Can a Texas public school hold a raffle to raise money, or does that have to be done through the PTA?

Texas AG Opinion JM-1176: Could a School District Hold a Charitable Raffle?

Plain-English summary

The Commissioner of Education asked whether an independent school district could organize and conduct a raffle under the Charitable Raffle Enabling Act, and, if not, whether an affiliated group like a parent-teacher association could do so instead. The act implemented a 1989 amendment to article III, section 47 of the Texas Constitution authorizing the legislature to let certain charitable organizations hold raffles for charitable purposes, with proceeds required to go to charitable purposes and the raffle conducted only by the organization's own members. The constitutional amendment named only qualified religious societies, volunteer fire departments, volunteer emergency medical services, and qualified nonprofit organizations as eligible, a list that includes no public corporations or political subdivisions.

The Attorney General concluded that an independent school district, as a political subdivision, is not among the organizations the constitution or the act authorizes to hold charitable raffles, since the act's definition of "qualified nonprofit organizations" requires federal tax-exempt status under Internal Revenue Code section 501(c), a category that likewise does not include political subdivisions or public corporations. On the district's alternative question, the opinion could not give a final answer about any specific parent-teacher association without facts about that particular organization, but noted that the legislative sponsor of both the constitutional amendment and the act specifically mentioned parent-teacher associations as an intended beneficiary during committee hearings, and that the act's "enhancement of educational advancement" charitable purpose fits a PTA's typical mission, so a PTA could qualify if it separately met the act's other requirements, including tax-exempt status.

Currency note

This opinion was issued in 1990, shortly after the underlying constitutional amendment and statute took effect. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule mentioned here.

Who this opinion affected (as of 1990)

Independent school districts: The opinion meant districts themselves could not organize or conduct charitable raffles, since they are political subdivisions, a category the constitutional amendment and the act did not include among eligible organizations.

Parent-teacher associations: The opinion left open the possibility that a PTA could qualify to hold a raffle under the act, if it met the act's qualified-nonprofit-organization requirements, including federal tax-exempt status under section 501(c) of the Internal Revenue Code, and used the proceeds for charitable purposes such as enhancing educational opportunities.

Common questions

Why couldn't a public school district hold its own raffle?
Because the constitutional amendment authorizing charitable raffles named only qualified religious societies, volunteer fire departments, volunteer emergency medical services, and qualified nonprofit organizations as eligible, and school districts, as political subdivisions, don't fall within any of those categories.

Could a PTA hold the raffle instead?
Possibly, according to the opinion. Legislative history from the committee hearings on the constitutional amendment and the act specifically mentioned parent-teacher associations as an intended beneficiary, and a PTA's educational mission fits the act's charitable purposes, but the opinion could not confirm any specific PTA qualified without facts about whether that PTA met the act's other requirements, including 501(c) tax-exempt status.

Background and statutory framework

Article III, section 47(d) of the Texas Constitution, added by an amendment the electorate adopted on November 7, 1989, authorizes the legislature to permit certain charitable organizations to conduct raffles for charitable purposes, requiring that all raffle-ticket proceeds be spent for the organization's charitable purposes and that only members of the organization conduct, promote, and administer the raffle. The constitutional list of eligible organizations, a qualified religious society, qualified volunteer fire department, qualified volunteer emergency medical service, or qualified nonprofit organization, contains no public corporations or political subdivisions.

The implementing statute, the Charitable Raffle Enabling Act (article 179f, V.T.C.S.), defines those qualified organizations in sections 2 and 6. Because an independent school district plainly is not a religious society, volunteer fire department, or volunteer emergency medical service, the opinion looked only to section 6's definition of "qualified nonprofit organizations," which requires the organization to have obtained a federal tax exemption under section 501(c) of the Internal Revenue Code. Section 501(c) grants exempt status to certain corporations, civic leagues, fraternal societies, cemetery companies, and trusts, again with no political subdivisions or public corporations included. The opinion concluded a school district is not authorized to conduct charitable raffles under the act.

On the district's alternative question about a parent-teacher association, the opinion noted the sponsor of both the constitutional joint resolution and the enabling act specifically identified parent-teacher associations as an intended category of eligible organization during House committee hearings (citing hearing tape records from the House Committee on State Affairs), and that the act's charitable purpose covering "enhancement of the opportunity for educational advancement" (art. 179f, § 2(a)(2)(A)) aligns with a typical PTA's purposes. The opinion could not finally determine whether any specific parent-teacher association qualified without facts about that organization, including whether it met section 6's tax-exempt-status and other requirements.

Citations

Statutes and constitutional provisions:

• Tex. Const. art. III, § 47(d)
• V.T.C.S. art. 179f, § 2(a)(2)(A)
• V.T.C.S. art. 179f, § 6(a)(4), (b)(4), (c)(4)
• 26 U.S.C. § 501(c)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1176
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1990/jm1176.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

May 18, 1990

Dr. W. N. Kirby
Commissioner of Education
Texas Education Agency
1701 North Congress Ave.
Austin, Texas 78701-1494

Opinion No. JM-1176

Re: Authority of an independent school district to conduct a raffle (RQ-1949)

Dear Dr. Kirby:

You ask whether an independent school district is authorized to organize and conduct a raffle under the Charitable Raffle Enabling Act (hereinafter the act), article 179f, V.T.C.S., and alternatively, if an affiliated organization, such as a parent-teacher association, can do so.

The act was passed pursuant to a recent amendment to article III, section 47, of the Texas Constitution. That constitutional amendment, adopted by the state electorate on November 7, 1989, authorizes the legislature to permit certain charitable organizations to conduct raffles for charitable purposes. Tex. Const. art. III, § 47(d). The constitutional provision requires that all proceeds from the sale of raffle tickets be spent for the organization's charitable purposes. It also requires that only members of the charitable organization may conduct, promote, and administer the raffle.

The constitution expressly names certain types of organizations as being authorized to conduct charitable raffles. Those are "a qualified religious society, qualified volunteer fire department, qualified volunteer emergency medical service, or qualified nonprofit organization."

Notably, the constitutional list contains no public corporations or political subdivisions. We believe that independent school districts are not authorized to conduct charitable raffles.

The act further defines the qualified organizations that are permitted to conduct raffles. V.T.C.S. art. 179f, §§ 2, 6. Because it is obvious that an independent school district is not included in any of the first three types of qualified organizations, we look only to section 6 of the act, which defines "qualified nonprofit organizations." The common thread among these organizations is that they must qualify for and have obtained an exemption from federal income tax under section 501(c) of the Internal Revenue Code. Id. §§ 6(a)(4), (b)(4), (c)(4).

Section 501(c) of the Internal Revenue Code grants tax exempt status to, among others, certain corporations, civic leagues, fraternal societies, cemetery companies, and trusts. 26 U.S.C. § 501(c). Again, there are no political subdivisions or public corporations among those organizations that are granted tax exempt status. Therefore, we believe that independent school districts are not authorized to conduct charitable raffles under the Charitable Raffle Enabling Act.

We cannot finally answer your alternate question, whether a parent-teacher association is authorized to conduct a raffle under the act, because we have no facts about particular organizations. However, we note that there is express indication of legislative intent that parent-teacher associations are included in the act. The sponsor of both the joint resolution proposing the constitutional amendment and the act itself specifically mentioned parent-teacher associations as being one kind of organization that the act would permit to hold raffles. The Texas Charitable Raffle Enabling Act: Hearings on Tex. H.J.R. 32 and H.B. 240 before the House Comm. on State Affairs, 71st Leg. (March 13, 1989) (tape available at House Technical Services).

As you note in your letter, the act includes the enhancement of the opportunity for educational advancement as a charitable purpose for which raffles may be held. V.T.C.S. art. 179f, § 2(a)(2)(A). We agree that enhancement of educational opportunities is one of the purposes of a parent-teacher association. A PTA may qualify under the terms of section 6 of the act, if it meets not only the charitable purposes test but also meets the qualifications, including tax exempt status, mandated in section 6.

SUMMARY

Independent school districts are not qualified to hold charitable raffles under the Charitable Raffle Enabling Act, article 179f, V.T.C.S. A parent-teacher association may be qualified to hold such raffles if it meets the requirements of the act.

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Karen C. Gladney
Assistant Attorney General