Opinion ID: 2812467
Heading Depth: 2
Heading Rank: 2

Heading: A More Accurate Interpretation

Text: If a statute’s words are susceptible to two or more reasonable interpretations, and we “cannot discern legislative intent in the language of the statute itself,” the statute is ambiguous, and we may rely on applicable canons of statutory construction. Tex. Lottery Comm’n v. First State Bank of DeQueen, 325 S.W.3d 628, 639 (Tex. 2010). I would conclude that the words “supported by” are ambiguous in this context, and would thus grant deference to the Attorneys General’s long-standing construction of the Act’s definition of a “governmental body.” See Combs v. Health Care Servs. Corp., 401 S.W.3d 623, 629–30 (Tex. 2013) (stating that we grant deference to construction of agency that is charged with enforcement of statute if statute is ambiguous, agency interpretation results from formal proceedings, and interpretation is reasonable). Though not controlling, I would consider the Attorney General constructions to be persuasive, particularly in light of the responsibility the Legislature has given the Attorney General for “interpreting” and promoting uniformity in the application of the Act. See TEX. GOV’T CODE § 552.011; see also City of Dall. v. Abbott, 304 S.W.3d 380, 384 (Tex. 2010) (observing that Attorneys General’s interpretations of Public Information Act are persuasive but not controlling). But I would also clarify the Kneeland test to provide greater simplicity and guidance. 30
The Court and the parties agree that not every private entity that contracts with the government and receives payments of public funds is “supported . . . by public funds.” More specifically, they agree with the Attorneys General’s conclusion that an ordinary, arms-length transaction between a private party and a governmental entity does not render the private party a “governmental body” under the Act. They agree that something more is required, but they dispute whether that something is present here. I too agree that something more is required, but I conclude that the statute is ambiguous as to what that something is.10 The phrase “supported by” can have multiple common, ordinary meanings, including: 1. To carry the weight of, exp. from below. 2. To maintain in position so as to keep from falling, sinking, or slipping. 3. To be able to bear : WITHSTAND. 4. To keep from failing or yielding during stress. 5. To provide for, by supplying with money or necessities. 6. To furnish corroborating evidence for 7. To aid the cause of by approving, favoring, or advocating 8. To endure : tolerate. 10 The Court argues that “governmental body” should not include every single vendor who sells a product or service to the government in a quid pro quo transaction, and cites authority from other jurisdictions to support this contention. This is, of course, a straw man argument, as everyone in the case agrees that we cannot construe the term that broadly. But merely because one extreme construction is available that would lead to an (arguably) absurd result does not mean that every less extreme construction within the range from narrowest to broadest possible constructions is unreasonable. Moreover, no one argues that the Partnership is merely an ordinary vendor under the contracts at issue here. 31 9. a. To act (a part or role). b. To act in a secondary or subordinate role to (a leading performer). WEBSTER’S II NEW COLLEGE DICTIONARY 1108 (1995). I agree with the Court that most of these definitions do not apply in this statutory context, which limits “support” to a function that can be performed by money. See TGS-NOPEC Geophysical, 340 S.W.3d at 441 (using statutory context to eliminate inapplicable meanings of a word in the statute). An ordinary reader could construe some of the broader definitions to include financial “support”: e.g., public funds could “carry the [financial] weight of” an entity. See WEBSTER’S II NEW COLLEGE DICTIONARY at 1108. In context, the most relatable definition is “[t]o provide for, by supplying with money or necessities.” Id. The Partnership relies on this common meaning and argues that, just as a person “pays” an employee but “supports” a family member, the City “paid” rather than “supported” the Partnership. But even this definition of “support” does not resolve the statute’s ambiguity because the statute requires only that the entity be supported “in whole or in part” by public funds. TEX. GOV’T CODE § 552.003(1)(A)(xii) (emphasis added). As the Court notes, in the broadest sense, virtually any income from public funds could reasonably be considered to “provide for” the Partnership “in part” by supplying it with money, even if the City pays the money in exchange for specific goods or services rendered. Ante at __; see also Tex. Ass’n of Appraisal Dists., Inc. v. Hart, 382 S.W.3d 587, 591–92 (Tex. App.— Austin 2012, no pet.) (observing that the dictionary definitions of “support” are “so broad and varied that any private entity that receives any public funds can be said to be, at least in part, ‘supported’ by those public funds,” yet all authorities have agreed that “simply receiving public funds does not make a private entity a ‘governmental body’ under the [Act]”). The same problem 32 results from the Court’s definition of “supported” to mean “to provide a basis for the existence or subsistence of.” Ante at __. At least “in part,” the City’s payments for chamber-of-commerce services provide a reason for the Partnership’s existence and enable it to “pursue its mission,” and the City’s payments for those services constitute at least a “part” of the revenue that sustains the Partnership. See ante at __. I would conclude that the Act’s reference to entities that are “supported in whole or in part by public funds” is ambiguous, and thus turn to existing precedents—and specifically Attorney General decisions and the Kneeland test—for further guidance.11
Although this Court has not previously construed the Act’s “supported by” language, the Fifth Circuit has in Kneeland, and Attorneys General have since consistently relied on the Kneeland test as the governing standard. The Partnership urges us to reject the Kneeland test, asserting that it “has no basis in the statutory text” and leaves too much uncertainty in the law. The Attorney General counters that the Kneeland test “satisfies the legislature’s intent[] to shed light on the affairs of government” and “provides a workable framework for determining whether an entity is a governmental body under the [Act] because it treats entities functioning as 11 A statute is ambiguous if two or more plausible constructions are reasonable. Tex. Lottery Comm’n, 325 S.W.3d at 639. The Court finds the phrase “supported in whole or in part by public funds” unambiguous, although it suggests that two of the dictionary definitions (“sustenance” and “maintenance”) are “remotely possible.” Ante at ___. The Court pursues a backwards approach to the ambiguity analysis: it relies on context, purpose, and canons of construction first to exclude every possible meaning of the word “supported” except two, then to exclude all but the most narrow of those two “possible” definitions, and then declares that the term is “unambiguous” because there’s only one “reasonable” definition.” I find the term ambiguous because, even in context and considering the statute’s purpose, it is susceptible to more than one reasonable meaning, and I thus turn to canons of construction and persuasive authorities for assistance in determining what the statute’s actual language must mean. 33 governmental bodies as such while eliminating vendors providing goods and services through arms-length contracts from the definition.” I would conclude that the Kneeland test and its related precedent offer persuasive, though not controlling, legal authority. See Christus Health Gulf Coast v. Aetna, Inc., 237 S.W.3d 338, 343 & n.8 (Tex. 2007) (noting that Fifth Circuit precedent is persuasive but not binding on this Court) (citing Penrod Drilling Corp. v. Williams, 868 S.W.2d 294, 296 (Tex. 1993)). The test is founded on deference to the Attorneys General’s interpretations of the Act, which are likewise persuasive but not controlling. See City of Dall., 304 S.W.3d at 384. The Court complains that the Kneeland test has a “questionable foundation,” noting that even the Kneeland court acknowledged that its explanation of its holding was “a mite uncertain.” Ante at ___ (quoting Kneeland, 850 F.2d at 224). But as the Court notes, it is the “direction given” in Kneeland that the court described as “uncertain,” not the “foundation” on which the court relied. Although the court acknowledged that its description of the test was less than clear, “[o]ne may have no quarrel with the formulae” it adopted. Kneeland, 850 F.2d at 228. I would take this opportunity to clarify the Kneeland test by articulating three basic requirements for determining whether a private entity that provides services to or for the government and is paid with public funds is “supported in whole or part by public funds” and is thus a governmental body under the Act.
First, to be “supported by” public funds, a private entity must at least “receive” public funds, so an entity that does not receive public funds is not a governmental body under this provision. Thus, while the Attorney General was cognizant in JM-821 that the role of a volunteer fire department is one “traditionally provided by governmental bodies,” this fact, standing alone, 34 is not enough. See Tex. Att’y Gen. Op. No. JM-821. Arguably, at least, the private high school in JM-154, the water supply corporation in JM-596, and the Fiesta planning commission in ORD569 also provided services “traditionally provided by governmental bodies.” See Tex. Att’y Gen. ORD-569; Tex. Att’y Gen. Op. Nos. JM-154, JM-596. But because they did not receive public funds, they were not governmental bodies under part (xii). See TEX. GOV’T CODE § 552.003(1)(A)(xii). As the Attorney General recognized, “[t]he threshold question is whether the [private entity] receives any funds from the [public fisc].” Tex. Att’y Gen. ORD-569; see also Tex. Att’y Gen. OR2013-09038 (determining that El Paso Zoological Society that received no public funds was not a governmental body).
Everyone agrees, however, that merely “receiving” public funds does not equate to being “supported by” those funds. Governmental entities regularly purchase a wide variety of goods and services from private vendors, including everything from legal pads to legal services, and I agree that such vendors are generally not “supported . . . by public funds” as a result of such transactions, at least as the Act uses that term. Thus, a private entity that receives public funds in exchange for assuming an “obligation to provide a measurable amount of service in exchange for a certain amount of money as would be expected in a typical arms-length contract for services between a vendor and purchaser” is not “supported by” those public funds, and is not a governmental body under the Act. CareFlite v. Rural Hill Emergency Med. Servs., Inc., 418 S.W.3d 132, 141–42 (Tex. App.—Eastland 2012, no pet.) (holding that medical service provider was not a governmental body); see also Hart, 382 S.W.3d at 595 (holding that association of appraisal districts was not a governmental body). 35 A second requirement for a private entity to be “supported . . . by public funds,” then, should be that the private entity must receive public funds not as compensation or consideration paid in exchange for “specific goods” or “specific measurable services,” but as a general or unrestricted payment provided to subsidize or underwrite the private entity’s activities. See Tex. Att’y Gen. Op. No. GA-666; compare Tex. Att’y Gen. ORD-228 (concluding that commission was governmental body because it received public funds “used for [its] general support”); Tex. Att’y Gen. ORD-302 (concluding that promoter of manufacturing and industrial development was governmental body because it was provided “unrestricted” grant of public funds); Tex. Att’y Gen. Op. No. JM-116 (concluding that athletic association was governmental body because it was provided public funds to be “used for [its] ‘general support . . . rather than being attributable to specific payments for specific measurable services’”), with Tex. Att’y Gen. ORD-343 (concluding that ambulance service provider was not governmental body because it was paid specific amounts to cover specific, measurable services provided under service contract). This requirement would most easily be met when a governmental entity provides a “grant” to promote the private entity’s activities, but it may also be met when the governmental entity “pays” the private entity to provide services to or for the governmental entity or its constituents. The terminology that the parties choose to use should not be determinative. A key factor in the context of a service contract like those at issue here would be whether the relationship between the service provider and the governmental entity is the kind of “quid pro quo” relationship common in the service industry, see Kneeland, 850 F.2d at 230, or whether the relationship is something more akin to a governmental body outsourcing governmental services to a private entity, see Tex. Att’y Gen. ORD-228, ORD-302; see also Hart, 382 S.W.3d at 595 36 (observing that association of appraisal districts did not perform services traditionally performed by governmental bodies and instead provided services under conditions similar to what would be expected in typical arm’s-length transaction). In this context, I note that the Attorney General’s ruling here should have come as no surprise to the Partnership, as Attorneys General have repeatedly concluded that chambers of commerce, see Tex. Att’y Gen. Nos. ORD-621 (Arlington Chamber of Commerce), OR20014849 (Round Rock Chamber of Commerce), chambers-of-commerce-like entities, see Tex. Att’y Gen. ORD-228 (entity chartered to promote interest of Dallas-Fort Worth metropolitan area), ORD-302 (entity promoting manufacturing and industrial development around City of Bryan), and even the Partnership itself, see Tex. Att’y Gen. OR2004-4221, are governmental bodies under the Act. But these conclusions are based on a “fact-specific” analysis of the contract and context of each case. See Kneeland, 850 F.2d at 228; see also CareFlite, 418 S.W.3d at 138 (“The answer to the [governmental-body] inquiry depends upon the circumstances of each case.”). As the Attorney General has confirmed, a chamber of commerce that is not “supported in whole or in part by public funds” is not a governmental body under the Act. See Tex. Att’y Gen. OR2015-05495 (2015) (finding Central Fort Bend Chamber of Commerce is not governmental body because it only received public funds as membership fees paid for specific measurable services). With regard to this second requirement, I would not dictate that the public funds equal a particular amount or percentage of the entity’s total revenue, nor would I mandate that the entity require those funds for its existence or survival. The Act defines “governmental body” to include “the part, section, or portion” of an entity that is “supported in whole or in part by public funds.” 37 TEX. GOV’T CODE § 552.003(1)(A)(xii). Thus, public funds could make up only a small portion of an entity’s total revenues and yet provide general support, and even the sole support, for a particular part, section, or portion of the entity, or support “in part” of the entity as a whole. See Tex. Att’y Gen. ORD-602 (holding that city provided general support to museum even though public funds constituted only 15% of total revenue, but only portion of museum that received “direct support” was a governmental body). Under this construction of the Act, that part, section, or portion of the entity is a governmental body under the Act, even if the rest of the entity is not. See id. In short, because the statute includes the “part, section, or portion” of entities that are supported “in part” by public funds, it is the nature of the public funds (as support or sustenance and not as compensation or consideration), and not the amount or percentage of the public funds, that matters.
Finally, to ensure that the funds are received as a general or unrestricted payment to subsidize or underwrite the private entity’s activities, a third requirement should be that the funds be intended to promote a purpose, interest, or mission that the governmental and private entities share and would both pursue even in the absence of their contractual relationship. The mere existence of an “agency-type relationship” or a “common purpose or objective,” or even the fact that the service is one “traditionally provided by governmental bodies,” should not be sufficient by itself to meet this third requirement. See Tex. Att’y Gen. Op. No. GA-666; Kneeland, 850 F.2d at 228–29.12 It is not unusual for an arms-length services vendor to take on an agency-type 12 See also CareFlite, 418 S.W.3d at 142 (“[W]e have not found[] any authority, primary or persuasive, that stands for the proposition that, if a private entity and a governmental body share a common purpose or objective, the 38 role for its customer, or for a governmental agency to enter into an arms-length contract for government services that the agency itself traditionally provides, and contracting parties will ordinarily share at least the common objective of effectuating the obligations and purposes of their contract. In ORD-343, for example, the Amarillo Hospital District and its ambulance service provider shared the common goal of the contract: providing the people of Amarillo with emergency transportation to local hospitals. See Tex. Att’y Gen. ORD-343. But such relationships do not necessarily result in the governmental body “supporting” the private entity. Instead, I would hold that a supportive relationship exists when the parties share a true “identity of interests” that each of them has beyond any particular transaction or finite series of transactions between them. See Kneeland, 850 F.2d at 228–29 (“[T]here apparently is some common purpose or objective between the association and the universities, or they would not be drawn to each other, but there is no real identity of interest and neither may be considered the agent of the other.”). The volunteer fire department in JM-821 provides an example of this more extensive “identity of interests” relationship. See Tex. Att’y Gen. Op. No. JM-821. There, the private entity and the governmental entity each independently had the purpose of protecting citizens and property from fires and other hazards, and the governmental entity promoted the private entity’s pursuit of that purpose by providing “general support.” See id. I would thus distinguish between (1) a situation in which a private entity contractually undertakes a governmental entity’s objectives because the governmental entity agrees to pay for those services, and (2) a situation in which a private entity and a governmental entity that each private entity is automatically a governmental body for purposes of the [Act]. Neither are we aware of any like authority when an entity provides services traditionally provided by governmental bodies.”). 39 independently have the same purpose or interest, and thus an “identity of interest,” contractually agree to pursue that interest in cooperation and using public funding. See Kneeland, 850 F.2d at 228–29. For example, when a governmental entity hires a law firm to represent it in litigation, the firm and the government share interests and objectives specific to the firm’s representation of that entity, but they do not necessarily have an “identity of interests.” Although both the firm and the client may desire and jointly pursue the same outcome from the representation, the firm’s interest in achieving that outcome is transaction specific: the law firm takes on that goal because the client pays it to do so, and but for the client-attorney relationship, the law firm generally has no stake in the outcome of the litigation.13 In summary, then, I would clarify the Kneeland test and hold that a private entity (or a part, section, or portion thereof) is “supported in whole or in part by public funds,” and is thus a governmental body under the Public Information Act, if (1) the private entity receives public funds; (2) it does so not as compensation or consideration made in exchange for “specific goods” or “specific measurable services,” but as a general or unrestricted payment provided to subsidize or underwrite the private entity’s activities; and (3) the funds provided are intended to promote a purpose, interest, or mission that the governmental and private entities share and would each pursue even in the absence of their contractual relationship. 13 Contrary to the Court’s concern, this distinction would apply as effectively when the government contracts with a private firm to “provide more enduring and wide-ranging counsel” as it would when it hires a firm to handle a specific matter. See ante at ___. In either case, the third requirement (common purpose) typically would not be met because it is not part of the law firm’s mission or purpose to achieve the specific objectives that the government hires it to achieve, other than to fulfill its obligation to its client. But if the government paid funds to a special interest firm whose mission as a firm was to protect the environment, or promote a pro-life agenda, or increase health care for children, for example, this third requirement might be satisfied if the purpose of the government’s payment was to “support” the firm’s efforts to accomplish that mission. If the second requirement were also satisfied (i.e., the government paid the funds to subsidize or underwrite the firm’s efforts, rather than as consideration for specific, measurable services), the firm would be a governmental body under the Act. 40