Untitled Texas Attorney General Opinion

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
May 6,2005
Mr. Reagan E. Greer Opinion No. GA-0323
Executive Director
Texas Lottery Commission Re: Whether the Lottery Commission may sell
Post Office Box 16630 promotional items to the general public,
Austin, Texas 78761-6630 Commission employees, or vendors with whom
the Commission contracts (RQ-0287-GA)
Dear Mr. Greer:
On behalf of the Texas Lottery Commission (the “Commission”), you ask whether the
Commission may sell promotional items to the general public, Commission employees, or vendors
with whom the Commission contracts.’
You indicate that the Commission “regularlyprocures promotional goods[, such as] koozies,
T-shirts, scratch-offcoins, Christmas ornaments, towels, [and] sports bags. to distribute to lottery
players and retailers through contests and direct-sales events.” Request Letter, supra note 1, at 1.
The Commission believes that the items “promote sales” of lottery tickets ‘and help to generate and
maintain high levels of player awareness throughout the State.” Id. at 1-2. The Commission now
is considering whether to offer promotional goods for sale to the public, Commission employees,
and vendors. See id. at 2. You therefore ask whether the Commission has authority to sell
promotional’goods “either on a cost[-Irecovery or for-profit basis.” Id.
The Commission has authority to sell promotional goods only if that authority is among the
Commission’s express powers or is necessarily implied from the Commission’s express powers. A
state agency has only those powers that the legislature has explicitly or implicitly delegated to the
agency. See Pub. Util. Comm’n v. City Pub. Serv. Bd., 53 S.W.3d 310,315-16 (Tex. 2001); R.R.
Comm ‘nv. Lone Star Gas Co., 844 S.W.2d 679,685 (Tex. 1992); Tex. Att’y Gen. Op. No. GA-0022
(2003) at 3.
Chapter 466the State Lottery Act-and chapter 467 of the Government Code set out
the Commission’s powers. See TEX. GOV’T CODE ANN. chs. 466,467 (Vernon 2004); see also id.
$466.001 (titling chapter 466). Under the statutes, the Commission has express authority to adopt
‘See Letter from Reagan E. Greer, Executive Director, Texas Lottery Commission, to Honorable Greg Abbott,
TexasAttomeyGeneral(Oct. 27,2004)(onfilewithOpinionCo~nee, alsoavailableathttp:iiwww.oag.state.tx.us)
[hereinafter Request Letter].
Mr. Reagan E. Greer - Page 2 (GA-0323)
rules governing “the means of advertising to be used for the lottery.” Id. 5 466.015(~)(10). The
Commission’s executive director has express statutory authority to award a contract for lottery
supplies or services, see id. § 466.014(c), as well as authority to purchase, lease, or contract for any
necessary facilities, goods, and services. Id. 5 466.101(a).
You suggest that the cutrent General Appropriations Act authorizes the Commission to
promote the lottery. See Request Letter, supra note 1, at 1 & n.1. You particularly cite two
strategies that outline the Commission’s marketing and advertising duties:
A.12 Strategy: MARKETING, RESEARCH, AND PROMOTION
[Elducate players and provide opportunities to learn about lottery products
communicate game information to lottery retailers .
A.1.3. Strategy: ADVERTISING
Inform adult Texans by mass media (television, radio, newspaper, billboards), point-
of-sale materials and merchandising regarding lottery games
General Appropriations Act, 78th Leg., R.S., ch. 1330, art. VII, 14-15,2003 Tex. Gen. Laws 5023,
5734-35.
Neither the Commission nor the executive director has express statutory authority to sell
promotional goods. This office previously has concluded that a state agency must have express
authority to engage in “what may be characterized as proprietary or commercial activities, ifthey are
to engage in them at all.” Tex. Att’y Gen. LO-93-004, at 3. For this reason, this office previously
has determined that the Board of Nurse Examiners may not, by itself or through a vendor, secure
advertising to cover the costs ofproducing and mailing an agency newsletter. See id. at 3. Similarly,
this office previously has determined that the Governor’s Office of Traffic Safety lacks authority to
contract with a private entity to merchandise “Drive Friendly” T-shirts to generate revenue for the
State Traffic Safety Program. See Tex. Att’y Gen. Op. No. H-366 (1974) at 3; see also Tex. Att’y
Gen. Op. No. WW-192 (1957) at 3 (stating that a county may not enter a contract to sell asphalt,
other than surplus asphalt, to the state).
We decline to infer authority to sell promotional goods from the Commission’s or executive
director’s general statutory authority to regulate the means of advertising the lottery, see TEX. GOV’T
CODE ANN. 5 466.015(~)(10) (Vernon 2004) (authorizing the commission to adopt rules governing
“the means of advertising to be used for the lonery”), although we believe the Commission is thereby
authorized to advertise the lottery. The Commission and executive director successfully may
exercise their statutory dutyto advertise the sale oflotterytickets without selling promotional goods.
Because the Commission lacks statutory authority to sell promotional goods, we will not infer
the authority from the appropriations act riders you cite. An appropriation act rider “may detail,
Mr. Reagan E. Greer - Page 3 (GA-0323)
limit, or restrict the use of funds appropriated elsewhere in the appropriations act or may otherwise
insure that money is spent for the purpose for which it is appropriated.” Tex. Att’y Gen. Op. No.
GA-0016 (2003) at 5 n.4. A rider may not, however, attempt to alter substantive law. See Strake
v. Ct. App. for the First Jud. Dist., 704 S.W.2d 746, 748 (Tex. 1986) (stating that a rider may not
attempt to alter substantive law); see also TEX. CONST. art. III, 5 35 (prohibiting a bill from
containing more than one subject, although permitting general appropriation bills to “embrace the
various subject and accounts, for and on account of which moneys are appropriated”); Tex. Att’y
Gen. Op. No. GA-0143 (2004) at 8-9 (“General laws may not be adopted, repealed, or amended by
a general appropriations act.“).
Certain state agencies have express statutory authority to sell particular items. For example,
the Parks and Wildlife Department has express authority under sections 12.006 and 13.017 of the
Parks and Wildlife Code to “provide or sell information, including books, magazines, photographs,
prints, and bulletins, to the public about wildlife values and management” and about state parks.
TEX. PARKS & WILD. CODE ANN. $5 12.006(a), 13.017(a) (Vernon 2002). The Parks and Wildlife
Department has additional express authority to sell products grown on Department land when the
product exceeds “wildlife management needs.” Id. 5 12.008(a). Similarly, the Department of
Criminal Justice has express authority to sell repaired or refurbished data processing equipment to
a school district, a state agency, or a political subdivision of the state. See TEX. GOV’T CODE ANN.
3 497.012(b) (Vernon 2004); see also id. 5 497.03 1 (authorizing the Department of Criminal Justice
to sell “prison-made articles or products” to certain governmental entities and flags to the
Commission on Law Enforcement Officer Standards and Education). The State Preservation Board
has express statutory authority to operate gift and souvenir shops in the State Capitol and the General
Land Office building, see id. 5 443.013(d), and the Bob Bullock Texas State History Museum has
express authority to operate a gift shop and food services, see id. 5 445.003(a)(l), (2). By contrast,
the Commission has not been granted such authority.
We conclude that the Commission has no authority to sell promotional goods. Whether the
sales are made on “a cost[-Irecovery or for-profit basis” is irrelevant. Our conclusion does not
extend to the Commission’s current practice of giving away promotional goods. See supra at 1
(stating that the Commission regularly procures and distributes promotional goods). Given our
conclusion, we need not answer your remaining questions: into which treasury or account sales
proceeds should be deposited, and what exposure to liability in contract, tort, or otherwise the
Commission would have in connection with the sales. See Request Letter, supra note 1, at 2.
Mr. Reagan E. Greer - Page 4 (GA-0323)
SUMMARY
The Texas Lottery Commission lacks authority to sell
promotional goods.
BARRY R. MCBEE
First Assistant Attorney General
DON R. WILLETT
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
Kymberly K. Oltrogge
Assistant Attorney General, Opinion Committee