Untitled Texas Attorney General Opinion ( 2004 )

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
March 23,2004
The Honorable Troy Fraser Opinion No. GA-01 69
Chair, Business & Commerce Committee
Texas State Senate Re: Whether the common-law doctrine of
P.O. Box 12068 incompatibility prohibits a city council member
Austin, Texas 787 1 l-2068 from simultaneously serving as a member of the
board of directors of a tax increment reinvestment
zone created by his or her municipality under
chapter 3 11 of the Tax Code (RQ-0120-GA)
Dear Senator Fraser:
You ask whether the common-law doctrine of incompatibility prohibits a city council
member from simultaneously serving as a member of the board of directors of a tax increment
reinvestment zone created by the member’s municipality under chapter 3 11 of the Tax Code.
The Tax Increment Financing Act, chapter 3 11 of the Tax Code, provides for the creation of
a reinvestment zone by a municipality. Section 3 11.003 states that “[tlhe governing body of a
municipality by ordinance may designate a contiguous geographic area in the jurisdiction of the
municipality to be a reinvestment zone to promote development or redevelopment of the area if the
governing body determines that development or redevelopment would not occur solely through
private investment in the reasonably foreseeable future.” TEX. TAX CODE ANN. 5 3 11.003(a)
(Vernon 2002). Before adopting an ordinance providing for a reinvestment zone, the municipality
must prepare a preliminary reinvestment zone financing plan and send a copy to the governing body
of each taxing unit that levies taxes on real property in the proposed zone. Id. 6 3 11.003(b). The
municipality must also hold public hearings on the reinvestment zone proposal, id. 8 3 11.003(c);
schedule meetings with officials of the taxing units in the proposed zone, id. 8 3 11.003(g); and
perform certain other preliminary duties, id. 5 3 11.003(d)-(f). Section 311.004 describes the ’
requisite contents of a reinvestment zone ordinance; section 311.005 details the criteria for
designating an area as a reinvestment zone; and section 3 11.006 provides for restrictions on the
composition of a reinvestment zone. Id. $5 3 11.004-.006.
Section 3 11.009 sets forth the composition of the board of directors of a reinvestment zone.
Each taxing unit other than the originating municipality may appoint one member to the board, and
the municipality may appoint not more than ten directors. Id. 9 3 11.009(a). If a taxing unit waives
its right to appoint a member, the municipality may appoint additional members, so long as the total
membership of the board does not exceed fifteen. Id. Members serve for two-year terms, except in
The Honorable Troy Fraser - Page 2 (GA-0169)
home-rule municipalities that have opted for terms of longer than two years for their elected officials.
Id. 0 3 11.009(c). Section 3 11.009(e) provides:
(e) To be eligible for appointment to the board by the governing body of the
municipality, an individual must:
(1) if the board is covered by Subsection (a):
(A) be a qualified voter of the municipality; or
(B) be at least 18 years of age and own real
property in the zone, whether or not the individual
resides in the municipality; or
(2) if the board is covered by Subsection (b):
(A) be at least 18 years of age; and
(B) own real property in the zone or be an
employee or agent of a person that owns real property
in the zone.’
Id. 0 3 11.009(e). You ask whether the common-law doctrine of incompatibility prohibits a member
of the city council that establishes a reinvestment zone from being appointed by the council to the
board of directors of the reinvestment zone.
The common-law doctrine of incompatibility has three aspects: self-appointment, self-
employment, and conflicting loyalties. See Tex. Att’y Gen. Op. Nos. GA-001 5 (2003) at 1, JC-0564
(2002) at l-2. Because a member of the board of a reinvestment zone is not an “employee” of the
creating municipality, the self-employment aspect of incompatibility is not relevant here. The self-
appointment aspect of the doctrine derives from the Texas Supreme Court’s decision in EhZinger v.
Clark, 8 S.W.2d 666 (Tex. 1928). The principle states that “all officers who have the appointing
power are disqualified for appointment to the offices to which they may appoint.” Id. at 674. Under
this doctrine, a city council that created a reinvestment zone would be barred from appointing its
members to positions on the board of directors of the reinvestment zone. We note that, under
Ehlinger, both positions must be “offices.”
The last aspect of common-law incompatibility - conflicting loyalties - derives from the
1927 case of Thomas v. Abernathy County Line Independent School District, 290 S.W. 152 (Tex.
Comm’n App. 1927, judgm’t adopted). This doctrine prohibits an individual from simultaneously
holding two positions that would prevent him or her from exercising independent and disinterested
judgment in either or both positions. It most often occurs where two governmental bodies have
‘Subsection (b) of section 3 11.009 describes the composition of a board “[i]f the zone was designated under
Section 3 11.005(a)(5).” Section 3 11.005(a) provides for four different sets of criteria for designating an area as a
“reinvestment zone.” Subsection (5) thereof details the requirements for one of those sets of criteria. For purposes of
your question, the set of criteria under which a zone is designated is irrelevant.
The Honorable Troy Fraser - Page 3 (GA-0169)
overlapping geographical jurisdiction, and each has the power of taxation or the authority to contract
with the other. See, e.g., Tex. Att’y Gen. Op. Nos. GA-0032 (2003), JC-0557 (2002), DM-311
(1994), JM- 1266 (1990). Both positions must be “offices” in order for conflicting-loyalties
incompatibility to be applicable. See Tex. Att’y Gen. Op. No. JM-1266 (1990); Tex. Att’y Gen.
LO-96-148, LO-95-052, LO-95-029, LO-93-027. Section 3 11.010(b) of the Tax Code authorizes
“[t]he board of directors of a reinvestment zone and the governing body of the municipality that
creates a reinvestment zone” to “each enter into agreements as the board or the governing body
considers necessary or convenient to implement the project plan and reinvestment zone financing
plan and achieve their purposes.” TEX. TAX CODEANN. 8 3 11.010(b) (Vernon 2002). Thus, if we
considered only the common law, conflicting-loyalties incompatibility would bar a member of an
originating city council from simultaneously serving as a member of the board of directors of the
reinvestment zone.
Both city council members and members of the board of directors of a reinvestment zone
would appear to hold “offices.” In Aldine Independent School District v. Standley, 280 S.W.2d 578
(Tex. 1955), the Texas Supreme Court said that “the determining factor which distinguishes a public
officer from an employee is whether any sovereign function of the government is conferred upon the
individual to be exercised by him for the benefit of the public largely independent of the control of
others? Id. at 583. The key phrase here is “largely independent of the control of others.” On the
basis of this criterion, this office has held that a person is not ordinarily an officer if his or her actions
are subject to control by a superior body, for in such instance, he cannot be said to exercise his
authority “largely independent of the control of others.” See Tex. Att’y Gen. Op. No. JM-1266
(1990) at 2. Under this formulation, members of a city council, because they are elected, are clearly
“officers.” Likewise, members of the board of directors of a reinvestment zone would seem to be
“officers,” because they are appointed for specific terms, and because they are granted various
powers that are not subject to approval by the originating municipality. See TEX. TAX CODE ANN.
$5 3 11.009(c), .Ol O(b), (d)-(f) (Vernon 2002).
Section 3 11.009(g) of the Tax Code provides, however, that “[a] member of the board
of directors of a reinvestment zone: (1) is not a public official by virtue of that position.” Id.
8 3 11.009(g). The question before us is thus whether the term “public official” as used in section
3 11.009(g) includes the term “public officer.” If it does so, the legislature, by its enactment of
section 3 11.009(g), has abrogated the common-law doctrine of incompatibility as applied to these
individuals, because reinvestment zone board members have been removed from the category of
“public officer.” A number of Texas statutes and cases suggest that the term “public official” is at
least as broad as that of “public officer.”
The nepotism statutes, chapter 573 of the Government Code, define “public official” as
(A) an officer of this state or of a district, county,
municipality, precinct, school district, or other political subdivision
of this state;
(B) an officer or member of a board of this state or of a
district, county, municipality, school district, or other political
subdivision of this state; or
The Honorable Troy Fraser - Page 4 (GA-0169)
(C) a judge of a court created by or under a statute of this
state.
TEX. GOV’T CODE ANN. 8 573.001(3) (Vernon 1994). Likewise, chapter 171 of the Local
Government Code, which regulates conflicts of interest among local public officials, defines that
term as follows:
(1) “Local public official” means a member of the governing
body or another officer, whether elected, appointed, paid, or unpaid,
of any district (including a school district), county, municipality,
precinct, central appraisal district, transit authority or district, or other
local governmental entity who exercises responsibilities beyond those
that are advisory in nature.
TEX. LOC. GOV’T CODE ANN. 8 171.001(l) (Vernon 1999). These definitions, while arguably
somewhat broader than the definition of “public officer” set forth in Aldine are, at a minimum, at
least as broad as the Aldine standard.
In addition, Texas cases consistently hold that the meaning of the terrn “public official” for
purposes of the libel statutes is broader than the “public officer” standard of AZdine. In Johnson v.
Southwestern Newspapers Corp., 855 S.W.2d 182 (Tex. App.-Amarillo 1993, writ denied), for
example, the court held that, in a libel action, an individual who served as a high school athletic
director, head football coach, and classroom teacher was a “public official.” Id. at 186-87. See also
Beck v. Lone Star Broadcasting Co., 970 S.W.2d 610, 614 (Tex. App.-Tyler 1998, pet. denied)
(assistant superintendent for business services of school district was “public official”). Similarly,
in Rogers v. Cassidy, 946 S.W.2d 439, 448 (Tex. App.-Corpus Christi 1997, no writ), the court
concluded that a city attorney who was paid on retainer was a “public official” for purposes of libel.
By contrast, this office has said that an at-will city attorney is not a “public officer” under the Aldine
test. See Tex. Att’y Gen. Op. No. JC-0054 (1999). Compare HBO v. Harrison, 983 S.W.2d 31,
36-40 (Tex. App.-Houston [ 14th Dist.] 1998, no pet.) (court-appointed psychologist was a “public
official” under the test for actions in defamation), with Tex. Att’y Gen. Op. No. JM-847 (1988)
(position of special commissioner in condemnation proceeding, appointed for one case only, lacks
the elements of permanency and continuity essential to an “office”). These authorities indicate that
the category of “public official” is at least as broad as, or, in some circumstances, broader than, that
of “public officer.” While every “public officer” is a “public official,” the reverse is not necessarily
true.
Because incompatibility is a common-law doctrine, it may be overcome by statute. See
Diversion Lake Club v. Heath, 86 S. W.2d 441,444 (Tex. 1935). By providing that a member of the
board of directors is not a “public official,” and consequently, not a “public officer,” the legislature
has declared that the incompatibility doctrine is preempted by statute. We conclude therefore that
a city council member is not prohibited from simultaneously serving as a member of the board of
directors of a tax increment reinvestment zone created by his or her municipality under chapter 3 11
of the Tax Code.
The Honorable Troy Fraser - Page 5 (GA-0169)
SUMMARY
A city council member is not prohibited from simultaneously
serving as a member of the board of directors of a tax increment
reinvestment zone created by his or her municipality under chapter
3 11 of the Tax Code.
BARRY R. MCBEE
First Assistant Attorney General
DON R. WILLETT
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
Rick Gilpin
Assistant Attorney General, Opinion Committee