AUSTIN - The Texas Windstorm Association is not a state agency subject to a government code prohibiting the use of appropriated funds for lobbying activities, Attorney General Ken Paxton recently opined.
While some people tend to think of TWIA, a lost resort insurer for Gulf Coast residents, as a quasi state agency, at least one state representative is asking whether the money the association collects falls within the scope of Texas Government Code Chapter 556, which addresses political activities by public entities and individuals.
Section 556.006 of the Code prohibits a state agency from using “appropriated money to attempt to influence the passage or defeat of a legislative measure.”
Back in late July, Rep. Briscoe Cain, District 128, submitted an opinion request to the Office of the Attorney General, asking whether TWIA is deemed a state agency solely for the purposes of Chapter 556.
TWIA is governed under Chapter 2210 of the Texas Insurance Code, which provides the method by which “adequate windstorm and hail insurance” can be obtained by Gulf Coast residents.
Although TWIA receives no appropriations by the Texas Legislature, the association does collect premiums from policyholders, which are considered state funds when placed in the association’s Catastrophe Reserve Trust Fund.
In his request, Briscoe writes that, based on Section 2210, “it seems clear that the Legislature intended premium payments collected by TWIA to be ‘appropriated’ by law for a state purpose – namely paying benefits to policyholders and administration of the Association.”
“It thus seems plausible that the monies TWIA receives collected under the portents of state law fall within the ambit of ‘appropriated funds’ in Texas Government Code 556,” the request states.
Briscoe’s concerns over where exactly TWIA falls within the Code seem to be related to the association’s “concerns” over House Bill 769.
“Among other things, the bill would have required the relocation of the TWIA headquarters to a first or second tier coastal county,” the request states. “Records from TWIA indicate that, before HB 769 passed the House in late April of 2021, staff from the Association met with seven House members and the Speaker of the House on their ‘concerns’ with TWIA Headquarters relocation.”
The second part of Briscoe’s request posed the following question: “If TWIA is deemed a state agency for the purposes of Chapter 556, has it violated this statute by meeting with legislative staff regarding House Bill 769 from the 87th Legislative Session?”
On Jan. 26, Paxton issued his opinion, finding that TWIA has express authority to obtain legal counsel for representation before the Texas Legislature, and that the Sunset Commission has concluded in its review that “TWIA is not a state agency.”
“Government Code chapter 556 prohibits a state agency from using appropriated funds to engage in certain lobbying activities,” the opinion states. “A court would likely conclude that chapter 2210 of the Insurance Code does not establish the Texas Windstorm Insurance Association as a state agency for purposes of chapter 556.”
Opinion No. KP-0398