The Texas State Capitol from the top of the Dewitt C. Greer building. Photo by Stan A. Williams

The Fifth Amendment to the United States Constitution, as everyone knows, provides that no person “shall be compelled in any criminal case to be a witness against himself.” Article 1, § 10 of the Texas Constitution similarly states that an accused “shall not be compelled to give evidence against himself.” We have grown familiar with witnesses appearing before judicial tribunals or congressional investigative committees invoking their right against self-incrimination, undoubtedly to the immense frustration of the investigators. Frustrating or not, the Fifth Amendment is aimed squarely at the power of the state to coerce and threaten its citizens, and it would be hard to conceive of a free society without it.

This fundamental constitutional protection, however, may arguably be infringed by proposed legislation (HB 1280 and SB 953) seeking to require franchise taxpayers to certify whether they provide health care benefits, including for travel, or sick leave for employees for the purpose of obtaining an abortion. Here’s why.

The proposal bars a taxable entity that elects to compute its taxable margin by subtracting compensation rather than cost of goods sold from subtracting “the cost of health care benefits provided to the entity’s officers, directors, owners, partners, or employees” if the benefits include “coverage for items or services that facilitate access to abortion, including travel vouchers” or “sick leave . . . for the purposes of procuring an abortion or for a recovery period following an abortion.” This provision, in and of itself, does not seem to implicate the Fifth Amendment, but that’s not all the bill does. In order to enforce that provision, the proposal requires the taxable entity to include in its initial report to the comptroller “a certification as to whether the taxable entity provides health care benefits that include the coverage . . . or sick leave” described above.

One constitutional question is whether the required certification compels a taxable entity to give evidence against itself, since aiding or abetting an abortion is a crime in Texas. (It further gives plaintiffs in SB 8 lawsuits a list of businesses they can sue, but that’s another issue.) The proposal thus puts to a Hobson’s choice: (1) certify that your plan covers women’s reproductive health care, lose your franchise tax deduction, and hand over the incriminating evidence to a prosecuting attorney, or (2) refuse to make the certification, lose your franchise tax deduction, and hand over that information to a prosecuting attorney for further investigation of whether you are aiding or abetting abortions by way of your health benefits plan. Either way, you have incriminated yourself.

Of course, one could argue that the proposal does not compel a business to reveal incriminating information because nobody is entitled to a franchise tax deduction for providing health insurance benefits in the first place. But this argument doesn’t hold water because a franchise taxpayer is obligated to file the form on which the certification must be made under penalty of law. The only way to avoid liability, therefore, for a business is subject to the franchise tax, would be not to offer benefits that could in any way be construed “to facilitate access to an abortion,” whatever that may mean. Good luck disentangling which covered services for female employees who might become pregnant “facilitate access” and which don’t. For example, if a business’s health plan covers pre-natal services and childbirth, it presumably also covers treatment of complications of pregnancy, which may include miscarriage, fatal fetal anomalies, and any number of medical treatments that blur the line between “abortion” and “life and health of the mother.” It is a crime to perjure oneself on a state form, such as a franchise tax report. How is a business to know what services a prosecutor believes “facilitate access” to an abortion?

There is really no good outcome here. If the purpose of the proposal is to force a business to trade its franchise tax liability for its employee health care benefit plan, which certainly appears to be the case, this proposal may well accomplish that (although now we’re wondering whether the proposal has implications for equal and uniform taxation under Art. 8, §1 of the Texas Constitution). But that’s not an option, for example, for employers with self-funded ERISA plans that provide uniform benefits to employees in multiple states. It’s highly unlikely that a multi-state business with Texas employees is going to deprive its employees of health care benefits in every state just to receive a franchise tax deduction in Texas. This does not bode well for locating employees in Texas or the economy in general.

But maybe that’s the point. Maybe the idea of this and similar proposals really is to drive multi-state employers with health benefit plans that cover women’s reproductive services out of the state. That’s the only way one can make any sense out of tying the franchise tax, which taxes business activity, to the regulation of abortion. The Texas Miracle has always presupposed that we want businesses to locate their activities and employees here. The franchise tax itself is in many ways designed to reward those businesses. If the franchise tax is now to be used to punish Texas businesses for something that has nothing to do with their business activities, then we have turned a corner into a new era with new assumptions about the desirability of bringing businesses to Texas. Either the Texas Miracle means something, or it does not. This session is shaping up as a referendum on that question.

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