Court Opinion

ID: 4128596
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:40:12.771657+00
Date Added: 2024-06-11T14:34:13.666618
License: Public Domain

ATTORNEY                ENERAL         OF       EXAS
                                             GREG        ABBOTT

                                                 January 12,2007

Mr. C. Tom Clowe, Jr., Chair                            Opinion No. GA-0499
Texas Lottery Commission
Post Office Box 16630                                   Re: Whether Occupations Code section 200 1.458(b)
Austin, Texas 7876 l-6630                               prohibits a licensed authorized organization from
                                                        paying or incurring an expense in connection with
                                                        the conduct of bingo to provide health care insurance
                                                        or a health benefit for its employees or their                        ,
                                                        dependents    (RQ-0499.GA)

Dear Mr. Clowe:

         As chair of the Texas Lottery Commission (the “Commission”),            you ask whether
Occupations Code section 200 1.458(b) prohibits a licensed authorized organization from paying or
incurring an expense in connection with the conduct of bingo to provide health care insurance or a
health benefit for its employees or their dependents.’

         The Bingo Enabling Act (the “Act”), Occupations Code chapter 2001, charges the
Commission with administering the Act and requires the Commission to “exercise strict control and
close supervision over all bingo conducted in this state so that bingo is fairly conducted and
the proceeds derived from bingo are used for an authorized purpose.” TEX. OCC. CODE ANN.
8 2001.05 1(a)-(b) (V ernon 2004); see id. 5 2001.001; see also id. 8 2001.002(4), (8) (defining the
terms “bingo” and “commission”).     The Act thus authorizes the Commission to issue to eligible
authorized organizations licenses to conduct bingo and prohibits persons “other than a bona fide
member of a licensed authorized organization” from conducting, promoting, administering, or
assisting in conducting, promoting, or administering bingo. Id. $5 2001.101 (a), .411 (a). The
Commission may suspend or revoke a license to-conduct bingo for failure to comply with the Act                            S
or a Commission rule. See id. tj 2001.353(l); see also id. 5 2001.054 (authorizing the Commission
to “adopt rules to enforce and administer” the Act).

        A licensed authorized organization is implicitly authorized to hire individuals who are not
members of the organization to work as “a bookkeeper, an accountant, a cashier, an usher, or a
caller.” Id. tj 2001.411 (c)(5); see also id. 8 2001.4115 (authorizing “[t]wo or more licensed

           ‘See Letter from C. Tom Clowe, Jr., Chair, Texas Lottery Commission, to Honorable Greg Abbott, Attorney
General of Texas, at 2 (June 6,2006) (on file with the Opinion Committee, also available at http://www.oag.state.tx.us)
[hereinafter Request Letter].
Mr. C. Tom Clowe, Jr. - Page 2                 (GA-0499)           .

authorized organizations” that conduct bingo at the same location to “jointly hire bingo employees”).
The Commission’s rules recognize that a licensed authorized organization may employ persons in
certain positions-operator,    manager, cashier, usher, caller, and salesperson-and        permit an
organization to hire only persons who have registered with the Commission. See 16 TEX. ADMIN.
CODE 5 402.402(b) (2006) (Texas Lottery Commission, Registry of Bingo Workers); see also id.
9 402.402(a) (defining terms).

         Chapter 200 1, subchapter J provides in detail for the disposition of bingo proceeds. Cl’TEX.
OCC. CODE ANN. ch. 2001, subch. I-l (Vernon 2004) (providing             for accounting by two or more
licensed authorized organizations that conduct bingo at the same location and join together to share
revenues and authorized expenses). Under section 200 1.45 1(a), a licensed authorized organization
must establish and maintain a regular checking account, denoted the “bingo account,” and an
interest-bearing savings account, denoted the “bingo savings account.” Id. 5’2001.45 1(a). The
organization must deposit in the bingo account all funds derived from the conduct of bingo, “less
the amount awarded as cash prizes.” Id. 5 2001.45 1(b). Section 2001.453 restricts a licensed
authorized organization’s use of funds in the bingo account:

                        (a) A licensed authorized organization may draw a check on
               its bingo account only for:

                           (1) the payment of necessary and reasonable bona fide
               expenses, including compensation of personnel, as permitted under
               Section 2001.458 incurred and paid in connection with the conduct
               of bingo;

                    L      (2) the disbursement of net proceeds derived from the
               conduct of bingo to charitable purposes; or

                           (3) the transfer of net proceeds derived from the conduct
               of bingo to the organization’s bingo savings account pending a
               disbursement to a charitable purpose.

Id. 5 2001.453(a); see also id. $5 2001.002(7), .454, .457(a) (defining “charitable purposes” and
requiring a licensed authorized organization quarterly to disburse at least 35% of adjusted gross
receipts for charitable purposes); cf: id. 5 2001,456 (prohibiting the use of proceeds for political
purposes). Section 2001.458, which is particularly at issue in your request, sets out permissible
expenses that a licensed authorized organization may incur and pay:

                        (a) An item of expense may not be incurred or paid in
                                                                                                         .
                connection with the conduct of bingo except an expense that is
                reasonable or necessary to conduct bingo, including an expense for:

                            (1) advertising   ...;
Mr. C. Tom Clowe, Jr. - Page 3                   (GA-0499)

                             (2) security;

                             (3) repairs to premises and equipment;

                             (4) bingo supplies and equipment;

                             (5) prizes;

                             (6) stated rental or mortgage and insurance expenses;

                             (7) bookkeeping,    legal, or accounting services related to
               bingo;

                            (8) fees for callers, cashiers, ushers, janitorial services,
               and utility supplies and services;

                             (9) license fees;

                             (10) attending a [required] bingo seminar or convention
               . . . , and
                    l

                             (11) debit card transaction fees. ,

                       (b) The value of health insurance or a health benefit
               provided by a licensed authorized organization to an employee is not
               included under Subsection (a) (8).

Id. $ 2001.458 (emphasis added); cJ: id. 5 2001.4115 (authorizing organizations who jointly hire
employees to pay a share of the employees ‘-“compensation and other employment-related costs”).
Finally, section 2001.459(a)(7) requires a licensed authorized organization to pay from its bingo
account “fees for callers, cashiers, and ushers.” Id. $2001.459(a)(7).

         You suggest that section 2001.458(b) may be read in two ways: On the one hand, subsection
(b) “appears to prohibit a licensed authorized organization from paying or incurring an expense . . .
for providing dependent health care insurance or a health benefit for its employees,” but on
                                                                                           * the other
hand, subsection (b) “can also be interpreted to mean that such an expense is allowable but distinct
from the subsection (8) expenses to which it refers.” Request Letter, supra note 1, at 1. In your
view, the ambiguity may have arisen as the result of the 1999 codification of the Bingo Enabling Act,
including section 200 1.458(b), which the Legislature intended to be nonsubstantive. See id. at 2; see
also TEX. OCC. CODE ANN. 5 2001.001 (Vernon 2004) (titling the Act); Act of May 13, 1999,76th
Leg., R.S., ch. 388, $9 1,7,1999 Tex. Gen. Laws 1431,2319-59,244O           (adopting the Occupations
Code and indicating that the codification was nonsubstantive).
Mr. C. Tom Clowe, Jr. - Page 4                  (GA-0499)

         In a 1999 decision captioned Fleming Foods of Texas v. Rylander the Texas Supreme Court
considered the possibility that a nonsubstantive codification actually had revised a statute’s
substance. See Fleming Foods of Tex. v. Rylander, 6 S.W.3d 278,283-86 (Tex. 1999). The court
in Fleming Foods addressed an apparently inadvertent omission of significant language from a
nonsubstantive codification of the Tax Code. See id. at 283. According to Fleming Foods, when
a specific provision of a purportedly nonsubstantive codification is “direct, unambiguous, and cannot
be reconciled with prior law,” the codification, “rather than the prior, repealed statute,” must be
effectuated. Id. at 286. On the other hand, if a provision in the codification is ambiguous, a court         3
will examine the predecessor law to determine the statute’s meaning. See id. at 287.

          Section 2001.458 is not ambiguous. Subsection (a) strictly limits a licensed authorized
organization to incur or pay only those expenses that are “reasonable or necessary to conduct bingo.”
TEX. OCC. CODE ANN. § 2001.458(a) (Vernon 2004). Subsection (a) then specifically lists items
that are included within those reasonable or necessary expenses. See id. The list is inclusive, not
exclusive, and thus subsection (a) does not prohibit the incursion or payment of unlisted expenses
that are “reasonable or necessary.” Id.; see also TEX. GOV’T CODE ANN. 5 3 11.005(13) (Vernon
2005) (defining the term “include” as a “term[] of enlargement and not of limitation or exclusive
enumeration”). But see Jackson Law Office v. ChappeZZ, 37 S.W.3d 15,25-26 (Tex. App.-Tyler
2000, pet. denied) (stating that a statutory list following the term “includes” or “including” is “for
purposes of illustration”); Tex. Att’y Gen. Op. No. JC-0410 (2001) at 3 (applying the doctrine of
ejusdem generis to limit the items within an illustrative list signaled by the term “include”); cJ:
 County of Harris v. Eaton, 573 S.W.2d 177, 178-79 (Tex. 1978) (construing the phrase “such as”
 in a statute listing “special defects such as . . .” in light of the ejusdem generis doctrine to “include
those defects of the same kind or class as the ones expressly mentioned”).

         In this case, however, the Legislature has determined that employees’ health insurance costs
are not reasonable or necessary expenses related to the conduct of bingo that a licensed authorized
organization may incur or pay from its bingo account, and subsection (b)‘s plain language effectuates
that intent. See TEX. OCC. CODE ANN. 5 2001.458(b) (V ernon 2004). Subsection (b) expressly
excepts from subsection (a)(8)‘s list of permissible fees “[tlhe value of health insurance or a health
benefit provided . . . to an employee.” Id. If, as you say, this means simply that the costs of health
insurance and benefits may not be included in the fees listed in subsection (a)(8) but may be
“allowable,” then subsection (b) has no meaning: Without subsection (b), health insurance and
benefits might be allowable as a reasonable or necessary cost that is similar to the expenses expressly
listed. Request Letter, supra note 1, at 1; cJ: TEX. GOV’T CODE ANN. § 3 11.021(2), (4) (Vernon
2005) (stating that in enacting a statute the Legislature intends the entire statute to be effective and
to achieve a result that is feasible of execution). And you make no argument that classifying health
 insurance and benefits expenses as fees within subsection (a)(8) or as some other type of reasonable
 or necessary expense is significant for purposes of paying the expenses.

         We find no obvious error in section 2001.458’s unambiguous language, nor do we find that
construing section 2001.458 consistently with its plain language leads to an absurd result. Rather,
section 200 1.45 8(b) is entirely consistent with the Act’s strict regulation of allowable expenses to
ensure that bingo-derived        proceeds are generally “devote[d] to” the licensed authorized
Mr. C. Tom Clowe, Jr. - Page 5               (GA-0499)

organization’s charitable purposes. TEX. OCC. CODEANN. 5 2001.454(a) (Vernon 2004). Because
we have found that the language of the current statute is unambiguous, has no obvious error, and
does not produce an absurd result, we may not consider whether the pre-codified statute had a
different meaning. See Fleming Foods of Tex., 6 S.W.3d at 286.

        Consequently, we conclude, consistently with the language the Legislature has chosen, that
section 2001.458(b) forbids the incursion or payment of expenses from a bingo account for “[t]he
value of health insurance or a health benefit provided . . . to an employee.” TEX. OCC. CODEANN.
kj2001.458(b) (V ernon 2004). Health insurance or benefits provided to an employee’s dependents
are likewise forbidden.
Mr. C. Tom Clowe, Jr. - Page 6                (GA-0499)

                                       SUMMARY

                        Occupations    Code section 2001.458(b)        prohibits    an
               authorized organization licensed to conduct bingo games from
               incurring or paying from a bingo account the costs of health insurance
               or benefits for the organization’s employees or their dependents.

                                              Very truly yours,

                                                          eneral of Texas

KENT C. SULLIVAN
First Assistant Attorney General

ELLEN L. WITT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Kymberly K. Oltrogge
Assistant Attorney General, Opinion Committee