encourage volunteer services and maximize the 

resources devoted to delivering these services." Civ. Prac. 

& Rem. Code 5 84.002(7). 1 With certain exceptions, a volunteer serving as an officer, director, or trustee of a 

charitable organization is granted immunity from civil 

liability for "any act or omission resulting in death, 

damage, or injury" done in the course and scope of his 

1. The Supreme Court of Texas gave notice in Watkins 

v. Southcrest Baotist Chm 399 S.W.2d 530 (Tex. 

that the doctrine of. charitable immunity would be 

1966), 

reconsidered and might be abrogated. In Rowle v. Camu Amon C rt I: 

470 S.W.2d 629 (Tex. 1971), the court held thata t&k 

doctrine was completely abrogated as to causes of action 

arising from events occurring after the motion for rehearing 

in Watkins was overruled on March 9, 1966. 

P. 6701 
Honorable Steven D. Wolens - Page 2 (JM-1257) 

duties. ;EBL 0 84.004(a); s.s2 ia, JS 84.004(c), 84.007 

(exceptions). A similar immunity is granted to a person 

serving as a direct service volunteer of a charitable 

organization if he acts in good faith and in the course and 

scope of his duties or functions within the organization. 

L 5 84.004(b). The liability of employees and of the 

organization itself is limited to money damages in a maximum 

amount set out in the statute. ra, 5s 84.005 - 84.006. 

These limitations on liability are available only to a 

charitable organization that carries liability insurance in 

the amounts required by the statute. L f 84.007(g). 

The definition of "charitable organization" is given in 

section 84.003 of the act: 

(1) *Charitable organization' means: 

(A) any organization exempt from federal 

income tax under Section 501(a) of the 

Internal Revenue Code of 1986 by being 

listed as an exempt organization in Section 

501(o)(3) or 501(c)(4) of the code, 

[enumeration of additional conditions thi: 

must be met]: 

(B) any bona fide charitable, religious, 

prevention of cruelty to children or animals, 

youth sports and youth recreational, or 

educational organization, excluding alumni 

associations and related on-campus organizations, or other orua&j&ation oraanized and 

ouerated exclusivelv for the nromotion of 

social welfare bv beina nr.&8rllv enoaaed in 

promotina the common aood and aeneral welfare 

of the oeoole in a commu~&y, and that: 

(i) is organized and operated exclusively 

for one or more of the above purposes: 

(ii) does not engage in activities which 

in themselves are not in furtherance of the 

purpose or purposes; 

(iii) does not directly or indirectly 

participate or intervene in any political 

campaign on behalf of or in opposition to any 

candidate for public office; 

P. 6702 
Honorable Steven D. Wolens - Page 3 (JM-1257) 

(iv) dedicates its assets to achieving 

the stated purpose or purposes of the 

organization: 

(v) does not allow any part of its net 

assets on dissolution of the organization to 

inure to the benefit of any group, shareholder, or individual: and 

(vi) normally receives more than onethird of its support in any year from private 

or public gifts, grants, contributions, or 

membership fees: or 

((3 a homeowners association as defined 

by Section 528(c) of the Internal Revenue 

Code of 1986. 

Civ. Prac. h Rem. Code S 84.003(l) (emphasis added, footnotes deleted). 

A chamber of commerce is not a homeowners association 

within section 84,003(1)(C). Wor does it fit the definition 

of charitable organization within section 84.003(1)(A). 

Although a chamber of commerce does have an exemption from 

federal income tax, it is not exempt under section 501(c)(3) 

or 501(c)(4), but under section 501(c)(6) of the Internal 

Revenue Code, which designates the following entities as 

exempt organizations: 

'(6) Business leagues, Ghambers of commerc 

real-estate boards, boards of trade, EG 

professional football leagues . . . not 

organized for profit and no part of the net 

earnings of which inures to the benefit of 

any private shareholder or individual. 

I.R.C. 8 501(c)(6) (emphasis added). 

Section 84.003(1)(B) describes organizations that are 

organized and operated for one or more stated purposes. An 

organization must fit within this description and comply 

with the conditions. set out in subsection (B)(i) through 

(B)(vi) to qualify as a "charitable organizationV1 under this 

provision. Thus, as a threshold issue, we must identify the 

purpose of a chamber of commerce and determine whether it is 

one of the purposes described in subsection 84.003(1)(B). 

p. 6703 
Honorable Steven D. Wolens - Page 4 (JM-1257) 

The decision that a particular entity is a "charitable 

organizationn within the act ordinarily involves the investigation and resolution of fact questions, which cannot be 

undertaken in the opinion process. &S Attorney General 

Opinion JW-951 (1988) (whether a public broadcasting station 

is a charitable organization within section 84.003(1)(B) is 

a question of fact). However, in the present case, we may 

rely on judicial and administrative determinations about the 

purpose of a chamber of commerce in deciding whether it is a 

charitable organization. 

The federal regulation construing the tax exemption 

granted by section 501(o)(6) of the Internal Revenue Code 

describes the activities of a chamber of commerce as lIdirected to the improvement of business conditions of one or 

more lines of business as distinguished from the performance 

of particular services for individual persons.n 26 C.F.R. 

5 1.501(c)(6)-1 (regulation defining "business league" by 

analogy to 'chamber of commerce) . A chamber of commerce 

promotes the general economic welfare within a geographically defined area. a I 

-States, 565 F.2d 845 (2d Cir. 1977), affLB, 440 U.:. 

472 (1979) (discussing Treas. Reg. 5 1.501(c)(6)-1). 

Prior opinions of this office and at least one Texas 

court have also considered the purposes of a chamber of 

commerce. &S Jcordus v. Citv of Gaw 561 S.W.Zd 260 

(Tex. Civ. App. - Tyler 1978, writ ref'd A.r.e.); Attorney 

General Opinions JW-1199 (1990); JW-516 (1986); Ii-397 

(1974): see also Attorney General Opinions C-76 (1963); 

WW-106 (1957) (application of franchise tax exemption to 

chamber of commerce). Most of these decisions address the 

question of whether a municipal government may donate money 

to a chamber of commerce, but their descriptions of the 

purpose of such entities are helpful in addressing the 

question before us. 

Attorney General Opinion H-397 (1974) held that a 

county could not become a dues-paying member of a chamber of 

commerce operated by a private corporation. The county 

attorney who requested the opinion advised that the purposes 

of the Beeville and Bee County Chamber of Commerce included 

"promoting industrial development in the county, the 

development of downtown Seeville, and the promotion of the 

county-owned stadium." &at 1. It also supported other 

measures beneficial to its commercial members. The opinion 

determined that the payment of dues would be a donation of 

public funds to a private entity in violation of article XI, 

section 3, of the Texas Constitution. It was "an attempt to 

p. 6704 
Honorable Steven D. Wolens - Page 5 (JM-1257) 

secure for the community and its citizens by subscription 

general benefits resulting from encouragement of private 

industry and business." L at 2. 

Attorney General Opinion H-397 was cited in Rordus v. 

Cm a suit by taxpayers of the city to 

money the city' had donated to the Garland 

recover 

Chamber of 

Commerce and to enjoin future payments. The court agreed 

with the opinion that the Texas Constitution prohibited 

donations and expenditures of this nature. See also Attorney 'General Opinion JW-1199 (1990) (festivals held by 

chamber of commerce and similar organizations to promote 

local products and businesses). 

The purpose of a chamber of commerce can be summarized 

as the promotion of the general economic welfare of an area 

through activities that advertise its products and industries and encourage private industry and business. Our 

question is whether an organization with this purpose is 

included in the following definition of "charitable organization": 

(B) any bona fide charitable, religious, 

prevention of cruelty to children or animals, 

youth ~sports and youth recreational, or 

educational organization . . . 9r other 

d ODerated excluSivelv for the uromot1on of social welfare . . 

v belna or-v enaaaed in Dromotma the 

008)~gn aood and aeneral welfare of the neonle 

in a mrmw4.b . 

Civ. Prac. h Rem. Code S 84.003(1)(B) (emphasis added). 

A chamber of commerce is not any of the special purpose 

entities listed at the beginning of the provision. The 

remainder of the provision, underlined in the quotation, 

encompasses organizations that promote the social welfare by 

promoting "the common good and general welfare of the people 

in a community." This statement of charitable purpose is so 

broad that it is difficult to apply in isolation from the 

rest of the statute. However, it can be given further 

definition by reference to the .legislature‘s statement of 

findings and purposes, which provides in part: 

(1) robust, active, bona fide, and wellsupported charitable organizations are needed 

within Texas to Derform essential and needed 

senrices: 

P. 6705 
Honorable Steven D. Wolens - Page 6 (JM-1257) 

(2) the willingness of volunteers to 

offer their services to these organizations 

is deterred by the perception of personal 

liability arising out of the services rendered to these organizations; 

. . . . 

(5) these to diminish 

services beina orovided +o Texas nq 

v because of higher costs znd 

fewer programs: 

(6) the citizens of this state have an 

pverridina interest in the continued and 

must be balanced with other policy considerations. 

Civ. Prac. 6 Rem. Code 5 84.002 (emphasis added). 

This statement of purpose indicates that the legislature was concerned about the delivery of needed services to 

citizens. In resolving the question before us, we will not 

attempt to determine the full range of activities that might 

be performed by organizations that are *organized and 

operated exclusively for the promotion of social welfare by 

. . . promoting the common good and general welfare of the 

people in a community.w Nonetheless, we believe that the 

legislature had in mind an organization that provides 

services to individuals who are in need of them. It did not 

intend to include an entity that promotes the general 

economic welfare of an area in expectation of some benefit 

to some residents in the indefinite future, but does not 

provide tangible assistance to specific individuals in the 

present.2 We conclude that the purposes of a chamber of 

2. Courts of other states have determined that a 

chamber of commerce was not a charitable institution within 

particular statutes. &S Bostomer of Commerce v, 

Assessors, 54 N.E.2d 199 (Mass. 1944) (not a 

charitable institution within tax exemption): Chamber of 

Commerce of North K nsa Citv v. Unemolovment 

comm ission , 201 S.i.2ds771 (MO. 1947) (not a 

Comuen sation 

charitable 

institution within exemption from unemployment compensation 

law). 

p. 6706 
Honorable Steven D. Wolens - Page 7 (JM-1257) 

commerce are not the purposes of "charitable organization" 

as defined by section 84.003(1)(B) of the Civil Practice and 

Remedies Code. The Charitable Immunity and Liability Act of 

1987 does not apply to a chamber of commerce. 

SUMMARY 

The Charitable Immunity and Liability 

Act of 1987, 

Civil Practice 

codified as chapter 84 of the 

and Remedies Code, does not 

apply to a chamber of commerce. 

JIM MATTOX 

Attorney General of Texas 

RARYZBLLRR 

First Assistant Attorney General 

Lou MCCREARY 

Executive Assistant 'Attorney General 

JUDGE ZOLLIE STEARLBY 

Special Assistant Attorney General 

RENEA HICKS 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Susan Garrison 

Assistant Attorney General 

P- 6707