Can employees of JAUNT (a transit corporation whose stock is owned by Virginia cities and counties) participate in Virginia's local health benefits program?

Plain-English summary

JAUNT, Inc. is a public service corporation that provides transit service across Charlottesville and the Counties of Albemarle, Nelson, Louisa, and Fluvanna. It is a stock corporation organized under the general incorporation laws of Virginia (Title 13.1). All of its shares are owned by the five local governments it serves. Its board of directors is appointed by the governing bodies of the shareholder localities. Over 84% of its operating funds come from state, local, and federal sources. It hires its own employees, runs its own office, and provides health and dental insurance through private insurance companies.

Minority Leader Toscano asked whether JAUNT's employees could participate in The Local Choice (TLC), the state-administered health benefits program for local government employees authorized by Code § 2.2-1204. The Attorney General said no.

The statute defines "employees of local governments" in Code § 2.2-1204(D) to cover officers and employees of:

• the governing body of any county, city, or town
• the directing or governing body of any political entity, subdivision, branch, or unit of the Commonwealth
• any commission or public authority or body corporate created by or under an act of the General Assembly specifying its powers, privileges, or authority (excluding generic-statute creations under §§ 15.2-1300 or 15.2-1303)
• specifically deemed-included: social services departments, welfare boards, community services boards, behavioral health authorities, library boards

It expressly excludes "private nonprofit organizations" as governmental agencies.

JAUNT is a public service corporation created under Title 13.1, not by a specific Act of the General Assembly. Its employees work for the corporation, not for any of the categories listed in § 2.2-1204(D). The Supreme Court of Virginia held in Appalachian Power Co. v. Greater Lynchburg Transit Co. (1988) that a public service corporation whose stock is owned by a municipality is not itself a governmental entity or instrumentality of the municipality. The same logic applies here: the local-government ownership does not transform JAUNT into a governmental entity for purposes of § 2.2-1204. The General Assembly knows how to include or exclude entities by name (the deemed-included list demonstrates that), and it chose not to include locally owned public service corporations.

Currency note

This opinion was issued in 2018. 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, deadline, or remedy mentioned here.

Background and statutory framework

The Local Choice (TLC) program was established by 1989 Va. Acts ch. 475 (predecessor to Code § 2.2-1204) to make the Commonwealth's group health insurance plans available to local government employees, teachers, and retirees. The Department of Human Resource Management administers the program. Eligibility turns on the definition of "employees of local governments" in subsection (D), which is structured around governmental status rather than functional public service.

A public service corporation is defined in Code § 56-1 to include entities "created ... under the general incorporation laws of this Commonwealth" to conduct business as public service corporations, including "transport[ing] passengers or property as a common carrier." JAUNT fits that definition; it transports the general public, agency clients, the elderly, and people with disabilities as a common carrier.

The structural distinction matters because Virginia recognizes a range of public-private hybrid entities. Some are political subdivisions in their own right (community services boards, behavioral health authorities, airport commissions, community development authorities). Some are stock corporations chartered under the general business laws even when their stock is owned by public bodies. The TLC eligibility statute distinguishes between these: it includes the former but not the latter.

Appalachian Power v. Greater Lynchburg Transit Co. (1988) is the controlling Supreme Court precedent. Greater Lynchburg Transit, like JAUNT, was a public service corporation owned by a local government. The Court held that municipal stock ownership does not transform the corporation into a governmental entity or instrumentality. That holding controls here.

Common questions

Why is JAUNT not a government agency?
Because it is organized as a corporation under the general business incorporation laws, not as a political subdivision created by a specific Act of the General Assembly. The fact that its stock is owned by local governments does not change its corporate form. It hires its own employees, runs its own office, and has its own corporate identity.

Are JAUNT employees eligible for any state benefits at all?
The opinion addresses only TLC eligibility under Code § 2.2-1204. JAUNT provides its own employee benefits through private insurance carriers. State and federal grants help fund JAUNT's operations, including its compensation structure, but JAUNT employees are not state or local government employees in the technical statutory sense.

Could JAUNT restructure itself as a political subdivision to qualify?
Yes, but it would require legislative action. The General Assembly would have to enact specific legislation creating JAUNT as a political subdivision or as a commission/public authority/body corporate with specified powers. That is a significant restructuring, not just a paperwork change.

Do CSB and BHA employees get TLC coverage?
Yes, expressly. Code § 2.2-1204(D) deems them employees of local government even though community services boards and behavioral health authorities have their own legal identities separate from the localities that created them. The General Assembly chose to include them by name in the deemed-included list.

What about employees of an airport commission or community development authority?
These are separate political subdivisions whose enabling acts specify their powers, privileges, and authority. They fit the "body corporate created by or under an act of the General Assembly specifying [its] power, powers, privileges, or authority" category and so their employees can be eligible. The opinion's distinction is between special-act creations (eligible) and general-incorporation creations (not eligible), regardless of whether local governments own the stock.

Does this opinion suggest a public service corporation could ever qualify?
The opinion was about JAUNT specifically. The analysis hinges on JAUNT's corporate form. A public service corporation that was created by a specific act of the General Assembly with statutorily specified powers might come within § 2.2-1204(D)'s second prong, but JAUNT was not.

Citations

• Va. Code § 2.2-1204 (TLC program)
• Va. Code § 56-1 (public service corporation definition)
• Va. Code §§ 13.1-620, 13.1-627, 13.1-825 (general incorporation framework)
• Appalachian Power Co. v. Greater Lynchburg Transit Co., 236 Va. 292 (1988)
• Cummings v. Fulghum, 261 Va. 73 (2001) (plain meaning rule)
• 1 Va. Admin. Code § 55-20-20 (TLC eligibility definitions)
• 1989 Va. Acts ch. 475 (TLC predecessor statute)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/opinions/2018/18-040Toscano-issued.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Mark R. Herring
Attorney General

December 7, 2018

The Honorable David J. Toscano
Minority Leader, House of Delegates
211 East High Street
Charlottesville, Virginia 22902

Dear Delegate Toscano:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of
the Code of Virginia.

Issue Presented
You have asked whether a public service corporation owned by local government entities is
eligible to participate in the Commonwealth's healthcare program as set forth in § 2.2-1204 of the Code
of Virginia.

Background
Your specific question relates to JAUNT, Inc. ("JAUNT"), a public service corporation organized
under the general incorporation laws of the Commonwealth.[1] JAUNT transports "the general public,
agency clients, the elderly, and people with disabilities" throughout its Central Virginia service area.[2] It is
a stock corporation owned by the City of Charlottesville and the Counties of Albemarle, Nelson, Louisa
and Fluvanna.[3] JAUNT is governed by a Board of Directors appointed by the governing bodies of its five
shareholder local governments.[4] In 2017, over 84% of its operating funds were provided by state and local
funds and federal assistance.[5] JAUNT is responsible for the selection and hiring of its employees.[6]
JAUNT maintains its own business office and provides workers' compensation and general liability
insurance for its operations.[7] Eligible employees receive health and dental insurance from private
insurance companies.[8] JAUNT administers its own deferred compensation plan, available to all
employees.[9]

Applicable Law and Discussion
Section 2.2-1204 of the Code of Virginia establishes a health insurance program for employees
of local governments, local officers, teachers, retirees, and their dependents.[10] Subsection (D) of
§ 2.2-1204 defines "employees of local governments" to include

all officers and employees of the governing body of any county, city, or town, and the
directing or governing body of any political entity, subdivision, branch, or unit of the
Commonwealth or of any commission or public authority or body corporate created by or
under an act of the General Assembly specifying the power or powers, privileges, or
authority capable of exercise by the commission or public authority or body corporate, as
distinguished from § 15.2-1300, 15.2-1303, or similar statutes, provided that the officers
and employees of a social services department, welfare board, community services board
or behavioral health authority, or library board of a county, city, or town shall be deemed
to be employees of local government. For purposes of this section, private nonprofit
organizations are not governmental agencies or instrumentalities.[11]

JAUNT is a public service corporation as defined in § 56-1 of the Code of Virginia, which
includes corporations "created ... under the general incorporation laws of this Commonwealth" to
conduct business as public service corporations, including the "transport[ation] [of] passengers or
property as a common carrier."[12] Applying the § 2.2-1204(D) definition of "employees of local
governments" to the employees of such a public service corporation owned by local government entities, I
am of the view that such employees are not employed by "the governing body of any county, city, or
town," or by "the directing or governing body of any political entity, subdivision, branch, or unit of the
Commonwealth or of any commission or public authority or body corporate created by or under an act of
the General Assembly specifying the power or powers, privileges, or authority capable of exercise by the
commission or public authority or body corporate."[13]

JAUNT's employees are employed by a public service corporation formed under the general
incorporation provisions of Title 13.1 of the Code of Virginia.[14] The fact that its shareholders are political
subdivisions of the Commonwealth does not render the public service corporation a political entity, public
authority, commission, or body corporate created under an act of the General Assembly as described in
§ 2.2-1204(D),[15] nor is it "a social services department, welfare board, community services board or
behavioral health authority, or library board of a county, city, or town."[16] Accordingly, JAUNT's
employees are not eligible for participation in the state's healthcare program.[17]

I do not find § 2.2-1204 or the related administrative code provision[18] ambiguous. In Virginia,
"[w]hen the language in a statute is clear and unambiguous, [a court is] bound by the plain meaning of
that language."[19] Moreover, "[w]hen interpreting and applying a statute, [a court] 'assume[s] that the
General Assembly chose, with care, the words it used in enacting the statute, and [a court is] bound by
those words.'"[20] Had the General Assembly wished to include officers or employees of a public service
corporation owned by local government entities, such as JAUNT, it could have done so expressly.[21]

Conclusion
Accordingly, it is my opinion that the employees of a public service corporation organized under
§ 13.1 and owned by local government entities, such as JAUNT, Inc., are not eligible for participation in
the state health benefits program authorized by § 2.2-1204.
With kindest regards, I am,
Very truly yours,

Mark R. Herring
Attorney General

1. Articles of Incorporation of JAUNT, Inc., at 1 (Oct. 28, 1982) [hereinafter Articles of Incorporation] (on file with the Virginia State Corporation Commission).

2. JAUNT, INC. FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2016, at 9 [hereinafter JAUNT 2015-2016 FINANCIAL REPORT] (on file with the Office of the Attorney General).

3. Id.

4. See JAUNT, INC., Board of Directors, http://ridejaunt.org/board-of-directors/ (last visited Dec. 5, 2018).

5. FEDERAL TRANSIT ADMINISTRATION, JAUNT, INC. 2017 ANNUAL AGENCY PROFILE, https://www.transit.dot.gov/sites/fta.dot.gov/files/transit_agency_profile_doc/2017/30045.pdf (last visited Dec. 5, 2018).

6. See JAUNT, INC., Jobs at JAUNT, http://ridejaunt.org/employment/ (last visited Nov. 7, 2018).

7. JAUNT 2015-2016 FINANCIAL REPORT, supra note 2, at 17.

8. Id.

9. Id. at 18.

10. VA. CODE ANN. § 2.2-1204 (2017). The predecessor statute to § 2.2-1204 was enacted in 1989, see 1989 Va. Acts ch. 475, and designated the Virginia Department of Personnel and Training (now the Department of Human Resource Management) to establish the plan or plans necessary to effect the goals of the legislation. See § 2.2-1204(A). It is popularly known among administrators and participants as "The Local Choice" or "TLC Program." See COMMONWEALTH OF VIRGINIA, About the Local Choice, THE LOCAL CHOICE HEALTH BENEFITS PROGRAM, http://www.thelocalchoice.virginia.gov/about.html (last visited Nov. 7, 2018).

11. Section 2.2-1204(D).

12. VA. CODE ANN. § 56-1 (Supp. 2018); see Articles of Incorporation, supra note 1, at 1 (stating that the purpose of JAUNT is "to provide mass transportation service by motor vehicle as a public service corporation").

13. VA. CODE ANN. § 2.2-1204(D).

14. See supra notes 1, 12 and accompanying text; VA. CODE ANN. § 13.1-620 (2016); § 13.1-627 (2016); § 13.1-825 (2016).

15. See Appalachian Power Co. v. Greater Lynchburg Transit Co., 236 Va. 292, 296-97, 374 S.E.2d 10, 12-13 (1988) (holding that a public service corporation whose stock is owned by a municipality is not itself a governmental entity or instrumentality of the municipality).

16. Section 2.2-1204(D).

17. The Virginia Administrative Code carefully tracks the eligibility provisions of the statute; it provides a specific definition for "employer" as meaning "the entity with whom a person maintains a common law employee-employer relationship." See 1 VA. ADMIN. CODE § 55-20-20.

18. Id. (1 VA. ADMIN. CODE § 55-20-20).

19. Cummings v. Fulghum, 261 Va. 73, 77, 540 S.E.2d 494, 496 (2001).

20. Kiser v. A.W. Chesterton Co., 285 Va. 12, 19 n.2, 736 S.E.2d 910, 914 n.2 (2013) (quoting Halifax Corp. v. First Union Nat'l Bank, 262 Va. 91, 100, 546 S.E.2d 696, 702 (2001)).

21. Section 2.2-1204(D) sets out specific boards, authorities, and departments whose officers and employees "shall be deemed to be employees of local government" who would otherwise be excluded (or potentially excluded) by the statute's plain language. See supra, note 16 and accompanying text.